Conflict-of-interest rules to apply only to new A-76 studies, says GAO

In a decision that spares hundreds of public-private job competitions across the military from potential cancellation, the General Accounting Office has announced that new conflict-of-interest rules will not affect most ongoing A-76 studies.

Conflict-of-interest guidelines issued in a December ruling will be applied only to new job competitions, GAO said in a May 29 decision. The Navy, Army and Defense Logistics Agency had argued that retroactive application of the standard could derail the vast majority of their job competition studies, some of which are nearly finished.

The ruling is the latest wrinkle in what is known as the Jones-Hill case, a long-running bid protest involving hundreds of base support jobs at the Naval Air Station in Lemoore, Calif. In December, GAO urged the Navy to restart its competition because employees on the in-house team had a conflict-of-interest. The Navy had used the same employee and private sector consultant to set performance targets for the competition and develop the in-house proposal to meet these targets. The two could have skewed the performance targets to favor the in-house bid, according to GAO.

GAO essentially directed agencies to build a firewall between the employees who work on two stages of the job competition process: the creation of performance targets and the development of the in-house bid. But the military services often rely on the same employees to perform both functions. The Army, for example, claimed that GAO's ruling would jeopardize more than 83 percent of its ongoing competitions.

GAO reaffirmed this ruling in its May 29 decision but limited it to new studies. "The fact is that disruption or cancellation of large numbers of studies will not serve the private sector firms who would presumably be disadvantaged by the conflicts, nor the agencies endeavoring to conduct the studies, nor the viability of the A-76 process overall," wrote GAO.

GAO's December ruling also had wide reverberations at civilian agencies, many of which designed their competitive sourcing programs to avoid the appearance of conflicts of interest. In particular, many agencies awarded contracts to multiple support consultants and clarified that consultants who work on one phase of a job study cannot work on the others.

The Navy still must perform a new cost comparison in the Lemoore competition under GAO's ruling.