Combating Personal Conflicts of Interest - A Dictionary As Our Weapon?

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2010 should see the finalization of a personal conflicts of interest rule proposed by the Federal Acquisition Regulatory (FAR) councils last November, but first harsh criticism levied at particular provisions must be addressed.

This proposed rule, issued under FAR Case 2008-025 on November 13, 2009, aims at preventing personal conflicts of interest among contractor employees engaged in acquisition functions closely related to inherently governmental functions[1].

The Rule is a response to § 841 (a) of the Duncan Hunter National Defense Authorization Act for Fiscal Year ndaaa (FY 09 ndaaa), which required the Office of Federal Procurement Policy (OFPP) conflicts, personal development of guidelines for reduce interest on deposits the employee contractor support or advice or recommendation for acquisition activities of the agency. Also charged that a contract clause to limit conflicts of interest shouldbe drafted and included in solicitations and contracts.

If this rule is implemented, it will add subsection 3.11 to the Federal Acquisitions Regulation, laying out the personal conflict of interest policy and other requirements. It will also insert FAR clause 52.203-16, "Preventing Personal Conflicts of Interest," to all contracts exceeding the simplified acquisition threshold where at least a portion of the contract involves "the performance of acquisition functions closely associated with inherently governmental functions."

No one disagrees with the importance of having a personal conflicts of interest rule. The proposed rule is a result of the Government Accountability Office (GAO) report, Contracting: Additional Personal Conflict of Interest Safeguards Needed for Certain DoD Contractor Employees (GAO-08-169), released in March 2008[2]. In its report, the GAO found that "government officials believed that current requirements are inadequate to prevent conflicts from arising for certain contractor employees influencing DoD decisions, especially financial conflicts of interest and impaired impartiality."

However, organizations and individuals that commented on the rule by the January deadline express concerns that major revisions of the proposed rule are necessary to ensure consistency with other FAR provisions and current laws, as well as to meet its goal to prevent and mitigate personal conflicts of interest in the targeted areas. Not only did these commentators find issues with the procedures outlined in the proposed rule, but they found ambiguity and trouble with the basic definitions contained within the rule. In other words, at first glance, this is a proposed rule that may need not just tweaking, but an outright rewrite.

Luckily, for the most part, a successful rewrite is possible if promulgators of the rule are able to clarify the definitions of those important words and terms contained within the rule. This is because what this rule addresses, personal conflicts, situations of interest are covered by the law and how conflicts on a case by case basis rather than black letter rule. These are for the most part, "soft" definitions and is not responsible to accept that, at least to some extent.

For example, the Council of Defense and Space Industry Association (cods) has requested the revision of the definition of "conflict of interest," which covers "financialActivities, interests and personal relationships that an employee whose ability to act impartially and in the best interest of the government could interfere. "Sources of personal conflicts of interest are highlighted by the rule, the financial interests of the employee or close relatives of Employees, compensation, relations consultancy, investment in real estate, intellectual property Interests, funding or research support and gifts, including others.

How cods, has identified themdefinition is imprecise because important words in the clause are undefined. CODSIA recommended in its comments submitted that there be "further explication of the many varied elements and circumstances involved in the terms 'financial interests, personal activity, and relationships.'"

At the same time, however, so long as these words are defined elsewhere in the FAR, or there is a common understanding as to their meaning, ambiguity may be avoided. When interpreting language in a statute, when they enumerated a long list of items not listed objects are often interpreted as having been deliberately excluded from the list. Thus, although the statement may cods that clarification is necessary to proclaim the rule must be careful that it is not written to be interpreted too strictly, correct. may also be defined cods the recommendation that these "other factors and circumstances that can be defined to be realistic - and some of its previous decisions, other distantlanguage, and other statutory language, an enumerated list of every situation may not exist or even be forthcoming.

The Project on Government Oversight (POGO) also urged that the rule be put on hold until the Office of Management and Budget clarifies the definition of "inherently governmental activities" as proposed by President Obama in March 2009[3]. POGO argues that there will be confusion until that guidance is finalized, incorporated into FAR Subpart 7.5, and applied by

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