DOD gives new guidance on conflicts of interest

Officials choose resolving conflicts while promoting competition and preserving access to expertise

The Defense Department’s contracting officers now have clearer guidance on how to handle conflicts of interest in a way that will help them get unbiased industry advice on programs.

In a major revision, the final rule on organizational conflicts of interest tells contracting officers to minimize the risk of conflicts in a variety of ways but cautions against limiting the pool of potential advisers by using broad restrictions. DOD officials want their agencies to solve those predicaments in ways that promote competition and preserve access to contractors’ expertise.

That is a change from the initial proposal, released in April. At that time, DOD wanted contracting officers to use mitigation to resolve conflicts. But several industry groups and experts said DOD officials were not clear enough in that proposal and didn’t meet Congress’ intent for protecting the government.

After reviewing comments on its proposal, DOD officials said a formal preference for mitigation might not have been the best strategy because it could have unintentionally encouraged contracting officers to make decisions without considering all the facts and information.

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The Professional Services Council said government officials would not have supported the mitigation strategies that companies proposed.

DOD’s rules on organizational conflicts of interest went into effect in late December.

In the Weapon Systems Acquisition Reform Act of 2009, Congress required DOD to create uniform guidance on conflicts of interest and tighten existing requirements.

A number of comments on the proposed rule brought up the issue of where to place the regulation in the Defense Federal Acquisition Regulations System. Some experts thought it belonged in the section on improper business practices, but several said it fit best in the Contractor Qualifications section because the rule deals with a company’s responsibilities as a business partner with the government.

Officials decided to put the rule in the Contractor Qualifications section but said the placement does not lend credence to the idea that a conflict of interest is in the same category as criminal conduct.

They cautioned that another proposed rule regarding employee conflicts of interest might require them to relocate the new rule.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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