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Ethics as Applied to Source Selection

TRICARE Management Activity. HEALTH AFFAIRS. Ethics as Applied to Source Selection. Overall Seminar Agenda. Ethics as Applied to Source Selection Planning and Preparation Conducting and Documenting the Evaluation. Ethics as Applied to Source Selection.

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Ethics as Applied to Source Selection

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  1. TRICARE Management Activity HEALTH AFFAIRS Ethics as Applied to Source Selection

  2. Overall Seminar Agenda Ethics as Applied to Source Selection Planning and Preparation Conducting and Documenting the Evaluation

  3. Ethics as Applied to Source Selection • Responsibilities for Ethical Conduct • Statutory and Regulatory Framework • Procurement Integrity • Nondisclosure of Procurement Information • Post Government Employment

  4. Ethics - Responsibility for Ethical Conduct • Employees shall NOT: • Hold financial interests conflicting with conscientious duty performance • Engage in financial transactions using nonpublic Government information • Use public office for private gain • Engage in outside employment that conflicts with Government responsibilities Executive Order 12674 of April 12, 1989 (as modified by E.O. 12731)

  5. Ethics – Statutory and Regulatory Framework • Public Law 95‑521, “Ethics in Government Act of 1978” • Code of Federal Regulations (Title 5) • United States Code (Titles 5, 18, and 41) • Joint Ethics Regulation DoD 5500.7-R • Federal Acquisition Regulation (FAR) Part 3.104 – Source Selection • Additional ethics guidance and resources can be found at www.usoge.gov(U.S. Office of Government Ethics web site)

  6. Ethics - Conflict 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. Source: 18 U.S.C. Sections 201, 203, 205, 208, 209 • As a Government employee, you may not participate personally and substantially (e.g., make a decision, give advice, make a recommendation) in any government matter that would affect the financial interests of: • You, your spouse, or your minor child, your general partner, an organization in which you are serving as an officer, director, trustee, general partner or employee, or an organization with which you are negotiating for employment, or have an arrangement for future employment. Source: 18 U.S.C. 208

  7. Ethics - Procurement Integrity:Statutory and Regulatory Framework • Procurement Integrity Act – 41 USC § 423, FAR 3.104-4 • Three Key Provisions: • Prohibition on disclosure or obtaining Contractor bid or proposal information or source selection information before contract award (applies to government employees and Contractors) • Requires agency officials to report employment contacts during a procurement (applies to government employees only) • Prohibits a group of employees who have participated in actions over $10 million from accepting compensation from the contractor for one year after participation (applies to government employees only)

  8. Ban on DisclosingProcurement Information • In any competitive award, the Procurement Integrity Act prohibits: • The disclosure of Contractor Bid or Proposal Information (CBPI), or • The disclosure of sensitive Source Selection Information (SSI) • The ban applies to: • Current and former Federal employees, and • Anyone who is advising or has advised the Government regarding the procurement (i.e., contractor employees, consultants, etc.). Source: 41 U.S.C. § 423(a))

  9. Contractor Bid or Proposal Information (CBPI) • CBPI includes any of five types of information: • Cost or pricing data • Indirect costs & direct labor rates • Proprietary information about technical approach, processes, operations or techniques marked by the contractor IAW applicable law or regulation • Information marked by the contractor as “contractor bid or proposal information” • Information marked by the contractor IAW FAR clause 52.215-1, entitled “Restriction on Disclosure and Use of Data” Source: 41 U.S.C. § 423(f) and FAR Subpart 52.215-1(e)

  10. Ethics - Discussion • Ed is part of a team evaluating proposals for a competitive procurement for TMA. • At dinner, after a week of evaluating proposals, Ed shares his opinions and observations with his wife, a college student, about the differences between the proposals. Violation?

