Organizational and Consultant Conflicts of Interest

The scope of Subpart 9.5 in the Federal Acquisition Regulation is relevant to the overall responsibilities, rules, and methods for “identifying, evaluating, and resolving organizational conflicts of interest” (FAR 9.500) involving the government contracting process and applies to both for-profit and nonprofit organizations. This section is applicable to all types of acquisitions that may create organizational and consultant conflicts of interest.

Contracting officers are responsible for conflicts that can be detected. This should help avoid any structural problems of the engaged for adhering to specific rules that analyze acquisitions with the purpose of ensuring compliance to the government’s standards of fair and reasonableness as early in the acquisitions process before the contract is awarded. The contracting officer may leverage the assistance of relevant technical specialists to discern any possible problems with parties involved in the contract and then can strengthen the agreement with appropriate provisions and clauses to protect its beneficiaries. Recommendations are made by the contracting officer to the head of the contracting activity when potential conflicts are found. If no conflicts arise, the contracting officer awards the contract to the winning bid.

Two main reasons for evaluating potential conflicts of interest are for “preventing the existence of conflicting roles that might bias a contractor’s judgment and preventing unfair competitive advantage.” (FAR 9.505) It is best for the general population when the most competent and affordable contractors are selected to complete projects and when the contractors do not have agendas outside of the scope of the awarded engagement. The contracting officer is accountable for maintaining a level playing field between contractors that restricts receiving or using insider information that could be advantageous for forming a successful bid.

FAR 9.5 elaborates on the roles that contractors must have on certain engineering and consulting services performed. Even if a contractor contributes systems engineering and technical direction, the contractor must accept total responsibility for the system’s successful development in order to be awarded the engagement and to be allowed to consult to the system’s supplier. The mentioned system’s engineering encompasses “determining specifications, identifying and resolving interface problems, developing test requirements, evaluating test data, and supervising design” (FAR 9.505-1). And technical direction includes “developing work statements, determining parameters, directing other contractors’ operations, and resolving technical controversies” (FAR 9.505-1). These rules were developed because of the influences that contractors inherently possess over the underlying concepts of systems implementation. The guidelines should be followed to prevent contractors from benefitting their own products by configuring systems in a certain manner.

The competitive acquisition process requires additional adherence when relating to the preparation of certain specifications or work statements. However, certain fields of work cannot be regulated in the same manner because they intrinsically rely on the contractor using prior knowledge that leverages it as the only organization to deliver the service/product. Development work generally allows for the most experienced firms to solely handle the process and continue through creation and implementation of their work. The contractor may use its unavoidable competitive advantage to continue into any production processes related to their system as this may benefit the government and the general population in terms of efficiency and effectiveness of the product/service.

Written by:
Josh Siler
TGG Accounting

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