Ethics & Procurement Integrity (TXT)


Ethics &
Procurement
Integrity


What You Need to Know as a Federal Employee Involved in
the Procurement and Acquisition Process


U.S. Office of Government Ethics
www.usoge.gov



Ethics &
Procurement
Integrity


What You Need to Know as a Federal Employee Involved
in the Procurement and Acquisition Process


Contents

Introduction
Conflicts of Interest
Financial Conflicts
Impartiality Issues
Gifts
Gifts From Contractors
Gifts To Contractors
Procurement and Other Nonpublic Information
Procurement Information
Other Nonpublic Information
Restrictions on Employment Discussions
Seeking Employment: General Rules
Seeking Employment with a Bidder or Offeror
Working for a Contractor After Government
Accepting Compensation from a Contractor
General Post-Employment Restrictions
Miscellaneous
Fundraising
Letters of Recommendation
Outside Employment with a Contractor
Conclusion
About OGE

Introduction

As a Federal employee involved in the procurement and acquisition process, you
play an important role in preserving the integrity of Government contracting and
assuring fair treatment of bidders, offerors, and contractors. A violation of
ethics rules can cause a bid protest or undermine the public’s confidence in
Government. Improper conduct can also result in an administrative, civil or even
criminal penalty.

This brochure provides general information only. It will help you recognize some
of the most common ethics and procurement integrity issues that can come up
during the contracting process. Where there are examples, please note that they
just illustrate a few common scenarios. You might encounter other issues or
different situations.

If you have a specific issue, have questions, or need additional help, contact
an ethics official at your agency before taking any action. For information on
how to contact your Designated Agency Ethics Official (DAEO), consult the DAEO
list on the Office of Government Ethics website at http://www.usoge.gov.


1 Conflicts of Interest

Ethics laws prohibit Government employees from having financial conflicts of
interest. By keeping in mind a few basic concepts, you can help ensure that
contracts are awarded and administered free from improper influence or even the
appearance of impropriety.

Financial Conflicts

A criminal law prohibits you from working on a Government matter (such as a
contract) that would affect your financial interests. This prohibition also
covers the financial interests of certain other persons such as:

* your spouse;
* minor child;
* general partner;
* an organization in which you serve as an employee, officer, director, trustee,
or general partner; and
* a person with whom you are seeking or have an arrangement for future
employment.

A Few Examples of Financial Conflicts of Interest

You would have a financial interest in a contract or other matter that affects
the contractor in situations such as these:

* You own stock in a company­ that is bidding on a contract­ (or that is likely
to be a­ subcontractor).
* You have a pension with, or deferred compensation from, your former employer,
a contractor that is participating in a procurement with your agency.
* You moonlight for a company that gets a contract with your agency.
* Your spouse works for a contractor and her salary would be affected if her
company is awarded (or loses) a contract with your agency.

If you think you have a financial conflict, contact your agency ethics official
right away. He will help you determine whether you will have to stop working on
the Government matter, or whether another remedy would resolve the conflict.

Impartiality Issues

Even though you may not have a financial interest that can be affected by a
procurement activity or contract, circumstances might arise that could call your
impartiality into question. Some examples of when your impartiality could be
questioned include the following:

* Your duties require you to work on a procurement involving your former
employer or clients, your spouse’s employer or clients, close relatives, or
others with whom you have some kind of business relationship.
* You are assigned to a contract involving a person you are dating.
* You are required to evaluate bids, one of which was submitted by a friend.

If you encounter any situation where you think your impartiality would
reasonably be questioned, you should stop working on that matter, and contact
your supervisor and agency ethics official for further advice.


2 Gifts

Gifts From Contractors

As a Government employee, you must not solicit or accept gifts from contractors
and their employees.

A gift is anything that has monetary value, such as food, travel, entertainment,
discounts, and loans.

Even though you might work closely with contractor employees on a daily basis,
remember that both agency contractors and their employees are considered
“prohibited sources” of gifts to you.

You also must not accept a gift given by an organization or individual who is
seeking business with your agency. Thus, the safest course of action is to
remember this rule: Do not solicit anything, or accept a gift, from a
contractor, prospective contractor, or contractor employee, unless clearly
permitted by an exception in the ethics rules or you have received advice from
your agency ethics official.

