In recent years, the Government Accountability Office (GAO) has increasingly scrutinized organizational conflicts of interest (COIs) with government contractors. If a COI is discovered that the contractor hadn't previously disclosed, it could delay the award while the COI is investigated — or worse, it could disqualify the contractor for the award. And in the Internet age, it's easier than ever for your competitors to investigate possible COIs and protest the awarded contract should they find such an issue.
Part 9.5 of the FAR covers conflicts of interest. From part 9.505:
"Each individual contracting situation should be examined on the basis of its particular facts and the nature of the proposed contract. The exercise of common sense, good judgment, and sound discretion is required in both the decision on whether a significant potential conflict exists and, if it does, the development of an appropriate means for resolving it. The two underlying principles are—
(a) Preventing the existence of conflicting roles that might bias a contractor's judgment; and
(b) Preventing unfair competitive advantage. In addition to the other situations described in this subpart, an unfair competitive advantage exists where a contractor competing for award of any Federal contract possesses—
- Proprietary information that was obtained from a Government official without proper authorization; or
- Source selection information (as defined in 2.101) that is relevant to the contract but is not available to all competitors, and such information as would assist that contractor in obtaining the contract."
Here are some examples of possible Conflicts of Interest:
- Competing for a management/services contract that might require the contracting company to evaluate its own or its competitors' products for use by the government
- Competing to supply products/services for which you have designed the specifications
- Access to other companies' proprietary information that has not been authorized for use in landing/performing the contract
- Access to other companies' proprietary information obtained by leveraging the contract in question, which might provide an unfair competitive advantage"
If a legitimate conflict of interests exists, it's probably in everyone's best interest for the contractor involved to withdraw from the contract. However, if you feel it's possible for your company to complete the contract without running afoul of a potential COI, there are avenues to pursue. It's important to be honest and up-front about COIs in your proposal. If it's informational in nature, go into detail about what restrictions will be placed on the information's use in the contract, and explain how an unfair competitive advantage has been avoided.