What is meant by "conflict of interest" in contract management?

In contract management, "conflict of interest" specifically refers to situations where an individual has a personal stake or interest that could potentially influence their decisions in the context of their professional responsibilities. This concept is critical in ensuring fairness, integrity, and compliance within the contract management process. When individuals involved in contract decisions have personal benefits or relationships that may sway their judgment, it can lead to biased outcomes, undermining the trust and transparency essential for effective contract management.

For instance, if a contracting officer stands to gain financially from a supplier’s success due to a personal investment in that company, their decisions regarding contract awards might be compromised, ultimately affecting the organization's integrity and performance. This understanding is crucial in managing contracts to uphold ethical standards and prevent potential legal issues.