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 contractors, as well as conflict of interest mitigation instruments and ethics policies and training. The good news for DARPA is that, in a report issued January 24, 2013, the IG found that the Program met federal government standards.
To foster an innovative and “entrepreneurial” research and development efforts DARPA hires program managers from industry for 3- to 6-year tours. In its audit, the IG reviewed the ethics records of a sample of 40 senior DARPA employees, including pre-employment correspondence, ethics training records, authorizations, recusals, post-employment opinions, as well as DARPA’s ethics annual training plans and training material. The IG found that DARPA’s ethics policies and program implementation were consistent with federal government conflict of-interest mitigation standards, and that DARPA personnel were properly trained and followed DARPA ethics policies.
The IG analyzed, in detail, the elements of DARPA’s Ethics Program:
- The DoD Standards of Conduct Office (SOCO) manages and oversees the DoD Ethics Program and is responsible for maintaining implementing guidance and training material. SOCO reviews the program every 4 to 5 years to verify compliance with governing statutes and regulations.
- DARPA’s ethics training follows the Federal Government’s ethics rules and regulations, using ethics training material developed each year by DoD SOCO. DARPA provides new employee and annual ethics training for all DARPA employees.
- DARPA personnel were properly trained and followed applicable ethics laws and regulations.
- DARPA’s internal controls over its ethics program were effective.
- DARPA’s ethics program personnel mitigated the potential for conflicts-of-interest by counseling DARPA managers and current and former employees on potential conflict-of-interest issues and potential remedial actions (such as recusals and authorizations), and by providing ethics guidance and operating procedures to implement current ethics laws and regulations.
- The sampled DARPA employees filed 30 notices of disqualification and 9 disqualifications for seeking employment. Each determination was based on a supervisory review of the employees’ financial disclosure and coordinated with the DARPA OGC.
- The Broad Agency Announcement programs (BAA’s) managed by the sampled employees followed appropriate guidance and led to no conflicts-of-interest.
POGO also raised concerns that because eight employees from BAE/AlphaTech had become DARPA program managers, rotating between working at DARPA and then returning to senior positions within BAE Systems, BAE/AlphaTech was awarded a disproportionate share of contracts.
The DOD IG found, however, that, DARPA did not award BAE Systems contracts as a result of undue influence from former BAE Systems employees. DARPA personnel were properly trained, followed ethics laws and regulations, and mitigated conflicts-of-interest in program management and contract award decisions. Annual financial disclosure reports, as well as training and ethics advice, including post-employment limitations, was properly documented in DARPA’s ethics files. The IG’s review of BAE contracts found that the scientific reviews and proposal evaluations complied with acquisition conflict-of-interest requirements, and that there were no apparent conflicts-of-interest or undue influence from former BAE employees. The IG found that contract award decisions and proposal evaluations were impartial, equitable, and comprehensive.
So what are the morals of the story?
- We can expect that the area of personal conflicts of interest will be increasingly subject to challenges and audits, following the trend of increasing numbers of Organizational Conflict of Interest challenges (mainly in bid protests).
- The DoD IG’s report provides a road map of the processes used by DARPA that satisfied the IG’s concerns. Most of these processes are required (or at least appropriate) for other government agencies as well.
- As in all government contract matters, documentation is critical. DARPA “passed” the IG’s conflict-of-interest audit because they complied with required federal government rules and procedures AND THEY FULLY DOCUMENTED THEIR COMPLIANCE!
The full DoD IG report can be found at: http://www.dodig.mil/PUBS/documents/DODIG-2013-039.pdf
Want to learn more about personal conflicts-of-interest as well as Organizational Conflicts of Interest? Take the OCI Workshop.