FORTY MOST ASKED QUESTIONS & ANSWERS
Disclosure Statement to Avoid Conflict of Interest
17a. If an EIS is prepared with the assistance of
a consulting firm, the firm must execute a disclosure statement.
What criteria must the firm follow in determining whether it has
any "financial or other interest in the outcome of the project"
which would cause a conflict of interest?
17b. Q. If the firm in fact has no promise of future
work or other interest in the outcome of the proposal, may the
firm later bid in competition with others for future work on the
project if the proposed action is approved?
Section 1506.5(c), which specifies that a consulting
firm preparing an EIS must execute a disclosure statement, does
not define "financial or other interest in the outcome of the
project." The Council interprets this term broadly to cover any
known benefits other than general enhancement of professional
This includes any financial benefit such as a promise of
future construction or design work on the project as
Well as indirect benefits the consultant is aware of
(e.g., if the project would aid proposals sponsored by the
firm's other clients). For example, completion of a
highway project may encourage construction of a
shopping center or industrial park from which the
consultant stands to benefit. If a consulting firm is aware
that it has such an interest in the decision on the
proposal, it should be disqualified from preparing the EIS, to
protect the objectivity and integrity of the NEPA
When a consulting firm has been involved in
developing initial data and plans for the project, but does not
have any financial or other interest in the outcome of
the decision, it need not be disqualified from preparing
the EIS. However, a disclosure statement in the draft
EIS should clearly state the scope and extent of the
firm's prior involvement to expose any potential
conflicts of interest that may exist.