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rules contained in Appendix A to the (Summary of Pertinent Charter ProviArmed Services Procurement Regula- sions) delete in its entirety the third tions, Title 32 Code of Federal Regula paragraph pertaining to the requiretions 30.1, which are hereby adopted ment of the Secretary of Defense or as amended.

the Secretary of a Military Depart

ment to personally render a decision § 19-60.402 Amendment to rules for on a matter in dispute based on findAgency application.

ings and recommendations submitted

by the ASBCA. The following amendments to Part

(c) Preliminary procedures, para2-Rules of the ASBCA shall be effec

graph 3 (Forwarding Appeals)-after tive whenever such rules pertain to ap

the word “Board” at the end of the peals arising from Agency contracts.

first sentence, insert a comma in lieu (a) Preface to rules of the Armed of the period and add immediately Services Board of Contract Appeals thereafter the words “through the (Summary of Pertinent Charter Provi. Office of the General Counsel, Intersions) delete all references to the national Communication Agency." Secretary of Defense and the Secretar- (dPreliminary procedures, paraies of the Military Departments and graph 4 (Duties of the Contracting Ofsubstitute therefor the words “Direc ficer)-delete the words "and to the tor, International Communication Government Trial Attorney” and add Agency.”

in lieu thereof the words “through the (b) Preface to rules of the Armed Office of the General Counsel, InterServices Board of Contract Appeals national Communication Agency."

40-113

0–794-3

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PART 20-1-GENERAL

Subpart 20–1.54-Contractor Organizational

Conflicts of Interest

Sec. 20-1.5401 Scope and policy. 20-1.5402 Definitions. 20-1.5403 Criteria for recognizing contrac

tor organizational conflicts of interest. 20-1.5404 Representation. 20-1.5405 Contract clauses. 20-1.5405-1 General contract clause. 20-1.5405-2 Special contract provisions. 20-1.5406 Evaluation, findings, and con

tract award. 20-1.5407 Conflicts identified after award. 20-1.5408-20-1.509 (Reserved) 20-1.5410 Subcontractors. 20-1.5411 Waiver. 20-1.5412 Remedies.

AUTHORITY: Sec. 8, Pub. L. 95-601, adding sec. 170A to Pub. L. 83-703, 68 Stat. 919, as amended (42 U.S.C. ch. 14).

SOURCE: 44 FR 19198, Apr. 2, 1979, unless otherwise noted.

$ 20–1.5401 Scope and policy.

(a) It is the policy of the U.S. Nuclear Regulatory Commission (NRC) to avoid, eliminate or neutralize contractor organizational conflicts of interest. The NRC achieves this objective by requiring all prospective contractors to submit information describing relationships, if any, with organizations or persons (including those regulated by NRC) which may give rise to actual or potential conflicts of interest in the event of contract award.

(b) Contractor conflict of interest determinations cannot be made auto matically or routinely; the application of sound judgment on virtually a caseby-case basis is necessary if the policy is to be applied so as to satisfy the overall public interest. It is not possible to prescribe in advance a specific method or set of criteria which would serve to identify and resolve all of the contractor conflict of interest situa tions which might arise; however, examples are provided in these regulations to guide application of the policy. NRC contracting and program officials must be alert to other situations which may warrant application of this policy guidance. The ultimate test is: Might the contractor, if award ed the contract, be placed in a position

where its judgment may be biased, or where it may have an unfair competitive advantage?

(c) The conflict of interest rule contained in this subpart applies to contractors and offerors only. Individuals or firms who have other relationships with NRC (e.g., parties to a licensing proceeding) are not covered by this regulation. This rule does not apply to the acquisition of consulting services through the personnel appointment process, NRC agreements with other government agencies, international organizations, or state, local or foreign governments; separate procedures for avoiding conflicts of interest will be employed in such agreements, as appropriate. 820–1.5402 Definitions.

