ANNUAL ACQUISITION ETHICS TRAININGANNUAL ACQUISITION ETHICS TRAININGFORFOR

DESIGNATED DEPARTMENT OF ARMY DESIGNATED DEPARTMENT OF ARMY PERSONNELPERSONNEL

20072007

11

DUTY……HONOR…..DUTY……HONOR…..

GOVERNMENT GOVERNMENT CONTRACTSCONTRACTS

22

Got Ethics Questions?Got Ethics Questions?

Contact your ethicsContact your ethics

counselor counselor beforebefore you act. you act.

CPT Nancy Lewis: (703) 806-4484CPT Nancy Lewis: (703) 806-4484Nancy.J.Lewis@us.army.milNancy.J.Lewis@us.army.mil

33

Why Ethics Rules?Why Ethics Rules? Ensure that we perform our Ensure that we perform our

mission with public interest in mission with public interest in mind.mind.

Uphold public’s confidence in Uphold public’s confidence in integrity of Government.integrity of Government.

44

Ex-Air Force Official Gets Prison Ex-Air Force Official Gets Prison TimeTime

Boeing Received Special Boeing Received Special Treatment in ProcurementTreatment in Procurement

By Renae Merle and Jerry MarkonBy Renae Merle and Jerry Markon

Washington Post Staff WriterWashington Post Staff Writer

Saturday, October 2,2004; Page A01Saturday, October 2,2004; Page A01

55

DragonladyDragonlady gets her tail caught in the gets her tail caught in the revolving doorrevolving door

"The stain of this offense is very severe," said Judge T.S. Ellis of the U.S. District Court in "The stain of this offense is very severe," said Judge T.S. Ellis of the U.S. District Court in Alexandria, Virginia, while sentencing Darlene Druyun this morning. Druyun, also known Alexandria, Virginia, while sentencing Darlene Druyun this morning. Druyun, also known as the Dragonlady for being a tough negotiator, was the second-most senior Air Force as the Dragonlady for being a tough negotiator, was the second-most senior Air Force procurement official and, while overseeing billions of dollars of Air Force contracts, was procurement official and, while overseeing billions of dollars of Air Force contracts, was involved in discussions with Boeing for a $250,000-a-year job. She was sentenced to involved in discussions with Boeing for a $250,000-a-year job. She was sentenced to nine months in prison, a $5,000 fine, three years of supervised release and 150 hours of nine months in prison, a $5,000 fine, three years of supervised release and 150 hours of community service.community service.

Druyun (who referred to herself as the "Godmother of the C-17") pleaded guilty to\Druyun (who referred to herself as the "Godmother of the C-17") pleaded guilty to\conspiracy to violate federal conflict-of-interest regulations on a technical basis. That is, conspiracy to violate federal conflict-of-interest regulations on a technical basis. That is, she initially admitted only knowingly violating regulations, but not to using her position in she initially admitted only knowingly violating regulations, but not to using her position in the Pentagon to give Boeing advantages. However, she failed a lie detector test and then the Pentagon to give Boeing advantages. However, she failed a lie detector test and then admitted that she "did favor the Boeing Company in certain negotiations as a result of admitted that she "did favor the Boeing Company in certain negotiations as a result of her employment negotiations and other favors provided by Boeing to the defendant," her employment negotiations and other favors provided by Boeing to the defendant," according to the supplemental statement of facts and supplemental plea agreement . according to the supplemental statement of facts and supplemental plea agreement . Druyun helped Boeing obtain a grossly-inflated $23 billion deal where the Pentagon Druyun helped Boeing obtain a grossly-inflated $23 billion deal where the Pentagon would lease Boeing tankers, rather than buy them (and save up to $5 billion). would lease Boeing tankers, rather than buy them (and save up to $5 billion). Essentially, she was negotiating for Boeing rather than the government at this point. Essentially, she was negotiating for Boeing rather than the government at this point. Assistant U.S. Attorney Robert Wiechering said, "she did this as a parting gift to Boeing Assistant U.S. Attorney Robert Wiechering said, "she did this as a parting gift to Boeing and to ingratiate herself into Boeing."and to ingratiate herself into Boeing."

For more information on the Boeing tanker deal check out our Contractor BailoutFor more information on the Boeing tanker deal check out our Contractor BailoutArchives and our new report Archives and our new report The Politics of ContractingThe Politics of Contracting..

