Congress Takes Aim at Organizational Conflicts of Interest in Federal Acquisition

On March 23, 2022, a bipartisan group of senators introduced the Preventing Organizational Conflicts of Interest in Federal Acquisition Act. Designed to identify and address potential conflicts of interest in the federal acquisition system, current and prospective government contractors should closely monitor the Act’s progress.

The Act emphasizes the potential for conflicts of interest due to contractor business relationships that could lead to impaired objectivity or undue influence, and would require the Federal Acquisition Regulatory (FAR) Council to take certain actions within 18 months of enactment. Specifically, the FAR Council would be required to identify “contracting methods, types, and services that raise heightened concerns for potential organizational conflicts of interest” beyond those currently addressed in the FAR. The Act would also require the FAR Council to revise the FAR to achieve specific goals, including: (i) addressing organizational conflicts of interest “with sufficiently rigorous, comprehensive, and consistent governmentwide policy and guidance to prevent or effectively mitigate such conflicts of interest;” (ii) providing updated definitions related to conflicts of interest, including “contractor relationships with public, private, domestic, and foreign entities that may cause contract support to be subject to potential conflicts of interest, including undue influence;” (iii) providing solicitation and contract provisions for executive agencies that require contractors to disclose information relevant to potential conflicts of interest and to limit future contracting with respect to potential conflicts of interest; (iv) requiring executive agencies to tailor solicitation and contract clauses to provide specific information required to be disclosed and limitations on future contracting based on potential conflicts; and (v) requiring agencies to establish or update their procedures to implement any FAR revisions made pursuant to the Act.

Crowell will continue to track the Act as it makes its way through Congress.