52.203-16
Preventing Personal Conflicts of Interest
Contractors must proactively identify, prevent, and report personal conflicts of interest among employees performing acquisition functions to protect the integrity of government contracting.
Overview
FAR 52.203-16, Preventing Personal Conflicts of Interest, establishes requirements for contractors whose employees perform acquisition functions closely associated with inherently governmental functions. The clause aims to prevent personal conflicts of interest (PCI) among contractor and certain subcontractor employees, ensuring impartiality and protecting the integrity of the federal acquisition process. Contractors must implement procedures to identify, prevent, and mitigate PCIs, maintain oversight, and report violations to the Contracting Officer. The clause also requires flow-down to certain subcontracts and provides for mitigation or waiver in exceptional circumstances.
Key Rules
- Screening and Disclosure
- Contractors must screen covered employees for potential PCIs and obtain initial and updated disclosures of interests that could affect impartiality.
- Prevention and Mitigation
- Contractors must prevent or mitigate identified PCIs, prohibit use of non-public information for personal gain, and require signed non-disclosure agreements.
- Employee Awareness and Oversight
- Contractors must inform employees of their obligations, maintain oversight, and take disciplinary action for non-compliance.
- Reporting Violations
- Contractors must report PCI violations to the Contracting Officer, including corrective actions taken.
- Mitigation or Waiver Requests
- In exceptional cases, contractors may request mitigation plans or waivers through the Contracting Officer.
- Subcontract Flow-down
- The clause must be included in subcontracts above the simplified acquisition threshold where acquisition functions are performed.
Responsibilities
- Contracting Officers: Ensure inclusion of the clause, review mitigation/waiver requests, and oversee contractor compliance.
- Contractors: Implement PCI procedures, screen and inform employees, maintain oversight, report violations, and flow down the clause to applicable subcontracts.
- Agencies: Review and approve mitigation or waiver requests, and monitor contractor compliance.
Practical Implications
- This clause is designed to protect the integrity of government acquisitions by preventing conflicts that could bias contractor employees. Contractors must have robust compliance programs, regular training, and effective oversight to avoid violations. Failure to comply can result in disciplinary action, contract remedies, or reputational harm. Common pitfalls include inadequate screening, failure to update disclosures, and insufficient reporting of violations.