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HEALTH AFFAIRS

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Activity

Ethics as Applied to Source


Selection

Overall Seminar Agenda


HEALTH AFFAIRS

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Management
Activity

Ethics as Applied to Source Selection


Planning and Preparation
Conducting and Documenting the Evaluation

Ethics as Applied to Source


Selection
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Management
Activity

Responsibilities for Ethical Conduct


Statutory and Regulatory Framework
Procurement Integrity
Nondisclosure of Procurement Information

Post Government Employment

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Ethics - Responsibility for


Ethical Conduct

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Activity

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)

Ethics Statutory and


Regulatory Framework
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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)

Ethics - Conflict of Interest


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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
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Ethics - Procurement Integrity:


Statutory and Regulatory Framework
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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)
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Ban on Disclosing
Procurement Information
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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))

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Contractor Bid or
Proposal Information (CBPI)

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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)

Ethics - Discussion
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Activity

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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?
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Source Selection
Information (SSI)
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SSI means any of ten types of information:


(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)

Bid prices submitted by bidders


Costs or prices submitted by offerors
Source selection plans (including officials names and positions
Technical evaluation plans
Technical evaluations of proposals
Cost or price evaluations of proposals
Competitive range determinations
Rankings of bids or proposals
Reports & evaluations of source selection panels, boards or
advisory councils
(10) 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)

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Ethics - Discussion
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Management
Activity

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LTC Smith is the Army representative to a team


evaluating proposals for a competitive procurement
for TMA.
LTC Smiths 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?
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Ethics - Penalty for


Disclosing Information

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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)

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Ethics - Post Government


Employment Restrictions
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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 contractors 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 contractors 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.

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Procurement Integrity One-Year Compensation Ban


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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

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Procurement Integrity One-Year Compensation Ban


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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

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Ethics - Post Government


Employment Restrictions
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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

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Ethics - Discussion
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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?
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Ground Rules:
Ethics Summary
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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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