1. ETHICS: Sink or Swim 1

2. Acquisitions Fraud & Ethics
Crooks 2

3. Objectives Acquisition Fraud Acquisition Ethics Conclusion 3 Types
Management
Remedies
Acquisition Ethics
Basic Principles
Sources of Standards
Government Ethics Regulation
Gifts From Outside Sources
Conflicting Financial Interests
Procurement Integrity Act
Representational Restrictions
Contracts with Government Employees
Conclusion 3

4. Acquisition Fraud Types
DEFECTIVE PRICING
TINA requires contractors to disclose and certify expected costs. If not accurate, may lead to investigation.
COST MISCHARGING
Over charging gov’t (i.e., $1K for hammer)
PRODUCT SUBSTITUTION
Cases where contractors deliver goods which do not conform to contract requirements w/out informing the gov’t (ie., Bragg parachute case)
FALSE INVOICE CLAIM
Contractor submits monthly claim w/out performing the work according to contract terms $ 4

5. ACQUISITION FRAUD MANAGEMENT RESPONSIBILITY
SECRETARY OF THE ARMY
ASA
THE JUDGE ADVOCATE GENERAL
PROCUREMENT FRAUD DIVISION
MACOM PROCUREMENT
FRAUD COORDINATOR
MAJOR SUBORDINATE COMMAND
PROCUREMENT FRAUD ADVISOR
CONTRACTING
OFFICER
US ATTY
DOJ
DCAA
DODIG
CID
DCIS
DCIS = investigative arm of IG
Debarring Official = Commander, US Army Legal Services Agency (delegated by JAG) 5

6. Remedies TERMINATION FOR DEFAULT NONRESPONSIBILITY DETERMINATION
DEBARMENT/SUSPENSION 6

7. TOPICS Basic Principles Sources of Standards
Government Ethics Regulation
Gifts From Outside Sources
Conflicting Financial Interests
Procurement Integrity Act
Representational Restrictions
Contracts with Government Employees
Conclusion 7

8. Basic Principles Preserve the public trust
Place loyalty in the Constitution, laws, and ethical principles over private gain
What you Should v. Must do?
The Rule of Law 8

9. Sources of Standards (1-2)
Statutory Standards
5 C.F.R (Gifts from Sources)
18 U.S.C. 207/208 (Conflicts of Interests)
41 U.S.C. 423 (Procurement Integrity Act)
Regulatory Prohibitions
Executive Orders
Agency Guidance
Local Policies 9

10. Government Ethics Regulations (2-2)
Office of Government Ethics Regulations Published at 5 CFR Part 2635
DoD R, Joint Ethics Regulation
Applies to civilian employees, military officers, and enlisted members (bold face print only)
Federal Acquisition Regulation (FAR), Part 3 - Improper Business Practices and Personal Conflicts of Interest 10

11. Gifts From Outside Sources 5 C.F.R. 2635.202 (1-5)
An employee shall not directly or indirectly, solicit or accept a gift:
from a prohibited source
given because of the employee’s official position.
FAR 11

12. Definition: “Prohibited Source” (2-5)
Means any person or entity:
Seeking official action by the employees agency;
Doing or seeking to do business with the employee’s agency;
Regulated by the employee’s agency;
Substantially affected by the employee’s official duties, or;
A majority of whose members fit into one or more of these categories. 12

13. Gifts Include: 5 C.F.R. 2635.203 (3-5) Gratuity Favor Discount
Entertainment
Hospitality
Loan Forbearance
Item of Monetary Value
Services
Training
Transportation
Local Travel
Lodging & Meals
Purchase of Tickets
Payment in Advance 13

14. Gifts Do Not Include: 5 C.F.R. 2635.203 (4-5)
Coffee and Donuts
Greeting Cards
Plaques, Trophies
Discounts Available to Public
Anything for which fair market value is paid for by the employee 14

15. Gift Exceptions: 5 C.F.R. 2635.204 (5-5)
Unsolicited Gifts of $20 or less per occasion.
Annual restriction - not to exceed a total value of $50 from a single source.
Gifts based on a personal relationship. 15

16. Conflicting Financial Interests 18 U.S.C. 208 (1-3)
Employee may not participate in a matter in which he or she has a financial interest.
De Minimus: Publicly traded securities; $5,000 or less.
Seek waiver, disqualification, or divestiture 16

17. Conflicting Financial Interests 18 U.S.C. 208 (2-3)
Violation can result in:
Imprisonment up to one year
If willful: five years
In addition: a fine of $50,000 to $250,000
Civil Penalties provisions provided by 18 U.S.C. 216 17

