Conflict of Interest (COI)

What is a Conflict of Interest in Procurement?

A Conflict of Interest (COI) arises when someone involved in a government procurement process — whether an evaluator, decision-maker, or tenderer — has a personal, financial, or professional interest that could compromise, or appear to compromise, the integrity of the process. Managing COIs is a fundamental aspect of Probity in Australian government tendering.

Types of Conflict of Interest

Conflicts can take several forms:

• Actual conflict — a real, existing conflict that is currently affecting or could affect decisions (e.g., an evaluator who holds shares in a tendering company)
• Perceived conflict — a reasonable person could believe a conflict exists, even if it does not actually influence the individual (e.g., an evaluator whose spouse works for a tendering company)
• Potential conflict — circumstances that could develop into a conflict in the future (e.g., an evaluator in discussions about joining a tendering company)

How Are COIs Managed?

Australian government procurement frameworks require proactive management:

• Declaration — all evaluation panel members must declare any potential, perceived, or actual conflicts before the evaluation begins
• Assessment — the procuring agency assesses the severity and nature of each declared conflict
• Mitigation — depending on severity, the agency may require the person to be excluded from the evaluation, have their access restricted, or implement other controls
• Documentation — all declarations and management actions are recorded

COI Obligations for Tenderers

Suppliers also have COI obligations. Tender documents typically require respondents to declare:

• Any relationships with the procuring agency’s staff
• Any involvement in preparing the tender specifications or requirements
• Any other interests that could create a conflict

Failing to declare a known conflict can result in your tender being disqualified or a contract being terminated.

Tips for Tenderers

• Declare early and fully — non-disclosure is worse than the conflict itself.
• Propose management strategies — if a conflict exists, explain how you will manage it.
• Check your subcontractors — conflicts held by your team members or subcontractors are also your responsibility to declare.