SUBPART 209.5—ORGANIZATIONAL AND CONSULTANT
CONFLICTS OF INTEREST
(Revised
July 15, 2009)
209.570 Limitations on
contractors acting as lead system integrators.
209.570-1 Definitions.
209.570-2 Policy.
209.570-3 Procedures.
209.570-4 Solicitation
provision and contract clause.
209.570 Limitations on
contractors acting as lead system integrators.
209.570-1 Definitions.
“Lead system
integrator,” as used in this section, is defined in the clause at 252.209-7007,
Prohibited Financial Interests for Lead System Integrators. See PGI 209.570-1 for additional information.
209.570-2 Policy.
(a)
Except as provided in paragraph (b) of this subsection, 10 U.S.C. 2410p
prohibits any entity performing lead system integrator functions in the
acquisition of a major system by DoD from having any direct financial interest
in the development or construction of any individual system or element of any
system of systems.
(b)
The prohibition in paragraph (a) of this subsection does not apply if—
(1) The Secretary of Defense certifies to the
Committees on Armed Services of the Senate and the House of Representatives
that—
(i) The entity was selected by DoD as a
contractor to develop or construct the system or element concerned through the
use of competitive procedures; and
(ii) DoD took appropriate steps to prevent any
organizational conflict of interest in the selection process; or
(2) The entity was selected by a subcontractor to
serve as a lower-tier subcontractor, through a process over which the entity
exercised no control.
(c) In accordance with Section 802 of the
National Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181), DoD
may award a new contract for lead system integrator functions in the
acquisition of a major system only if—
(1) The major system has not yet proceeded beyond
low-rate initial production; or
(2) The Secretary of Defense determines in
writing that it would not be practicable to carry out the acquisition without
continuing to use a contractor to perform lead system integrator functions and
that doing so is in the best interest of DoD.
The authority to make this determination may not be delegated below the
level of the Under Secretary of Defense for Acquisition, Technology, and
Logistics. (Also see 209.570-3(b).)
(d) Effective October 1, 2010, DoD is prohibited
from awarding a new contract for lead system integrator functions in the
acquisition of a major system to any entity that was not performing lead system
integrator functions in the acquisition of the major system prior to January
28, 2008.
209.570-3 Procedures.
(a) In making a responsibility determination
before awarding a contract for the acquisition of a major system, the
contracting officer shall—
(1)
Determine whether the prospective contractor meets the definition of
“lead system integrator”;
(2)
Consider all information regarding the prospective contractor’s direct
financial interests in view of the prohibition at 209.570-2(a); and
(3)
Follow the procedures at PGI 209.570-3.
(b) A determination to use a contractor to
perform lead system integrator functions in accordance with 209.570-2(c)(2)—
(1) Shall specify the reasons why it would not be
practicable to carry out the acquisition without continuing to use a contractor
to perform lead system integrator functions, including a discussion of
alternatives, such as use of the DoD workforce or a system engineering and
technical assistance contractor;
(2) Shall include a plan for phasing out the use
of contracted lead system integrator functions over the shortest period of time
consistent with the interest of the national defense; and
(3) Shall be provided to the Committees on Armed
Services of the Senate and the House of Representatives at least 45 days before
the award of a contract pursuant to the determination.
209.570-4 Solicitation
provision and contract clause.
(a)
Use the provision at 252.209-7006, Limitations on Contractors Acting as
Lead System Integrators, in solicitations for the acquisition of a major system
when the acquisition strategy envisions the use of a lead system integrator.
(b)
Use the clause at 252.209-7007, Prohibited Financial Interests for Lead
System Integrators—
(1) In solicitations that include the provision
at 252.209-7006; and
(2) In contracts when the contractor will fill
the role of a lead system integrator for the acquisition of a major system.