2. Move From Subpart 9.5 to Subpart 3.12

Comment: Various respondents recommended that the rule on OCIs should remain in DFARS part 209 for the following reasons:

Four respondents stated their opinions that the OCI rules should not be moved to DFARS part 203 to avoid the perception that OCI is in the same category as improper business practices, which pertains to conduct that is criminal in nature. Two of these respondents stated that putting OCI coverage in part 209 is inconsistent with the notion that mitigation is the preferred method of addressing OCI. One respondent said it was unreasonable even to imply that an OCI inherently constitutes misconduct, since OCIs are routine in typical businesss settings and a byproduct of defense industry consolidation.

On the positive side, one respondent said that the OCI rules should remain in DFARS part 209 because of their relationship to a company's responsibility. Another respondent stated the opinion that a contracting officer's determination of whether to accept or reject a mitigation plan has the same weight as a determination of affirmative responsibility.

One respondent pointed out that while the Government has the discretion under both FAR 9.503 and the proposed rule to waive OCIs, it cannot waive improper business practices, such as unlawful gratuities and kickbacks.

One respondent thought that the regulations should remain within DFARS part 9 simply for continuity.

Response: DoD does not agree that placing the OCI rules in part 203 vs. part 209 lends credence to the perception that OCI is in the same category as conduct that is criminal in nature. We note that part 209 also covers criminal activity by way of its association with suspension and debarment. Furthermore, the scope of part 203 has been evolving over time, an example being the recent FAR rule proposing inclusion of a new FAR subpart 3.11 to include policy addressing personal conflicts of interest by contractor employees performing acquisition functions closely associated with inherently governmental functions--see FAR Case 2008-025. And while acceptance or rejection of a mitigation plan might affect a contractor's responsibility, it is not, in and of itself, a determination relating to responsibility.

However, because the FAR proposed rule has not yet been published, and because the decision has been made to limit this rule to implementation of OCIs in MDAPs (see section II.A.1.), this final rule has been located primarily in subpart 209.5, until such time as the FAR coverage on OCIs may be relocated.