Organizational Conflict of Interest (OCI)

Definition

Organizational Conflict of Interest (OCI), under FAR 9.5, arises when a contractor's other activities or relationships may impair its ability to render impartial assistance or advice to the government, give the contractor an unfair competitive advantage, or otherwise appear inappropriate. Three typical categories are recognized: unequal access to information, biased ground rules, and impaired objectivity. Contracting officers identify, evaluate, and mitigate OCIs, often by requiring firewalls, divestitures, or team reconfiguration before award.

Why It Matters

OCI issues can disqualify otherwise-strong proposals. Firms that perform systems-engineering and technical-assistance (SETA) work for an agency often face OCI constraints that prevent bidding on the follow-on production contract. Recognizing potential OCIs early lets you structure teaming and firewall arrangements that mitigate rather than eliminate business opportunity. Competitors also file OCI-based protests, so defending against OCI allegations during capture is a standard skill.

Example

A SETA contractor helping an agency write a RFP for a new weapon system must exclude itself from bidding on the follow-on production contract. The firm negotiates an OCI mitigation plan with firewalls and dedicated staff, and retains the SETA work while spinning off a separate subsidiary that bids on production.

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