Overview
This section outlines the mandatory actions a contracting officer must take before awarding a contract to a firm owned or controlled by government employees, focusing on obtaining proper authorization and addressing potential conflicts of interest.
Key Rules
- Authorization Requirement: The contracting officer (CO) must obtain official authorization under FAR 3.602 if they suspect a prospective contractor is subject to the prohibitions in 3.601.
- Compelling Reason Standard: Authorization is only sought when there is a "most compelling reason" to make the award despite the general prohibition.
- Conflict of Interest Compliance: COs must adhere to the requirements of FAR Subpart 9.5 regarding Organizational and Consultant Conflicts of Interest (OCI) when dealing with entities owned or controlled by government employees.
- Timing: All authorizations and OCI compliance measures must be completed prior to the actual contract award.
Practical Implications
- This section places the burden of due diligence on the CO to investigate potential ethical conflicts and ensures that exceptions to the policy are rare and documented at high levels.
- It bridges the gap between general ethics prohibitions and technical conflict-of-interest rules, ensuring that "insider" entities do not receive an unfair competitive advantage.