FAR 3.6—Subpart 3.6

Policy.

FAR 3.601 states the basic policy on awarding contracts to Government employees and to businesses or organizations owned, substantially owned, or controlled by Government employees. It is designed to prevent actual conflicts of interest and to avoid even the appearance that the Government is favoring its own employees in procurement decisions. The section also explains how special Government employees are treated when they serve as experts, advisors, consultants, or advisory committee members, and it identifies the circumstances in which they are still treated as Government employees for this policy. In practice, this rule requires contracting officers to screen for employee ownership or control, consider whether a prospective contractor is a Government employee, and evaluate whether a special Government employee’s role creates a direct connection to the contract or an influence risk. The section matters because it protects procurement integrity, public trust, and the fairness of the competition process.

Exceptions.

FAR 3.602 explains when the Government may make an exception to the organizational conflict of interest policy in FAR 3.601. It covers who has authority to approve the exception, the high threshold that must be met, and the kind of justification required before the policy can be set aside. In practice, this means exceptions are not routine procurement judgments but rare, senior-level decisions reserved for situations where the Government’s needs cannot reasonably be met any other way. The section is designed to protect the integrity of the acquisition process by ensuring that departures from the conflict-of-interest policy are tightly controlled and based on a compelling, documented need. For contracting officers and program officials, it signals that any request for relief must be elevated and supported by a strong factual record. For contractors, it means they should not assume an exception will be granted simply because performance is difficult or inconvenient; the standard is much stricter than ordinary business necessity.

Responsibilities of the contracting officer.

FAR 3.603 tells the contracting officer what must happen before award when there is a potential conflict-of-interest or prohibited-award issue. It covers two specific situations: first, when the contracting officer knows or has reason to believe a prospective contractor is barred from award under FAR 3.601, but there is a most compelling reason to proceed anyway; and second, when the prospective awardee is an organization owned, substantially owned, or controlled by Government employees, which triggers the organizational conflict-of-interest guidance in FAR subpart 9.5. In practice, this section is a gatekeeping rule: it prevents a contracting officer from making an award until the required higher-level authorization or conflict-of-interest review has been completed. Its purpose is to protect the integrity of the procurement process, avoid favoritism or improper influence, and ensure that any exception to a prohibited award is fully justified and properly approved. For contractors, it signals that certain ownership or relationship structures can delay or block award unless the agency completes the required review.