Items You Can Accept

Examples of items that you generally may accept – even from a contractor –
include:

* Modest food and refreshments, such as coffee and donuts that are not offered
as part of a meal;
* Gifts valued at $20 or less per “source” per occasion, although the total
value of such gifts must not exceed $50 in a calendar year from a single
source (Note: a contractor and its employees are considered the same “source.”
For example, you could not accept five $15 lunches from five employees who
work for the same contractor.);
* Gifts based on a personal relationship (This means gifts from family members
or friends with whom it is clear you have a true friendship – not a friendly
relationship with a contractor that was formed on the job.);
* Meals, lodging, transportation, or other benefits that are from your spouse’s
employer, provided that the gift was not given or enhanced because of your
Government job;
* Gifts or discounts available to the general public, to all Government
employees, or to all military personnel;
* Free attendance at a conference or similar “widely attended gathering” (as
long as your agency determines that your attendance is in the agency’s best
interest and certain other conditions are met); and
* Anything paid for by the Government or secured by the Government under a
contract.

Your agency ethics official can help you determine whether you can accept a
particular gift.

Some Words of Caution

Of course, you should not accept anything of value from a bidder or contractor
if you think that the integrity of the procurement process could be questioned.
Also, be careful not to accept gifts so frequently that a reasonable person
would think you are using your public office for private gain. Finally, remember
that you may never accept cash or solicit a gift from a contractor or contractor
employee.


Gifts to Contractors

You should be mindful that contractors usually have their own rules and policies
about gift-giving, especially when dealing with the Government. You do not want
to embarrass a contractor employee, or cause him to violate his company’s rules.


3 Procurement and Other Nonpublic Information

As a Government employee, you might have access to procurement and other
nonpublic information that could affect a contract bid or the award process.
Improper disclosure of such protected information could violate numerous laws,
as well as ethics rules. It also could subject you to administrative actions, as
well as civil or criminal penalties.

Procurement Information

You may not knowingly obtain or disclose contractor bid or proposal information
or source selection information before the award of the contract, other than as
permitted by law.

Contractor bid or proposal information

This proprietary information must be secured to prevent disclosure. It includes
certain nonpublic information submitted in connection with a bid or proposal,
such as:

* Cost or pricing data, including indirect costs and direct labor rates;
* Information about manufacturing processes, operations­ and techniques when
marked “proprietary” in accordance­ with law or regulation;
* Information marked as “contractor bid or proposal information”; and
* Any other information related to a specific procurement that a company making
a bid deems proprietary.

Source selection information

This is information not previously available to the public that is prepared for
use by an agency in evaluating a bid or proposal. Such information includes:

* Bid prices for sealed bids or lists or prices;
* Proposed costs or prices;
* Source selection plans;
* Technical evaluation plans;
* Technical, cost or price evaluations of competing proposals;
* Competitive range determinations;
* Rankings of bids, proposals or competitors;
* Reports, evaluations and recommendations of source selection panels, boards or
advisory councils; and
* Any other information marked as “source selection information.”

Other Nonpublic Information

In addition to the rules on disclosure of specific procurement information,
ethics rules prohibit you from disclosing any nonpublic information to further
your private interests, or those of another person, such as a contractor or
contractor employee. Nonpublic information includes information about a contract
or procurement that you gain through your job and that you reasonably should
know has not been made available to the public. An example of nonpublic
information would be an agency’s internal decision to terminate a particular
contract.

If you have any doubt about whether information is protected information, or
whether you are permitted to disclose such information, you should get advice
from your agency ethics official before disclosing or otherwise using the
information.


4 Restrictions on Employment Discussions

During the course of your Government service, you might decide to seek
employment in the private sector or even with a contractor who does business
with your agency. There are several restrictions that apply to your Government
work when you seek future employment or have employment discussions with
contractors.

Seeking Employment: General Rules

All Government employees are subject to the rules on seeking employment. These
rules are quite broad and apply well before you and a potential employer
actually negotiate specific terms and conditions of employment.

You may not work on Government matters that would affect the financial interests
of a contractor with which you are seeking employment. This rule generally
applies even if you make an unsolicited contact about possible employment. It
also applies if you do not reject a contractor’s unsolicited overture about
possible employment.

Once you have reached an agreement for future employment with a contractor, you
still may not work on any Government matters that would affect the financial
interests of the contractor. And remember, in any case where you have an
obligation to recuse yourself from working on an assignment, you should notify
your supervisor as soon as possible about your need to recuse.

Seeking Employment with a Bidder or Offeror

As a Federal employee involved in the procurement process, you might be subject
to additional rules under the Procurement Integrity Act when you have employment
discussions with 7bidders or offerors. These rules apply only if you are
performing certain functions involving:
* the specification or statement of work;
* the solicitation;
* the evaluation of bids or proposals, or selecting a source;
* the negotiation of price or terms and conditions of the contract; or
* the review or approval of the award of a contract.

If you are performing one of these functions in a competitive procurement for a
contract in excess of $100,000, and you contact or are contacted by a bidder or
offeror in that procurement about possible non-Federal employment, you must:

* promptly report the contact in writing to your supervisor and your agency
ethics official; and
* either
-- reject the possibility of non-Federal employment; or
-- consult with your supervisor and do not work on that procurement until the
agency has authorized you to do so.

