Industry group argues against expanded conflict-of-interest rules

Agencies have addressed personal conflicts of interest when needed, showing that there's no need for broader rules to prevent such conflicts, an industry trade group told the Federal Acquisition Regulatory Council.

 “Where a federal agency identifies specific circumstances that merit coverage, agencies have been adopting their own coverage to meet these specific situations,” Alan Chvotkin, executive vice president and counsel for the Professional Services Council (PSC), wrote Jan. 4 in a letter to the FAR Council.

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Treasury Department officials revised their conflict standards to meet the Office of Government Ethics' standards last year. The Health and Human Services Department made recent changes, as well as the Army and Air Force, among others, Chvotkin wrote.

In November, FAR Council members, along with the Government Ethics Office, posed the question of whether they should broaden the personal conflicts of interest rules, the same day it announced the final rule-change to the Federal Acquisition Regulation.

The rule addressed personal conflicts of interest by employees of government contractors. More specifically, it applies to contractors who are performing acquisition functions closely associated with inherently governmental functions. Inherently governmental functions are jobs that only federal employees are allowed to do, such as entering into a contract on behalf of the government. The rule took effect Dec. 2.

In answering regulators’ questions, PSC recommended that FAR Council wait to see how the new rules pan out before expanding coverage.

“It is premature to expand the current FAR [personal conflicts of interest] coverage because the existing coverage is untested and ambiguous,” Chvotkin wrote.

Agencies are only now starting to apply the rules to new contracts and task orders. On the other side, companies that have employees working close to government employee-only work are beginning their process of developing procedures to screen covered employees for potential conflicts and obtaining a disclosure of interest from each of those employees, he wrote.

PSC held a members meeting to discuss the new rule in December, including a response to the request for information.

“It was clear from that discussion that companies are making a good faith effort to comply with the rule but that implementation is still a work in progress for them and for the agencies,” Chvotkin wrote.

He added that it’s premature to move ahead so quickly or identify any lessons the parties have learned since December.

“Over time, common practices are likely to develop to address ambiguities and that could be considered in a revision or expansion of the final FAR rule,” he wrote.