An organizational conflict of interest (OCI) arises when the performance of one contract undermines a contractor’s objectivity or creates an unfair competitive advantage with respect to another contract. An agency cannot issue an award to a contractor that possesses a significant OCI unless that OCI has been avoided, mitigated or waived. Many government contracts include clauses that require contractors to avoid potential OCIs; to notify the government of any OCIs that arise after award; and to work with the government to mitigate any such OCIs. Some contracts also avoid OCIs proactively by precluding the contractor from performing specific types of work.

Most sophisticated government contractors have procedures to screen for OCIs. This allows a contractor to comply with OCI prohibitions and analyze the impact of each opportunity on its portfolio of government business, to avoid competing for current contracts that would unacceptably restrict its ability to obtain significant future work.

Originally published in Federal Contracts Report on October 11, 2016.