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Organizational Conflicts of interest have increasingly gained attention from the Government and Government contractors.  Organizational Conflicts of Interest (OCI) are discussed in the Federal Acquisition Regulation (FAR) subpart 9.5.  OCI rules are meant to prevent conflicting roles or unfair competitive advantage in government contracting.  Assessment of OCI is very fact specific, and mitigations should be sculpted to fit your contracts and situation. 

OCI Categories

There are three primary categories for OCI: Unequal Access to Information, Biased Ground Rules, and Impaired Objectivity.  Based on the different types of tasks involved in each category, differing mitigation techniques are considered effective for each category.

Unequal Access to Information

Unequal access to information OCIs occur when a contractor gains access to nonpublic information that is competitively useful in obtaining a separate government contract, such as a competitor’s proprietary information or the government’s confidential information.  Tools such as firewalls can be used to mitigate unequal access to information OCIs.

Biased-Ground Rules

A bias-type conflict occurs when a contractor, as part of its performance of a government contract, has, in some sense, set the ground rules for another government contract.  For example, if a contractor prepares and furnishes complete specifications for a non-developmental item, the contractor cannot furnish the item.  Another example, if the contractor prepares a work statement to be used in a competing services contract, the contractor may not provide the services.

Mitigation techniques such as firewalls are considered ineffective against bias-type OCIs.  However, there are exceptions to the bias-type OCI rules.  As indicated by the first example above, the restriction does not apply to development work.  Another exception applies if the contractor was providing the specifications of their own product in response to the government’s request. A number of other exceptions exists for bias-type OCI and should be reviewed for each potential bias-type OCI.

Impaired Objectivity

Impaired objectivity could occur if a company is in the position of evaluating its own performance or products, or the performance or products of a competitor.  This could also exist if the contractor is positioned to favor its own interests over the interests of the government.  Impaired objectivity OCIs can be hard to mitigate.  Typical firewalls are considered ineffective against impaired objectivity OCIs.  However, while a typical firewall is considered ineffective, a firewalled subcontractor, meaning a subcontractor that works directly with the government rather than through the prime (contractor), could equate to a potential mitigation.  Consequently, this technique is more administratively burdensome for the government. 

Responsibilities with Regards to OCI

Contracting officers have the responsibility to identify and evaluate potential OCIs as early in the acquisition process as possible.  The contracting officer should avoid, neutralize, or mitigate potential significant OCIs prior to contract award.  Contracting officers examine each potential OCI based on the facts at hand and nature of the proposed contract.  OCIs are very fact specific and the analysis can vary from case to case, even when working with the same contract. 

Contractors need to identify their potential conflicts and prepare adequate mitigation plans.  Mitigation plans should propose actions to identify and reduce actual (or apparent) OCIs to an acceptable level.  The mitigation plan should be based on accurate facts, be reasonable, and should be actively followed.  The plan should address the steps the contractor will take to preclude any perception that a contractor would favor its own products or services.

How Redstone Government Consulting Can Help

The team at Redstone Government Consulting is well versed in Organizational Conflicts of Interest and OCI mitigation plans.  Contact us to assess your potential conflict, develop mitigation plans, or develop internal policies to assist with monitoring OCIs.  Our team also frequently assists our client base with the development of response strategies in the event of perceived OCIs from competitors during acquisitions.

 

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Written by Kelli Beene

Kelli Beene Kelli is a Senior Legal Consultant with Redstone Government Consulting, Inc. Formerly Associate General Counsel for the Missile Defense Agency, Kelli assists companies with compliance, interpretation, and analysis of contract and procurement laws, regulations, and contract clauses. Additionally, Kelli advises companies with preparation and review of proposals. She also assists companies with teaming agreements, contract negotiations, claims, terminations, debriefings, protests, and general government contract topics. She assists companies with assessing potential Organizational Conflicts of Interests (OCI), establishing OCI monitoring programs and training employees on OCI. Kelli advises clients with responding to external agencies such as Suspension and Debarment Officials and Department of Justice with regard to procurement fraud investigations and provides litigation support as needed.

Professional Experience

Kelli began her career at the Missile Defense Agency in 2006 in the Ground Based Mid‐Course Defense contracts office. There she negotiated contracts, worked contract terminations, claims, modifications, and any other contracting actions needed. Kelli also working in the MiDAESS office where she assisted with developing acquisition strategies, wrote requests for proposals, advised evaluation teams, assisted with preparing evaluation documentation, and prepared Agency position concerning OCI issues. In 2010, Kelli joined the Missile Defense Agency General Counsel’s Office. In that capacity, Kelli served as legal counsel on complex source selections to include multiple Targets procurements, as well as MiDAESS and TEAMS. She advised clients on all acquisition and contract matters to include interpretation of procurement related laws and regulations, acquisition strategy, data rights considerations, claims, terminations, and defending the Agency against legal challenges. She served as MDA’s Procurement Fraud attorney and Suspension and Debarment counsel. She assisted with forming and served on MDA’s OCI panel.

About Redstone GCI

Redstone Government Consultants are a team of the most senior industry veterans and the brightest new talent in the industry. Many have held senior government positions including leadership roles in the DCAA. Our new talents bring significant accounting and software experience along with fresh perspectives, inspiration and energy to our team. Through our leadership and combined experience, we provide a unique perspective, bringing both government and contractor proficiencies to bear and ensuring rock-solid government compliance for our clients.

Topics: Compliant Accounting Infrastructure, Small Business Compliance, Contracts Administration