66

Contractor fraud probed on Contractor fraud probed on Kuwait baseKuwait base

U.S. authorities are investigating a web of U.S. authorities are investigating a web of more than $10 million in favors, bribes and more than $10 million in favors, bribes and kickbacks among Army officers, contractors kickbacks among Army officers, contractors and subcontractors at Camp Arifjan, court and subcontractors at Camp Arifjan, court and military records show.and military records show.

By By Matt KelleyMatt Kelley, USA TODAY, USA TODAY

October 14, 2007October 14, 2007

77

Camp Arifjan. . . is the center of the Army's financial operation for Iraq. It Camp Arifjan. . . is the center of the Army's financial operation for Iraq. It

has handled more than $4.2 billion in military contracts. has handled more than $4.2 billion in military contracts. It's also a It's also a center for corruption investigations. center for corruption investigations.

So far, 13 people associated with the Army's contracting operation in So far, 13 people associated with the Army's contracting operation in Kuwait have been charged with corruption in federal courts — the Kuwait have been charged with corruption in federal courts — the majority of the 20 corruption cases brought to date involving Army majority of the 20 corruption cases brought to date involving Army contracts for Iraq. Eight of the 13 have pleaded guilty. Two enlisted contracts for Iraq. Eight of the 13 have pleaded guilty. Two enlisted soldiers at Camp Arifjan were court-martialed for taking bribes.soldiers at Camp Arifjan were court-martialed for taking bribes.

Six companies accused of corruption in Kuwait also have been punished Six companies accused of corruption in Kuwait also have been punished administratively by Army contracting officials, records show.administratively by Army contracting officials, records show.

The biggest bribery case of the Iraq war so far involves Army Maj. John Cockerham,a former contracting officer at Arifjan, who is accused of taking $9.6 million in bribes from at least eight companies seeking contracts to provide bottled water and other supplies.

88

Those linked to Cockerham include some involved in other cases:Those linked to Cockerham include some involved in other cases:

Maj. Gloria Davis, a fellow contracting officer at Arifjan who Maj. Gloria Davis, a fellow contracting officer at Arifjan who worked on several contracts with Cockerham. Davis killed herself worked on several contracts with Cockerham. Davis killed herself in December, a day after admitting to Army investigators that in December, a day after admitting to Army investigators that she took $225,000 in bribes from contractor Lee Dynamics she took $225,000 in bribes from contractor Lee Dynamics International, federal court records say. Lee Dynamics also hired International, federal court records say. Lee Dynamics also hired Davis' son, Damien Thomas, the company's lawyer says. The Davis' son, Damien Thomas, the company's lawyer says. The Army suspended Lee Dynamics from contracting in July.Army suspended Lee Dynamics from contracting in July.

Diaa Salem, a businessman from Kuwait whom Cockerham Diaa Salem, a businessman from Kuwait whom Cockerham named as a business partner when creating a Texas company in named as a business partner when creating a Texas company in 2004. The Army barred Salem and his firm, Jasmine International 2004. The Army barred Salem and his firm, Jasmine International Trading, from getting contracts for a year in 2006 in a separate Trading, from getting contracts for a year in 2006 in a separate case. case.

In that case, two Army soldiers working at Camp Arifjan's finance In that case, two Army soldiers working at Camp Arifjan's finance office were court-martialed for taking $7,000 from Salem to office were court-martialed for taking $7,000 from Salem to process Jasmine's payments more quickly, according to Army process Jasmine's payments more quickly, according to Army records released to USA TODAY under the Freedom of records released to USA TODAY under the Freedom of Information Act.Information Act. 99

Other unassociated cases:Other unassociated cases:

LTC Guiterrez: Assigned to ASG-KU as Director of Logistics. LTC Guiterrez: Assigned to ASG-KU as Director of Logistics. Offered to disclose procurement –sensitive information to an Offered to disclose procurement –sensitive information to an employee of a contractor providing logistics support to the Army employee of a contractor providing logistics support to the Army in exchange for a cash payment of $3400. LTC Guiterrez in exchange for a cash payment of $3400. LTC Guiterrez committed suicide subsequent to the preferral of bribery charges committed suicide subsequent to the preferral of bribery charges against him.against him.

CW2 Peleti: Charged in federal court with receiving $50,000 in CW2 Peleti: Charged in federal court with receiving $50,000 in bribes regarding a food services contract and smuggling $40,000 bribes regarding a food services contract and smuggling $40,000 in cash to the US. Peleti was the Food Services Advisor for Iraq in cash to the US. Peleti was the Food Services Advisor for Iraq and Kuwait in 2005.and Kuwait in 2005.

