ACQ370 Ethics

Ethics Philosophy "In order to maintain public confidence in the federal procurement process, government and contractor employees must follow exemplary standards of conduct.” --John Cibinic and Ralph Nash Administration of Government Contracts Administration of Government Contracts Fourth Edition

Code of Ethics For Government Service

Code of Ethics Two Core Concepts Employees shall not use public office for private gain Employees shall act impartially and not give preferential treatment to any private organization or individual To ensure that every citizen can have complete confidence in the integrity of the Federal Government

Code of Ethics Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws and ethical principles above private gain. Employees shall not hold financial interests that conflict with the conscientious performance of duty. Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to further any private interest. An employee shall not, except as permitted by subpart B of this part, solicit or accept any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the employee's agency, or whose interests may be substantially affected by the performance or nonperformance of the employee's duties. Employees shall put forth honest effort in the performance of their duties. Employees shall not knowingly make unauthorized commitments or promises of any kind purporting to bind the Government. Employees shall not use public office for private gain. Employees shall act impartially and not give preferential treatment to any private organization or individual.

Code of Ethics Employees shall protect and conserve Federal property and shall not use it for other than authorized activities. Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that conflict with official Government duties and responsibilities. Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities. Employees shall satisfy in good faith their obligations as citizens, including all just financial obligations, especially those—such as Federal, State, or local taxes—that are imposed by law. Employees shall adhere to all laws and regulations that provide equal opportunity for all Americans regardless of race, color, religion, sex, national origin, age, or handicap. Employees shall endeavor to avoid any actions creating the appearance that they are violating the law or the ethical standards set forth in this part. Whether particular circumstances create an appearance that the law or these standards have been violated shall be determined from the perspective of a reasonable person with knowledge of the relevant facts. Standards of Ethical Conduct for Employees of the Executive Branch 5 C.F.R. Part 2635

Discussion Jake’s long-time friend and neighbor brought a very expensive gift to his 50th birthday party. She works for a company that is seeking a permit from Jake’s agency. Jake has sought out your advice. As the Ethics Counselor at the Agency, what do you tell Jake?

Laws and Regulations Executive Branch Employees Are Subject To Statutes enacted by Congress Executive orders issued by the President Ethics regulations issued by the U.S. Office of Government Ethics Supplemental ethics regulations issued by some agencies for their employees

Laws and Regulations Selected Ethics Laws and Regulations 18 U.S.C. § 201: Bribery of public officials and witnesses 5 U.S.C. app. 4 §§ 501-505: Outside earned income and activities 18 U.S.C. § 203: Compensation to Members of Congress, officers, others in matters affecting the Government 41 USC § 423: Procurement Integrity Act (PIA) 5 C.F.R., Part 3601: Supplemental Standards of Conduct for Employees of the Department of Defense 18 U.S.C. § 205: Activities of officers and employees in claims against and other matters affecting the Government 5 CFR 2635 Subpart B: Gifts From Outside Sources 18 U.S.C. § 207: Restrictions on former officers, employees, and elected officials of the executive and legislative branches 5 CFR 2635.808: Fundraising Activities 5 CFR 2635.303: Gifts Between Employees 18 U.S.C. § 208: Acts affecting a personal financial interest 5 CFR 2635.401: Conflicting Financial Interests 18 U.S.C. § 209: Salary of Government officials and employees payable only by United States 5 CFR 2635.501: Impartiality in Performing Official Duties 5 CFR 2635.601: Seeking Other Employment 5 U.S.C. app. 4 §§ 101-111: Public financial disclosure requirements

Laws and Regulations Executive Branch Legislative Branch Office of Government Ethics 202-482-9300 http://www.usoge.gov Legislative Branch Senate Select Committee on Ethics 202-224-2981 http://ethics.senate.gov/ethics2.html House Committee on Standards of Official Conduct 202-225-7103 www.house.gov/ethics Judicial Branch Judicial Committee on Codes of Conduct Office of the General Counsel Administrative Office of the U.S. Courts 202-502-1100 www.uscourts.gov

The Joint Ethics Regulation

The Joint Ethics Regulation The Joint Ethics Regulation (JER) DOD 5500.7-R Single source of standards of ethical conduct and ethics guidance for DoD OSD Office of General Counsel, Standards of Conduct Office http://www.dod.mil/dodgc/defense_ethics/ DOD 5500.7-R

The Joint Ethics Regulation Department of Defense Policy Employees shall become familiar with all ethics provisions, including the standards set out in E.O. 12674, and comply with them  DoD employees shall become familiar with the scope of and authority for the official activities for which they are responsible Sound judgment must be exercised All DoD employees must be prepared to account fully for the manner in which that judgment has been exercised --DoD 5500.7-R (JER), Chapter 1 This is the regulation that implements 18 USC provisions.

