Subpart 3.6 Contracts with Government Employees or Organizations Owned or Controlled by Them
Source: FAR 3.6 on acquisition.gov
FAR Subpart 3.6 strictly prohibits awarding contracts to government employees or their controlled organizations unless a documented public interest exception is approved by agency leadership.
Overview
FAR Subpart 3.6 establishes strict policies prohibiting contracts with current government employees or organizations owned or substantially controlled by them, to prevent conflicts of interest and maintain public trust in federal procurement. The subpart outlines the general prohibition, limited exceptions, and the specific responsibilities of contracting officers in identifying and addressing potential conflicts. Exceptions may be granted only when the agency head or designee determines that the public interest outweighs the potential for conflict, and such determinations must be documented. Contracting officers are required to exercise due diligence in reviewing potential awardees for conflicts and must ensure compliance with these rules before proceeding with contract awards.
Key Rules
- Policy (3.601)
- Contracts may not be awarded to government employees or organizations owned or controlled by them, except as provided in 3.602.
- Exceptions (3.602)
- Exceptions are allowed only if the agency head or designee determines that awarding the contract is in the public interest, and this determination is documented in writing.
- Responsibilities of the Contracting Officer (3.603)
- Contracting officers must identify potential conflicts, ensure compliance with the prohibition, and document any exceptions or determinations.
Responsibilities
- Contracting Officers: Must screen for conflicts, document exceptions, and ensure compliance before awarding contracts.
- Contractors: Must disclose any ownership or control by government employees.
- Agencies: Must review and approve exceptions, and maintain documentation for oversight.
Practical Implications
- This subpart exists to prevent conflicts of interest and maintain integrity in federal contracting.
- It impacts daily contracting by requiring careful vetting of awardees and strict documentation.
- Common pitfalls include failure to identify conflicts or improper documentation of exceptions, which can result in contract invalidation or disciplinary action.