GAO Indicates Reasonable Conflict of Interest Investigation Must Include Inquiry of Involved Firm

The U.S. Government Accountability Office’s (GAO) recent decision in Viderity Inc.—Costs, B-424422.5, Sept. 1, 2026, offers useful insight into what constitutes a legally sufficient conflict of interest investigation. The decision arose in an unusual procedural posture: Viderity initially protested, alleging that an agency evaluator had a personal conflict of interest. After the agency took corrective action, Viderity filed a cost entitlement claim requesting that GAO direct the agency to reimburse Viderity’s protest costs. In evaluating that claim, GAO assessed whether Viderity’s underlying protest ground was “clearly meritorious.”

The U.S. Department of the Interior (DOI) conducted the procurement, which sought communications infrastructure support, on behalf of the U.S. Department of Health and Human Services. DOI awarded the contract to Bixal Solutions, Inc., and Viderity protested, alleging that an agency evaluator — whom GAO referred to as “Ms. X” — had a personal conflict of interest because she had previously served as a consultant for Bixal. According to Viderity, Ms. X had advised Bixal regarding the procurement and the potential competition.

In response to the protest, the contracting officer (CO) investigated by reviewing Viderity’s allegations, speaking with Ms. X, and requesting her communications with Bixal. Ms. X represented to the CO that she had never been employed by, nor served as a consultant to, Bixal.  The agency accepted those representations and concluded that the procurement was untainted, submitting these conclusions, along with a declaration from Ms. X, in its agency report to GAO.

Just six days after the agency filed its report, however, Bixal — an intervenor in the protest — informed the agency that Ms. X had, in fact, executed a purchase order for consulting services with Bixal. The agency took corrective action that same day, acknowledging that Ms. X’s representations were inaccurate and that “Ms. X entered into a purchase order with Bixal Solutions Inc. to provide subject matter expertise and expert insights related to the recompete of the subject requirement.” The agency stated that it planned to further investigate the conflict of interest allegations and conduct a new evaluation of proposals. Based on this corrective action, GAO dismissed the protest as academic.

Viderity next filed a protest of the corrective action, alleging that it was too narrow because DOI had not excluded Bixal from the competition. However, GAO dismissed this challenge as premature, noting that Bixal “may not be the eventual awardee — either because DOI ultimately concludes that the firm has an impermissible conflict of interest, or the firm is not otherwise determined to represent the best value for the agency.” 

Viderity then sought reimbursement of its protest costs in connection with its initial conflict of interest allegations; when the agency refused, Viderity filed a cost entitlement claim at GAO.  Under the applicable standard, GAO may recommend cost reimbursement when an agency unduly delays corrective action in the face of a clearly meritorious protest ground. This gave GAO an opportunity to opine on the merits of Viderity’s underlying conflict of interest allegations. GAO concluded that Viderity was entitled to reimbursement, finding the allegations clearly meritorious. In reaching this conclusion, GAO stressed that a reasonable agency inquiry would have revealed facts demonstrating the absence of a defensible legal position.

Significantly, GAO found the agency’s investigation deficient because it never asked Bixal — the very firm alleged to have the business relationship, and itself a party to the protest — whether it had any records of a relationship with Ms. X. Had DOI made that inquiry, it would have learned of the executed purchase order and would not have categorically denied the relationship in its agency report. GAO rejected the agency’s argument that the allegation could not be clearly meritorious because no one had conclusively proven a disqualifying conflict, explaining that such a showing is not required where the agency’s inadequate investigation led it to flatly disclaim even the appearance of a conflict. Most consequentially, GAO stated its conclusion in categorical terms, tying the investigation’s unreasonableness directly to the failure to inquire of the involved firm — suggesting that GAO may view such an inquiry as a necessary, not optional, component of a conflict of interest investigation.

Key Takeaways

• GAO’s analysis in Viderity indicates that an agency’s conflict of interest investigation may be considered legally inadequate where the agency relies exclusively on the allegedly conflicted individual’s own representations without independently inquiring of the contractor involved. Contractors challenging a procurement on conflict of interest grounds should scrutinize whether the agency’s investigation included independent inquiry of the firm alleged to have the relationship. If it did not, Viderity suggests that this omission may suffice to render the investigation unreasonable.
• The Viderity decision also presents a cautionary tale for awardees and their counsel. When a conflict of interest allegation surfaces in a protest, intervenor counsel should not sit back and wait for events to unfold. Had Bixal’s counsel proactively coordinated with agency counsel during the early stages of the protest, the agency might have produced a more reasonable investigation from the outset, and Bixal might have avoided the reputational and competitive damage that followed the dramatic reversal of the agency’s position. Proactive coordination by intervenor counsel at an early stage is not merely good practice; in cases like this, it may be essential to protecting the award.