An organizational conflict of interest (OCI) is a significant issue for both contractors and the government. When a contract opportunity presents a potential or actual OCI—whether due to unequal access to information, biased ground rules, or impaired objectivity—and the conflict is not sufficiently mitigated or neutralized, a procuring agency may find the contractor ineligible for award. Thus, if a contractor believes a competitor has an unmitigated OCI, filing a protest alleging the OCI’s existence and challenging the competitor’s eligibility for award, can be a powerful tool for contractors trying to protect their competitive position and ensure a fair procurement process.
The question becomes when to file a protest challenging a competitor’s OCI. GAO’s recent decision in Island Creek Associates, LLC, B-423301.3 (Dec. 5, 2025) addresses its timeliness rules for these protests and suggests some best practices for contractors that wish to use their competitors’ OCIs as a sword against them.
Background
The story of Island Creek begins in familiar territory for government contractors. Precise, a large prime contractor, was performing a contract for the Navy along with its small business subcontractor, Island Creek. Through their performance, both Precise and Island Creek had access to the Navy’s Acquisition Management System (AMS) software tool, which contained proprietary information related to various agency acquisitions. Precise, however, developed the AMS tool and maintained it under a separate contract that began in 2017, giving Precise arguably greater access and a higher potential to have an OCI.
When it came time to recompete the contract that both Precise and Island Creek were performing, the Navy set aside the opportunity for small businesses, making Precise no longer eligible to prime the work. The solicitation included a list of contractors that the Navy assessed as having OCIs, but Precise was not included on that list. Island Creek, a small business, submitted a proposal to perform the work as a prime contractor, and, unbeknownst to it, another small business, StraCon, also submitted a proposal, which included Precise as a subcontractor.
On January 8, 2024, the Navy sent out two notifications:
- a notification to all unsuccessful offerors, including Island Creek, informing them that StraCon received the award and
- a second notification to the employees working on the incumbent effort, including five of Island Creek’s employees and nineteen employees of one of Island Creek’s proposed subcontractors, discussing the award to StraCon and transition.
While the first notification did not identify Precise as one of StraCon’s subcontractors, the second notification “clearly identified Precise’s role on StraCon’s team.” While Island Creek filed a protest of the award decision in late January 2024, it did not raise any OCI allegations against Precise in its initial protest. Rather, on February 3, 2024, Island Creek alleged that it learned that Precise was one of StraCon’s subcontractors when one of its proposed subcontractors notified Island Creek of Precise’s involvement. Island Creek then filed a supplemental protest on February 13, raising various OCI allegations against Precise.
While GAO’s decision discusses the merits of the various OCI allegations and ultimately denies the same, concluding that the agency reasonably performed its OCI analysis and found StraCon and Precise eligible for award, GAO first had to assess the timeliness of the protest. GAO’s decision on the timeliness of Island Creek’s protest is significant and offers valuable lessons for contractors in Island Creek’s shoes.
Arguments for Dismissal
Both the Navy and StraCon moved to dismiss Island Creek’s OCI challenges as untimely for two reasons:
First, they argued that the solicitation included a list of firms with OCIs that were wholly or partially disqualified. Precise was not included on that list, and to the extent Island Creek argues that Precise should have been excluded, Island Creek should have raised these challenges prior to the proposal deadline since it knew Precise was not on the list and, thus, eligible for award. In addressing this argument, GAO explained that a protester generally does not need to protest that another contractor has an impermissible OCI until after an agency has selected that contractor for award unless:
- a solicitation is issued on an unrestricted basis,
- the protester is aware of the facts giving rise to the potential OCI, and
- the protester is advised by the agency that it considers the potential offeror eligible for award.
GAO further explained that this alternative timeliness standard will only be applied in the “narrow circumstance where an agency has specifically advised that they believe a firm is eligible to compete in a given procurement.” In denying the request to dismiss the protest on this basis, GAO concluded that the list in the solicitation was not exhaustive and that “it would be unfair and burdensome to require a protester to make a negative inference from such a list and allege OCIs related to any and all non-excluded firms prior to the time of award.” In short, because the Navy did not specifically advise that it considered Precise eligible prior to award, GAO concluded that Island Creek’s post-award protest was timely.
Second, the defendants argued that personnel who worked for Island Creek and its subcontractor became aware that Precise was a subcontractor to StraCon on January 8, 2025, and therefore Island Creek’s February protest was filed more than ten days after when it knew—or reasonably should have known—that Precise was part of StraCon’s team. In addressing this argument, GAO explained that its “decisions are clear that a protester generally cannot be charged with such knowledge where it was transmitted only to lower-level employees of the firm.” Interestingly, while GAO describes its “decisions” as “clear” on this point, it cites only to a footnote in a 1992 decision, Quintron Systems, Inc., B-249763 (Dec. 16, 1992), for support. Defendants objected that Island Creek did not explain what roles the five employees held or convincingly show they were so junior that their knowledge should not count against Island Creek. GAO explained that such “facts are not material” and that because GAO “could not establish whether the information should be imputed to the protester,” it would “resolve doubts about timeliness in favor of the protester.” Ultimately, GAO denied the request for dismissal on this basis as well.
Best Practices for Government Contractors
While Island Creek survived dismissal, GAO’s decision presents a cautionary tale for contractors that believe a competitor has an impermissible OCI and suggests the following best practices:
- Maintain regular contact with your employees regarding procurements: While Island Creek did not identify the employees who received notice in January of Precise’s role on the new award, and while GAO resolved doubts about timeliness in favor of Island Creek based on it not doing so, future protesters may not be so lucky. GAO’s Bid Protest Regulations require protesters to set forth all information establishing the timeliness of a protest, and GAO could have just as easily dismissed Island Creek’s protest for failing to present the facts—that were assuredly in its possession—to establish timeliness here. Had Island Creek kept in regular contact with its employees, it could have filed a protest within ten days of the notice in January and avoided the issue altogether.
- Ask agencies strategic questions: If you believe a potential competitor has an OCI and was not advised by the agency about the competitor’s eligibility for award, it may make sense to ask the question in certain circumstances. If the agency advises the competitor is ineligible for award, you have certainty and can adjust your competitive strategy accordingly. If the agency advises the competitor is eligible for award, you can file a protest before award when an agency may not get locked into defending the competitor’s eligibility as a result of the proposal it submitted. And, if the agency does not respond, you may be able to reasonably wait and see if the competitor is selected for award while avoiding dismissal because you were not specifically advised.
- When in doubt, file protests early: Filing a protest can be a resource-intensive process, but it can also be a strategic tool to protect a contractor’s ability to compete. The worst-case scenario when filing a protest too early is that GAO will dismiss it as premature, allowing the contractor to re-file the protest when the issue becomes ripe for review.
If you have questions about OCI protests, please contact Katie Burrows, Eric Valle, or another member of PilieroMazza’s Bid Protests Group.
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If you’re seeking practical insights to gain a competitive edge by understanding the government’s compliance requirements, tune into PilieroMazza’s podcasts: GovCon Live!, Clocking in with PilieroMazza, and Ex Rel. Radio.
