Organizational conflicts of interest (OCIs) continue to be a critical compliance risk in the federal contracting landscape. The Federal Acquisition Regulation (FAR) mandates that contracting officers “avoid, neutralize, or mitigate” OCIs to ensure that government decisions are made objectively and without improper influence. For contractors — especially those engaged in professional services, systems engineering, or technical support — the presence (or even the appearance) of an OCI can lead to lost contract awards, contract terminations, or bid protest challenges. Below are six key tips to help contractors proactively address OCI risks throughout the procurement lifecycle.
1. Understand the Three Core Types of OCIs
Before you can avoid or mitigate an OCI, you need to know what you’re dealing with. The FAR and related case law recognize three primary categories of OCIs:
- Biased Ground Rules – Occurs when a contractor helps draft or otherwise shape the requirements for a solicitation, potentially skewing the competition
- Impaired Objectivity – Arises when a contractor’s judgment in evaluating products or services could be compromised due to other business interests
- Unequal Access to Information – Happens when a contractor gains non-public, competitively useful information through prior or existing work, giving it an unfair advantage
Being able to spot which type may be implicated is essential for crafting an effective compliance strategy.
2. Conduct an Internal OCI Assessment Early
OCI issues often surface during proposal development or after award — both high-risk times for your business. Thus, contractors should instead conduct a pre-proposal OCI screening for each opportunity, reviewing:
- Prior or current contracts that may overlap in scope or subject matter
- Involvement in drafting the solicitation or advising the agency
- Subcontractor or teaming partner relationships that may raise OCI concerns
This due diligence should be documented and updated regularly, especially if organizational changes occur.
3. Develop and Maintain an OCI Compliance Plan
An effective OCI mitigation or avoidance strategy often hinges on a written, proactive plan. Key components should include:
- Firewalls – Clearly separate personnel and systems to prevent the flow of non-public or sensitive information
- Screening Procedures – Pre-assignment reviews to ensure staff are not conflicted
- Non-Disclosure Agreements (NDAs) – Ensure employees, subcontractors, and teaming partners sign NDAs specific to each project
- Training – Regular OCI training for staff involved in proposal development, contract performance, and business development
The existence of a documented and credible plan can also be persuasive in responding to agency inquiries or protest allegations.
4. Engage with the Contracting Officer Early
If there’s any ambiguity about a potential OCI, it’s usually best to disclose the issue to the agency up front. FAR Subpart 9.5 requires that contracting officers identify and resolve OCIs. Voluntary disclosure shows good faith and allows you to shape the narrative and propose your own mitigation approach, rather than waiting for the agency or a protester to define the issue for you.
5. Tailor Mitigation Strategies to the Specific Conflict
Not all OCIs are created equal — and not all can be mitigated. But where mitigation is appropriate, it is important to be specific. Generic assertions of “firewalls” or “screening” will not suffice. Instead, provide information such as:
- Named individuals responsible for OCI compliance
- Details of data segregation procedures
- Timing and documentation of mitigation efforts
- Evidence that mitigation measures are in place and effective
Tailored mitigation is often the difference between staying in the competition and being eliminated.
6. Stay Vigilant Post-Award
OCI compliance doesn’t end when the contract is awarded. Performance-related conflicts may arise if your company acquires a new business, hires former government officials, or is awarded additional work. Regular internal reviews, coupled with clear communication with the contracting officer, are essential to staying on the right side of FAR 9.5.
Conclusion
OCIs are a complex and evolving area of government contracts law — but they’re not insurmountable. With proactive planning, robust internal controls, and open communication with the government, contractors can avoid or mitigate even complex OCI scenarios. Failing to do so, however, can result in costly bid protests, reputational damage, and lost opportunities.