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ALL YOU WANTED TO KNOW ABOUT OCI/PCI/INHERENTLY GOVERNMENTAL FUNCTIONS, BUT WERE AFRAID TO ASK

ALL YOU WANTED TO KNOW ABOUT OCI/PCI/INHERENTLY GOVERNMENTAL FUNCTIONS, BUT WERE AFRAID TO ASK . OCI & PCI PROPOSED RULES “HOW AND WHY WE GOT HERE”. Nicholas “Chip” Retson DoD Counsel, Defense Acquisition Regulation System July 20, 2010. 0. Defense Industry Consolidation 1986 - 2003.

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ALL YOU WANTED TO KNOW ABOUT OCI/PCI/INHERENTLY GOVERNMENTAL FUNCTIONS, BUT WERE AFRAID TO ASK

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  1. ALL YOU WANTED TO KNOW ABOUT OCI/PCI/INHERENTLY GOVERNMENTAL FUNCTIONS, BUT WERE AFRAID TO ASK OCI & PCI PROPOSED RULES “HOW AND WHY WE GOT HERE” Nicholas “Chip” Retson DoD Counsel, Defense Acquisition Regulation System July 20, 2010 0

  2. Defense Industry Consolidation 1986 - 2003

  3. Defense Science Board Task Force on Defense Industrial Structure for Transformation [Jul 2008] “many of the systems engineering firms which previously provided independent assessment [of major defense acquisition programs] have been acquired by the large prime contractors.” As a result, “different business units of the same firm can end up with both the service and product side in the same program or market area.” This conflict of interest may result in “bias [and] impaired objectivity.”

  4. A Proper OCI Protection System Must Be Able to Show -- Those Competing for a Government Contract Cannot: • Obtain an unfair competitive advantage thru their ability to determine or fashion agency requirements in such a way that those requirements improperly favor their own products/services [bias-type OCIs], • Impair the govt’s objective determination of contractor performance by having the ability to evaluate one’s own performance or the performance of their subsidiaries or subcontractors [OCIs that impair objectivity], • Have improper access to proprietary or sensitive govt info, particularly acquisition sensitive or budgetary information [OCIs based upon unequal access to information].

  5. How Did We Get Here - OCI? • Weapons Systems Acquisition Reform Act of 2009 (WSARA)(Pub. L. 111-23) • DoD Panel on Contract Integrity • DFARS Case 2009 – D015. Organizational Conflicts of Interest in Major Defense Acquisition Programs. 75 Fed Register 20954 (Apr 22, 2010). Comment Period closes: June 21, 2010 July

  6. Contractor Employee PCI Risk • Inherently Govt’l • Advice on Decision • Advice on Process Likelihood of Influencing Gov’t Decisions • Blended Workforce • Assistance Ks • Depot Services • Utility Services • Supply Ks (FFP) Potential Impact Of PCIs

  7. How Did We Get Here - PCI? • GAO Report 08-360 • Army Case Study Delineates Concerns with use of Contractors as Contract Specialists • FAR Case 2008-025 • Preventing Personal Conflicts of Interest by Contractor Employees Performing Acquisition Functions • Implementing Sec. 481(a), FY-09 DOD Authorization Act • Status: DAR & FAR Staff resolving open issues

  8. KO & PM actions in OCI/PCI? • Identify all Krs supporting the organization. • Use common sense, good judgment, & sound discretion in – • Deciding if acquisition will give rise to OCIs, and • Developing means to resolving any such OCIs. • Duty on Kr to report and self disclose • Analyze Kr OCI/PCI identified • Contractor's Identify and Exclude Employees With Potential PCI • Employee's Financial Interest Reporting • Financial Disclosure Reporting

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