9.507-2 Contract clause
Source: FAR 9.507-2 on acquisition.gov
When imposing organizational conflict of interest restrictions, the contract clause must clearly define the nature and fixed duration of the restraint, ensuring it is reasonable and negotiated with the contractor.
Overview
FAR 9.507-2 outlines requirements for including contract clauses that impose restrictions on contractors’ eligibility for future awards due to organizational conflicts of interest (OCI). When such restrictions are necessary as a condition of award, the solicitation must include a proposed clause detailing the nature and duration of the restraint. The contracting officer is responsible for negotiating the final terms of this clause with the successful offeror, if appropriate. The duration of any imposed restraint must be reasonable and clearly defined, either by a specific date or by an identifiable event, to prevent unfair competitive advantage or bias. The clause should not impose indefinite or overly broad restrictions, but rather be tailored to the specific circumstances of the contract and the potential OCI risk involved.
Key Rules
- Inclusion of Restrictive Clauses
- Solicitations must include a proposed clause specifying the nature and duration of any restraint on future contracting eligibility due to OCI concerns.
- Negotiation of Clause Terms
- Contracting officers should negotiate the final terms of the clause with the successful offeror, as appropriate.
- Reasonable and Fixed Duration
- Any restraint must be limited to a reasonable, fixed term, ending on a specific date or upon an identifiable event, to address the OCI risk without being unnecessarily restrictive.
Responsibilities
- Contracting Officers: Draft, negotiate, and include appropriate restrictive clauses in solicitations and contracts when OCI restraints are required; ensure the duration and scope are reasonable and clearly defined.
- Contractors: Review and negotiate the terms of any proposed restraint clause; comply with the agreed-upon restrictions regarding future contract eligibility.
- Agencies: Oversee the proper application of OCI restrictions and ensure compliance with FAR requirements.
Practical Implications
- This section ensures that OCI-related restrictions are transparent, negotiated, and not overly broad, protecting both the government’s interests and contractor fairness. Contractors should be vigilant in reviewing proposed clauses and negotiating reasonable terms. Common pitfalls include failing to specify clear termination conditions or imposing unnecessarily long or vague restrictions.
(a) If, as a condition of award, the contractor’s eligibility for future prime contract or subcontract awards will be restricted or the contractor must agree to some other restraint, the solicitation shall contain a proposed clause that specifies both the nature and duration of the proposed restraint. The contracting officer shall include the clause in the contract, first negotiating the clause’s final terms with the successful offeror, if it is appropriate to do so (see 9.506(d)).
(b) The restraint imposed by a clause shall be limited to a fixed term of reasonable duration, sufficient to avoid the circumstance of unfair competitive advantage or potential bias. This period varies. It might end, for example, when the first production contract using the contractor’s specifications or work statement is awarded, or it might extend through the entire life of a system for which the contractor has performed systems engineering and technical direction. In every case, the restriction shall specify termination by a specific date or upon the occurrence of an identifiable event.