Regulators Look at Conflict-of-Interest Rules The Federal Acquisition Regulation councils are considering establishing personal conflict-of-interest rules for contractor employees. In a notice in the March 26 Federal Register, the councils asked for comments that would help them decide how to write a rule, if one is necessary. Both the Government Accountability Office and the Acquisition Advisory Panel have recommended such rules. The FAR councils are working on a separate rule governing organizational conflicts of interest. “The Federal Government is increasingly turning to private contractors to perform a wide array of its work,” the councils said. “As a result, contractor employees are increasingly working side-by-side with Federal employees, but are not subject to the same ethical safeguards that have been put in place for Federal employees to ensure the integrity of Government operations. Issues such as financial conflicts of interest, impartiality concerns, misuse of information, misuse of apparent or actual authority, and misuse of property are all areas of potential personal conflicts of interest for contractor employees that could result in harm to the public fisc and loss of public confidence in Government.” In its March 7 report, GAO found that contractor employees, unlike their federal counterparts, are not required to disclose their financial interests or to avoid the appearance of impartiality. No rules prohibit them from participating in a matter that affects their personal interest; accepting travel and gifts; using nonpublic information for personal gain; or misusing their positions to provide preferential treatment to a private interest. Nor do contractor employees have restrictions on their future employment, as federal workers do. After surveying practices in the Defense Department, GAO said, “No departmentwide or FAR policy obliges DOD offices using contractor employees to require that they be free from personal conflicts of interest.” (SAA, 3/21) But industry executives told the auditors that administering conflict-of-interest rules would add to the government’s costs. Many in industry said new rules were not needed because government officials, not contractor employees, make the decisions. The notice is FAR case 2007-017. Comments are due May 27.