FAR 3.1102—Policy.
Plain-English Summary
FAR 3.1102 states the Government’s basic policy for contractor personal conflict-of-interest controls. It covers two related but distinct obligations: first, contractors must identify and prevent personal conflicts of interest involving their covered employees; second, contractors must prohibit covered employees who obtain nonpublic information through performance of a Government contract from using that information for personal gain. In practice, this policy is the foundation for contractor ethics and conflict-management programs under the personal conflict of interest rules in FAR subpart 3.11. It signals that the Government expects contractors to actively manage employee conflicts, not merely react after a problem occurs. The section matters because it protects the integrity of procurement decisions, reduces the risk of biased performance, and helps prevent misuse of sensitive Government information. For contractors, it means building screening, disclosure, training, and enforcement processes; for contracting officers and agencies, it provides the policy basis for requiring and evaluating contractor compliance measures.
Key Rules
Identify personal conflicts
Contractors must have a process to identify personal conflicts of interest involving covered employees. This means looking for situations where an employee’s outside interests, relationships, or financial circumstances could interfere with objective contract performance.
Prevent conflicts from arising
It is not enough to discover conflicts after the fact; contractors must take steps to prevent them. That typically includes screening, disclosure requirements, assignment controls, and other safeguards before a conflicted employee works on affected tasks.
Ban personal use of nonpublic information
Covered employees who gain access to nonpublic information because of contract performance may not use that information for personal gain. The policy is aimed at preventing misuse of sensitive Government or contractor information for trading, business advantage, or other private benefit.
Applies to covered employees
The policy is limited to 'covered employees' as defined elsewhere in FAR subpart 3.11. Contractors must know which employees fall within that category and apply controls accordingly, rather than treating the rule as a general ethics policy for all personnel.
Supports contractor compliance systems
This section establishes the Government’s expectation that contractors will maintain internal controls to manage conflicts and information misuse. It is a policy statement, but in practice it drives training, certifications, reporting, and disciplinary procedures.
Responsibilities
Contractor
Identify covered employees, screen for personal conflicts of interest, prevent conflicted performance, and prohibit covered employees from using nonpublic information obtained through contract work for personal gain.
Covered Employees
Avoid personal conflicts of interest and refrain from using nonpublic information acquired through Government contract performance for private benefit.
Contracting Officer / Agency
Rely on this policy as the basis for requiring contractor conflict-of-interest controls and for overseeing contractor compliance with applicable FAR subpart 3.11 requirements.
Practical Implications
Contractors should expect to implement formal conflict-screening and disclosure procedures, especially for employees working on sensitive or decision-support contracts.
A common pitfall is treating this as only an ethics-training issue; the policy requires active prevention, not just awareness.
Another risk area is nonpublic information: employees may not realize that information learned on the contract can be off-limits for personal use even if it is not classified.
Contractors should maintain clear internal reporting channels so employees can disclose potential conflicts before they affect performance.
Contracting officers should look for whether the contractor’s controls are practical and enforced, not merely written into a policy manual.
Official Regulatory Text
The Government’s policy is to require contractors to- (a) Identify and prevent personal conflicts of interest of their covered employees; and (b) Prohibit covered employees who have access to nonpublic information by reason of performance on a Government contract from using such information for personal gain.