The PCI Network – Ethics in Government Contracting

Understanding the difference between right and wrong isn’t always as easy as you may think. In the Federal Contracting industry, there are important ethical distinctions that can create confusion if you don’t know where to look. Join Fred Geldon, a PCI Director and Faculty, as he explains the importance of ethics in Government Contracting and how to minimize the confusion.

Fred’s FAR Fact or Fiction: Nobody Cares About Contract Closeout

Fiction/Myth:  “My manager just moved me into the Contract Closeout group.  What a bummer!  I want to be able to ‘feed the elephant,’ not clean up after it.  Anyway, who cares about closeout?  I don’t spend my free time at home sorting socks, and I certainly don’t want to that at the office!”   Fact:  Admittedly, contract closeout is not a glamor center.  Agencies and contractors regularly trumpet the awards of major contracts, but I challenge any reader to find a press release announcing the “closeout” of a group of contracts. I won’t comment about sock drawers.  But contract closeout is more important than one might think. Here’s what timely contract closeout can mean: To the agency funding authority, closeout frees up money.  It allows … Continue reading

Fred’s FAR Fact or Fiction: “I’m sure the Federal Procurement Data System (FPDS) is useful for contracting officers when they need information. But why should I, as a contractor, care about it?”

Fiction/Myth:  “I’m sure the Federal Procurement Data System (FPDS) is useful for contracting officers when they need information.  But why should I, as a contractor, care about it?” Fact: True, the FPDS is helpful to the government policy makers and the government’s contracting team.  As FAR 4.602(a) notes, the contract data reported to the FPDS gives agencies a basis for reports to the President, Congress, GAO, and the public, as well as the means to measure the extent to which businesses in certain socio-economic categories (small businesses, service-disabled veteran-owned, HUBZone, etc.) are receiving federal contracts and the effect of Federal contracting on policy and management initiatives (such as for promoting sustainable technologies and products). But is that all the FPDS can do? With a few … Continue reading

Organizational Conflict of Interest Challenges

Thirty-Nine in a Row! During the past two-and-a-half years, 40 Organizational Conflict of Interest (OCI) challenges have been raised in protests before the Government Accountability Office (GAO).  And – with the exception of one protest where the agency waived a potential OCI at the last minute, after receiving an unfavorable ADR “outcome prediction” – in every case the contracting officer determined that there was no disqualifying OCI, and in every case GAO upheld the contracting officer’s decision.[1]  Every single time!  Even Stephen Strasburg doesn’t strike out everybody.  (Alas, especially this year) It might even be said that OCI reversals have become as rare as leap days, since the last sustained OCI protest was Niksoft, issued on February 29, 2012.  And in that protest, unlike the … Continue reading

Fred’s FAR Fact or Fiction: The Gift Rule

Fiction:  “I don’t have to worry about gift rules.  The ‘Standards of Conduct’ (5 C.F.R. 2635), and FAR 3.101 don’t address contractors – they only apply to government employees.  So I’ll let them worry about it.  Anyway, who will know?  And when there’s a violation, the prosecutors only go after the government employee.” Fact:  This is a dangerous misconception.  Acting on it may lead directly to the unemployment lines, or worse. First, contractors are subject to criminal penalties, including jail time, if they violate the federal bribery/gratuities statute.  Under 18 U.S.C. 201, anyone who “gives, offers, or promises anything of value to any public official” with intent to “influence any official act” or to “induce” an action or omission [bribe] or “for or because of … Continue reading

Fred’s FAR Fact or Fiction: Everything has to be by the book

Fiction: “I always thought that our country was built on experimentation and enterprise: Unless something is prohibited by law, you can do it!  But our government contracting system doesn’t seem to operate that way.  Everything has to be ‘by the book.’  Unless the FAR specifically spells it out, no one is willing to try a sensible business approach.” Fact: It’s understandable why you feel that way.  In a rule-based environment, it can be so difficult learning the rules and regulations that apply that one doesn’t have time to “think outside the box.”  And by the way, that can be true in the private sector as well – remember the old saying, “no one ever got fired for buying from IBM”?  [Personal note: That slogan still … Continue reading

Fred’s FAR Fact or Fiction: Negotiation with the Government is a Zero-Sum Game

**We are giving our readers the opportunity to vote on what this series should be called. If you want to chime in please use the poll below. Thank you!** Fiction/Fallacy: “Negotiation with the Government is a zero-sum game.  My contracting officer’s job is to keep the Government’s costs down, no matter what.  He/she doesn’t care whether I go bankrupt in the process.” Fact: Unfortunately, whether due to inexperience, improper training, or budget pressures, these situations have occurred. But it’s not in a contracting officer’s “job description.” True, the FAR repeatedly admonishes the contracting officer to do what is in the best interests of the United States.  But the FAR doesn’t tell the contracting officer to be a one-sided advocate whose only goal is to win, … Continue reading

Contract Administration: What Do I Do?

*This is part of the series, What Do I Do?, which will address common scenarios with practical views on possible ways to handle situations.  Consider the following scenario: Your government Program Manager has asked you to make changes to deliverables that will increase your costs.  The COR has endorsed this request, but you haven’t heard from the Contracting Officer, who can’t be reached.  Time is of the essence.  What should you do? Your Legal Counsel advises you not to do any extra work without a written direction from the Contracting Officer.  “Only the Contracting Officer has a warrant to bind the government.  Unless the CO directs the change, or ratifies it, you will be treated as a volunteer, and won’t be paid.” Your Business Manager … Continue reading

CMS Is “Not Intercepted.”

“When you know what you’re doing, you’re not intercepted.” – Johnny Unitas Johnny U. famously uttered those words in 1958, after leading the Baltimore Colts to victory in “The Greatest Game Ever Played.” Fifty-five years later the Baltimore-based Center for Medicare and Medicaid Services (CMS), demonstrating that they “knew what they’re doing,” were “not intercepted” in an OCI bid protest. [Disclaimer: on several occasions during the past two years the author has conducted OCI training for CMS contracting officers and program managers.] In September 2012, CMS awarded a task order to CGI Federal to be a Medicare Secondary Payer (MSP) Recovery Audit Contractor (RAC). The function of an MSP-RAC is to identify and recover erroneous overpayments made by Medicare where an employer-sponsored Group Health Plan … Continue reading

DARPA’s Conflict-of-Interest Program Gets Clean Bill of Health

It is well understood that government employees are subject to a wide variety of ethics and disclosure obligations.   Indeed, with contractor employees becoming more involved in procurement support roles, similar obligations are being imposed on contractor employees – for example, the recent Personal Conflict of Interest Rule (FAR Subpart 3.11).   But is there any review of the government’s compliance with these rules?  The answer is yes.   In response to a letter from the Program On Government Oversight (POGO), the DoD Inspector General (IG) reviewed the Ethics Program of the Defense Advanced Research Projects Agency’s (DARPA).  POGO asked the IG to examine DARPA’s application of ethics laws, rules, and regulations to conflict of interest situations, including recusals, waivers, and divestments by DARPA employees and … Continue reading