Senators sound alarm on unaddressed conflicts of interest in government contracting provision in FAR

TL;DR

Bipartisan senators are pressing for implementation of the Preventing Organizational Conflicts of Interest in Federal Acquisition Act (Public Law 117-324), which required FAR (Federal Acquisition Regulation) updates by June 2024 to strengthen how organizational conflicts of interest (OCI) are identified and mitigated. The law, enacted in December 2022, mandates contractors disclose potential conflicts before award; the FAR Council’s proposed rule remains incomplete nearly two years past the statutory deadline. This gap leaves the government acquisition community operating under existing OCI rules while a stronger disclosure regime is expected once the final FAR rule is issued. All federal contractors will be affected when the final rule is implemented, with immediate implications for capture, proposal, and pre-award due diligence processes. Contractors should assume enhanced pre-award disclosure expectations are coming and take steps now to inventory potential conflicts, harden disclosure workflows, and monitor the FAR Council rulemaking. Use Cabrillo Club monitoring and proposal tooling to rescore pipelines, update compliance matrices, and centralize audit-ready disclosure records.

Key Points

• What happened: Bipartisan senators demanded implementation of the Preventing Organizational Conflicts of Interest in Federal Acquisition Act (Public Law 117-324); required FAR updates by June 2024 remain incomplete and the FAR Council’s proposed rule has not been finalized.
• Who is affected: Specific NAICS codes and agencies listed in segmentation, including NAICS: 541330, 541512, 541519, 541611, 541618, 541690, 541715, 541990, 336414, 336415, 336411, 541713, 541714, 541720; agencies: DOD, DHS (Department of Homeland Security), GSA (General Services Administration), DOE, NASA, VA, HHS, DOJ, State, DOT; contract vehicles: OASIS+, STARS III, Alliant 3, 8(a) STARS III, VETS 3, CIO-SP4, SEWP, GSA Schedules, PSS; market segments and compliance surfaces listed in segmentation.
• Timeline: The law required FAR updates by June 2024; the FAR Council’s proposed rule remains incomplete nearly two years past the statutory deadline.
• What contractors should do NOW: inventory potential OCIs, update pre-award disclosure processes, brief capture/proposal/legal teams, centralize evidence and disclosures into audit-ready workflows, and monitor the FAR Council rulemaking using Cabrillo Club monitoring and proposal systems.

Who Is Affected

• NAICS codes: 541330; 541512; 541519; 541611; 541618; 541690; 541715; 541990; 336414; 336415; 336411; 541713; 541714; 541720.
• Agencies: DOD; DHS; GSA; DOE; NASA; VA; HHS; DOJ; State; DOT.
• Contract vehicles: OASIS+; STARS III; Alliant 3; 8(a) STARS III; VETS 3; CIO-SP4; SEWP; GSA Schedules; PSS.
• Market segments: Professional Services; Management Consulting; Engineering Services; IT Services; Defense; Systems Engineering; Research and Development; Advisory and Assistance Services; Program Management; Acquisition Support.
• Compliance surfaces: FAR Part 9.5; Organizational Conflicts of Interest; Contractor Disclosure Requirements; FAR Council Regulations.

Specific NAICS codes, agencies, and contract vehicles are provided above per the event segmentation.

Frequently Asked Questions

Q: What does Public Law 117-324 require contractors to do?

A: The law mandates that contractors disclose potential organizational conflicts of interest before award. It also required the FAR Council to issue implementing FAR updates by June 2024. Further procedural specifics in the final FAR text are pending source review.

Q: Has the FAR been updated to meet the law’s deadline?

A: No — per the report, the FAR Council’s proposed rule remains incomplete nearly two years past the statutory deadline. Exact issuance or implementation dates for a final rule are pending source review.

Q: How should firms prepare now for the eventual final rule?

A: Prepare by inventorying relationships and activities that could create OCIs, updating pre-award disclosure templates and workflows, coordinating capture/legal/proposal teams for proactive disclosures, and centralizing documentation for audit-ready records. Monitor the FAR Council rulemaking closely and be ready to incorporate any new disclosure checkpoints into proposal and compliance processes.

Definitions

• Preventing Organizational Conflicts of Interest in Federal Acquisition Act (Public Law 117-324): Federal law enacted to strengthen standards for identifying and mitigating organizational conflicts of interest in federal contracting; required FAR updates by June 2024.
• Organizational conflicts of interest (OCI): Situations in which a contractor’s other interests may impair objectivity or give it an unfair competitive advantage in federal contracting.
• FAR Council: The administrative body responsible for issuing and updating the Federal Acquisition Regulation (FAR).

Intelligence Response

• Cabrillo product set to leverage:
• Cabrillo Signals War Room — Already detected this event and delivered this briefing. Use it to receive live alerts on FAR Council publications and senator letters.
• Cabrillo Signals Match Engine — Rescore opportunity pipelines and reprioritize pursuits where OCI exposure or enhanced disclosure risks increase competitive burden.
• Cabrillo Signals Intelligence Hub — Track affected NAICS codes, agencies, and listed contract vehicles; set saved searches for follow-on solicitations and rulemaking notices on SAM.gov (System for Award Management).
• Proposal Studio (Proposal OS) — Update proposal compliance matrices and disclosure templates to reflect anticipated enhanced pre-award disclosure requirements.
• Proposal Studio Workflow Tracker — Enforce a 9-gate capture workflow with automated compliance routing for OCI review and maintain audit-ready documentation.
• Who to notify:
• Capture/BD Leads — for pursuit reprioritization and disclosure strategy.
• VP/Director of Proposals — to update proposal templates and compliance checks.
• General Counsel / Compliance Officer — for legal review and policy updates.
• Security/Clearance Manager — to ensure supporting documentation is stored per policy and access controls.
• First 48-hour playbook:
• Hour 0–4: Convene capture, proposals, and legal stand-up. Instruct teams to pause filing any discretionary no-submission decisions until initial inventory is complete.
• Hour 4–12: Run a targeted Signals Match Engine rescore of current pipeline to flag high-risk pursuits; tag opportunities on vehicles listed in segmentation.
• Hour 12–24: Use Proposal Studio to push updated disclosure templates and start populating audit-ready evidence for top-priority pursuits.
• Hour 24–48: Use Signals Intelligence Hub saved searches to monitor FAR Council notices and senator inquiries; finalize assignment of ownership for OCI disclosures and update Workflow Tracker routing rules.

Relevant guidance: Secure Operations Guide (/insights/secure-operations-guide). For related compliance context see CMMC (Cybersecurity Maturity Model Certification) Compliance Guide (/insights/cmmc-compliance-guide) and CUI (Controlled Unclassified Information)-Safe CRM Guide (/insights/cui-safe-crm-guide).