Organizational Conflicts of Interest (OCI) Guide for Government Contractors
Complete guide to organizational conflicts of interest in federal contracting. Learn about OCI types, identification, mitigation strategies, and how to avoid disqualification from contract awards.
Quick Answer
An Organizational Conflict of Interest (OCI) occurs when a contractor's relationships, activities, or access to information could give them an unfair competitive advantage or impair their ability to provide impartial advice. OCIs can result in disqualification from contracts, termination, and debarment. FAR 9.5 governs OCI identification and mitigation.
What is an OCI?
An Organizational Conflict of Interest exists when a contractor's work for the government or relationships with other entities creates situations where the contractor might be unable to render impartial assistance or advice, or might have an unfair competitive advantage.
OCIs are fundamentally about protecting the integrity of the procurement process. The government needs to ensure that contractors can perform objectively and that competition is fair. Unlike personal conflicts of interest (which involve individual employees), OCIs arise from the contractor organization's position and activities.
Why OCIs Matter
- Ensure government receives unbiased advice and services
- Maintain fair and open competition
- Protect public trust in procurement process
- Prevent self-dealing and unfair advantages
- Reduce GAO protests and award challenges
Types of OCIs
FAR 9.5 recognizes three primary categories of organizational conflicts of interest.
Unequal Access to Information
Competitive Advantage OCI
Occurs when a contractor has access to nonpublic information as part of its performance of a government contract and that information could provide an unfair competitive advantage in a later competition.
Examples:
- • SETA contractor learns incumbent pricing for recompete
- • IT support contractor accesses proposal evaluation data
- • Consultant sees proprietary competitor information
Biased Ground Rules
Specification OCI
Occurs when a contractor drafts specifications, statements of work, or evaluation criteria for a procurement in which it might also compete.
Examples:
- • A/E firm designs building then bids on construction
- • Consultant writes RFP requirements then proposes
- • Contractor develops specs favoring its own products
Impaired Objectivity
Advisory OCI
Occurs when a contractor's ability to provide impartial advice to the government is compromised by its own financial or other interests.
Examples:
- • Contractor evaluates its own products for government
- • Parent company advises on procurement involving subsidiary
- • Consultant recommends solutions from affiliated vendor
Identifying OCIs
Both contractors and contracting officers have responsibility for identifying potential OCIs. Early identification is crucial for successful mitigation.
High-Risk Contract Types
- • Systems engineering and technical assistance (SETA)
- • Advisory and assistance services
- • Acquisition support services
- • IT support with access to source selection data
- • Independent verification and validation (IV&V)
- • Engineering studies and analyses
- • Program management support
Red Flags to Watch
- • Access to procurement-sensitive information
- • Work that defines requirements for future contracts
- • Evaluation or recommendation roles
- • Ownership interests in competitors
- • Parent/subsidiary relationships in same market
- • Former employees with insider knowledge
- • Teaming partners with conflicting interests
OCI Self-Assessment Questions
Mitigation Strategies
When an OCI is identified, it must be either avoided or mitigated. The appropriate strategy depends on the type and severity of the conflict.
Common Mitigation Measures
Firewalls
Physical, electronic, and procedural barriers preventing information sharing between affected personnel
Recusal
Removing conflicted individuals or business units from participation in the affected work
Nondisclosure Agreements
Binding agreements preventing use or disclosure of sensitive information
Divestiture
Selling or divesting the conflicting business interest
Exclusion from Competition
Voluntarily or involuntarily withdrawing from the follow-on competition
Unequal Access
Firewalls, NDAs, information security controls, segregation of duties
Biased Ground Rules
Exclusion from follow-on competition, government review of specifications
Impaired Objectivity
Recusal, independent review, divestiture of conflicting interests
Disclosure Requirements
What to Disclose
- All known potential or actual OCIs
- Related work performed for government or private sector
- Parent, affiliate, and subsidiary activities
- Teaming and subcontracting relationships
- Proposed mitigation measures
Affirmative Duty to Disclose
Contractors have an affirmative duty to disclose potential OCIs. Failure to disclose can result in proposal rejection, contract termination, and potential debarment—even if the OCI could have been mitigated had it been disclosed.
Consequences of OCIs
Procurement Stage
- • Proposal rejection
- • Exclusion from competition
- • GAO protest sustaining
- • Award to competitor
- • Negative publicity
Post-Award
- • Contract termination for default
- • Repayment of contract amounts
- • Debarment from future contracts
- • False Claims Act liability
- • Criminal prosecution (extreme cases)
Best Practices
Establish OCI Program
Create formal OCI identification, disclosure, and mitigation procedures. Assign responsibility to a compliance officer.
Train Employees
Ensure all BD and program staff understand OCI concepts and their obligation to report potential conflicts.
Screen Opportunities Early
Evaluate potential OCIs during bid/no-bid decisions before investing B&P resources.
Document Everything
Maintain records of OCI analyses, disclosures, and mitigation measures for every opportunity.
Engage Legal Counsel
Consult with experienced government contracts attorneys for complex OCI situations.
Proactive Disclosure
When in doubt, disclose. It's better to address potential OCIs early than face challenges later.
Frequently Asked Questions
Can OCIs always be mitigated?
Not always. Some OCIs are considered "hard" conflicts that cannot be adequately mitigated—particularly impaired objectivity situations. The contracting officer has discretion to determine whether proposed mitigation is sufficient.
Are subcontractor OCIs my responsibility?
Yes, prime contractors are responsible for identifying and mitigating OCIs throughout their team, including subcontractors and consultants. You must include OCI provisions in subcontracts.
How long do OCI restrictions last?
OCI restrictions typically last for the duration of the creating contract plus any follow-on competitions. Some agencies impose specific time limits (e.g., 3 years after contract completion). Check specific contract clauses.
Can competitors protest based on OCI?
Yes, OCI is a common basis for GAO protests. Competitors can challenge whether the agency properly identified and evaluated OCIs or whether mitigation measures were adequate.
Does my company size affect OCI analysis?
Large contractors with multiple divisions and diverse work portfolios face more complex OCI situations than small specialists. However, the same rules apply regardless of size.
Find Conflict-Free Opportunities with BidFinds
The best way to avoid OCIs is to build a diverse portfolio. BidFinds helps you discover opportunities across all 50 states and multiple agencies.
Ready to Find Your Next Contract?
Get instant access to thousands of government construction bids with our AI-powered platform.
Get Started