Against 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 clause should aim at reducing conflicts of interest,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 in connection with the functions of public nature. "

No one disputes the importance of a conflict of interest rule. The proposed scheme is the result of the Government Accountability Office (GAO) report, Contracting: Additional Personal Conflict of interest guarantees to certain DoD contractor employees (GAO-08-169), published in March 2008 [2]. In its report, the GAO, that "government officials believed that the current rules are sufficient to preventconflicts 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 these commentators have described the problems with the procedure referred to the proposed rule, but found the ambiguity and anger with the basic definitions contained in the rule. In other words, at first sight, this is a proposed rule, which must not only optimization, but a regular rewrite.

Fortunately for the most part a rewriting of success is possible when the rule may herald the definitions of key words and concepts must be solved separately in order. This isbecause what this rule addresses, personal conflicts of interest, involves situations that are covered by case law and established as conflicts on a case-by-case basis and not by black letter rule. Thus, these are, for the most part, "soft" definitions, and liable to be disagreed upon at least to some extent.

For example, the Council of Defense and Space Industry Association (CODSIA) urged for revision of the definition of "personal conflict of interest," which covers "financial interests, personal activity, and relationships that could impair a covered employee's ability to act in an impartial manner and in the best interest of the Government." Sources of personal conflicts of interest highlighted by the rule include financial interests of the employee or close relatives of the employee, compensation, consulting relationships, real estate investments, intellectual property interests, research funding or support, and gifts, among others.

As noted by CODSIA, this definition 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, if there is a long list of enumerated items, non-enumerated items will often be construed as having been deliberately excluded from the list. Thus, although CODSIA may be correct in asserting that clarification is necessary, promulgators of the rule must be careful to ensure that it is not written to be construed too narrowly. Moreover, CODSIA's recommendation that these "varied elements and circumstances" be defined may be unrealistic - while some may be defined by prior decisions, other FAR language, 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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