As if corporate government contract compliance wasn’t difficult enough – security clearances, organizational conflicts of interest, post-government employment conflicts, corporate and agency non-disclosure agreements, cost accounting principles and standards… The list could go on for pages.
Well, back in December, FAR 3.11 was updated. Now contractors, big and small, are on the hook for one more requirement – Personal Conflicts of Interest. That’s right! For covered contracts you now will have to track your employees’ personal actions resulting from their work on government contracts performing or supporting “acquisition-related” work and report any violations to the Contracting Officer.
Late last year, DOD, GSA, and NASA finalized a rule designed to prevent personal conflicts of interests for contractor employees performing acquisition functions for government agencies. The new requirement has started to appear in contracts over the simplified acquisition threshold and requires the contractor do the following:
(1) Have procedures in place to screen covered employees for potential personal conflicts of interest by—
(i) Obtaining and maintaining from each covered employee, when the employee is initially assigned to the task under the contract, a disclosure of interests that might be affected by the task to which the employee has been assigned, as follows:
(A) Financial interests of the covered employee, of close family members, or of other members of the covered employee’s household.
(B) Other employment or financial relationships of the covered employee (including seeking or negotiating for prospective employment or business).
(C) Gifts, including travel; and
(ii) Requiring each covered employee to update the disclosure statement whenever the employee’s personal or financial circumstances change in such a way that a new personal conflict of interest might occur because of the task the covered employee is performing.
So, what if the contractor or the person doesn’t disclose such conflicts? FAR 3.1105 is very clear on this. “If the contracting officer suspects violation by the contractor of a requirement of paragraph (b), (c)(3), or (d) of the clause at 52.203-16, Preventing Personal Conflicts of Interest, the contracting officer shall contact the agency legal counsel for advice and/or recommendations on a course of action.” :-) I couldn’t help myself.
What could be appropriate action, in my humble opinion, may be removing the person from the responsibility where the COI exists. Or, it could be that the COI is so egregious that the contractor should have known and could be debarred. I could see either of these ends being plausible in the more and more cutthroat world of GC.
Did I mention this is also a subcontract FLOWDOWN requirement?
Bottom-line: If you don’t have a corporate COI policy, it is probably a good idea to form one now. Right now, it is just acquisition personnel, but looking at the landscape and recent changes in congressional reporting and COI indicates a more broad-range policy could be on the horizon.