The risk of an organizational conflict of interest (“OCI”)—either perceived or actual—strikes fear in the heart of many a government contractor. An OCI may result in disqualification from a procurement, an adverse bid protest decision, or termination of a contract. Although that can be unnerving, in many cases, an OCI is mitigatable if the contractor implements measures to avoid, neutralize, or mitigate the conflict. At the same time, it is critical to implement a mitigation plan early on. For this reason, contractors should be aware of signs that a contract could give rise to a perceived or actual OCI.
Indicator #1: The contract gives you access to nonpublic, competitively useful information about another procurement. For example, if while performing a contract to support an agency’s project management office, a contractor has access to information about the labor categories, labor rates, and/or estimated number of employee hours that other contractors use in their contracts with the agency, that contractor would likely have an unequal access to information OCI.
Indicator #2: The contract requires the contractor to assist the government in preparing specifications for an upcoming procurement. A biased ground rules OCI occurs when a contractor prepares or assists the government in preparing solicitation documents of future contract requirements. A contractor that has the ability to shape the requirements for a competitive acquisition would have a biased ground rules OCI if that company or an affiliate intended to compete in the procurement.
Indicator #3: The contract requires the contractor to evaluate the effectiveness of a program, and another division of the company has a contract that supports that program. This situation would give rise to an impaired objectivity OCI, which occurs when a contractor will evaluate its work, the work of an affiliate, or the work of a competitor.
When an indicator is identified, it is time to start thinking about mitigation strategies. Importantly, as noted above, it is often possible to mitigate an OCI. The mitigation and avoidance measures provided for in the plan must be tailored to address the requirements in the relevant contract(s) and the type(s) of OCIs presented. Although this may seem like a daunting task, OCI mitigation is achievable, and successful mitigation of OCIs may enable a contractor to continue to serve its agency customers—and potentially expand its portfolio.
On November 7, 2018, PilieroMazza will be presenting a webinar where these topics and more will be discussed. Learn more about the types of OCIs a contractor may face, as well as proven techniques and strategies to avoid, neutralize, and mitigate OCIs in a webinar entitled Understanding OCI Mitigation Plans.
About the author: Michelle Litteken is an associate with PilieroMazza in the Government Contracting and Litigation law groups. She may be reached at mlitteken@pilieromazza.com.