3.1101 Definitions
Source: FAR 3.1101 on acquisition.gov
If contractor personnel support sensitive acquisition decisions, they may be “covered employees” whose financial interests, relationships, or outside activities must not compromise impartial service to the Government.
Overview
- FAR 3.1101 provides the core definitions used in Subpart 3.11, which addresses personal conflicts of interest involving contractor personnel who perform acquisition-related support for the Government.
- Its purpose is to identify which functions, which individuals, and which types of interests trigger the subpart’s conflict-of-interest safeguards.
Key Rules
- Acquisition functions closely associated with inherently governmental functions
- This term covers contractor support or advice involving key acquisition activities such as acquisition planning, defining requirements, developing statements of work, preparing or approving contractual documents, evaluating proposals, awarding contracts, administering contracts, terminating contracts, and assessing whether costs are reasonable, allocable, and allowable.
- Covered employee
- A covered employee is either a contractor employee performing one of these acquisition-related functions or a self-employed subcontractor performing those functions, because there may be no separate employer to receive required disclosures.
- Personal conflict of interest
- A personal conflict exists when a covered employee has a financial interest, personal activity, or relationship that could impair impartial performance in the Government’s best interest. The rule excludes de minimis interests that would not realistically impair impartiality.
Responsibilities
- Contracting Officers: identify contracts involving covered acquisition support functions and ensure the subpart’s safeguards are applied.
- Contractors: determine which personnel are covered employees and monitor for disqualifying financial interests, relationships, outside employment, and gifts.
- Agencies: oversee contractor performance in sensitive acquisition support roles and protect the integrity of procurement decisions.
Practical Implications
- This section matters because it defines the boundary between ordinary contractor support and work that creates heightened ethics risk.
- Contractors supporting source selections, contract administration, or requirement development should screen personnel carefully.
- A common pitfall is overlooking indirect interests, such as family financial holdings, job-seeking activity, consulting arrangements, or travel gifts, that could compromise objectivity.
As used in this subpart-
Acquisition function closely associated with inherently governmental functions means supporting or providing advice or recommendations with regard to the following activities of a Federal agency:
(1) Planning acquisitions.
(2) Determining what supplies or services are to be acquired by the Government, including developing statements of work.
(3) Developing or approving any contractual documents, to include documents defining requirements, incentive plans, and evaluation criteria.
(4) Evaluating contract proposals.
(5) Awarding Government contracts.
(6) Administering contracts (including ordering changes or giving technical direction in contract performance or contract quantities, evaluating contractor performance, and accepting or rejecting contractor products or services).
(7) Terminating contracts.
(8) Determining whether contract costs are reasonable, allocable, and allowable.
Covered employee means an individual who performs an acquisition function closely associated with inherently governmental functions and is-
(1) An employee of the contractor; or
(2) A subcontractor that is a self-employed individual treated as a covered employee of the contractor because there is no employer to whom such an individual could submit the required disclosures.
Personal conflict of interest means a situation in which a covered employee has a financial interest, personal activity, or relationship that could impair the employee’s ability to act impartially and in the best interest of the Government when performing under the contract. (A de minimis interest that would not "impair the employee’s ability to act impartially and in the best interest of the Government" is not covered under this definition.)
(1) Among the sources of personal conflicts of interest are-
(i) Financial interests of the covered employee, of close family members, or of other members of the covered employee's household;
(ii) Other employment or financial relationships (including seeking or negotiating for prospective employment or business); and
(iii) Gifts, including travel.
(2) For example, financial interests referred to in paragraph (1) of this definition may arise from-
(i) Compensation, including wages, salaries, commissions, professional fees, or fees for business referrals;
(ii) Consulting relationships (including commercial and professional consulting and service arrangements, scientific and technical advisory board memberships, or serving as an expert witness in litigation);
(iii) Services provided in exchange for honorariums or travel expense reimbursements;
(iv) Research funding or other forms of research support;
(v) Investment in the form of stock or bond ownership or partnership interest (excluding diversified mutual fund investments);
(vi) Real estate investments;
(vii) Patents, copyrights, and other intellectual property interests; or
(viii) Business ownership and investment interests.