Vendor Information: Conflict of Interest

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The Province must be diligent to avoid both actual and the appearance of conflicts of interest with vendors. What does a vendor need to know to avoid actual and the appearance of conflicts of interest with government?

From a government employee’s perspective, a conflict of interest occurs when an employee’s private affairs or financial interests are in conflict – or appear to be in conflict – with the employee’s duties or responsibilities to the government. More information on this can be found in the guidance document: Standards of Conduct and Relationships with Contractors.

Conflict of interest from a vendor’s perspective needs to consider other elements in addition to the factors that a government employee uses to assess conflict of interest. As basic guidance, vendors should not put themselves in a position where they may have (or be perceived to have) an undue unfair advantage over others when selling or attempting to sell their goods, services or construction services to government. The Province may even remove a vendor from consideration where, in the Province’s opinion, a serious conflict arises that may undermine the integrity of the competition.

 

Examples of Possible Vendor Conflicts of Interest

The following are examples of behaviours and activities that vendors should avoid as they may be considered conflicts of interest. This list is not exhaustive but only meant as a guide to help inform vendors:

  • Offering gifts, personal loans, or any other special considerations to any government employee;
  • Assisting government to develop all or part of a competitive solicitation when no other vendors are given the same opportunity, and also competing on the opportunity;
  • Presenting information about how the vendor would deliver services that are or will be competed (unless this is part of the formal solicitation process offered to all participating vendors);
  • Having private discussions with government about their competitive solicitation, unless this process is included as part of the formal solicitation and is available to multiple vendors;
  • Hiring someone who recently left government to assist in writing any part of the vendor’s submission to a solicitation issued by the employee’s former government office; and
  • Hiring an individual who was part of the decision-making process for a contract that the vendor has recently been awarded.

 

Examples That Do Not Cause Vendor Conflicts of Interest

The following are examples of behaviours that generally do not create a conflict of interest for a vendor, noting that this is not an exhaustive list:

  • Shortlist processes, such as presentations, interviews or tests that are part of a competitive solicitation: As the shortlist process would be disclosed in the solicitation with the intent of including all vendors who met the criteria for shortlisting, vendors would not be in conflict even if this process included private discussions. More information on shortlist processes can be found in Mandatory and Weighted Criteria.
  • Vendors responding to the Province’s Requests for Information (RFI): The purpose of the RFI is to ask vendors for market information that may be used in a solicitation. Because the RFI is posted on the BC Bid website and anyone can respond, submitting a response to the RFI would not put a vendor into a conflict of interest for the subsequent solicitation. More information on RFIs can be found in Market Research and Notifications
  • Ongoing work with a government office that has issued or will issue a competitive solicitation: Vendors who are currently providing goods, services or construction to government are usually not in a conflict when responding to that government office’s solicitations, even if the vendor is the current contractor providing the same or similar goods or services. However, vendors in this situation should not discuss the competition with the government outside of the formal processes described in the solicitation, as this may create a conflict. Also, some solicitations are designed where certain vendors are restricted from participating; for example, a vendor that is providing design work for a system may not be permitted to participate in the solicitation for the implementation of that system.

 

If in doubt, ask the government contact named in the solicitation if your circumstances would be considered a conflict or not. Refer to Asking Questions for more information.

 

Frequently Asked Questions re: Vendor Conflicts of Interest

What creates a vendor conflict of interest?

A conflict of interest is a situation that has the potential to undermine the impartiality of a person because of a clash between the person's self-interest and professional interest or public interest. As a vendor, you may create a conflict of interest if you are awarded a contract or purchase order because you have or appear to have an unfair advantage over other vendors with comparable abilities who are offering similar goods, services or construction. Perception is just as important as the reality; even if you know that you have no unfair advantage, others may not see it that way.

 

As a vendor, I want government buyers to know what my company can offer. Can I invite potential buyers for coffee or lunch to discuss my offerings, or would this create a conflict of interest?

Government employees can meet and exchange small tokens, such as a cup of coffee, without creating a conflict of interest. Such meetings can benefit both parties, as vendors can make themselves known to government, and government can learn more about what vendors have to offer. However, these meetings cannot include any discussions about a planned or open competitive process.