18. Imputed Interests (3-3)
An interest belonging to an employee’s spouse, minor child, general business partner, an organization in which the employee serves as an officer, director or employee, or a party with whom an employee is negotiating for employment
5 CFR 18

19. Procurement Integrity Act FAR 3.104 (41 U.S.C. 423) (1-7)
Procurement information
Employment restrictions
Post-government employment
Penalties 19

20. Procurement Integrity Act (2-7)
Restriction on Disclosing or Obtaining procurement information
Contractor Bid or Proposal information
Source Selection Information
Coverage: persons, agency officials, and former officials
FAR (a) 20

21. Procurement Integrity Act Employment Restrictions (3-7)
Non-Federal employment?
Promptly report employment contact
Reject employment or seek disqualification
FAR (c) 21

22. Negotiating For Employment (3-7)
Same as buying stock in the company; any discussion (i.e., going to lunch to discuss future prospects), however tentative is negotiating for employment.
An employee is not seeking employment if he or she makes an unsolicited commo for the reasons of:
requesting a job application
submitting a resume or employment proposal only as part of an industry or other discrete class. 22

23. Procurement Integrity Act Post-government Employment (4-7)
One-Year ban on accepting compensation
Time Begins (i.e., PCO, ACO, SSA, SSEB, Chief, etc) 1yr from date of K award.
Time Begins (i.e., Supervisors, those who make decisions about award) 1yr from date of decision to award K.
Contracts or contracting decisions in excess of $10 million
FAR (d) 23

24. Procurement Integrity Act Criminal Penalties (5-7)
5 years in jail and a fine, for improperly disclosing or obtaining procurement information. 24

25. Procurement Integrity Act Civil Penalties (6-7)
Civil Penalty up to
$50,000 (individuals)
and $500,000
(organizations) plus
twice the amount of
compensation received
or offered. 25

26. Procurement Integrity Act Penalties to Contractors (7-7)
Loss of profit or fee
Termination
Rejection of bid or proposal
Suspension/debarment 26

27. Representational Restrictions (Switching Sides) 18 U.S.C. 207 (1-5)
Applies to all former officers and civilian employees
Lifetime Prohibition
Two year Prohibition
One Year Prohibition for “Senior employees” (0-6 & GS15 above) 27

28. Representational Restrictions 18 U.S.C. 207 (2-5)
Lifetime Prohibition
Matters in which the
former employee was
personally and
substantially involved
Two year Prohibition
Matters formerly under
the employee’s
official responsibility 28

29. Representational Restrictions 18 U.S.C. 207 (3-5)
One Year Prohibition for “Senior employees”
Matters involving the former employee’s agency (GOs going back to Pentagon as civilian contractor reps)
What Do You Think About This? 29

30. Representation Restrictions 18 U.S.C. 207 (4-5)
Criminal Penalties:
5 years confinement
$250,000 fine
$50,000 civil Penalty 30

31. Representational Restrictions 18 U.S.C. 207 (5-5)
Does not prohibit an employee from working for any entity
Restricts how an former employee may work for the entity
May not communicate or appear with the intent to influence a particular matter
On behalf of anyone other than the government
Does not bar behind the scenes involvement 31

32. Contracts with Government Employees FAR 3.6 (1-3)
General Rule: A KO shall not knowingly award a contract to a Government employee or to a business concern FAR
The agency head, or a designee not below the level of the HCA may authorize an exception to the policy in only if there is a most compelling reason to do so FAR 32

33. Dealing with Contractors FAR 3.101-1 (2-3)
Conduct government business above reproach
Strictly avoid any conflict of interest or appearance of a conflict of interest in Government - contractor relationships
Will become even more difficult to accomplish b/c contractors now work in the government workplace. 33

34. Release of Acquisition Information FAR 14.203-2 (3-3)
Furnish identical information to all prospective contractors.
Release information as nearly as simultaneously as possible through designated channels.
Do not give out information concerning future solicitations.
Some pre-contract contacts with industry are permissible and encouraged (i.e., negotiating method of contracting). 34

35. The Ethical Path
Public Service: a position of trust and a duty of integrity
Avoid conflicts of interest
Avoid an appearance of any conflict of interest
Conduct yourself so that you would not hesitate to make a full public disclosure. 35

36. Questions? Contact your local agency E/C.
“Always do right. This will gratify some people and astonish the rest” Mark Twain 36