In Viderity Inc. – Costs, GAO found an agency’s investigation into a potential conflict of interest to be unreasonable where the agency “failed to inquire with” the awardee-intervenor “as to whether the firm had a business relationship with” an agency evaluator.  The decision was issued on September 1, 2026.  

The protester alleged that one of the agency evaluators, referred to by GAO as Ms. X, “previously served as a consultant for” the awardee and allegedly “advised the firm regarding the requirement and the potential competition.”  The contracting officer investigated the potential conflict of interest, including speaking to Ms. X, but did not ask the awardee whether it had a business relationship with her.  The agency produced a declaration from Ms. X stating that she was never employed by the awardee and never served as a consultant to them, and the agency thus concluded that no conflict existed. 

After the agency report was filed, however, the awardee-intervenor informed the agency that, contrary to the agency’s findings, they and Ms. X “had executed a purchase order for consulting services.”  The agency then opted to take voluntary corrective action, which led to the protester’s cost claim addressed in the decision.

GAO found that the agency’s failure to ask the awardee about its relationship with Ms. X rendered its investigation unreasonable.  GAO explained:

Notably absent from the agency’s initial investigation was an inquiry with [the awardee] as to whether it had any records of a business relationship with Ms. X.  Indeed, had [the agency] asked [the awardee] — the firm with whom Ms. X was alleged to have a business relationship and a party to the protest proceedings before our Office — whether it had employed or contracted with Ms. X in some capacity, it would have learned of the executed purchase order for consulting services.  In turn, the agency would have likely continued its investigation into whether that relationship tainted the agency’s conduct of the procurement, rather than summarily concluding that no potential conflict existed.  Generally, our Office reviews a contracting officer’s consideration of a potential conflict of interest for reasonableness and whether an agency has given meaningful consideration as to whether a conflict of interest exists. . . .  Here, we conclude the agency’s investigation into a potential conflict of interest was unreasonable where [the agency] failed to inquire with [the awardee] as to whether the firm had a business relationship with Ms. X.

In short, Viderity is much more than a cost decision.  It provides an instructive look into how GAO considers the adequacy of an agency’s conflict of interest investigation. 

Photo of Jay Carey Jay Carey

Recognized by Chambers as one of the nation’s top bid protest lawyers and government contracts practitioners, Jay Carey represents clients in complex, high-stakes government procurements often worth billions of dollars. He is a co-chair of the firm’s Government Contracts practice group and a…

Recognized by Chambers as one of the nation’s top bid protest lawyers and government contracts practitioners, Jay Carey represents clients in complex, high-stakes government procurements often worth billions of dollars. He is a co-chair of the firm’s Government Contracts practice group and a co-chair of the Aerospace, Defense, and National Security industry group.

Jay has won bid protests collectively worth more than $100 billion, for clients across a range of industries — including aerospace & defense, energy, healthcare, biotechnology, cybersecurity, IT, and telecommunications. He litigates protests before the U.S. Government Accountability Office (GAO); the Court of Federal Claims (COFC); and state tribunals across the country. A list of his recent wins can be found under the “Representative Matters” tab.

In addition, Jay advises clients on compliance matters, conducts internal investigations, and defends against investigations by federal and state agencies. He also counsels clients on matters related to the formation of government contracts, including organizational conflicts of interest and the protection of intellectual property rights when entering into procurement contracts, grants, cooperative agreements, and “Other Transaction Authority” agreements with the government.

Jay serves as co-chair of the American Bar Association Public Contract Law Section’s Bid Protest Committee.

Photo of Kayleigh Scalzo Kayleigh Scalzo

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability…

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability Office, U.S. Court of Federal Claims, U.S. Court of Appeals for the Federal Circuit, FAA Office of Dispute Resolution for Acquisition, federal and state agencies, and state courts.

Kayleigh is a former co-chair and current vice-chair of the American Bar Association Public Contract Law Section’s Bid Protest Committee. She is also a frequent speaker on bid protest issues.

Kayleigh maintains an active pro bono practice focused on immigration issues and gender rights.

Photo of Darby Rourick Darby Rourick

Darby Rourick is a government contracts lawyer that advises on federal contracting compliance requirements and on government and internal investigations that stem from these obligations. She has particular experience in federal cybersecurity and information technology supply chain issues. Darby has an active investigations…

Darby Rourick is a government contracts lawyer that advises on federal contracting compliance requirements and on government and internal investigations that stem from these obligations. She has particular experience in federal cybersecurity and information technology supply chain issues. Darby has an active investigations practice and advises contractors when faced with cyber incidents involving government information, as well as representing contractors facing allegations of cyber fraud under the False Claims Act. She also counsels clients on cybersecurity incident response; compliance with federal cybersecurity laws, regulations, and standards; supplier and subcontractor security issues; and cybersecurity related investigations.

Darby has particular regulatory experience with:

Government cybersecurity supply chain issues like the Cybersecurity Maturity Model Certification (CMMC), DFARS 7012, and NIST SP 800-171 requirements; and
Information handling, marking, and dissemination requirements, including those relating to Covered Defense Information (CDI) and Controlled Unclassified Information (CUI)

She also assist clients when allegations of non-compliance arise with procurement requirements, such as in the following areas:

Procurement fraud and FAR mandatory disclosure requirements;
Allegations of violations of cybersecurity regulation;
Cyber incidents and data spills; and 
Compliance with MIL-SPEC requirements, the Qualified Products List, and other sourcing obligations.