Conflicts of Interest on Construction Projects Part 2
As we covered in part one, a conflict of interest has the potential to derail a private construction project. But what happens when a conflict of interest presents itself on a government contract? Below, a Greensboro contractor attorney will be discussing how to spot and mitigate conflicts of interest on public construction projects.
Organizational Conflicts of Interest
As defined by the Federal Acquisition Regulation (FAR) an organizational conflict of interest (OCI) is a situation in which, due to other concerns or relationships, “a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person’s objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.” Basically, an OCI occurs when a contractor cannot adequately perform work on one government contract due to their obligations to another.
Mitigating Organizational Conflicts of Interest
An OCI may occur because of one of the three following reasons:
Unequal Access to Information
This conflict occurs when a contractor is privy to confidential and proprietary information from a previous government contract that gives them a competitive advantage when bidding on another government contract. This information must be useful for obtaining a new contract and not available to competitors. In order to mitigate this type of OCI, contractors must compartmentalize information in order to keep damaging information from reaching those who are drafting the proposal.
When a contractor’s decision making or performance is impaired by their own financial interests, it is known as impaired objectivity. This conflict arises when a contractor is charged with evaluating their own work or the work of their competitors. A contractor may judge a competitor’s work too harshly while being biased towards their own work. Impaired objectivity can be mitigated by tasking an unbiased subcontractor with giving impartial advice or performing any work that may create conflict.
Biased Ground Rules
If a contractor helps to establish the specifications for how the contract is to be procured only to turn around and try to procure the contract, it is known as biased ground rules. It’s not possible to remove bias once a contractor has set the stage for contract procurement. Contractors that may be interested in securing a government contract must avoid establishing that contract’s ground rules.
Consult a Professional
Failure to mitigate the above conflicts could result in a contractor being excluded from bidding on a contract or even all future government contracts. Such a negative outcome can be avoided with a conflict mitigation plan. To ensure that your company is compliant with all federal regulations on government projects, consult with a Greensboro contractor lawyer at Cotney Construction Law.