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POGO Comments on Contractor Personal Conflicts of Interest

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The Project On Government Oversight submitted a public comment Monday supporting a proposed change in the regulation of federal contractor personal conflicts of interest. The change will revise the Federal Acquisition Regulation (FAR) to extend the guidelines on contractor employee conflicts of interest.

The FAR requires contractors and subcontractors to identify and prevent personal conflicts of interest of and misuse of non-public information by their employees. Right now, the FAR provision only applies to contractor employees who perform acquisition functions closely associated with inherently governmental functions (see Appendix B). The proposed change will extend this requirement to cover individuals who perform any function closely associated with inherently governmental functions or perform under a personal services contract.

The proposed rule is a welcome expansion of conflict of interest safeguards. Extending the conflict requirements will ensure that contractor employees perform their duties with integrity and in the public’s interest rather than for personal financial gain, especially when the contractor employees have access to non-public information.

However, POGO thinks the proposed rule should eliminate the exception for commercial items. Commercial item acquisitions, on which the government spends approximately $110 billion a year, are inherently risky because they circumvent some of the checks and balances of the contracting system. We also think the new rule should define the term “non-public government information,” outline a range of punishments for violations, and require the immediate reporting of violations to the Federal Awardee Performance and Integrity Information System (FAPIIS).

Despite its shortcomings, POGO supports the proposed rule. POGO has long advocated for stronger and more consistent federal contractor PCI regulations. Ensuring that federal employees and as many contractor employees as possible adhere to the same personal conflict of interest rules will bolster the public’s confidence in the government and the federal contracting process.


By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Contract Oversight

Related Content: Contractor Accountability, Conflicts of Interest, Inherently Governmental Functions, Federal Acquisition, Transparency in Contracting

Authors: Neil Gordon

Submitted by Dfens at: June 5, 2014
Really, the problem is that there is a huge conspiracy of government procurement officials to jack up the cost of procured goods and services by constantly changing requirements? And I am expected to believe this is a real conspiracy even though the procurement officials gain nothing by doing this, but at the same time these poor defense contractors are forced to make record profits simply because of this crazy conspiracy of procurement officials who just cannot make up their mind as to what they want? That's what POGO really thinks is happening? That's why, for instance, a DDG-1000 costs nearly as much as a Nimitz class carrier or more than twice as much as an Iowa Class Battleship? It's all the fault of these indecisive procurement officials? The government signs their contractors up to a contract that amounts to guaranteeing them $1.10 for every $1.00 they spend, inviting them to spend themselves rich, but it is actually a conspiracy of government workers that is causing the price of procured goods and services to spiral out of control? You seriously believe that? Are these government workers space aliens too?
Submitted by auditor at: June 5, 2014
This is in response to the comment on June 5, 2014. The writer states that contractors receive more money when they screw up or are late on delivery. What the writer fails to understand is that many of those contracts are cost-type, which means that neither the government or contractor know what the final cost, or even product, will be. It's similar to when I got a recent estimate on remodeling my bathroom. Until I'd selected the countertop, toilet, fixtures, etc., the contractor couldn't give me a total price. This is the same with cost-type contracts. The government often changes the requirements of the product as during the design process. Some of it is because of new technology and other times it can be because of a requirements from Congress. Consider the process that would occur if you contracted to have a house custom designed and built. How can any contractor give you the final price when they don't know all of the "bells and whistles" that you'll add? The same is for many Government contracts.
Submitted by Dfens at: June 5, 2014
It's funny how POGO can be concerned about an individual who might be identified as having a potential conflict of interest, but continues to willfully ignore the obvious conflict of interest that exists in the way the government procures weapons and other contracted services and goods. What happens to a contractor that screws up? They get more money. What happens if they are late in delivering? They make more money. What happens if they drive the cost of the delivered goods sky high? They make more money. What is that if not an obvious conflict between the contracting rules in the FAR and the taxpayer's best interest? Yet again, POGO is willing to go after the middle class American working for the government, but they stay strictly hands off when it comes to obvious conflicts of interest that are daily being exploited by multi-national defense corporations and the richest 1%.

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