Overview
FAR 9.507 prescribes the requirements for including specific language in solicitations and contracts when potential Organizational Conflicts of Interest (OCI) necessitate restraints on a contractor's future activities to ensure competitive fairness.
Key Rules
- Solicitation Requirements: When a potential OCI exists, the contracting officer must include a provision that alerts offerors to the conflict, describes its nature, outlines the proposed restraint on future activities, and specifies if these terms are negotiable.
- Clause Specifics: If a contractor’s future eligibility is restricted, the contract must contain a clause that explicitly details the nature and the duration of the restraint.
- Duration of Restraint: Any imposed restraint must be limited to a fixed, reasonable term. This must be defined by either a specific calendar date or the occurrence of a distinct event (e.g., the award of the first production contract).
- Negotiation: Contracting officers are directed to negotiate the final terms of the OCI clause with the successful offeror when appropriate, rather than simply imposing a unilateral standard.
Practical Implications
- Early Risk Assessment: Contractors must carefully analyze solicitation provisions to determine if winning a specific contract will "lock them out" of more lucrative downstream work, such as moving from a systems engineering role to a production role.
- Definite Exit Strategies: Because the FAR mandates a "fixed term" for restraints, contractors should advocate for clearly defined "identifiable events" that trigger the end of the OCI to ensure they are not restricted longer than necessary to mitigate the unfair advantage.