CW2 Wiesemann: Charged with graft and bribery. He has since CW2 Wiesemann: Charged with graft and bribery. He has since resigned with an Under Other Than Honorable Conditions resigned with an Under Other Than Honorable Conditions discharge as he faces federal prosecution.discharge as he faces federal prosecution.

LTC Bruce D. Hopfengardner, USAR: In connection with a bribery LTC Bruce D. Hopfengardner, USAR: In connection with a bribery and fraud scheme, accused of fraudulently awarding contracts and fraud scheme, accused of fraudulently awarding contracts and authorizing cash payments despite defective or non and authorizing cash payments despite defective or non performance; also accused of stealing $120,000 in cash from the performance; also accused of stealing $120,000 in cash from the Coalition Provisional Authority (CPA) in cooperation with other Coalition Provisional Authority (CPA) in cooperation with other co-conspirators; faces wire fraud, wrongful conversion, co-conspirators; faces wire fraud, wrongful conversion, interstate transportation of stolen property, conspiracy and interstate transportation of stolen property, conspiracy and money laundering charges.money laundering charges.

1010

Other cases:Other cases:

COL Whiteford:. Once the second most senior person at CPA. COL Whiteford:. Once the second most senior person at CPA. Charged with conspiracy, bribery, wire fraud.Charged with conspiracy, bribery, wire fraud.

LTC Debra Harrison: Assigned to CPA at one point as the Acting LTC Debra Harrison: Assigned to CPA at one point as the Acting Comptroller. Charged in federal court with conspiracy, bribery, Comptroller. Charged in federal court with conspiracy, bribery, wire fraud, interstate transport of stolen property, bulk cash wire fraud, interstate transport of stolen property, bulk cash smuggling, money laundering and falsifying tax report.smuggling, money laundering and falsifying tax report.

LTC Michael Wheeler: Assigned as an advisor for CPA projects LTC Michael Wheeler: Assigned as an advisor for CPA projects for the reconstruction of Iraq. Charged in federal court with for the reconstruction of Iraq. Charged in federal court with conspiracy, bribery, wire fraud, interstate transport of stolen conspiracy, bribery, wire fraud, interstate transport of stolen property, bulk cash smuggling.property, bulk cash smuggling.

These three worked in conjunction with LTC Bruce D. These three worked in conjunction with LTC Bruce D. Hopfengardner. Phillip Bloom is a US citizen who received more Hopfengardner. Phillip Bloom is a US citizen who received more than $8.6 million in rigged contracts. The indictment alleges that than $8.6 million in rigged contracts. The indictment alleges that Bloom, in return, provided Whiteford, Harrison, Wheeler, Stein, Bloom, in return, provided Whiteford, Harrison, Wheeler, Stein, Hopfengardner and others with over $1 million in cash, SUVs, Hopfengardner and others with over $1 million in cash, SUVs, sports cars, a motorcycle, jewelry, computers, business class sports cars, a motorcycle, jewelry, computers, business class airline tickets, liquor, promise of future employment with Bloom, airline tickets, liquor, promise of future employment with Bloom, and other items of value.and other items of value.

1111

TopicsTopics GiftsGifts BriberyBribery Contractor Personal Contractor Personal Organizational Conflict of Organizational Conflict of

InterestInterest Procurement Integrity Act Procurement Integrity Act Seeking Employment/Post-Seeking Employment/Post-

Government Service Government Service EmploymentEmployment

1212

GG

II

FF

TT

ss

SThe servants of the nation are to rendertheir services without

any taking of presents . . The disobedient shall, ifconvicted, die withoutceremony. --Plato

1313

The rules on the acceptance of gifts are The rules on the acceptance of gifts are with a few exceptions, the same for all with a few exceptions, the same for all agencies in the Executive Branch. agencies in the Executive Branch.

Everyone in DoD must be aware of the Everyone in DoD must be aware of the restrictions in order to restrictions in order to avoid inadvertent avoid inadvertent mistakesmistakes that could ruin a career. that could ruin a career.

As decision-makers, we all perform official As decision-makers, we all perform official duties that outsiders may want to unfairly duties that outsiders may want to unfairly influence. influence. As public servants, we must not As public servants, we must not allow even the appearance of impropriety. allow even the appearance of impropriety.

