3.1103 Procedures
Source: FAR 3.1103 on acquisition.gov
Contractors must implement and enforce comprehensive procedures to identify, prevent, and report personal conflicts of interest for employees performing acquisition functions, ensuring integrity in government contracting.
Overview
FAR 3.1103 outlines the required procedures for contractors whose employees perform acquisition functions closely associated with inherently governmental functions, focusing on preventing personal conflicts of interest (PCI). Contractors must implement robust screening, disclosure, and oversight processes to identify and mitigate PCIs among covered employees. The regulation mandates the use of FAR clause 52.203-16 and details specific steps for disclosure, prevention, training, oversight, disciplinary action, and reporting of violations. Contracting officers are responsible for ensuring contractor compliance and for taking further action if violations are not adequately addressed.
Key Rules
- Employee Screening and Disclosure
- Contractors must obtain and maintain disclosures from covered employees regarding financial interests, employment relationships, and gifts, and require updates if circumstances change.
- Conflict Prevention and Mitigation
- Contractors must prevent covered employees from performing tasks where a PCI exists and cannot be mitigated, prohibit use of non-public information for personal gain, and require signed non-disclosure agreements.
- Employee Notification and Training
- Contractors must inform employees of their obligations to disclose and prevent PCIs, avoid using non-public information for personal gain, and avoid even the appearance of a conflict.
- Oversight and Enforcement
- Contractors must maintain oversight, take disciplinary action for non-compliance, and report violations to the contracting officer, including corrective actions taken.
- Contracting Officer Responsibilities
- Contracting officers must review contractor actions regarding violations and determine if further action is needed.
Responsibilities
- Contracting Officers: Ensure clause inclusion, review contractor reports, and take action if violations are unresolved.
- Contractors: Implement PCI procedures, screen and train employees, maintain oversight, and report violations.
- Agencies: Provide legal counsel and oversight as needed.
Practical Implications
- This section exists to protect the integrity of the acquisition process by preventing conflicts of interest among contractor employees. It impacts daily operations by requiring ongoing monitoring, documentation, and prompt reporting. Common pitfalls include inadequate disclosure processes, failure to update disclosures, and insufficient oversight or reporting.
(a) By use of the contract clause at 52.203-16, as prescribed at 3.1106, the contracting officer shall require each contractor whose employees perform acquisition functions closely associated with inherently Government functions to-
(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.
(2) For each covered employee-
(i) Prevent personal conflicts of interest, including not assigning or allowing a covered employee to perform any task under the contract for which the Contractor has identified a personal conflict of interest for the employee that the Contractor or employee cannot satisfactorily prevent or mitigate in consultation with the contracting agency;
(ii) Prohibit use of non-public information accessed through performance of a Government contract for personal gain; and
(iii) Obtain a signed non-disclosure agreement to prohibit disclosure of non-public information accessed through performance of a Government contract.
(3) Inform covered employees of their obligation-
(i) To disclose and prevent personal conflicts of interest;
(ii) Not to use non-public information accessed through performance of a Government contract for personal gain; and
(iii) To avoid even the appearance of personal conflicts of interest;
(4) Maintain effective oversight to verify compliance with personal conflict-of-interest safeguards;
(5) Take appropriate disciplinary action in the case of covered employees who fail to comply with policies established pursuant to this section; and
(6) Report to the contracting officer any personal conflict-of-interest violation by a covered employee as soon as identified. This report shall include a description of the violation and the proposed actions to be taken by the contractor in response to the violation, with follow-up reports of corrective actions taken, as necessary.
(b) If a contractor reports a personal conflict-of-interest violation by a covered employee to the contracting officer in accordance with paragraph (b)(6) of the clause at 52.203-16, Preventing Personal Conflicts of Interest, the contracting officer shall-
(1) Review the actions taken by the contractor;
(2) Determine whether any action taken by the contractor has resolved the violation satisfactorily; and
(3) If the contracting officer determines that the contractor has not resolved the violation satisfactorily, take any appropriate action in consultation with agency legal counsel.