Overview
This section defines the criteria for identifying contractor employees and activities subject to regulatory oversight regarding personal conflicts of interest. It specifically targets individuals performing "acquisition functions closely associated with inherently governmental functions," where their advice or support could significantly influence government procurement decisions.
Key Rules
- Acquisition Functions: Identifies eight specific high-risk activities, including planning acquisitions, developing Statements of Work (SOWs), evaluating proposals, awarding or terminating contracts, and determining cost allowability.
- Covered Employee: Defined as any contractor employee or self-employed subcontractor performing these specific acquisition support functions.
- Personal Conflict of Interest (PCI): Occurs when a covered employee’s financial interests, personal relationships, or outside activities (including those of close family members) could impair their ability to act impartially in the government’s best interest.
- Exclusions: A de minimis interest (one too small to reasonably impair impartiality) and diversified mutual fund investments are generally not considered personal conflicts of interest.
- Broad Financial Scope: PCIs can arise from various sources including wages, consulting fees, stocks/bonds, real estate, intellectual property, or even negotiations for prospective employment.
Practical Implications
- Contractors must implement rigorous screening and disclosure protocols for staff assigned to acquisition support roles to identify potential conflicts before performance begins.
- Because "acquisition functions" include drafting requirements and evaluating proposals, firms providing these services must ensure their employees do not have financial ties to the vendors they are evaluating or the technologies they are specifying.