An organizational conflict of interest exists when the nature of the work to be performed under a contract may give an offeror or supplier an unfair competitive advantage and when an offeror or supplier has other interests that may impair its objectivity or ability to render impartial assistance or advice or to provide objectivity in performing the contract work. Although such conflicts are not limited to any particular type of purchase, they are more likely to occur in contracts involving professional, technical, and consultant services; performance of or assistance in technical evaluations; and those for projects that are purchased in separate phases (eg. design and then construction, research and development and then production).
As part of purchase planning (see 2-1, Develop Purchase Plan), contracting officers, with the assistance of the purchase/SCM team, must attempt to identify organizational conflicts of interest so that they may be avoided, neutralized or mitigated (when purchases will be made noncompetitively, certain disclosures must be made – see 2-10, Determine Extent of Competition). When a potential organizational conflict is foreseeable, the contracting officer should consult with assigned counsel and obtain the assistance of appropriate technical specialists to consider the potential to avoid, neutralize or mitigate the organizational conflict of interest. Mitigation actions may include, but are not limited to (a) developing a solicitation provision restricting competition to offerors without conflicts of interest, (b) including a contract clause limiting the supplier’s eligibility for future contracts and subcontracts, and (c) the adoption of other measures to ensure as fair a competition as possible. Any limit on future contracts must be for a reasonable period sufficient to avoid unfair competitive advantage or potential bias.
If it becomes apparent when proposals are received that participation by a particular offeror could lead to an organizational conflict of interest and unfair competition, the offeror may be disqualified and its proposal rejected. The contracting officer may take actions necessary and in the interest of the Postal Service and the offerors, to avoid, neutralize or mitigate the potential or apparent conflict of interest.
If the contracting officer decides to neutralize or mitigate a potential or apparent organizational conflict of interest, he or she should include a written analysis of the decision and the chosen course of action in the contract file. The analysis should include a consideration of the potential benefits and detriments to the Postal Service (including consideration of the overall business and competitive interests of the Postal Service and how the appearance of an organizational conflict of interest may affect them) and the offerors, and may consider information provided by offerors in response to the solicitation, or obtained during discussions and negotiations.
