The phrase organizational conflict of interest (“OCI”) may result in uncertainty and even anxiety for many government contractors. A contractor may be unsure as to whether it may have an OCI if it submits a proposal for or is awarded a contract. And, if the contractor has an OCI, it may not know if the OCI can be mitigated or what to do to mitigate or avoid the OCI. These are critical considerations, as an OCI may result in an offeror being excluded from a competition, a protest of a contract award, or, potentially, the termination of an existing contract.

The first step is to understand the types of OCI that exist because understanding the three types of OCI is essential to determining whether there is a potential or actual OCI. Additionally, understanding the type(s) of OCI presented by a particular contract is necessary to determine what mitigation techniques can effectively address the OCI risk. There are three types of OCI:

  • An unequal access to information OCI occurs when a contractor has access to competitively useful nonpublic information for an ongoing procurement that it obtained through the performance of another contract.
  • biased ground rules OCI occurs when a contractor prepares or assists in preparing solicitation documents of future contract requirements.
  • An impaired objectivity OCI occurs when a contractor will evaluate its products or the products of a competitor if it is awarded the contract.

A single contract can give rise to one or more types of OCI. For example, a contractor providing acquisition support may have access to nonpublic competitively useful information (giving rise to an unequal access to information OCI) and may have the ability to influence the requirements included in a solicitation (creating a risk of a biased ground rules OCI). All aspects of the scope of work should be considered in determining the nature of the OCI risk.

Once the OCI risks are identified, a mitigation plan can be developed. The plan should be tailored to the company’s capabilities, the services performed under the contract, and the types of OCI associated with performance. It is important to understand that a mitigation measure that addresses one type of OCI may not address other types of OCI. By way of example, an informational firewall may effectively mitigate an unequal access to information OCI, but it would not mitigate a biased ground rules or impaired objectivity OCI. Indeed, biased ground rules and impaired objectivity OCI are notoriously difficult to mitigate. However, mitigating these types of OCI is not impossible. Creatively using subcontractors, recusal, and implementing objective standards have been found to successfully mitigate difficult OCI.

There is no reason to fear an OCI. Understanding OCI and developing effective mitigation and avoidance strategies can help ensure a contractor’s ability to compete and expand. If you have any questions regarding OCI or need assistance drafting an OCI mitigation plan, please contact PilieroMazza’s Government Contracts group for assistance.

About the author: Michelle Litteken is an associate with PilieroMazza in the Government Contracting and Litigation law groups. She may be reached at [email protected].