Rules on personal conflicts considered

Addressing the possibility of personal conflicts of interest in federal contracting would be an appropriate topic for a separate, narrowly defined segment of the Federal Acquisition Regulation, according to the Professional Services Council (PSC).

Currently, the regulation does not address such conflicts, which are typically covered under ethics rules and prohibitions instituted by government agencies and contractors.

In March, the federal acquisition regulation councils issued a notice of proposed rulemaking that requested comments to determine whether the regulation ought to address personal conflicts of interest and how those disclosures might be done.

On July 17 PSC submitted separate comments on a notice of proposed rulemaking the councils published regarding organizational conflicts of interest.

PSC, a trade association for professional services contractors, recommended in its comments July 23 that further attention to personal conflicts is necessary and appropriate, given concerns raised in recent Government Accountability Office reports and protests. The focus is on the potential for undisclosed conflicts to influence government decision-making on contracts.

“To the extent that regulations are necessary, we support creating a narrowly prescribed set of disclosures, applicable to a narrowly defined set of contractor employees who may be susceptible to potential personal conflicts of interest that would affect the government’s decision-making processes,” wrote Alan Chvotkin, PSC’s executive vice president.

At the same time, there should be no standard clause, he wrote. And as a general policy, the contracting officer should examine each potential conflict and its mitigation plan closely, but at the same time encourage an environment in which such mitigation plans are acceptable when the government determines its interests will not be compromised, PSC added.

The coverage should focus on the work being performed, not where it is performed, and must describe the work specifically and not through the use of general phrases such as “inherently governmental functions,” PSC said.

It is also important to recognize that personal conflicts of interest and organizational conflicts of interest are separate and distinct and one can exist without the other, Chvotkin wrote.

PSC suggested that if the acquisition regulation addresses personal conflicts, it ought to be in a new subpart to Part 9. It should include a description of general principles relating to personal conflicts of interest and a description of the duties, timing, roles and requirements for agencies, contracting officers and contractors.

In defining a personal conflict, PSC is recommending that the regulation address factors including unequal access to information and impaired objectivity.

Once the government identifies areas of concern for personal conflicts of interest, the responsibility for implementation should rest with the contractor, PSC recommended. The implementation should be modeled after FAR’s ethics and compliance rule of November 2007, the council said.

As part of that implementation, contractors should conduct a risk assessment of its lines of business and develop policies and internal controls suitable to address those risks, PSC said. The contractors also must develop internal employee disclosure practices, and government disclosure and mitigation plans tailored to the specific personal conflicts that are identified.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

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