MiDAESS OCI Policy Statement 24 Nov 08.doc

Missile Defense Agency Announcement

MiDAESS Solicitation HQ0006-07-R-0012

MISSILE DEFENSE AGENCY

STATEMENT OF POLICY REGARDING

ORGANIZATIONAL CONFLICTS OF INTEREST (OCI)

24 November 2008

The Missile Defense Agency’s (MDA’s) OCI policy is based upon and guided by principles contained in Federal Acquisition Regulation (FAR) Subpart 9.5 and the decisions of the Government Accountability Office (GAO) and federal courts.

To that end, the agency prefers all offerors, particularly those aspiring to be prime contractors, which compete for the Missile Defense Agency Engineering Support Services (MiDAESS) effort to have no OCIs. While mitigation plans will be considered in some limited circumstances, they create considerable work for the agency and the contracting community in ensuring that OCIs are adequately mitigated at the time of contract award and at the time of the award of each task order. Consequently, the contracting community is encouraged to resolve all OCI issues prior to submitting proposals or teaming in connection with the MiDAESS effort.

As industry is well aware, the GAO has identified three general categories of OCIs to include:

a. Informational advantages that offerors may have; and that contractor teams may possess particularly after award. MiDAESS contracts will include rigorous requirements for contractor teams to develop, enforce, and comply with strict procedures for protecting government sensitive (acquisition and budgetary information for example) and contractor proprietary information from unauthorized disclosure. Nondisclosure agreements, contractor ethics programs and contractor screening of employees and teams will be required.

b. Preventing contractors or offerors from obtaining unfair competitive advantages which may favor their products or services through, for example, their participation in preparing statements of work or requirements, or in providing technical direction and oversight of developmental efforts conducted by other contractors (i.e., biased type OCIs). This concern may not be a significant issue prior to contract award. However, contractors which are awarded MiDAESS contracts may be precluded from future business opportunities with the agency should they develop statements of work or provide technical direction in performance of MiDAESS task orders.

c. Contractors or team members evaluating the services they or their primes perform on other contracts in support of the agency. This includes significant business arrangements that contractors may have under contracts unrelated to MDA that could potentially place contractor personnel in conflicting roles that might bias their judgment. This “impaired objectivity” OCI prong will probably be the predominant OCI issue for most contractors in teaming and in proposal preparation for the MiDAESS contracts.

In connection with c. above, the agency has become aware of a number of contractors and subcontractors which are executing our major developmental contracts (e.g., GMD, THAAD, Sensors), and which are also providing (either directly or through other corporate divisions/subsidiaries) advisory and assistance (currently known as SETA) services to the agency. This situation creates significant OCI issues, which the contracting community is encouraged to resolve prior to submitting MiDAESS proposals. Companies which are executing the agency’s major developmental programs will be placed in the untenable position of evaluating their own company’s developmental products, and the products of their prime contractors or their direct competitors on the developmental side.

There are two potential approaches to resolving this issue:

(1) Contractors and subcontractors decide which type of work they will perform for the agency (either work on our major developmental programs to the exclusion of participating in the MiDAESS competition; or participate in the MiDAESS competition to the exclusion of working on our major developmental programs.) This is the agency’s preferred solution.

(2) Although not the agency’s preferred solution, companies working on our major developmental programs could be allowed to serve as MiDAESS subcontractors if their MiDAESS prime contractors assemble teams with sufficient subcontractor depth so that conflicting task orders can be performed by other subcontractors without OCI issues. This approach would be contingent on the rigor and transparency of OCI mitigation measures to identify and implement recusals on conflicting task orders.

A key misconception which has been raised by some companies during our industry-to-industry meetings is that impaired objectivity OCIs can be adequately mitigated through firewalls and separate corporate divisions. The GAO and court decisions cases are clear that these measures are generally insufficient to resolve impaired objectivity OCIs. The use of a separate corporate division to evaluate a developmental effort which is being performed or directly supported by another division of the same corporation will not resolve an impaired objectivity OCI.

The following general OCI principles are therefore provided with respect to MiDAESS and specific MiDAESS efforts:

a. MDA will not favorably consider bias-type and impaired objectivity OCIs and encourages industry to avoid them. The agency does not intend to grant waivers of OCIs as part of the MiDAESS procurement process, but reserves the right to do so in very limited instances and when in the government’s best interest.

b. MDA will not make awards in the quality, safety and mission support functional area (Quality) to prime contractors or subcontractors which are executing our major developmental programs. Quality area contractors will evaluate the products and services of developmental contractors, their subcontractors and suppliers, often in their plants and at other onsite locations. Quality area contractors may, however, compete in other MiDAESS areas as permitted by FAR Subpart 9.5 and the GAO and court decisions. For example, a Quality area contractor might be able to provide security and administrative services.

c. Prime contractors and subcontractors (to include all corporate divisions and subsidiaries) which are executing our major developmental work will not be able to participate in the MiDAESS procurements for program support and engineering services, except as limited MiDAESS subcontractors in the circumstances discussed above. In the latter situation, the prime contractor will be required to submit a detailed mitigation plan which must address and resolve all OCI issues to the satisfaction of the agency.

d. Unless separated by government-approved firewalls, MiDAESS prime contractors and subcontractors will not be permitted to perform integrated or top-level ballistic missile defense system (BMDS) assessments or evaluations and also provide engineering and program support to individual MDA element program offices. For example, the contractor supporting the integration and synchronization center (ISC) may not also support the GM program office. Such efforts must be performed by separate contractors, or by contractor/subcontractor teams which are completely firewalled from each other in order for the Agency to obtain the full benefit of independent reviews/assessments and work products.

e. In all other areas, offerors will likely face less significant OCI issues, but must nonetheless disclose all instances in which they are providing support to the agency at any level (contractor or subcontractor at any tier) or under any instrument (either through a contract with MDA or another instrument awarded by another agency), identify OCIs, and submit adequate OCI mitigation plans.

We appreciate the significant support that many companies provide to the agency and the time and resources required to team and prepare proposals. We therefore urge contractors and contractor teams to contact the MiDAESS contracting officer prior to issuance of the final RFP to discuss OCIs, and to obtain an informal assessment of whether their OCI mitigation efforts will be adequate. The informal assessment will not be binding upon the agency, as these meetings and discussions will in all likelihood not be comprehensive and address all issues. However, this process should provide industry with an initial assessment to better inform industry teams of the agency’s probable response to their proposed OCI mitigation efforts. This process is not without precedent to MDA. The agency has in the past advised some offerors that should they be awarded an effort, they will have to choose between accepting the new award or continuing to perform other efforts in support of the agency.

All offerors are encouraged to review FAR Subpart 9.5 and relevant GAO and court decisions. The agency will not provide legal advice to the contracting community, but does intend to discuss its OCI policy during industry days and in one-on-one discussions.

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MiDAESS Statement of Policy Regarding

Organizational Conflicts of Interest (OCI)

24 November 2008