The Joint Ethics Regulation Conflicts of Interest A conflict of interest is a personal interest or relationship, as defined by law or regulation, that conflicts with the faithful performance of official duty O'Neill v. Department of Housing and Urban Development, 220 F.3d 1354 (2000) http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2000/do00034.pdf Violations: Misuse of Government property. Representation to Government Agencies. The initial dismissal did not address time and attendance policies. Also, on appeal, the Court sided with the employee that she was not an “agent” of the non-profit operation although she was petitioning on their behalf. The term “agent” was narrowly construed to be a person with authority to act on behalf of another. The dismissal was upheld based on the other charges against her.

The Joint Ethics Regulation Conflict of Interest Employee may not participate in a matter that would affect the financial interests of Self, spouse, or minor child An organization in which he is serving as officer, director, trustee, general partner or employee An organization with which he is negotiating for employment or has an arrangement for future employment (18 USC 208) --18 U.S .C. 208

Procurement Integrity Act

Procurement Integrity Act Bans disclosing or obtaining procurement information Contractor bid or proposal information Source selection information Ban applies to current and former Federal employees and contractor employees Requires procurement official disclosure of contacts regarding possible employment with contractors One-year ban for certain personnel accepting employment or compensation from contractor --41 USC 423

Procurement Integrity Act Contractor bid or proposal information Cost or pricing data Indirect costs and direct labor rates Proprietary information about manufacturing process, operations, or techniques identified as such by any contractor Information identified by any contractor as "contractor bid or proposal information" Person defined: A present or former official of the United States, or a person who is acting or has acted for or on behalf of, or who is advising or has advised the United States with respect to, a Federal agency procurement; and by virtue of that office, employment, or relationship, has or had access to contractor bid or proposal information or source selection information. FAR 3.104-3

Procurement Integrity Act Source selection information Bids or prices submitted by offerors Source selection plans Technical evaluation plans Technical evaluations of proposals Cost or price evaluations of proposals Competitive range determinations Rankings of bids, proposals or competitors Reports and evaluations of source selection panels, boards or advisory councils Other information marked as “source selection information” Person defined: A present or former official of the United States, or a person who is acting or has acted for or on behalf of, or who is advising or has advised the United States with respect to, a Federal agency procurement; and by virtue of that office, employment, or relationship, has or had access to contractor bid or proposal information or source selection information. FAR 3.104-3

Procurement Integrity Act Maximum Penalty Five years in prison Civil penalty of $50,000 for each violation Adverse personnel action (e.g., termination)

Contractor Code of Business Ethics and Conduct

Contractor Code of Business Ethics Government Contractors Must conduct themselves with the highest degree of integrity and honesty Should have a written code of business ethics and conduct Should have an employee business ethics and compliance training program --FAR 3.1002 Suggested or for guidance – notice the work “should” Found at FAR 3.102

Contractor Code of Business Ethics FAR Clause 52.203-13 “Contractor Code of Business Ethics and Conduct” Requires government contractors to: Exercise due diligence to prevent and detect criminal conduct Promote an organizational culture that encourages ethics and compliance Submit mandatory disclosures to the government Mandates: Code of Business Ethics and Conduct Business Ethics Awareness and Compliance Program Internal Control System Subcontract Flowdown

Contractor Code of Business Ethics Standards of Conduct Contractors and personnel must abide by standards of conduct as established by contract, statute, and regulation Violations could result in contractors being subjected to criminal, civil, administrative, and contractual remedies

Organizational Conflict of Interest A contractor may be unable to provide impartial advice or assistance to the Government, (i.e. the contractor’s objectivity may be impaired) A contractor has an unfair competitive advantage because of its other work with the government or other contracting/ subcontracting relationships Where a Contractor may have gained some information about the work to be done which they may be bidding on, generally after having worked on a prior or current contract with the government. This information gives the Contractor an unfair advantage with the bidding process. --FAR Subpart 9.5

Organizational Conflict of Interest More likely to occur in contracts involving Management support services Consultant or other professional services Contractor performance of or assistance in technical evaluations Systems engineering and technical direction work More likely to occur in contracts involving Management support services Consultant or other professional services Contractor performance of or assistance in technical evaluations Systems engineering and technical direction work Mitigation plans must be developed before any contract is awarded Mitigation plans must be developed before any contract is awarded --Johnson Controls World Services, Inc., B-286714.2, 2001

Conclusion

Conclusion Know your ethics counselor and the Joint Ethics Regulation (JER, DoD 5500.7R) Contact your supervisor and ethics counselor when questions/concerns arise Report fraud, waste and abuse to the appropriate investigative agency and/or to the Procurement Fraud Working Group.

Conclusion We have laws against murder− murders happens. We have laws against speeding− speeding happens. We have laws against . . . . WHAT IS THE ANSWER?

The Answer Living a life that matters doesn’t happen by accident. It’s not a matter of circumstance but of choice. What will matter is every act of integrity, compassion, courage or sacrifice that enriched, empowered or encouraged others to emulate your example. Choose to live a life that matters.

Assignment Read the case of “Ms. Friendly” The odd numbered teams are serving as Ms. Friendly’s defense counsel The even numbered teams are working to fire Ms. Friendly All teams are required to provide substantive justification for their position to include cases and/or particular reference to the JER Each side will have a chance to rebut the charges/ positions of the other team Team members will be randomly selected to present