The FAR Council recently issued a proposed rule that would update the U.S. Government’s approach to organizational conflicts of interest (OCIs). While the proposed rule is not finalized and may change in response to forthcoming comments from interested parties, the proposed rule contemplates major changes to the FAR’s existing framework in this area.
Here’s a summary of the key points from the proposed rule changes that provide the CO with more flexibility in addressing the risk of OCIs:
- Move to FAR Part 3 with Personal Conflicts of Interest: Organizational Conflict of Interest (OCI) coverage is moved from FAR Part 9 to FAR Part 3, reflecting a shift in focus from contractor qualifications to business ethics and conflicts of interest.
- Agency Discretion: Contracting officers can accept OCI risks if the benefits outweigh the risks and the conflict is manageable. This is separate from the agency head’s waiver authority.
- Standard Provisions and Clauses: Introduction of new standard provisions and clauses requiring disclosure of OCIs and mitigation plans.
- Updated Definitions: New definitions of OCI and categories including impaired objectivity, biased ground rules, and unequal access to information.
- Scope of Application: The rule does not apply to commercial product acquisitions or those below the Simplified Acquisition Threshold but does apply to commercial services.
- Disqualification as Last Option: Agencies must explore all resolution methods before disqualifying an offeror for unequal access to information.
- Natural Advantage: A distinction is made between natural advantages from prior work and unfair competitive advantages from unequal information access.
- Exchanges with Offerors: Clarifications that exchanges to address OCIs do not count as discussions if they don’t alter the technical or cost proposal.
- OCI Examples: The rule includes examples of tasks and situations likely to create OCIs.
- Methods of Addressing OCIs: Contracting officers can manage OCI risks through avoidance, limitations on future contracting, mitigation measures, or a combination of these methods.
The proposed changes are most welcome for USAID activities. Solicitations are often delayed because USAID Missions, in particular, are unable to mobilize appropriate expertise to provide design input and draft statements of work. Most firms with IDIQs or Buy-in mechanisms shy away from providing any support that will lead to work that will be competed. The added flexibility for COs to judge whether mitigation or avoidance measures are sufficient should be embraced by contractors.
The Covington & Burling post summarizes the background leading up to the proposed rule and highlight key areas of proposed change. It would be worth weighing in on the proposed changes, even if it only to express support.
Read the full post at Covington & Burling
