From an SRO’s explanation of how COI on a study section is appropriately handled:
“It sounds like you are concerned with conflict of interest rules for member conflicts. … At CSR, member conflicts generally occur if someone has a “significant” role on a project. If a member is participating as a consultant, this is considered to be an individual conflict rather than one for the entire study section. So, the member would be in CF and would leave the room during the review, but the study section could then review it.
However, once involvement reaches a certain point, the study section itself is in conflict. If involvement exceeds 5% of effort (more than 0.6 calendar months), or if the member is described in the budget justification as participating in the preparation of manuscripts for publication or receiving other tangible benefit, then a line has been crossed and the study section itself is in conflict. At this point, the “member conflict application” is assigned to a member conflict review group or to another appropriate study section if there is one. These situations are evaluated on an individual basis. It is a question of both (1) tangible benefit, and (2) extent of involvement (e.g., would this be considered “this person’s research”, as our Chief says). There is also the important matter of “perception” of conflict; this is always a matter of judgment by the SRO for the group doing the review. We are to avoid actual conflict of interest, as well as the perception of conflict.”