If your company is active in the federal market performing on existing contracts and competing for new contracts, then you should pay attention to Organizational Conflicts of Interest (OCI). An Organizational conflict of interest means that because of other activities or relationships with other entities, a person or entity is unable or potentially unable to render impartial assistance to the Government, or the entity’s objectivity in performing the contract work is or might be otherwise impaired, or an entity has an unfair competitive advantage.
An OCI may result when factors create an actual or potential conflict of interest on a federal contract, or when the nature of the work to be performed on the contract creates an actual or potential conflict of interest on a future acquisition. Some restrictions on future activities of the contractor may be required in the case of future acquisitions.
I have experienced multiple cases of OCIs during my time as a program manager at Space and Naval Warfare Systems Command (SPAWAR), San Diego where contractors were affected on current and future acquisitions due to OCI. In each case, the Contracting Officer was required to evaluate whether or not there is an actual or perceived OCI; and how the OCI should be resolved. The majority of OCIs I’ve witnessed were confined to specific types of contracts and scenarios. For example, Company A holds a Systems Engineering contract with the government and they also hold a Program Management administration contract. This creates a conflict of interest because Company A is building the systems for the government alongside government employees and also administering the system’s Program as it relates to cost, schedule and performance. Federal Acquisition Regulation 9.5 provides the applicability and scope on Organizational and Consultant Conflicts of Interest. Although Subpart 9.5 is not limited to any particular kind of acquisition; OCIs most likely occur in contracts involving the following:
(1) Management support services;
(2) Consultant or other professional services;
(3) Contractor performance of or assistance in technical evaluations; or
(4) Systems engineering and technical direction work performed by a contractor that does not have overall contractual responsibility for development or production.
An example of an organizational conflict of interest I’d like to share has to do with a defense contractor who was supporting Space and Naval Warfare Systems Center-Pacific (SSCPAC) Network Integration and Engineering Facility (NIEF). The contractor was performing engineering and production under a systems engineering contract for the NIEF. The NIEF is a government entity that supports the program offices of SPAWAR. The defense contractor was also performing program management support services for my Program Management Office, PMW-160, which is also a part of SPAWAR and also has a corporate (government) relationship with SSCPAC. The contractor was responsible for assisting the PMW-160 government employees in managing the day-to-day decisions of the systems supported by the program office, as well as those being supported by the NIEF. The contractor ended up in a conflict of interest because they are a part of the government team in Planning, Systems Engineering, Production and Program Management. This places them in a position to potentially have undue influence on government planning and operations for the benefit of the defense contractor. As you can see, things can get pretty messy in this situation because the contractor is planning and building the systems and also managing the day-to-day decisions.
Make sure to consider Organizational Conflicts of Interest during your strategic planning around federal contracting. An OCI may place your company at a position where you have to recuse yourself from competition and potentially lose a segment of opportunity because of it. Planning around OCI’s, especially within the same organization or agency, will allow you to plot your strategy with many more valuable considerations in mind.