Monday, March 13, 2006

Federal contracting and organizational conflicts of interest

John W. Chierichella, Washington Business Journal

Today, the burden is on the contractor to identify such conflicts and persuade the contracting officer that they can be adequately avoided and mitigated.

Dangerous corners of collision

OCI rules are designed to avoid unfair competitive advantage gained by unequal access to information or through the performance of conflicting roles in which the contractor's judgment might be biased or its objectivity impaired.

Some common OCI situations are:

- Unequal access to information. A contractor may perform services for the government that afford it access to the proprietary information of third parties, either directly or via access to source-selection sensitive information generated by the government. The recipient of such information should not be able to leverage it for its own advantage and to the disadvantage of the provider. Such OCIs are usually mitigated by way of a non-disclosure agreement between the companies that limits the uses to which the recipient may put the information.

- Biased judgment. One classic scenario is when a company is awarded a contract to develop a statement of work to be used in a future competitive acquisition; there may be an understandable tendency for that contractor to construct the statement around its products and capabilities.

Also getting attention in bid protests is when a contract calls for a systems engineering and technical assistance contractor to evaluate products developed or produced, or services provided, by itself, an affiliate or competitors. There may be a predisposition for that company to shade its evaluations to favor its products or services or its affiliates.

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