FAR 3.603—Responsibilities of the contracting officer.
Plain-English Summary
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.
Key Rules
Obtain authorization first
If the contracting officer knows or has reason to believe a prospective contractor is prohibited from award under FAR 3.601, the contracting officer must obtain an authorization under FAR 3.602 before award. The award cannot proceed on the contracting officer’s own judgment alone.
Most compelling reason required
An authorization is only relevant when there is a most compelling reason to award to the otherwise prohibited contractor. This sets a very high threshold and means the exception is not routine or discretionary in ordinary circumstances.
Follow subpart 9.5
Before awarding to an organization owned, substantially owned, or controlled by Government employees, the contracting officer must comply with the requirements and guidance in FAR subpart 9.5. This requires a conflict-of-interest review before award is made.
Pre-award duty
The section applies before contract award, not after. The contracting officer must resolve the authorization or conflict-of-interest issue as part of the award decision process, not as a post-award cleanup step.
Responsibilities
Contracting Officer
Identify when a prospective contractor may be prohibited under FAR 3.601 or may present an ownership/control issue involving Government employees. Before award, obtain the required authorization under FAR 3.602 when applicable, and comply with FAR subpart 9.5 before awarding to an organization owned, substantially owned, or controlled by Government employees.
Agency/Approving Authority
Review and decide whether the circumstances justify the required authorization for an otherwise prohibited award. Ensure the decision is supported by the necessary justification and complies with the applicable ethics and conflict-of-interest requirements.
Prospective Contractor
Disclose ownership, control, or relationship facts that could trigger prohibited-award or conflict-of-interest concerns. Be prepared for additional review, delay, or possible disqualification if the organization falls within the covered categories.
Practical Implications
This section is a stop-sign for award decisions when prohibited-award or employee-ownership issues appear; the contracting officer should not assume the award can proceed without formal review.
A common pitfall is treating a suspected conflict as a minor administrative issue. FAR 3.603 requires action before award, and failure to get the right authorization can make the award vulnerable to protest, ethics concerns, or internal review findings.
Contracting officers should document the basis for believing FAR 3.601 may apply and the steps taken to obtain authorization or complete the subpart 9.5 review.
Contractors with Government-employee ownership or control issues should expect heightened scrutiny and possible delays, especially if the agency must evaluate whether the arrangement creates an organizational conflict of interest.
Because the standard is a 'most compelling reason,' agencies should expect this to be rare and should not rely on it as a routine workaround for otherwise prohibited awards.
Official Regulatory Text
(a) Before awarding a contract, the contracting officer shall obtain an authorization under 3.602 if- (1) The contracting officer knows, or has reason to believe, that a prospective contractor is one to which award is otherwise prohibited under 3.601 ; and (2) There is a most compelling reason to make an award to that prospective contractor. (b) The contracting officer shall comply with the requirements and guidance in subpart 9.5 before awarding a contract to an organization owned or substantially owned or controlled by Government employees.