Contracting With The Federal Government  What Do I Need To Know

Contracting With The Federal Government What Do I Need To Know PowerPoint PPT Presentation


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2. Basic Concepts Of Public Contract Law. Duty of Fair ConsiderationGovernment obligation to fairly consider offer

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Contracting With The Federal Government What Do I Need To Know

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1. 1 Contracting With The Federal Government “What Do I Need To Know” Presented by: Terry E. Thomason, Esq. Hawai`i Procurement Institute July 24, 2008 682034/2

2. 2 Basic Concepts Of Public Contract Law Duty of Fair Consideration Government obligation to fairly consider offer “Full & Open” Competition Public Advertisement Enforced generally through Protest System

3. 3 Source Selection Methods Sealed Bids Award to low, responsive bid by responsible offeror “Negotiated” Procurements Award to “Best Value” and responsible offeror Sole Source / Special Preferences

4. 4 Small Business – SocioEconomic Programs Federal Programs to provide economic opportunities to: Small businesses Small disadvantaged businesses and 8(a) Women-owned small businesses HUB zone small businesses Veteran-owned small businesses Service-disabled Veteran-owned small businesses

5. 5 Over-View – Federal Programs Obtain needed goods and services at reasonable prices Through “full and open” competition Except where socio-economic benefit created by limiting competition

6. 6 Common Concept for All Contracts [FAR 9.104] “Responsible” Prospective Contractor Adequate financial resources Capable of meeting performance schedule Satisfactory performance record Necessary organization Necessary facilities/equipment Record of Integrity and Business Ethics

7. 7 New Emphasis On Integrity FAR Part 3 – Improper Business Practices and Personal Conflicts of Interest FAR F2.203-13 (Dec. 2007) [$5M K-values or more] Formal company code of ethics and standards of conduct Employee compliance training Internal control systems – reporting system Purpose: promote integrity in procurement

8. 8 New Emphasis On Integrity Response to continuing problems in overcharging / defective performance / misconduct Contractor conduct will be scrutinized and no tolerance of dishonesty or ethical lapses Sanctions: Adverse performance and responsibility determinations Suspension / debarment Criminal prosecution

9. 9 Substantive Ethics Rules Bottom Line – Considerations Even most ethical contractors can have ethical errors Most violations are the result of actions by less experienced employees Many violations arise from simple misunderstandings by employees who are unaware of ethics rules

10. 10 Substantive Ethics Rules General Rule Government employees must avoid appearance of impropriety Contractors should Maintain same standards as federal employees, and Know and obey specific legal restrictions

11. 11 Substantive Ethics Rules Accuracy in representations and certifications Eligibility for contract Small business status Non-collusion Compliance with contract obligations Certification of cost and pricing data Certification of Davis-Bacon payrolls Certification of claims data / “good faith” *All certifications must be accurate

12. 12 Substantive Ethics Rules Legal basis and sanctions: Truth and accuracy of statements False Statements Act – 18 USC §1001 Material statements – knowingly false/Reckless Truth in Negotiations Act (TINA) – 10 USC §2306a Requires certification of “expected costs”

13. 13 Substantive Ethics Rules Contract Disputes Act / False Claims Act FAR 52.333.1 “Disputes” “I certify that the claim is made in good faith; that the supporting data are accurate and complete to the best of my knowledge and belief; that the amount requested accurately reflects the contract adjustment for which the contractor believes the government is liable; and that I am duly authorized to certify the claim on behalf of the contractor.”

14. 14 Substantive Ethics Rules False Claims Act 18 USC §207 (criminal) 31 USC §3729-33 (civil) False invoices / demands for payment Claims / REAs Any act which contractor knows will affect / cause payment to be made Claims for progress payment with Davis-Bacon violations

15. 15 Substantive Ethics Rules Gifts And Gratuities Offered Or Given To Federal Employees [FAR 52.203-3] Giving of any “thing of value” to federal employee that might compromise the integrity of a procurement official is strictly prohibited Gift may violate criminal prohibition – Bribery; or Contract prohibition - offering a gratuity Government employee must report – Investigation follows.

16. 16 Substantive Ethics Rules Gifts and Gratuities Some offerings are permitted “Modest” offerings of food or beverage Coffee and donuts – probably okay Lobster buffet – probably not Penalties Termination / debarment and suspension Criminal sanctions

17. 17 Substantive Ethics Rules Anti-Trust Violations [FAR 3.3] Collusion Influencing who will compete Influencing what prices will be offered What about teaming agreements - FAR 9.603 Policy. The Government will recognize the integrity and validity of contractor team arrangements; provided, the arrangements are identified and company relationships are fully disclosed in an offer or, for arrangements entered into after submission of an offer, before the arrangement becomes effective. The Government will not normally require or encourage the dissolution of contractor team arrangements. Prime / subcontractor teams – JVs Sanctions – criminal and civil

18. 18 Substantive Ethics Rules Prohibition Against Contingent Fees [FAR Clause 52.203-5] Contractors may not engage consultant to help win a contract under terms where consultant paid Only if contractor received the contract Consultant must be paid regardless of result Sanctions: contract termination and debarment

19. 19 Substantive Ethics Rules “Kick Backs” – Prohibited by Anti Kickback Act of 1986 – 41 U.S.C. §51-58 FAR Clause 52.203-7 Prohibits payments from subs to primes and higher tier subs in return for favorable treatment of any kind on a subcontract “ . . . Any money, fee, commission, credit, gift, gratuity, thing of value, or compensation of any kind . . . “ Broad Prohibition – intended to stop perceived corruption in `70s and `80s Sanctions – termination, recovery and debar

20. 20 Substantive Ethics Rules Limitation on payment of funds for “lobbying” to influence federal transactions Contractor may not use “appropriated” funds to pay any person to influence a government official in the award of a federal contract. [FAR 3.802, 52.203-11 and 12]

21. 21 Substantive Ethics Rules Unreasonable restrictions on Subcontractor Sales May not unreasonably preclude subs from making direct sales to government 10 USC §2402 and 41 USC 253 Teaming agreements? “Best Price” agreement?

22. 22 Substantive Ethics Rules “Whistleblower” Protections 10 USC §2409 and 41 USC §251 et seq. Government contractors may not discharge, demote, or otherwise discriminate against an employee For making a disclosure to congress, agency official, DOT Related to violation of law related to the contract Also: [Hawaii law = HRS §370-61 et seq.] [False Claims Act – anti-retaliation]

23. 23 Substantive Ethics Rules “Whistleblower” retaliation sanctions “Corrective action” - i.e. reinstatement “Make whole” – Back pay and all related costs., i.e. attorney fees, damages Remedies under State law

24. 24 Summary Award process confirms contractor knows how to do “work” Past performance Key personnel Responsibility (Ethics and Business Conduct) Must be taught to employees Systems must be in place Reporting schemes – correction action

25. 25 FINAL THOUGHTS QUESTIONS?

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