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No Smoking Gun: GAO Backs Navy’s Conflict Investigation in $100 Million Protest

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In Island Creek Associates, LLC, B-423301.3 (Dec. 5, 2025), Island Creek Associates protested the Department of the Navy’s award to StraCon Services Group for program management contractor support services. Island Creek did not challenge any aspect of the Navy’s evaluation of proposals. Instead, its protest focused solely on alleged organizational and personal conflicts of interest related to StraCon’s subcontractor, Precise Systems, Inc., who was the incumbent contractor. Island Creek claimed that Precise gained an unfair competitive advantage from access to proprietary information and due to the involvement of a senior Navy official whose wife worked for Precise. GAO denied the protest in its entirety and provided a detailed analysis of conflict of interest law.

The Decision
GAO denied the protest, ruling:

  1. No Duty to Protest OCIs Before Award Absent an Agency Assurance: GAO reiterated that a protester is not required to challenge a competitor’s alleged conflict prior to award unless the agency has affirmatively stated the firm is eligible to compete. Here, the agency provided a list of firms for which OCIs existed, but Precise was not on that list and there was no suggestion in the record that the list was considered exhaustive. GAO declined to require protesters to draw negative inferences from such a list and file OCI protests related to any and all non-excluded firms prior to the time of award, much less to require firms to raise any potential personal conflicts of interest where the solicitation’s list did not even address that topic.
  2. Timeliness Turned on When Island Creek Actually Learned Precise Was Competing: Island Creek did not have actual knowledge of Precise’s participation until Feb. 3, when a subcontractor confirmed that Precise was part of StraCon’s team. GAO held that the 10-day clock started on that date, making its Feb. 13 supplemental protest timely.
  3. Knowledge of Lower-Level Employees Does Not Start the Clock: The agency argued that the protest was late because several Island Creek employees and 19 subcontractor employees knew of Precise’s involvement in early January. GAO rejected the argument, reaffirming that knowledge held by lower-level personnel is not imputed to the protester.
  4. No Evidence of Improper Access Through AMS Tool: Island Creek claimed Precise gained unequal access to its proprietary information through its work on the Navy’s Acquisition Management System (AMS). While the Navy acknowledged Precise’s AMS team may have had potential access, it found that team was firewalled from proposal-related activities and subject to internal controls, including NDAs and an OCI mitigation plan. GAO agreed that this was sufficient, reaffirming that NDAs and firewall safeguards can reasonably mitigate an OCI when there’s no evidence they were breached.
  5. No Personal Conflict Related to Contracting Chief’s Spouse: Island Creek argued that the contracting chief had a personal conflict of interest because his wife had been a program manager for Precise. GAO rejected the claim, noting that the official had formally recused himself from all Precise-related matters, left his position before proposals were received, took no part in the procurement, and that his wife had retired from Precise two years before the solicitation was issued.
  6. While Not Perfect, the Agency’s Investigation Was Reasonable: Island Creek challenged the adequacy of the agency’s OCI investigation, arguing that it was incomplete because the agency had not exhausted all possible investigative techniques. GAO disagreed, finding that the Navy conducted a reasonable investigation, including collecting declarations and verifying recusals. GAO reiterated that an agency’s conflict investigation is reviewed for reasonableness, not perfection, and found no basis to second-guess the Navy’s conclusions.

Key Takeaways for Contractors

  1. OCI Allegations Require More Than Suspicion: Whether you are alleging unequal access to information or personal conflicts, GAO expects specific, credible facts, not speculation or theoretical concerns. Protesters bear the burden to demonstrate how the alleged conflict actually impacted the procurement.
  2. Recusals Are Effective When Followed: A formal recusal can insulate an agency official from allegations of personal conflict. Without evidence of continued involvement or improper influence, such protest allegations will not succeed.
  3. Agencies Must Investigate Conflicts, But Don’t Have to Be Perfect: GAO reviews OCI investigations for reasonableness, not perfection in hindsight. If an agency documents its review and takes appropriate steps to address concerns, GAO will typically defer to its conclusions.
  4. Timeliness Rules Related to OCIs Can Be Tricky: Given the nuanced nature of GAO’s timeliness rules in this area, it is critical to get experienced counsel involved.
  5. Don’t Assume the Appearance of a Conflict Is Enough to Win: To win an OCI protest, a contractor must do more than raise eyebrows. It must present evidence of unfair advantage.