ACC Presentation July 20, Kevin P. Connelly Seyfarth Shaw LLP

Transcription

1 ACC Presentation July 20, 2010 Kevin P. Connelly Seyfarth Shaw LLP

2 Ethics in Federal Government Contracting: Sources of Law Federal Acquisition Regulation (48 C.F.R.) contains rules and implementing clauses to be used in contracts Part 3 on Improper Business Practices contains many ethics rules, including those on procurement integrity, kickbacks and gratuities Part 9 on Contractor Qualifications contains rules on what is a responsible contractor, including the Organizational Conflicts of Interest rules and suspension and debarment criteria False Claims and False Statements Acts (18 USC 287 and 31 U.S.C. 3729; 18 U.S.C. 1001) Can apply where you wrongly certified on any number of things in connection with a contract or proposal Can apply where you billed for labor that was not actually expended Bribery, Kickbacks and Gratuities laws (18 U.S.C. 201, 41 U.S.C , Office of Government Ethics Rules for Federal employees) Employment Prohibitions (FAR Part 3 and18 U.S.C ) Seyfarth Shaw LLP

3 Federal Government Contracting: What Are We Getting Ourselves Into Numerous good reasons to enter the federal marketplace Compliance with detailed statutory, regulatory and contractual requirements is the price you pay to play Non-compliance with procurement ethics rules can result in criminal, civil fraud or administrative actions against the company/employees Debarment/suspension may impact more than just federal contracts Mandatory disclosure Yes, in some instances you may have to turn yourself in Seyfarth Shaw LLP

4 Procurement Integrity Act (PIA) System built on fair competition PIA prohibits the improper disclosure or receipt of contractor bid or proposal information or source selection information before the award of a federal contract What is contractor bid or proposal information? What is source selection information? Common ways that PIA violations can occur Corporate espionage Corporate intelligence gathering New employees s (with inadvertent disclosures) Subcontractors, vendors, teaming partners Seyfarth Shaw LLP

5 Hiring Former Government Employees Revolving door: PIA and ERA restrictions on hiring, use and compensation of certain former government employees Certain military flag-rank officers and senior DoD civilian officers must obtain guidance from Ethics Office before accepting from a DoD contractor an offer of employment or consulting position any compensation Present and former agency officials may not even discuss employment with companies in certain cases Imposes requirements on contractors Full range of punishments exist for non-compliant contractors Seyfarth Shaw LLP

6 Giving Items of Value to Government Employees What are items of value Difference between federal government arena and the commercial world What constitutes a bribe or an illegal gratuity General prohibition on receipt of items of value by government employees Some exceptions to general prohibition More than just a business development issue Ease of audit and discovery Seyfarth Shaw LLP

7 Product Substitution Offering a non-conforming product Must conform to the specification Must be tested as required If non-conforming it does not matter if the product works better Product substitution is broadly defined Failure to conduct all required testing Failure to procure from approved sources OEM versus form, fit and function New versus refurbished parts Buy American Act, Trade Agreements Act, or special contract provisions Unauthorized worker substitution Seyfarth Shaw LLP

8 Kickbacks Happens in both the commercial world and federal government contracts arena Theory is buyer pays ultimate cost in higher prices U.S. Government better able to protect themselves than consumers Kickback is broadly defined by statute and in enforcement Seyfarth Shaw LLP

9 Organizational Conflicts of Interest (OCIs) Three general types of OCIs Impaired objectivity Unfair access to non-public information Biased ground rules Requirement of disclosure and mitigation Risk of losing awarded contract or not being able to compete Increased risk of fraud allegations Seyfarth Shaw LLP

10 GSA Schedule Contract One way that many companies enter the federal contracting arena Number of major potential traps Disclosure of Pricing Certification of same Trade Agreements Act Tracking comparable sales to the agreed upon customer of comparison (price reduction provision) Seyfarth Shaw LLP