9.508 Examples.

The examples in paragraphs (a) through (i) of this section illustrate situations in which questions

concerning organizational conflicts of interest may arise. They are not all inclusive, but are intended

to help the contracting officer apply the general rules in 9.505 to individual contract situations.

(a) Company A agrees to provide systems engineering and technical direction for the Navy on the

powerplant for a group of submarines (i.e., turbines, drive shafts, propellers, etc.). Company A

should not be allowed to supply any powerplant components. Company A can, however, supply

components of the submarine unrelated to the powerplant (e.g., fire control, navigation, etc.). In this

example, the system is the powerplant, not the submarine, and the ban on supplying components is

limited to those for the system only.

(b) Company A is the systems engineering and technical direction contractor for system X. After

some progress, but before completion, the system is canceled. Later, system Y is developed to

achieve the same purposes as system X, but in a fundamentally different fashion. Company B is the

systems engineering and technical direction contractor for system Y. Company A may supply system

Y or its components.

(c) Company A develops new electronic equipment and, as a result of this development, prepares

specifications. Company A may supply the equipment.

(d) XYZ Tool Company and PQR Machinery Company, representing the American Tool Institute,

work under Government supervision and control to refine specifications or to clarify the

requirements of a specific acquisition. These companies may supply the item.

(e) Before an acquisition for information technology is conducted, Company A is awarded a contract

to prepare data system specifications and equipment performance criteria to be used as the basis for

the equipment competition. Since the specifications are the basis for selection of commercial

hardware, a potential conflict of interest exists. Company A should be excluded from the initial

follow-on information technology hardware acquisition.

(f) Company A receives a contract to define the detailed performance characteristics an agency will

require for purchasing rocket fuels. Company A has not developed the particular fuels. When the

definition contract is awarded, it is clear to both parties that the agency will use the performance

characteristics arrived at to choose competitively a contractor to develop or produce the fuels.

Company A may not be awarded this follow-on contract.

(g) Company A receives a contract to prepare a detailed plan for scientific and technical training of

an agency’s personnel. It suggests a curriculum that the agency endorses and incorporates in its

request for proposals to institutions to establish and conduct the training. Company A may not be

awarded a contract to conduct the training.

(h) Company A is selected to study the use of lasers in communications. The agency intends to ask

that firms doing research in the field make proprietary information available to Company A. The

contract must require Company A to-

(1) Enter into agreements with these firms to protect any proprietary information they provide; and

(2) Refrain from using the information in supplying lasers to the Government or for any purpose

other than that for which it was intended.
(i) An agency that regulates an industry wishes to develop a system for evaluating and processing

license applications. Contractor X helps develop the system and process the applications. Contractor

X should be prohibited from acting as a consultant to any of the applicants during its period of

performance and for a reasonable period thereafter.

Parent topic: Subpart 9.5 - Organizational and Consultant Conflicts of Interest