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Saturday, April 24, 2010

Proposal to disclose organizational conflicts of interest as condition to bid

EDIT NOTE Feb 9, 2011: Having recently critically reviewed a Guam procurement administrative review decision on disclosure of minority ownership interests "as a condition of bidding" in my draft of the next version 2.1 of the Guam Procurement Process Primer (see Sneak Preview link in side bar), I want to correct the headline to this post. As the article noted below, the conflicts disclosure is not actually a condition precedent to bidding as the headline might suggest, but a condition, subsequent to bidding, of award, and a continuing obligation of performance, to voluntarily disclose conflicts (though it is hard to reconcile what is meant by the "mandate" to "voluntarily" disclose).

Pentagon seeks to force contract bidders to disclose conflicts of interest
Defense Department contractors would be required to disclose any possible organizational conflicts of interest before bidding on projects, under a proposed rule published on Thursday in the Federal Register.

"The government must avoid the appearance of impropriety, which taints the public view of the acquisition system," the notice stated. "Organizational conflicts of interest, by their mere appearance, call into question the integrity and fairness of the competitive procurement process. This concern exists regardless of whether any individual contractor employee or contractor organization ever actually renders biased advice or benefits from an unfair competitive advantage."

Organizational conflicts of interest occur when a firm has access to nonpublic information that would give it a leg up in competing for work, the rule said. Conflicts also could crop up when a contractor is performing tasks that are subjective and that could have an impact on its bottom line. These situations would include a company helping to prepare a statement of work and then bidding on that project.

The rule would mandate that bidders voluntarily disclose facts that could relate to an organizational conflict of interest both prior to the award and on a continuing basis during performance of the contract.

As with all other posts, you are encouraged to read the entire linked article.

For further general reading on the subject of conflicts of interest, see ADDRESSING CONFLICTS OF INTEREST IN PROCUREMENT: FIRST STEPS ON THE WORLD STAGE, FOLLOWING THE UN CONVENTION AGAINST CORRUPTION.

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