Question

What is an Organizational Conflict of Interest? What are dangers of OCIs? What are the three types of OCIs?

Answer 1

What is an Organizational Conflict of Interest?

An OCI happens when success by a contractor on one government contract can jeopardize his ability to perform on another government contract or can undermine his ability to bid equally for a government contract. The Federal Procurement Rule (FAR) describes an OCI as a condition when a individual is unavailable or theoretically unwilling to provide unbiased assistance or counsel to the government owing to certain actions or associations with other individuals, or when the objectivity of the individual in carrying out the contract work is or may otherwise be compromised, or a person has an undue competitive advantage.

What are dangers of OCIs?

Contractors should try to recognize current and possible OCIs, both proactively and in reaction to the contract officer's queries. Contractors also should communicate regularly with the contracting officer to agree on ways of preventing or mitigating potential OCIs. Contracting officers are forced to evaluate reasonably any mitigation plan submitted by a contractor that could potentially be excluded from a contest because of an OCI. In certain situations, treatment of an OCI after the event is not practicable, and every mitigation program will resolve prospective OCIs. In general, an OCI mitigation proposal would be granted considerable deference by the Government Oversight Office (GAO) and the Court of Federal Claims (COFC), as long as the procurement contractor has fully examined and settled the conflict of interest, and the strategy is properly adapted to the particular case.

What are the three types of OCIs?

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 — Unfair access to information OCIs occur when a contractor gains access to non-public information which is competitively useful in obtaining a separate government contract, such as proprietary information from a competitor or confidential information from the government. OCIs may be used tools such as firewalls to mitigate unequal access to information.

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

Impaired Objectivity — Impaired objectivity may arise if a corporation is in a position to evaluate its own results or products, or a competitor 's performance or products. That may also happen if the provider were placed to favor their own priorities over government needs. Impaired OCIs on objectivity can be difficult to mitigate. Typical firewalls are deemed ineffective against OCIs with impaired objectivity. However, although a conventional firewall is deemed inefficient, a firewalled subcontractor, suggesting a subcontractor who deals directly with the government rather than with the prime (contractor), may be seen as a possible mitigator.