 

A government employee has reached out to me to ask for information about what my company sells. If I provide this information, would I be allowed to participate in the competition later, or would I be in a conflict of interest?

This depends on the circumstances that apply. For example:

  • When the Province issues a Request for Information (RFI) on BC Bid (see Types of Solicitations and Other Opportunities for more information on RFIs), there may be a concern that vendors may not see the posting. To avoid this situation, the government buyer may reach out to those known vendors who offer the applicable goods, services or construction, asking them to respond to the RFI. Responding to the RFI will not create a conflict of interest.
  • Sometimes, a government buyer only knows of one vendor who is qualified to provide the needed goods, services or construction. The buyer may reach out directly to this one vendor, to determine their interest. The buyer may then want to direct award to this vendor, but a Notice of Intent (NOI) will likely need to be posted on BC Bid first to confirm that no one else is also capable and interested (see Types of Solicitations and Other Opportunities for more information on NOIs). If another vendor responds to the NOI and the buyer determines that they are also capable to provide what’s needed, a competition will result. This situation does not create a conflict of interest for the first vendor.
  • If a government buyer reaches out to just one vendor to gather information that may be used in a competitive process, a conflict of interest may be created. If you think this may be happening, express your concern to the buyer about this possibility. The buyer can then explain how they intend to ensure that such a conflict is not created (e.g. perhaps they are reaching out to multiple vendors, not just you), or they may decide to use another mechanism, such as an RFI, to get the information needed.

 

I have found an opportunity that I’m interested in, but the government contact has told me that I’m in a conflict of interest and am not eligible to respond. What can I do?

Government needs to be very careful to avoid real and perceived conflicts of interest, as it is accountable to taxpayers for how its funds are spent. This can result in policies and procedures related to conflicts that may not apply to the private sector.

If you’ve been told that you’re ineligible to compete on an opportunity, ask whatever questions you need to understand the government’s decision (refer to Asking Questions for more information). Don’t compare this decision to what you would do for your company in similar circumstances, as different criteria may apply to the government.

If after asking these questions you are not satisfied with the answer, you can make a formal vendor complaint. Refer to Vendor Concerns and Complaints for more information on this process.

 

What do I do if I suspect that there is a conflict of interest influencing a competitive process?

Submit questions to the government contact person named in the solicitation. Explain why you think there is a conflict of interest with this other vendor, and invite the Province to explain. There may be more information about the circumstance that the contact person can share, to address any concerns about potential conflicts.

You may believe that a conflict exists because of what you know about the relationship between the Province and another vendor. For example, you may feel that the incumbent contractor – i.e. the vendor that is currently providing the goods or services – has an unfair advantage over others in the competition because they know things no other vendor knows. However, this can be managed by the buyer ensuring that any relevant information known to one vendor is made available to all interested vendors. Just because the incumbent vendor knows about the government’s internal operations does not create a conflict in the form of an unfair advantage unless that knowledge is important to developing submissions and is not shared in the competition.

If after asking your questions you are still not satisfied that no conflict exists, you can make a formal vendor complaint. Refer to Vendor Concerns and Complaints for more information on this process.

 

Disclaimer

This Information on conflicts of interest and its organization, design and all information, text, hyperlinks and all other matters referred to in this link (referred to as “Content”) is very general information concerning a highly complex subject and is provided to vendors and any other third parties on an “as is” basis without warranties of any kind, whether express or implied, as to the Content or the operation of any website(s), hyperlinks or forms that may be referred to in the Content. The Province of British Columbia (the “Province”) believes the Content may be helpful to vendors as a general beginning point in assessing conflict of interest, however the Content may be or may become inaccurate or incomplete, and particular facts unique to your situation may render the Content inapplicable or incorrect for your situation. The Content is not legal or business advice and any person concerned about conflict of interest should make such further inquiries as they deem necessary to fully inform themselves about the subject, including consulting, as needed, with their business, legal and other advisors. No lawyer-client, advisory, fiduciary or other relationship is created between Province and any person accessing or otherwise using any of the Content.

 

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