(a) “Organizational conflicts of interest” means that a relationship exists whereby a contractor or prospective contractor has present or planned interests related to the work to be performed under an NRC contract which: (1) May diminish its capacity to give impartial, technically sound, objective assistance and advice or may otherwise result in a biased work product, or (2) may result in its being given an unfair competitive advantage.

(b) “Research” means any scientific or technical work involving theoretical analysis, exploration, or experimentation.

(c) “Evaluation activities” means any effort involving the appraisal of a technology, process, product, or policy.

(d) “Technical consulting and management support services” means internal assistance to a component of the NRC in the formulation or administration of its programs, projects, or policies which normally require the contractor to be given access to information which has not been made available to the public or proprietary information. Such services typically include assistance in the preparation of program plans; and preparation of preliminary designs, specifications, or statements of work.

(e) “Contract” means any contract, agreement, or other arrangement with the NRC except as provided in § 201.5401(c).

(f) “Contractor" means any person, given an unfair competitive advantage firm, unincorporated association, joint based on the performance of the conventure, co-sponsor, partnership, cor tract? The ultimate determination by poration, affiliates thereof, or their NRC as to whether organizational consuccessors in interest, including their flicts of interest exist will be made in chief executives, directors, key person light of common sense and good businel (identified in the contract), pro- ness judgment based upon the releposed consultants or subcontractors, vant facts disclosed and the work to be which is a party to a contract with the performed. While it is difficult to idenNRC.

tify and to prescribe in advance a spe(g) “Affiliates” means business con- cific method for avoiding all of the cerns which are affiliates of each various situations or relationships other when either directly or indirect, which might involve potential organily one concern or individual controls Zational conflicts of interest, NRC peror has the power to control another, sonnel will pay particular attention to or when a third party controls or has proposed contractual requirements the power to control both (41 CFR 1- which call for the rendering of advice, 1.606-1(e)).

consultation or evaluation activities, (h) “Subcontractor" means any sub- or similar activities that lay direct contractor of any tier which performs groundwork for the NRC's decisions work under a contract with the NRC on regulatory activities, future proexcept subcontracts for supplies and curements, and research programs. subcontracts in amounts of $10,000 or (b) Situations or relationships which less.

may give rise to organizational con(i) “Prospective contractor” or “of- flicts of interest. (1) The offeror or feror” means any person, firm, unin contractor shall disclose information corporated association, joint venture, concerning relationships which may partnership, corporation, or affiliates give rise to organizational conflicts of thereof, including its chief executive, interest under the following circumdirectors, key personnel (identified in stances: the proposal), proposed consultants, or (i) Where the offeror or contractor subcontractors, submitting a bid or provides advice and recommendations proposal, solicited or unsolicited, to to the NRC in a technical area in the NRC to obtain a contract.

which it is also providing consulting (j) “Potential conflict of interest” assistance in the same area to any ormeans that a factual situation exists ganization regulated by the NRC. that suggests (indicates that an (ii) Where the offeror or contractor actual conflict of interest may arise provides advice to the NRC on the from award of a proposed contract. same or similar matter in which it is The term “potential conflict of inter also providing assistance to any orgaest” is used to signify those situations nization regulated by the NRC. which merit investigation prior to con (iii) Where the offeror or contractor tract award in order to ascertain evaluates its own products or services, whether award would give rise to an or the products or services of another actual conflict or which must be re entity where the offeror or contractor ported to the contracting officer for has been substantially involved in investigation if they arise during con- their development or marketing. tract performance.

(iv) Where the award of a contract

would otherwise result in placing the § 20-1.5403 Criteria for recognizing con

offeror or contractor in a conflicting tractor organizational conflicts of in

role in which its judgment may be terest.

biased in relation to its work for the (a) General. Two questions will be NRC or may otherwise result in an asked in determining whether actual unfair competitive advantage for the or potential organizational conflicts of offeror or contractor. interest exist: (1) Are there conflicting (2) The contracting officer may reroles which might bias a contractor's quest specific information from an ofjudgment in relation to its work for feror or contractor or may require spethe NRC? (2) May the contractor be cial contract provisions such as pro

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