Prepared by SPAWARSYSCEN Atlantic Office of Counsel

1. Prepared by SPAWARSYSCEN Atlantic Office of Counsel 1 ORGANIZATIONAL CONFLICTS OF INTEREST (OCI)�LET THE CONTRACTOR BEWARE�PRESENTED BY MARK CHRISTOPHERSPAWARSYSCEN ATLANTIC OFFICE OF COUNSELAPRIL 23, 2009

2. Prepared by SPAWARSYSCEN Atlantic Office of Counsel 2 POINTS TO COVER Types of OCIs OCI Danger Zones/Cascading Strategies Contractor Safeguards: OCI Mitigation

3. Prepared by SPAWARSYSCEN Atlantic Office of Counsel 3 3 TYPES OF OCIsFAR 9.5 #1. Unequal access to information #2. Impaired objectivity #3. Biased ground rules

4. Prepared by SPAWARSYSCEN Atlantic Office of Counsel 4 #1. UNEQUAL ACCESS TO INFORMATION(FAR 9.505�4) Contractor access = Unfair competitive advantage: Proprietary information belonging to another contractor (whether allowed during the course of contract performance or not); or Access to source selection information

5. Prepared by SPAWARSYSCEN Atlantic Office of Counsel STAFF SUPPORT-TYPE CONTRACTS OCI Situation: Contractor Employee has access to internal agency information pertaining to competitor business proprietary/protected information 2-Scenarios: Mitigation Before the Fact (Maybe (?)) Mitigation After the Fact (Difficult)

6. Prepared by SPAWARSYSCEN Atlantic Office of Counsel MITIGATION BEFORE-THE-FACT Historically, GAO has not challenged an Agency�s determination that an OCI was properly mitigated unless GAO found the Agency determination to be either unreasonable or unsupported by the record. However, COFC recently reversed GAO � �The agency did not give meaningful consideration to the adequacy of the mitigation plan.�

7. Prepared by SPAWARSYSCEN Atlantic Office of Counsel MITIGATION AFTER-THE-FACT Information disclosed to K�tor employee Once �harm� occurs: Mitigation virtually impossible at this point � Not even an NDA or firewall will dispel the appearance of an OCI Standard of Proof: Establish the mere existence of the OCI Do not have to show impact If the facts demonstrate the existence of an OCI, the harm from that conflict, unless previously avoided or adequately mitigated, is presumed to have occurred

8. Prepared by SPAWARSYSCEN Atlantic Office of Counsel 8 #2. IMPAIRED OBJECTIVITY(FAR 9.505�3) Single contractor (include affiliates) Performing two or more roles At least one of the roles arises under a federal contract One role could compromise contractor�s ability to perform the other role effectively

9. Prepared by SPAWARSYSCEN Atlantic Office of Counsel IMPAIRED OBJECTIVITY(EXAMPLE) Contractor currently performing technical assistance contract: Contractor required to evaluate, comment or make recommendations on submittals (ECPs, RFIs, RFDs) Contractor would now like to propose on work related to efforts stated above Can the contractor propose? Would a Firewall mitigate the potential OCI?

10. Prepared by SPAWARSYSCEN Atlantic Office of Counsel IMPAIRED OBJECTIVITY(EXAMPLE)  Decision: NO! Conflict pertains to the organization, not the individual employees. A firewall may create the appearance of separation to mitigate the OCI, but personnel under both contracts will be working for the same organization with an incentive to benefit contractor overall Firewall arrangement ??? May Resolve an �unfair access to information� OCI, but IRRELEVANT to �impaired objectivity� A Firewall would not avoid, mitigate or neutralize the impaired objectivity OCI resulting from the contractor�s performance of dual roles reviewing and providing input on its own designs Agency argument that it had �final decision� authority was found by GAO to be �non-persuasive� (Nortel Government Solutions, Inc. , B-299522.5; (Dec 30, 2008 ))

11. Prepared by SPAWARSYSCEN Atlantic Office of Counsel 11 #3. BIASED GROUND RULES(FAR 9.505�2)  Situations wherein a contractor, as part of its performance of a government contract, has in some sense set the ground rules for the competition for another government contract by, for example, writing the statement of work or the specifications

12. Prepared by SPAWARSYSCEN Atlantic Office of Counsel BIASED GROUND RULES(EXAMPLE) The contractor drafted the technical specification for the system, as well as specs for other systems, under a competitive contract to provide general engineering support to a PM Contractor now wishes to submit a proposal in response to a solicitation requiring development and delivery of the same system Footnote: If X writes the requirements (T.O./D.O.) on a noncompetitive package, that does not cause a conflict.

