How Do I Recognize an Organizational Conflict of Interest (OCI)?

June 30, 2016

How Do I Recognize an Organizational Conflict of Interest (OCI)?

by Shelley Hall

According to FAR Part 2, “Organizational conflict of interest” means that because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the Government. It includes activities that might impact to a person’s objectivity in performing the contract work, or it might give a person an unfair competitive advantage.

An OCI can lead to:

  • a contractor being disqualified from a procurement,
  • the termination of an existing contract,
  • or specific prohibitions from competing.

FAR 9.504 states that Contracting Officers (COs) must:

  • Identify and evaluate potential organizational conflicts of interest as early in the acquisition process as possible; and
  • Avoid, neutralize, or mitigate significant potential conflicts before contract award

The reasons for identifying and mitigating OCIs early in the process include:

  • Preventing the existence of conflicting roles that might bias a contractor’s judgment; and
  • Preventing unfair competitive advantage, which occurs when a contractor competing for award of any Federal contract possesses —
    • Proprietary information that was obtained from a Government official without proper authorization; or
    • Source selection information that is relevant to the contract but is not available to all competitors, and such information would assist that contractor in obtaining the contract.

So as a contractor, how do you know there are signs that a contract may cause a potential OCI?

  • You will have access to other contracts.
  • You will be doing systems engineering and technical direction support.
  • You will be involved in developing the statement of work, performance work statement, or other such specifications.
  • You will provide evaluation services.
  • You will have access to proprietary information.
  • You will assist with the development of government cost estimates.

Remember, a subcontractor or affiliates involvement in any of the above could also give rise to a potential OCI.

The best course of action for a contractor is to discuss this with the government personnel early in the process.  If you are involved in work that could be a potential OCI, that’s okay, but you will not be able to compete on that specific acquisition.  It may also preclude other departments or offices in your company from competing also.  If you do plan on being a competitor, then do not involve yourself in any of the “red flag” activities listed above.

Potential OCIs should be handled proactively by both sides to ensure there is not even an appearance of any kind of conflict.  The CO should include OCI clauses in the RFP and resultant contract that clearly lay out what constitutes an OCI and how it will be handled.  Non-disclosure agreements should be signed by any contractors that are performing potential OCI activities.

Recently the number of OCIs has increased.  There are many reasons for this, including company consolidations, the increased use of multi-agency contracts, and the fact that the government is using contractors for work that requires the exercise of judgment on behalf of the Government.

OCIs are only bad if they are not identified early in a procurement where both the CO and contractor can take the necessary actions to mitigate the issue.


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