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    2. Service Contactor Personal Conflicts of Interest William Weisberg Bryan Cave LLP 700 13th Street, N.W. Washington, D.C. 20005 T (202) 508-6108 William.weisberg@bryancave.com Date: August 4, 2008 Time: 2:00 – 3:00PM

    3. What is a “personal conflict of interest?” An individual has a personal financial interest tied to the work performed for a Government customer. NOT “normal” salary, bonus, increase in employer’s stock price, etc. GAO has long said that such an improper conflict may be “actual” or “apparent.”

    4. Why the sudden interest? Recent attention paid to Organizational Conflicts of Interest (“OCI”) focused attention on the subject of conflicts of interest, more generally. Increasing attention paid to growth of contractor workforces compared to numbers of Government employees. Recognition that contractor employees are performing many of the substantive tasks once only performed by Government employees. “Conflicts of Interest” make a great news story.

    5. Current Laws and Regulations Source selection situations: contractor employees subject to laws and regulations preventing release of protected government source selection information. FAR 3.104-4. Prohibitions on bribery, kickbacks, and other clearly improper actions. 18 U.S.C. 201.

    6. (Current Laws and Regulations) FAR 3.10—Formal Government Contract Compliance Programs DFARS 203.70 (Contractor Standards of Conduct) Neither is Conflict of Interest-specific, but both suggest and/or require being tailored for particular contracts.

    7. (Current Laws and Regulations) Contractual actions which lead to federal False Statements Act and False Claims Act violations. The “reward” for the conflict of interest may lead to other criminal law violations, including tax, money laundering, conspiracy, etc.

    8. Source Selection Impact There is a potentially close interplay between personal conflicts of interest and OCI. OCI focuses on factors like “impaired objectivity,” “biased judgment,” and “unfair competitive advantage.” OCI is focused on the company, but of course, the company operates through individuals.

    9. (Source Selection) Open question: can personal conflicts of interest be mitigated, like OCI? Probably not, since most (if not all) personal conflicts of interest are per se improper.

    10. What Has GAO Said? Recent protest: Savannah River Alliance, LLC, B-311126 (2008). Allegation that source selection was tainted by both OCI and personal conflicts of interest. The personal conflict allegation related to a federal employee married to an employee of one of the competitors. Protest focused on conduct of federal employee.

    11. (GAO Protest) GAO said that a personal conflict of interest arose of the individual had both an “official role” and a “personal stake.” Although speaking about the conduct of the federal employee, GAO clearly was ready to apply the standard to a contractor employee, given the “official” role such an employee might play.

    12. (GAO Protest) GAO reiterated the “actual or apparent” conflict standard. Traditionally applied to Government employees, but would logically apply to contractor personnel in this context. Concern is an apparent conflict that would damage the “integrity of the competitive procurement system.”

    13. Interplay with new FAR 3.10 and DFARS 203.70 FAR 3.10 requires formal Compliance Programs for most contractors. Must be government-contract specific, not general corporate codes of conduct. For contractors performing contracts with “government-like” performance roles, personal conflict of interest rules should be part of the FAR/DFAR Compliance Program.

    14. Coming Round the Bend… New Contractor Personal Conflict of Interest regulations are in the pipeline. FAR Councils have active Cases. Public Comments have been received. Interim or Final Rules may be promulgated at any time.

    15. Specific Program Points For Now (Remember, personal conflicts may violate existing laws and/or lead to loss of a contract through a GAO protest) Compliance Review to baseline existing compliance with conflict rules and principles. Address the issue in written codes of ethics and in training programs. Conduct periodic reviews of practices and procedures.

    16. (Specific Points) Hot lines or other internal reporting mechanisms. Written procedures for dealing with conflicts, including escalation procedures and disciplinary steps. Internal and/or external audits.

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