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Breakout Session #401 Raymond S.E. Pushkar, Esq., Partner McKenna Long & Aldridge LLP, Washington, D.C. Date: Monday PowerPoint Presentation
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Breakout Session #401 Raymond S.E. Pushkar, Esq., Partner McKenna Long & Aldridge LLP, Washington, D.C. Date: Monday - PowerPoint PPT Presentation


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CONFLICTS OF INTEREST – ORGANIZATIONAL & PERSONAL. Breakout Session #401 Raymond S.E. Pushkar, Esq., Partner McKenna Long & Aldridge LLP, Washington, D.C. Date: Monday, April 23, 2007 Time: 10:45 am – 11:45 am. Organizational Conflicts of Interest.

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CONFLICTS OF INTEREST – ORGANIZATIONAL & PERSONAL

Breakout Session #401

Raymond S.E. Pushkar, Esq., PartnerMcKenna Long & Aldridge LLP, Washington, D.C.

Date: Monday, April 23, 2007

Time: 10:45 am – 11:45 am

organizational conflicts of interest
Organizational Conflicts of Interest
  • Government Interest is fair, competitive, and unbiased performance of a government contract (FAR Subpart 9.5)
  • Involves Agency Acquisition Planning
organizational conflicts of interest4
Organizational Conflicts of Interest
  • There are Four Basic FAR Rules (9.505) for Analysis and Avoidance of OCI
rule 1 systems engineering technical direction contracts
Rule 1: Systems Engineering & Technical Direction Contracts
  • Contractor not to be awarded prime supply contract for the system or subcontractor
    • Includes substantially all representative list of tasks (FAR 9.505-1)
rule 2 specifications statements of work contracts
Rule 2: Specifications & Statements of Work Contracts
  • Contractor for non-development items not to be awarded prime contract to furnish items or subcontract(FAR 9-505-2)
rule 2 specifications statements of work contracts cont d
Rule 2: Specifications & Statements of Work Contracts (Cont’d)
  • Exclusions:
    • Supplementing other specifications provided by the government
    • Helping agency to prepare or refine under the control of agency
rule 2 specifications statements of work contracts cont d8
Rule 2: Specifications & Statements of Work Contracts (Cont’d)
  • Rule 2 only applies to competitive contracts for non-developmental items (e.g., prototype does not bar contractor from follow-on contracts for further development and production)
rule 2 specifications statements of work contracts cont d9
Rule 2: Specifications & Statements of Work Contracts (Cont’d)
  • Rule 2 does not apply to non-competitive procurements (e.g., sole source or non-competitive follow-ons)
  • Restrictions apply for “reasonable time”
rule 3 technical evaluation contracts
Rule 3: Technical EvaluationContracts
  • Contracts for technical evaluation of other contractors’ products or advisory assistance services may not be awarded to contractors who would evaluate or advise agency on their own product (FAR 9.505-3)
rule 3 technical evaluation contracts cont d
Rule 3: Technical EvaluationContracts (Cont’d)
  • Proper safeguards can ensure objectivity
    • Contracting Officer has discretion for safeguards
rule 4 access to proprietary data of other contractors in performing advisory services far 9 505 4
Rule 4: Access to Proprietary Data of Other Contractors in Performing Advisory Services (FAR 9.505-4)
  • May Not Take Advantage of Same
  • Government requires non-disclosure agreement to protect proprietary information
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Rule 4: Access to Proprietary Data of Other Contractors in Performing Advisory Services (FAR 9.505-4) (Cont’d)
  • Contractor can bid on subsequent production contracts provided it does not use the proprietary data covered by non-disclosure agreement
  • No OCI if data has fallen into public domain
implementation of rules far 9 506
Implementation of Rules (FAR 9.506)
  • Role of CO is to identify “significant potential OCI”
  • Must prepare written analysis and plan for avoiding or mitigating OCI
implementation of rules far 9 506 cont d
Implementation of Rules (FAR 9.506) (Cont’d)
  • Could involve solicitation language identifying nature and duration of potential conflict and restraints on offerors/awardees
  • CO given “sound discretion,” protest cases illustrate
implementation of rules far 9 506 cont d16
Implementation of Rules (FAR 9.506) (Cont’d)
  • Government has burden of anticipating OCI and for mitigation plans, but some agencies shift that burden to contractors (e.g., DOE, EPA, by rules)
penalties for oci
Penalties for OCI
  • Loss of contract opportunities
  • If disclosures in bidding are inaccurate or wrong, criminal false statements may apply (18 U.S.C. 1001)
  • Suspension or debarment under FAR Part 9.1
marketing consultants far 9 501
Marketing Consultants (FAR 9.501)
  • Contractors must disclose activities
  • Offerors must certify no unfair competitive advantage
  • FAR defines as “independent” contractors who furnish advice, information, direction, or assistance to offeror or contractor
marketing consultants far 9 501 cont d
Marketing Consultants (FAR 9.501) (Cont’d)
  • Exclusions from definition:
    • “Advisory assistance” services under FAR 37.2;
