Legal Issues: Is Your Company Conflicted? By Jonathan Williams Successful performance on government contracts often feeds on itself, resulting in new opportunities for the contractor with the same agency or in the same field. While largely a good thing, prior work for the government may give rise to an organizational conflict of interest, or “OCI,” that will limit new contract opportunities and make contract awards vulnerable to protest. Therefore, it is important to be mindful of whether an organization is conflicted. To help answer that question, this article addresses the different types of OCI and the preventative measures that can be taken to avoid negative repercussions. There are three generally recognized categories of OCI: “impaired objectivity,” “biased ground rules” and “unequal access to information.” The first category, “impaired objectivity,” occurs when a contractor’s responsibilities under one contract could impair its objectivity in providing advice or assistance to the government under another contract. The next OCI category, “biased ground rules,” occurs when a firm, as part of its performance of one government contract, helps establish the requirements for a second project. The third OCI category, “unequal access to information,” arises when a company has access to nonpublic information as part of its performance of a government contract and that information unfairly gives the firm a competitive advantage in a later competition. Given the negative consequences, companies must actively seek to avoid and mitigate OCI. Contractors must be aware of whether OCI contract clauses are included in prime and subcontracts and must understand what such clauses require and how to maintain compliance. Contractors should also have written OCI policies and should require the same of any subcontractors. At a minimum, the OCI policy should include methods to facilitate (1) identification and evaluation of all perceived, potential or actual OCI as early in the acquisition process as possible; (2) compliance with all contractual or regulatory reporting requirements related to OCI; and (3) implementation of OCI mitigation plans. Lastly, employees should be made aware of a company’s OCI policy and trained in identifying, avoiding, and mitigating conflicts. If and when an OCI is discovered, proper mitigation is the key to avoiding or lessening the adverse impact. Depending on the nature of the OCI, mitigation may include: creating “firewalls” to segregate conflicted management or employees; using a confidentiality or non-disclosure agreement with each employee to specify how sensitive information should be handled; establishing storage, handling and transfer procedures for sensitive information; requiring OCI mitigation plans from subcontractors; and conducting internal audits of recordkeeping and reporting. In those instances when an OCI is discovered that cannot be mitigated, the conflicted organization may need to recuse itself from the contracting opportunity. In conclusion, government contractors ignore OCI issues at their own peril. With some adept planning, a prudent contractor can mitigate the harms caused by OCI, if not avoid them altogether. We routinely work with clients to develop and audit OCI policies and mitigation plans, so please contact us if you have questions or would like assistance with OCI issues. Jonathan Williams, an associate with PilieroMazza PLLC, practices in the areas of government contracts, general corporate matters, and telecommunications law. Mr. Williams also has an emphasis on federal procurement programs such as the 8(a), small disadvantaged and HUBZone programs.