9.508 Examples
Source: FAR 9.508 on acquisition.gov
FAR 9.508 provides real-world examples to help contracting professionals identify and mitigate organizational conflicts of interest in government contracting.
Overview
FAR 9.508 provides practical examples of situations where organizational conflicts of interest (OCI) may arise, helping contracting officers interpret and apply the general OCI rules in FAR 9.505. The section illustrates various scenarios, such as when a contractor is involved in systems engineering, specification development, or evaluation activities, and clarifies when a contractor should be excluded from follow-on work or supply contracts to prevent unfair competitive advantage or impaired objectivity. These examples are not exhaustive but serve as guidance for identifying and mitigating OCIs in specific contract situations.
Key Rules
- Systems Engineering and Technical Direction
- Contractors providing systems engineering or technical direction should not supply components for the same system but may supply unrelated components.
- Specification Development and Follow-on Work
- Contractors who develop specifications or performance criteria may be excluded from follow-on acquisitions based on those specifications to avoid conflicts.
- Proprietary Information Handling
- Contractors accessing proprietary information must protect it and avoid using it for unauthorized purposes.
- Consulting Restrictions
- Contractors assisting in regulatory or evaluation processes may be restricted from consulting for applicants or participants during and after contract performance.
Responsibilities
- Contracting Officers: Must assess contract situations for potential OCIs using these examples as guidance and apply appropriate restrictions or exclusions.
- Contractors: Must comply with restrictions on follow-on work, protect proprietary information, and avoid roles that create conflicts.
- Agencies: Should ensure oversight and enforcement of OCI mitigation measures and restrictions.
Practical Implications
- This section exists to help contracting professionals recognize and address OCIs before awarding or administering contracts.
- It impacts daily contracting by clarifying when exclusions or restrictions are necessary to maintain fairness and integrity.
- Common pitfalls include failing to identify OCIs early or improperly allowing conflicted contractors to participate in follow-on work.
The examples in paragraphs (a) through (i) of this section illustrate situations in which questions concerning organizational conflicts of interest may arise. They are not all inclusive, but are intended to help the contracting officer apply the general rules in 9.505 to individual contract situations.
(a) Company A agrees to provide systems engineering and technical direction for the Navy on the powerplant for a group of submarines (i.e., turbines, drive shafts, propellers, etc.). Company A should not be allowed to supply any powerplant components. Company A can, however, supply components of the submarine unrelated to the powerplant (e.g., fire control, navigation, etc.). In this example, the system is the powerplant, not the submarine, and the ban on supplying components is limited to those for the system only.
(b) Company A is the systems engineering and technical direction contractor for system X. After some progress, but before completion, the system is canceled. Later, system Y is developed to achieve the same purposes as system X, but in a fundamentally different fashion. Company B is the systems engineering and technical direction contractor for system Y. Company A may supply system Y or its components.
(c) Company A develops new electronic equipment and, as a result of this development, prepares specifications. Company A may supply the equipment.
(d) XYZ Tool Company and PQR Machinery Company, representing the American Tool Institute, work under Government supervision and control to refine specifications or to clarify the requirements of a specific acquisition. These companies may supply the item.
(e) Before an acquisition for information technology is conducted, Company A is awarded a contract to prepare data system specifications and equipment performance criteria to be used as the basis for the equipment competition. Since the specifications are the basis for selection of commercial hardware, a potential conflict of interest exists. Company A should be excluded from the initial follow-on information technology hardware acquisition.
(f) Company A receives a contract to define the detailed performance characteristics an agency will require for purchasing rocket fuels. Company A has not developed the particular fuels. When the definition contract is awarded, it is clear to both parties that the agency will use the performance characteristics arrived at to choose competitively a contractor to develop or produce the fuels. Company A may not be awarded this follow-on contract.
(g) Company A receives a contract to prepare a detailed plan for scientific and technical training of an agency’s personnel. It suggests a curriculum that the agency endorses and incorporates in its request for proposals to institutions to establish and conduct the training. Company A may not be awarded a contract to conduct the training.
(h) Company A is selected to study the use of lasers in communications. The agency intends to ask that firms doing research in the field make proprietary information available to Company A. The contract must require Company A to-
(1) Enter into agreements with these firms to protect any proprietary information they provide; and
(2) Refrain from using the information in supplying lasers to the Government or for any purpose other than that for which it was intended.
(i) An agency that regulates an industry wishes to develop a system for evaluating and processing license applications. Contractor X helps develop the system and process the applications. Contractor X should be prohibited from acting as a consultant to any of the applicants during its period of performance and for a reasonable period thereafter.