Conflict of Interest (COI) has gotten a good deal of attention over the years, especially as the federal government continues to increase its reliance on contractors. While most contractors understand the importance of COI, the cost of failing to diligently examine all potential COI concerns - whether intentional or nonintentional - can be high, as SAIC's position shows.

According to a Federal Times article, a federal jury found SAIC guilty of violating the False Claims Act by failing to disclose potential conflicts of interest that could have biased its work with the Nuclear Regulatory Commission (NRC). The company helped the agency develop radioactive waste recycling rules. Although actual bias wasn't proven, the jury determined that the potential for bias was there because the company has relationships with companies that could benefit from the rule, a fact that NRC says SAIC failed to disclose.

The cost for SAIC's misstep: $6 million in damages, plus $5,000 to $10,000 in fines for each claim (totaling 77), for an additional fine of between $385,000 to $770,000.

With the eagle eye of Congress on acquisitions, due diligence has never been more critical. The cost of these types of rulings can go well beyond financial; companies could also be suspended or disbarred from doing business with the government.