OCI: A Trap for the Unwary

By FH+H Counsel Andrew Turley

The increase in the federal government’s use of advisory assistance and professional services contracts has been a boon for many small- to medium-sized businesses.  The increased government reliance on contractors generally has permitted many companies to become more integrated with agency operations and has been a great source of business. 

In certain circumstances, however, such work can also lead to restrictions on activities by the contractor as well as a limitation on future business prospects.  Handled correctly, these risks can be minimized for the benefit of both the government and the company.

What is an OCI?

Organizational Conflicts of Interest (OCI) may result when the work to be performed on a current or future contract may create a conflict of interest for the company.  The tension is between providing the best possible advice to the government while at the same time ensuring that your company has the opportunity to bid on future related or unrelated work with that or another agency. 

When does the issue arise?

OCIs often arise in the context of acquisition support, advisory and assistance services, technical evaluation services, program management support, and Systems Engineering and Technical Assistance contracts.  FAR Part 9.505 is a great starting point to gaining an understanding of OCI and how they may be mitigated.  Conflicts most often arise when a company is assisting with developing specifications or statements of work, conducting proposal evaluations, or generally being in a position to receive proprietary information from other companies. 

What is my responsibility?

Support contractors must ensure that the ground rules for competition are unbiased and that their own companies are not unfairly advantaged.  If rendering advice to the government on a procurement, they must ensure that their competing interests must not undermine their objectivity in rendering such advice.  Finally, they must ensure that any proprietary information received from prospective competitors do not give them a competitive advantage in current or future competitions for government work.

Who decides?

Contracting officers are charged with the responsibility to determine whether an OCI exists and how it may be mitigated.  It is a very fact-specific determination based on the CO’s best judgment.  There is no magic formula to resolving it. 

What should I do?

Contracting Officers will often turn to the companies for input into ways to mitigate or eliminate the conflict.  For this reason, it is critically important to identify when an OCI or an appearance of OCI may occur and develop strategies to address the impact of an OCI on current operations or future business prospects.  An unidentified or unmitigated OCI can lead to the loss of contracts, and in worst case scenarios, could result in criminal charges or debarment.

Who can help?

The attorneys at FH+H, many of whom have decades of experience in the arena of Federal Government Contracting, can assist companies with identifying and mitigating OCIs, as well as develop strategies and processes for avoiding OCIs.

Learn about our Government Contracts practice group here, or contact us for more information.

Let's Talk

Do you have questions, comments or just want more information? We would love to hear from you.

Contact Form

CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.

Connect with Us: Sign Up to Receive Email Updates

Stay Updated and Receive Occasional FH+H Updates