1414

Prosecution !Prosecution !““. . . Michael Dubberly, GM-15 program . . . Michael Dubberly, GM-15 program director of the Air Vehicle Division for the director of the Air Vehicle Division for the Naval Air Systems command, pleaded guilty to Naval Air Systems command, pleaded guilty to accepting gratuities from Engineering Matrix accepting gratuities from Engineering Matrix Services of Cardiff, N.J. . . . Dubberly was Services of Cardiff, N.J. . . . Dubberly was treated to four expensive dinners from treated to four expensive dinners from executives of the company, which he helped executives of the company, which he helped award millions of dollars in Navy contracts. He award millions of dollars in Navy contracts. He also requested that a portion of the company’s also requested that a portion of the company’s profits be deposited in an offshore mutual profits be deposited in an offshore mutual fund, according to the inspector general. fund, according to the inspector general. Dubberly faces a maximum sentence of two Dubberly faces a maximum sentence of two years in prison and a $250,000 fine.” years in prison and a $250,000 fine.”

1515

Two years in prison and a $250,000 fine in Two years in prison and a $250,000 fine in exchange for four expensive meals?!?!?exchange for four expensive meals?!?!?

If Mr. Dubberly were prosecuted under the If Mr. Dubberly were prosecuted under the bribery statute (18 USC 201), he could face bribery statute (18 USC 201), he could face penalties of up to 15 years in prison and 3 penalties of up to 15 years in prison and 3 times the amount of the bribe. The prosecution times the amount of the bribe. The prosecution appears to have decided to ask for lesser appears to have decided to ask for lesser penalties in this case. penalties in this case.

And don’t forget:And don’t forget:

even if the courts don’t prosecute,even if the courts don’t prosecute,

the media surely will.the media surely will.

1616

Gift Acceptance AnalysisGift Acceptance Analysis1) Is it 1) Is it

(a) from a prohibited (a) from a prohibited source, orsource, or

(b) offered because of (b) offered because of your official position?your official position?

2) Is it defined as a “gift”?2) Is it defined as a “gift”?

3) Is there an exception? 3) Is there an exception?

4) Is there a limitation on using 4) Is there a limitation on using the exception? the exception? 1717

General Gift RuleGeneral Gift Rule

An employee shall not An employee shall not solicit or accept any solicit or accept any gift or other item of gift or other item of monetary valuemonetary value

1. From a prohibited 1. From a prohibited

source; orsource; or

2. Given because of the 2. Given because of the employee’s official employee’s official positionposition

1818

Prohibited SourcesProhibited Sources

Any personAny person

1) seeking official action from, doing 1) seeking official action from, doing business with, or conducting business with, or conducting activities regulated by, the activities regulated by, the individual’s employing agency; orindividual’s employing agency; or

2) whose interests may be substantially 2) whose interests may be substantially affected by the performance or affected by the performance or nonperformance of the individual’s nonperformance of the individual’s official dutiesofficial duties

DEFINITION

1919

Not Not “Gifts” “Gifts” Modest items of food and refreshment Modest items of food and refreshment Greeting cards and items with little intrinsic Greeting cards and items with little intrinsic

value, such as plaques, certificates, and trophies value, such as plaques, certificates, and trophies Loans from financial institutions Loans from financial institutions Opportunities and benefits available to Opportunities and benefits available to

the the public or a class of employeespublic or a class of employees Rewards and prizes to competitorsRewards and prizes to competitors Pensions and other benefits from a former employerPensions and other benefits from a former employer Anything paid for by the Government or Anything paid for by the Government or

by the employeeby the employee Gifts accepted under specific statuteGifts accepted under specific statute

2020

Gift ExceptionsGift Exceptions

Exceptions Exceptions

to the giftto the gift

acceptanceacceptance

prohibitionprohibition

2121

Gift ExceptionsGift Exceptions

Gifts of up to $20, up Gifts of up to $20, up to $50 per year from to $50 per year from the same sourcethe same source

Discounts and similar Discounts and similar benefitsbenefits

2222

You may accept gifts (other than cash or investment You may accept gifts (other than cash or investment interests) up to interests) up to $20 per occasion$20 per occasion, if the , if the aggregateaggregate market value received from one source under this market value received from one source under this exception does not exceed exception does not exceed $50$50 in a year. in a year.

You may accept reduced membership or other fees You may accept reduced membership or other fees offered to offered to all Government employees or all military all Government employees or all military personnel by professional organizationspersonnel by professional organizations if the only if the only restriction on membership is professional qualifications. restriction on membership is professional qualifications. You may accept opportunities, benefits, favorable rates, You may accept opportunities, benefits, favorable rates, and commercial discounts offered and commercial discounts offered

(1) to a group in which membership is unrelated to (1) to a group in which membership is unrelated to Government employment (e.g., The Association of Government employment (e.g., The Association of Retired Persons)Retired Persons)

(2) to members of an organization in which membership (2) to members of an organization in which membership is related to Government employment if the same is is related to Government employment if the same is broadly available to large segments of the public broadly available to large segments of the public through organizations of similar size, (e.g., The Senior through organizations of similar size, (e.g., The Senior Executive Service Association) orExecutive Service Association) or

(3) by an entity that is not a prohibited source(3) by an entity that is not a prohibited source 2323

Gift Exceptions, cont.Gift Exceptions, cont.

