Overview
FAR Subpart 9.5 establishes the policies and procedures for identifying, evaluating, and resolving Organizational Conflicts of Interest (OCI) in federal procurement. Its primary purpose is to ensure that a contractor's objectivity is not compromised by conflicting roles and to prevent any firm from gaining an unfair competitive advantage through privileged information or by influencing government requirements.
Key Rules
- The Two Underlying Principles:
- Preventing conflicting roles that might bias a contractor's judgment.
- Preventing unfair competitive advantage (e.g., unauthorized access to proprietary or source selection information).
- Systems Engineering & 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 that system or its major components as a prime or subcontractor.
- Specifications and Work Statements: Contractors that draft specifications or Statements of Work (SOW) for a competitive acquisition are generally barred from supplying those items/services for a reasonable period, as they could inadvertently (or intentionally) favor their own products or capabilities.
- Evaluation Services: Contractors may not evaluate their own offers or those of competitors without rigorous safeguards to ensure objectivity.
- Access to Proprietary Information: Contractors who gain access to other companies' proprietary data while performing government work must enter into legal agreements with those companies to protect the data and refrain from using it for competitive purposes.
- Waiver Authority: An Agency Head (or a designee no lower than the Head of a Contracting Activity) may waive OCI rules if applying them is not in the government's best interest.
Responsibilities
- Contracting Officers (COs):
- Analyze acquisitions early to identify and evaluate potential OCIs.
- Avoid, neutralize, or mitigate significant conflicts before contract award.
- Seek advice from legal counsel and technical specialists.
- Notify contractors of potential conflicts and provide an opportunity to respond before withholding an award.
- Document substantive OCI issues and formalize mitigation plans.
- Agency Heads / Designees: Responsible for reviewing and approving/denying written waiver requests.
- Chief of the Contracting Office: Reviews and approves the CO’s written analysis and recommended course of action for resolving significant OCIs.
- Contractors: Must disclose potential conflicts, enter into non-disclosure agreements when handling third-party proprietary data, and ensure marketing consultants do not provide an unfair advantage.
Practical Implications
- The "Firewall" Necessity: Companies performing Advisory and Assistance Services (A&AS) must often implement internal "firewalls" to separate personnel working on government specifications from those working on corporate bid proposals to avoid "unequal access to information" or "biased ground rules" OCIs.
- Market Strategy Trade-offs: Firms must make strategic decisions: if they win a contract to help an agency define the requirements for a massive IT modernization project (high-level consulting), they are effectively "firing themselves" from bidding on the subsequent multi-million dollar implementation contract.
- Mitigation Over Disqualification: The FAR encourages mitigation (e.g., through data isolation, physical separation of teams, or legal agreements) rather than automatic disqualification. However, if a conflict cannot be neutralized or mitigated, the CO is mandated to withhold the award to the conflicted offeror.
- Early Engagement: Because OCI issues can lead to bid protests or contract delays, sophisticated contractors address potential OCIs in their initial proposals by proactively suggesting mitigation plans.