13. Important!!!!! Incumbency, by itself, does not automatically equate to an OCI -- GAO has consistently rejected the argument that one contractor will gain improper competitive advantage because its subsidiary works on an existing/related contract. Such advantage is equal to advantages enjoyed by any incumbent contractor

14. Prepared by SPAWARSYSCEN Atlantic Office of Counsel �OCI DANGER ZONE� Acquisition support services Systems engineering or technical direction Management support services Any contract where contractor will obtain proprietary information belonging to other contractors, or other nonpublic information having commercial value Any contract where the PWS/SOW was prepared, or the deliverable developed, under a separate contract

15. Prepared by SPAWARSYSCEN Atlantic Office of Counsel CASCADING RESOLUTIONSTRATEGY AVOID/PREVENT: TRY FIRST Be Proactive!!!! MITIGATION: ATTEMPT ONLY IF AVOIDANCE/PREVENTION FAILS Safeguards should be in place whenever a contract is awarded that has OCI possibilities Plan needs to be in place before needed, not after the fact when it is too late WAIVER: ONLY REQUEST IF AVOIDANCE, PREVENTION AND MITIGATION IMPOSSIBLE -- Only as a last resort Note: Waivers will not mitigate an �impaired objectivity� type of OCI

16. Prepared by SPAWARSYSCEN Atlantic Office of Counsel What Should You Do? CONTRACTOR SAFEGUARDS:OCI MITIGATION PLANS Organizational Firewall Physical Firewall An OCI Identification and Tracking System An OCI Compliance / Enforcement Plan OCI and Procurement Integrity Training Employee Transfer; Separation; and Compensation Plans/Stock Ownership Non-Disclosure Agreements (NDAs)

17. Prepared by SPAWARSYSCEN Atlantic Office of Counsel ORGANIZATIONAL FIREWALL Identify ALL divisions and proposed subs with relationship to the program/contract office Explain the role of each contractor/subcontractor Identify and explain all existing contracts with OCI implications Provide Separate Management Reporting Chains Provide Organization Chart (prime and subcontractors) Identify whether the firewalled unit/division has its own cost reporting line or cost code

18. Prepared by SPAWARSYSCEN Atlantic Office of Counsel PHYSICAL FIREWALL Geographic separation - location of employees Data Security Measures (e.g., intranet, share drives)

19. Prepared by SPAWARSYSCEN Atlantic Office of Counsel OCI IDENTIFICATION AND TRACKING SYSTEMOCI COMPLIANCE/ENFORCEMENT OCI Reporting System - System to identify all personnel whose activities or involvement with the program present actual or potential OCIs SPAWAR notification procedures, including written notification to the Contracting Officer of actual or potential OCIs OCI Compliance / Enforcement Plan OCI Compliance Officer / Manager Checks on the system

20. Prepared by SPAWARSYSCEN Atlantic Office of Counsel OCI & PROCUREMENT INTEGRITY TRAINING In-house OCI training for new and existing employees; frequency (initial and recurring) OCI Enforcement OCI Certification Statements Employee OCI reporting requirements Consequences for OCI violations Disclosure of violations to Government

21. Prepared by SPAWARSYSCEN Atlantic Office of Counsel EMPLOYEE TRANSFER/SEPARATION/NDAS Employee Transfer Transferring policies between divisions of corporations Separation Outgoing training Compensation Plans/Stock Ownership/Retirement Policies for employees Non-Disclosure Agreements (NDAs) - Copy of the NDA as an attachment to the OCI Mitigation plan

22. Prepared by SPAWARSYSCEN Atlantic Office of Counsel 22 WHY SHOULD YOU CARE? KO is clearly charged with recognizing, avoiding and/or mitigating OCIs K�tor also has an independent duty to ensure proper safeguards are in place It irrelevant whether or not an OCI Clause is contained within the contract�. If an OCI occurs w/o proper safeguards, then you may not be eligible to compete on future awards impacted by the OCI

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