Overview
FAR 9.505 establishes the fundamental principles and specific restrictions designed to identify and mitigate Organizational Conflicts of Interest (OCI). The section aims to protect the integrity of the procurement process by preventing contractor bias in decision-making and ensuring no firm gains an unfair competitive advantage through non-public information.
Key Rules
- Core Principles: Conflict management is governed by two underlying goals: preventing conflicting roles that bias judgment and preventing unfair competitive advantages (specifically regarding proprietary or source selection information).
- Systems Engineering and Technical Direction (SE/TD): A contractor providing SE/TD for a system—without having overall responsibility for its development or production—is prohibited from supplying the system or its components as a prime contractor or subcontractor.
- Specifications and Work Statements:
- Non-developmental Items: Contractors drafting specifications for these items are generally barred from supplying them for a reasonable period (at least the duration of the initial production contract).
- Work Statements (SOW/PWS): Contractors assisting in SOW preparation cannot supply the resulting systems or services unless they are the sole source, participated in design/development, or were one of several contributors to the SOW.
- Developmental Exception: The FAR acknowledges that firms doing advanced development work will naturally design around their own knowledge; this "incumbency advantage" is considered unavoidable and is not a prohibited OCI.
- Evaluation Services: Contractors are prohibited from evaluating their own offers or those of competitors without strict safeguards to ensure objectivity.
- Proprietary Information Access: Contractors who gain access to other companies' proprietary data while performing government services must execute written agreements with those companies to protect the data and limit its use to the specific contract performance.
Practical Implications
- The "Choice" Rule: Firms must often make a strategic choice between "upstream" advisory and assistance roles (such as drafting requirements or providing technical direction) and "downstream" production or implementation contracts, as the former usually precludes the latter.
- Early Mitigation: Because Contracting Officers are directed to use "common sense and sound judgment" for situations not explicitly listed in the FAR, contractors should proactively disclose potential conflicts and propose mitigation plans (like firewalled teams) to avoid disqualification late in the acquisition cycle.