Policy
Contracting officers must not award contracts to Government employees or their controlled entities to prevent conflicts of interest and favoritism, with limited exceptions for special Government employees.
Overview
FAR 3.601 establishes a strict policy prohibiting contracting officers from knowingly awarding contracts to current Government employees or to businesses substantially owned or controlled by Government employees, except under specific circumstances outlined in FAR 3.602. The intent is to prevent conflicts of interest and avoid any appearance of favoritism or preferential treatment in the contracting process. The regulation also clarifies that special Government employees (such as experts, advisors, or consultants) are generally not considered Government employees for this purpose, unless the contract is directly related to their special Government employee activities, they can influence the award, or another conflict of interest is identified.
Key Rules
- Prohibition on Awards to Government Employees
- Contracting officers must not knowingly award contracts to Government employees or entities they own/control, except as allowed by FAR 3.602.
- Conflict of Interest Prevention
- The policy is designed to prevent both actual and perceived conflicts of interest and favoritism.
- Special Government Employees Exception
- Special Government employees are excluded from this prohibition unless their contract arises from their special role, they can influence the award, or another conflict exists.
Responsibilities
- Contracting Officers: Must screen for and avoid awarding contracts to Government employees or their controlled entities, and assess potential conflicts of interest involving special Government employees.
- Contractors: Must disclose ownership/control information and any potential conflicts of interest.
- Agencies: Should provide oversight and ensure compliance with conflict of interest policies.
Practical Implications
- This policy exists to maintain integrity and public trust in the federal procurement process.
- It impacts daily contracting by requiring due diligence in vetting potential awardees for Government employee involvement.
- Common pitfalls include failing to identify indirect ownership or control, or overlooking special Government employee status.