Note: you must also submit a written disqualification notice to the contracting
officer, the source selection authority, and your supervisor.


5 Working for a Contractor After Government

Depending on your Government position and what your role was in a procurement,
you might be subject to certain restrictions when you leave Government service.

Accepting Compensation from a Contractor

You might be banned from accepting compensation from a contractor for one year
after you served in a covered procurement-related position or made a
procurement-related decision for your agency. The ban, which is part of the
Procurement Integrity Act, prohibits you from accepting compensation as an
employee, officer, director, or consultant of the contractor.

Who is Covered by the One-Year Ban?

The one-year ban applies if you:

Served in any of the following positions on a contract over $10 million:
* Procuring contracting officer;
* Source selection authority;
* Member of a source selection evaluation board;
* Chief of a financial or technical evaluation team;
* Program manager;
* Deputy program manager; or
* Administrative contracting officer;

or

Personally made any of the following decisions on behalf of your agency to:
* Award a contract, subcontract, modification of a contract or subcontract, or a
task order or delivery order over $10 million;
* Establish overhead or other rates for a contractor on a contract or contracts
valued over $10 million;
* Approve a contract payment or payments over $10 million; or
* Pay or settle a claim over $10 million.

Exception

This restriction does not prohibit you from working for another division or
affiliate of the contractor, as long as it does not produce the same or similar
products or services as the division or affiliate responsible for the contract
in which you were involved.

General Post-Employment Restrictions

You should also keep in mind that there are criminal post-employment
restrictions that apply to all Federal employees regardless of whether they work
for a contractor after Government service. You may be covered by one or more of
these restrictions even if you did not perform any of the functions or serve in
any of the roles designated by the Procurement Integrity Act (see above). The
most common restrictions are explained below.

Common Restrictions

You are permanently barred from representing another person before the
Government on the same matter (such as a contract) on which you worked as a
Government employee. Representing means making a communication or appearance
with intent to influence the Government, and includes signing a letter,
attending a meeting, making a presentation, and making a telephone call.

If you had official responsibility for a matter (such as the award of a
contract) during your last year of Government service, you are barred for two
years from representing another person before the Government concerning that
same matter. To be covered by this restriction, you need not have worked on the
contract, so long as it was under your supervision.

If you are a “senior employee,” you are subject to a third restriction. This ban
prohibits you from representing other persons before the Government on any
matters before your agency for one year after leaving Government service. You
need not have worked on the matter, nor had official responsibility for the
matter. Your agency ethics official can tell you whether you are considered a
“senior employee.”

These restrictions are quite broad. They can include communications, appearances
or other representations that you might make on behalf of a company while
performing work under a Government contract — not just major communications
about the award or modification of a contract. However, they generally do not
include behind-the-scenes work that does not involve communication back to the
Government.

When in Doubt, Get Help

There are other restrictions, as well as exceptions, that govern this complex
area of the law. Moreover, the consequences of violating these restrictions can
be severe. You should consult with your agency ethics official before seeking
employment with a contractor to determine whether a post-employment restriction
might apply to your situation.


6 Miscellaneous

Fundraising

You may not solicit a contractor or its employees for a charitable donation
because they are “prohibited sources” of gifts under the Federal ethics rules.
This is true even if, for example, you are fundraising on your own time and
outside of the workplace, and you are quite friendly with the contractor
employee.

Letters of Recommendation

You generally may provide a letter of recommendation for a contractor employee,
on official agency letterhead, in response to a request for an employment
recommendation or character reference. The letter of recommendation must be
based on your personal knowledge of the ability or character of the contractor
employee with whom you have dealt during the course of your Federal employment
or whom you are recommending for Federal employment.

Outside Employment with a Contractor

If you would like to “moonlight” for an agency contractor, you should consult
with your agency ethics official before taking any action pursuing such outside
employment. Depending on the facts, you could trigger restrictions related to
the following issues: seeking or negotiating for employment, procurement
integrity, conflicting financial interests, impartiality concerns, and
agency-specific rules and procedures.

Conclusion

We hope this brochure has helped you identify some of the ethics and
procurement issues that can come up in the procurement and acquisition process.
For more information on these issues, contact your agency ethics official.

About OGE

The Office of Government Ethics (OGE) is the agency that exercises leadership
in the executive branch to prevent conflicts of interest on the part of
Government employees, and to resolve those conflicts of interest that do occur.
In partnership with executive branch agencies and departments, OGE fosters high
ethical standards for employees and strengthens the public’s confidence that the
Government’s business is conducted with impartiality and integrity.


www.usoge.gov
July 2007