  11. Source Selection Information (SSI) • “SSI” means any of ten types of information: • (1) Bid prices submitted by bidders • (2) Costs or prices submitted by offerors • (3) Source selection plans (including officials names and positions • (4) Technical evaluation plans • (5) Technical evaluations of proposals • (6) Cost or price evaluations of proposals • (7) Competitive range determinations • Rankings of bids or proposals • Reports & evaluations of source selection panels, boards or advisory councils • Other information, if marked “Source Selection Information -- See FAR 3.104” or so designated by the Contracting Officer Source: 41 U.S.C. § 423(f)

  12. Ethics - Discussion • LTC Smith is the Army representative to a team evaluating proposals for a competitive procurement for TMA. • LTC Smith’s commanding officer asks for a brief on how the evaluations are going. LTC Smith provides her with an overview of the strengths and weaknesses of each Offeror. Violation?

  13. Ethics - Penalty for Disclosing Information • If an individual improperly discloses or obtains SSI for anything of value, or in order to obtain for himself, or give to anyone else, a competitive advantage in the award of a Federal contract the maximum penalty is: • Five years in prison, • Civil penalty of $50,000 for each violation plus twice the amount of compensation which the individual received or offered for the prohibited conduct, and • Adverse personnel action (i.e. termination) • If an individual knowingly discloses or obtains SSI in violation of the Procurement Integrity Act (but not in exchange for anything of value, or to give anyone a competitive advantage), maximum penalty is: • Civil penalty of $50,000 for each violation, and • Adverse personnel action (i.e. termination) • Source: 41 U.S.C. § 423(e)

  14. Ethics - Post Government Employment Restrictions • The lifetime representation ban (18 U.S.C. 207(a)(1)) • If an officer or Federal employee participates personally & substantially in a contract, he/she may go to work for the contractor, but may never act as contractor’s representative before any Federal agency on that contract. • The two-year representation ban (18 U.S.C. 207(a)(2)) • If a Federal employee has a contract under his/her official responsibility during his/her last year in the government, he/she may go to work for the contractor, but may not, for 2 years, act as contractor’s negotiator or representative before any Federal agency on that contract. • The one-year no contact rule (18 U.S.C. 207(c)) • General/Flag officers and SES 5 & 6 employees may not, for one year, communicate with, or appear before, any employee of their former agency, on behalf of a third party, in connection with any matter on which the third party seeks official action by their former agency. • The one-year compensation ban (41 U.S.C. 423(d)) • People who serve in one of seven positions, or who make one of seven types of decisions, on a contract over $10 million, may not accept compensation from the contractor for one year from date of last service or decision.

  15. Procurement Integrity - One-Year Compensation Ban • Seven Positions Affected • Procuring Contracting Officer • Source Selection Authority • Member of Source Selection Evaluation Board • Chief of Financial or Technical Evaluation Team • Program Manager • Deputy Program Manager • Administrative Contracting Officer

  16. Procurement Integrity - One-Year Compensation Ban • Seven Types of Decisions • Decision to award a contract over $10 million • Decision to award a subcontract over $10 million • Decision to award a modification that is over $10 million of a contract or subcontract • Decision to award a task order or delivery order over $10 million • Decision to establish overhead or other rates applicable to a contract or contracts valued over $10 million • Decision to approve issuance of a contract payment or payments over $10 million • Decision to pay or settle a claim over $10 million

  17. Ethics - Post Government Employment Restrictions If you have any questions or concerns, seek the advice of your ethics counselor immediately. Military personnel should seek Post-retirement guidance from their Ethics Counselor

  18. Ethics - Discussion • Suppose: • You become a member of the Source Selection Board for a contract in excess of $100,000 • Offers have been received and evaluation is beginning • One of the offerors contacts you with a job opportunity • You immediately notify your supervisor and ethics counselor Can your supervisor demand that you terminate employment discussions?

  19. Ground Rules: Ethics Summary • Ethical behavior is your responsibility if you are involved with a source selection! • Rules are often complicated with many exceptions • If you are not sure, seek guidance • Government employees – TMA OGC Ethics Counselor (703) 681-6012 • Contractor employees – Supervisor or firm ethics advisor • Legal opinions should be sought at the earliest possible moment • Document your efforts to obtain clarification/ approval

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