[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR9.508]

[Page 167-168]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 9--CONTRACTOR QUALIFICATIONS--Table of Contents
 
    Subpart 9.5--Organizational and Consultant Conflicts of Interest
 
Sec. 9.508  Examples.

    The examples in paragraphs (a) through (i) following 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

[[Page 168]]

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.

[48 FR 42142, Sept. 19, 1983. Redesignated at 55 FR 42687, Oct. 22, 
1990; 61 FR 41469, Aug. 8, 1996]