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On January 9, 2006, the Government Accountability Office (“GAO”) issued a bid protest decision in Alion Science & Technology Corporation, B-297022.3, sustaining a protest on the ground that the awardee, ITT Industries, Inc. (“ITT”), possessed potential organizational conflicts of interest (“OCIs”).  In doing so, the GAO confirmed the continuing emergence of OCI issues, especially in the defense technology industry.

Alion Science and Technology Corporation (“Alion”) initially filed a protest on August 15, 2005, which challenged the award of a contract on OCI grounds.  As a result, the agency took corrective action, and Alion and the awardee submitted OCI mitigation plans.  After the agency, according to the GAO decision, “‘reconfirmed’ its prior decision,” Alion again protested that the agency had not adequately considered the OCI problems presented to the agency for consideration.  The GAO found for Alion, stating that “the agency failed to reasonably identify and evaluate potential OCIs associated with ITT’s performance of this contract and, accordingly, failed to reasonably evaluate the effect that such OCIs will have on ITT’s contract performance.”  In doing so, the GAO reasoned that “impaired-objectivity OCIs are created any time the performance of a contract requirement involves the contractor’s exercise of judgment that could affect other contractor-related interests.”

The Washington Post reported on January 23, 2006, that the case “could signal a more aggressive federal approach toward potential conflicts of interest in contracting ….” The Post explained that “[t]he potential for organizational conflicts is a growing concern as the government outsources more technical work to private companies and the defense industry continues to consolidate.” 

Venable’s Scott Hommer and Keir Bancroft represented the protester in this case. 

This update is published by Venable LLP. Venable publications are not intended to provide legal advice or opinion. Such advice may only be given when related to specific fact situations. © Copyright by Venable LLP 2006.