March 31, 2020 Procurement Lawyer

Preventing Unfairness When Employees Switch Contractors or Enter Industry From Government

by Charles S. McNeish, Brian Walsh, Tracye Winfrey Howard & Lindy C. Bathurst
Ensuring Balance

Ensuring Balance

"Our employee who has been working on the big proposal just resigned and is going to our competitor."
"Our competitor just hired a former government employee who knows everything about the big upcoming procurement."

With increasing regularity, contractors face issues like these, as personnel “switch sides” or move in and out of government employment. Relatedly, the expansion of the federal government’s use of indefinite-delivery, indefinite-quantity (IDIQ) contract vehicles, along with other factors, such as an uptick in mergers, has led to more situations in which there is, at a minimum, an appearance that work performed on another contract has given an offeror an “inside track” to win a new, separate contract award. What can be done in these situations? Should you protest? If so, when? Is there an organizational conflict of interest? Is there a Procurement Integrity Act violation? Should you sue your former employee and/ or competitor?

This article provides an overview of the types of problems that arise and the possible remedies available in various common fact patterns related to employees switching contractors or moving between government and industry. Table 1 on page 23 provides a summary of the four major concerns contractors face in these situations and what, if anything, they can do about them.

Unequal Access to Information OCI: FAR 9.5

One of the most common issues that arises when contractors or their personnel perform work on multiple contracts is the potential for the contractor to gain unequal access to information that might provide it with an unfair competitive advantage in future procurements. This type of “organization conflict of interest” (OCI), referred to as an “unequal access OCI,” does not arise merely because a contractor served as an incumbent. Instead, the contractor must obtain or have access to competitively useful, nonpublic information, typically source-selection sensitive information or another competitor’s proprietary information.

The FAR requires contracting officers (COs) to identify and evaluate potential OCIs and mitigate or neutralize significant conflicts to prevent a competitor from gaining an unfair advantage.1 This typically involves the CO conducting an investigation to identify any nonpublic information available to the contractor, determining whether access to this information could create an unfair competitive advantage, and taking steps to avoid, neutralize, or mitigate the advantage.

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