Section 27-4607. ORGANIZATIONAL CONFLICTS OF INTEREST; DISQUALIFICATION

 

4607.1The Hospital intends to avoid even the appearance of conflict of interest or impropriety in connection with its procurement activities.  Thus, even if a prospective contractor is determined to be responsible, the CCO has the discretion to disqualify the contractor (or to take other appropriate measures) based on a conflict of interest, the appearance thereof, or other ethical considerations as further described in subsections 4607.4 – 4607.7. 

 

4607.2If the Contracting Officer determines that there is a conflict of interest, the appearance of a conflict of interest, or another ethical consideration, the Contracting Officer may: 

 

(a)Disqualify a contractor at any point during procurement;

 

(b)Rescind or terminate a contract subsequent to contract award; or

 

(c)Take other appropriate corrective measures, such as canceling a pending solicitation and initiating a new procurement; provided, however, that prior to taking any such action, the Contracting Officer shall first obtain the approval of the CCO. 

 

4607.3A determination by the Contracting Officer and the CCO to take a corrective measure described in subsection 4607.2 shall be made in writing and included in the contract file. 

 

4607.4The ethical consideration(s) that may authorize disqualification or another corrective measure go beyond a violation of the ethics and conflict of interest rules of the Hospital and the prospective contractor, if any.  The CCO may properly take corrective measures whenever necessary or prudent to avoid the appearance of impropriety or otherwise eliminate doubts about the integrity and fairness of procurement.  For example, situations in which corrective measures might be warranted include (but are not limited to): 

 

(a) Cases where a member of the Board of the Hospital or the CCO have any interest, direct or indirect, as principal, surety, or otherwise in a contract, where the expense or consideration of the contract is payable from Hospital funds.
 

(b) Cases where a director or employee of the Hospital involved in a procurement had an affiliation with a contractor that raised questions about the procurement’s integrity;
 

(c) Cases where a prospective contractor received preferential treatment in relation to its competitors;
 

(d) Cases where a prospective contractor hired a former employee of the Hospital who was privy to non-public information about the procurement, and involved that individual in its proposal preparation efforts; or
 

(e) Cases where there is clear evidence suggesting collusive bidding or similar anti-competitive practices by prospective contractors.

 

4607.5Organizational conflicts of interest also may warrant disqualification or other corrective measures.  Organizational conflict of interest means a situation in which a contractor:

 

(a) May be unable to render impartial and objective assistance or advice to the Hospital; or

(b) May have an unfair advantage over potential competitors. 

 

4607.6Organizational conflicts of interests can arise in a variety of circumstances.  For example, a contractor that develops the technical specifications for an item that will be the subject of a future procurement may have an incentive to develop specifications favoring its own products unless it is barred from participating in the future procurement.  Another example is a case where a contractor performs services for the Hospital that require access to non-public information (for example, proprietary data of other companies) and could therefore gain an unfair advantage over competitors in future procurements.

 

4607.7A number of measures may be appropriate for eliminating or mitigating organizational conflicts of interest, and the Contracting Officer has broad discretion to select the approach that is most suitable in any particular case.  For example, a contract to assist the Hospital in developing requirements for a future procurement ordinarily should include a clause prohibiting the contractor from participating in the future procurement.  A contract in which the contractor gains access to proprietary information of other companies (or non-public information on the Hospital’s procurement plans) should include an appropriate clause that prevents the contractor from using such information in any manner that might give it an unfair advantage and prohibits the contractor from disclosing this proprietary information. 

 

4607.8In each case, the mechanism adopted to address an organizational conflict of interest should be designed to prevent: 

 

(a)The existence of conflicting roles that might bias a contractor’s judgment; and

 

(b)An unfair competitive advantage.

 

authority

The Board of Directors of the Not-for-Profit Hospital Corporation (Board), pursuant to authority granted by sections 105(a), 106(6), and 111 of the Not-for-Profit Hospital Corporation Establishment Emergency Amendment Act of 2010 (Act), effective July 7, 2010 (D.C. Act 18-476; 57 DCR 6937 (August 6, 2010), and applicable sections of any subsequent substantially identical emergency, temporary, or permanent legislation.

source

Notice of Emergency and Proposed Rulemaking published at 57 DCR 8507 (October 8, 2010)[EXPIRED]; as amended by Notice of Emergency and Proposed Rulemaking published at 58 DCR 3086 (April 18, 2011)[EXPIRED]; as amended by Notice of Final Rulemaking published at 58 DCR 4565, 4570 (May 27, 2011).