    • Routine engineering and technical services;
marketing consultants far 9 501 cont d20
Marketing Consultants (FAR 9.501) (Cont’d)
    • Legal, actuarial, auditing, and accounting services; and
    • Training services
  • Bottom line:
    • OCI rules apply to marketing consultants
personal conflicts of interest
Personal Conflicts of Interest
  • Prohibition of situations in which interests of persons inside government or recently departed from such service conflict with person’s responsibilities as a present or past federal employee (18 USC 207 & 208) NOTE: Sections 207 & 208 do not apply to enlisted members of armed forces because they are not officers or employees (Joint Ethics Regulation, DOD 5500.7-R, extends the requirements to enlisted)
personal conflicts of interest cont d
Personal Conflicts of Interest(Cont’d)
  • Personal financial interest conflict
  • Employment restrictions
  • Military personnel (pensions)
other post employment restrictions
Other Post-Employment Restrictions
  • Permanent restrictions
    • Former government employee cannot make appearance, influence, communicate before a department in a particular matter where:
      • U.S. or D.C. is a party or has substantial interest; or
      • Former officer or employee participated personally or substantially in the particular matter in his/her official capacity
other post employment restrictions cont d
Other Post-Employment Restrictions(Cont’d)
  • One-year restrictions:
    • Trade & treaty matters
      • Advice on ongoing trade or treaty negotiations if personally and substantially participated in on behalf of U.S.; had access to treaty or trade negotiations and knew or should have known information was exempt from disclosure
other post employment restrictions cont d25
Other Post-Employment Restrictions(Cont’d)
  • Senior Personnel
    • One-year prohibition from representing another party before agency from which he/she was terminated
other post employment restrictions cont d26
Other Post-Employment Restrictions(Cont’d)
  • Very Senior Personnel
    • One-year prohibition
    • Includes Executive Schedule I to V – Vice President of the United States and Executive Office of the President – at set levels
other post employment restrictions cont d27
Other Post-Employment Restrictions(Cont’d)
  • Members of Congress and Staff
    • One-year prohibition similar to those imposed on senior and very senior executive employees
other post employment restrictions cont d28
Other Post-Employment Restrictions(Cont’d)
  • Two-Year Restrictions
    • Executive Branch Employees
      • Prohibited from knowingly making, with intent to influence, any communication or appearance before an agency on behalf of another in connection with particular matters in which US or DC is a party or has direct & substantial interest and former employee knows or should know that the particular matter was actually pending under his/her official responsibility within one year before termination of employment
violations penalties
Violations/Penalties
  • Penalties Vary
    • Imprisonment of not more than one year and $50,000 for each violation, conspiracy, aiding and abetting, false statements in certification or report
    • Suspension and debarment
conflicts under procurement integrity act regulations
Conflicts Under Procurement Integrity Act & Regulations
  • Governed by 41 USC 423 and FAR Part 3.104
  • Restrictions on Former Agency Officials’ Acceptance of Compensation From a Contractor
conflicts under procurement integrity act regulations cont d
Conflicts Under Procurement Integrity Act & Regulations (Cont’d)
  • One-year prohibition after official:
    • Served as PCO SSA, SSB, chief of financial or technical team in which contractor was selected
    • Award must be for contracts in excess of $10 million
conflicts under procurement integrity act regulations cont d32
Conflicts Under Procurement Integrity Act & Regulations (Cont’d)
  • Served as program manager, deputy, or ACO for contract in excess of $10 million
  • Personally made decision to award contract/subcontract, modification, or delivery order to contractor in excess of $10 million
  • Established overhead rates valued in excess of $10 million
conflicts under procurement integrity act regulations cont d33
Conflicts Under Procurement Integrity Act & Regulations (Cont’d)
  • Approved payment to contractor in excess of $10 million
  • Paid or settled claim of contractor if in excess of $10 million
conflicts under procurement integrity act regulations cont d34
Conflicts Under Procurement Integrity Act & Regulations (Cont’d)
  • Exceptions
    • No prohibition against compensation from a division or affiliate of contractor that does not produce same or similar products or services
    • Law provides contractor must make careful inquiries before providing compensation
conflicts under procurement integrity act regulations cont d35
Conflicts Under Procurement Integrity Act & Regulations (Cont’d)
  • Should contact agency ethics officer prior to offering/providing compensation to former government employee
  • Good-faith reliance on agency ethics official protects against allegations of violations of Procurement Integrity Act