POGO Comments on Contractor Personal Conflicts of Interest

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.