Overview
FAR 9.508 provides a non-exhaustive list of illustrative scenarios designed to help Contracting Officers identify and navigate Organizational Conflicts of Interest (OCI). These examples apply the general principles of FAR 9.505 to specific situations involving systems engineering, specification development, and access to proprietary information.
Key Rules
- Systems Engineering and Technical Direction (SE&TD): A contractor providing SE&TD for a system is generally prohibited from supplying that system or its components, though they may supply unrelated components (Example a).
- Specification Development: Firms that prepare data system specifications or performance criteria used for a competitive acquisition are typically excluded from the initial follow-on hardware acquisition to prevent "biased ground rules" (Examples e, f, and g).
- Development Exceptions: If a contractor develops specifications as a direct result of their own research and development of new equipment, they are generally permitted to supply that equipment (Example c).
- Proprietary Information Protections: Contractors gaining access to the proprietary data of other firms while performing government studies must enter into formal agreements to protect that data and are prohibited from using it for competitive purposes (Example h).
- Impaired Objectivity in Regulation: Contractors supporting a regulatory agency in evaluating applications or developing evaluation systems are prohibited from consulting for the regulated applicants (Example i).
- Government Oversight: Industry participation in refining specifications does not create a conflict if the work is performed under strict Government supervision and control (Example d).
Practical Implications
- Strategic Bidding: Companies must carefully weigh the immediate revenue of a "front-end" consulting or design contract against the potential "lock-out" from significantly larger follow-on production or implementation contracts.
- Risk Mitigation: To participate in studies involving sensitive data, contractors must be prepared to execute multi-party Non-Disclosure Agreements (NDAs) and implement strict internal firewalls to protect third-party proprietary information.