The Federal Acquisition Regulatory (FAR) Council has proposed a policy to prevent personal conflicts of interest for contractor employees who perform federal acquisition functions. The proposal, which was developed in conjunction with the Office of Federal Procurement Policy (OFPP), seeks to establish a new subpart under FAR Part 3 to address conflicts of interest.

The proposed rule would require each contractor that has employees performing acquisition functions closely associated with inherently governmental functions to identify and prevent personal conflicts of interest. Contractor employees with access to non-public government information would be prohibited from using it for personal gain. In addition, contractors would be tasked with establishing procedures to screen for potential conflicts of interest, informing employees of their responsibilities regarding the conflict of interest policy, reporting any conflict of interest violations to the contracting officer, and taking appropriate disciplinary action against employees that do not comply with the policy.

The proposal also establishes a new contract clause to be included in service contracts valued above the simplified acquisition threshold that involve the performance of acquisition functions closely associated with inherently governmental functions for or on behalf of a federal agency or department. A “remedies” section within the clause delineates the measures the government can take if a contractor does not comply with the policy, including suspending contract payments, withholding an award fee, terminating for cause, and suspension or debarment.