Organizational Conflicts of Interest (OCIs) - Definition and Meaning

The purpose of the Organization Conflicts of Interest rules that were established in the Federal Acquisition Regulations (FAR) back in 2010 were to avoid, neutralize, or mitigate organization conflicts of interest that might otherwise exist in some contracting situations (See Organization Conflicts of Interest (OCI) for further background).

The situations in which OCIs arise, as described in FAR 9.5 can be broadly categorized into three groups: biased ground rules, unequal access to information, and impaired objectivity. Since adoption, unsuccessful bidders have had another weapon at their disposal to use when protesting awards to competitors and there have already been a plethora of protests that have included OCI challenges (See for example Organizational Conflicts of Interests (OCIs) - Strong and Direct Linkage Needed).

Many of the OCI protest decisions so far have involved unequal access to information. Unequal access to information OCI exists where a firm has access to nonpublic information as part of its performance of a Government contract, and where that information may provide the firm a competitive advantage in a later competition for a Government contract. This is rather difficult for a protestor to prove however. The identification of conflicts of interest is a fact-specific inquiry that requires the exercise of considerable discretion. A protestor must identify hard facts that indicate the existence or potential existence of a conflict. Mere inference or suspicion of an actual or potential conflict is not enough.

In a recent bid protest case, Unsuccessful Bidder (UnB) protested a Department of Labor (DOL) contract because the Winning Bidder (WB) had previously performed contract work in DOL Headquarters which provided WB with intimate details of a wide range of information that was highly relevant to the procurement. This familiarity, UnB alleged, gave WB an unfair competitive advantage that DOL failed to identify and mitigate.

The problem with the allegation is that UnB had no specific facts to back its claim. When the Comptroller General looked into the situation, it found that the contracting officer had indeed looked into the matter prior to awarding the contract and determined that there was no potential of a significant OCI arising from the work that WB had performed. Absent specific facts, the Comptroller General is not going to second-guess the determination.