(a) By use of the contract clause at 52.203-16, as prescribed at 3.1106, the contracting officer shall require each contractor whose employees perform acquisition functions closely associated with inherently Government functions to-

1. (1) Have procedures in place to screen covered employees for potential personal conflicts of interest by-

   1. (i) Obtaining and maintaining from each covered employee, when the employee is initially assigned to the task under the contract, a disclosure of interests that might be affected by the task to which the employee has been assigned, as follows:

      1. (A) Financial interests of the covered employee, of close family members, or of other members of the covered employee’s household.

      2. (B) Other employment or financial relationships of the covered employee (including seeking or negotiating for prospective employment or business).

      3. (C) Gifts, including travel; and

   2. (ii) Requiring each covered employee to update the disclosure statement whenever the employee’s personal or financial circumstances change in such a way that a new personal conflict of interest might occur because of the task the covered employee is performing.

2. (2) For each covered employee-

   1. (i) Prevent personal conflicts of interest, including not assigning or allowing a covered employee to perform any task under the contract for which the Contractor has identified a personal conflict of interest for the employee that the Contractor or employee cannot satisfactorily prevent or mitigate in consultation with the contracting agency;

   2. (ii) Prohibit use of non-public information accessed through performance of a Government contract for personal gain; and

   3. (iii) Obtain a signed non-disclosure agreement to prohibit disclosure of non-public information accessed through performance of a Government contract.

3. (3) Inform covered employees of their obligation-

   1. (i) To disclose and prevent personal conflicts of interest;

   2. (ii) Not to use non-public information accessed through performance of a Government contract for personal gain; and

   3. (iii) To avoid even the appearance of personal conflicts of interest;

4. (4) Maintain effective oversight to verify compliance with personal conflict-of-interest safeguards;

5. (5) Take appropriate disciplinary action in the case of covered employees who fail to comply with policies established pursuant to this section; and

6. (6) Report to the contracting officer any personal conflict-of-interest violation by a covered employee as soon as identified. This report shall include a description of the violation and the proposed actions to be taken by the contractor in response to the violation, with follow-up reports of corrective actions taken, as necessary.

(b) If a contractor reports a personal conflict-of-interest violation by a covered employee to the contracting officer in accordance with paragraph (b)(6) of the clause at 52.203-16, Preventing Personal Conflicts of Interest, the contracting officer shall-

1. (1) Review the actions taken by the contractor;

2. (2) Determine whether any action taken by the contractor has resolved the violation satisfactorily; and

3. (3) If the contracting officer determines that the contractor has not resolved the violation satisfactorily, take any appropriate action in consultation with agency legal counsel.