Gifts based on Gifts based on personal personal relationshipsrelationships

Gifts based on Gifts based on outside employmentoutside employment

Awards and honorary Awards and honorary degreesdegrees

2424

Gift Exceptions, cont.Gift Exceptions, cont.

Social invitations Social invitations from other than from other than prohibited sources prohibited sources

Speaking Speaking engagements and engagements and widely attended widely attended gatheringsgatherings

Mr. and Mrs. InviteeDefense PentagonWashington, D.C.

2525

Gift HypotheticalGift Hypothetical

You are a quality assurance officer for the X-Files You are a quality assurance officer for the X-Files Project. UFO Corp. is the contractor. You attend a Project. UFO Corp. is the contractor. You attend a week of related meetings.week of related meetings.

On MondayOn Monday, the VP for at UFO Corp. takes you to , the VP for at UFO Corp. takes you to lunch and insists on paying the $18 for your meallunch and insists on paying the $18 for your meal

On TuesdayOn Tuesday, the CEO of UFO Corp. invites you to join , the CEO of UFO Corp. invites you to join him for dinner for which you never see a bill. him for dinner for which you never see a bill.

On WednesdayOn Wednesday, you run into an old college chum and , you run into an old college chum and have drinks in the hotel lounge, where you discover have drinks in the hotel lounge, where you discover your friend is now the Director of Marketing for UFO your friend is now the Director of Marketing for UFO Corp. He charges the tab to his own room before Corp. He charges the tab to his own room before you can get out your wallet. You leave the tip. you can get out your wallet. You leave the tip.

On ThursdayOn Thursday, you sit down for a quiet breakfast alone , you sit down for a quiet breakfast alone when a UFO Corp. project officer sits down with you. when a UFO Corp. project officer sits down with you. You ask the waiter for separate checks, but the UFO You ask the waiter for separate checks, but the UFO employee insists on covering the entire amount employee insists on covering the entire amount through his corporate expense account.through his corporate expense account.

Are you in trouble?Are you in trouble? 2626

Analysis:Analysis:

1) Is it from a 1) Is it from a prohibited sourceprohibited source? YES, YES, YES, and YES? YES, YES, YES, and YES

2) Is it defined as a “2) Is it defined as a “giftgift”? YES”? YES

3) Is there an 3) Is there an exceptionexception? YES and NO. ? YES and NO.

The first meal probably qualifies for the The first meal probably qualifies for the $20 exception$20 exception. .

The second meal probably does not, unless you only had a The second meal probably does not, unless you only had a Caesars salad for dinner. You would need to send a check Caesars salad for dinner. You would need to send a check to UFO Corp. to cover the cost of your dinner if it was over to UFO Corp. to cover the cost of your dinner if it was over $20.$20.

The drinks in the lounge would have put you over the $50 The drinks in the lounge would have put you over the $50 limit from the same source, since your chum works for UFO limit from the same source, since your chum works for UFO Corp. Gifts from different representatives of the same Corp. Gifts from different representatives of the same company are deemed to be from the company. BUT, you company are deemed to be from the company. BUT, you might accept the gift of the drinks under another might accept the gift of the drinks under another exception: gifts based on a exception: gifts based on a personal relationshippersonal relationship. .

The breakfast with the project officer clearly would put you The breakfast with the project officer clearly would put you over the limit of $50 from the same source in a yearover the limit of $50 from the same source in a year unless unless you reimbursed the company for your dinner with the UFO you reimbursed the company for your dinner with the UFO executive AND you were able to accept the drinks under executive AND you were able to accept the drinks under the personal relationship exception.the personal relationship exception. 2727

BriberyBriberyAccepting a gift, even if nominal inAccepting a gift, even if nominal in

value, in return for being influenced in value, in return for being influenced in

the performance of an official act is a the performance of an official act is a

bribe. bribe.

18 USC Section 20118 USC Section 201

2828

Contractors in Government Contractors in Government Workplace!Workplace!

2929

Changing WorkplaceContractors Support DoDMission- No longer considered “outsiders” with whom we deal with at arms length!!

Contractors are Perceived as “Partners”

Unchanging LawsFundamental DifferencesLegal and Ethical Limitations

3030

Oath of OfficeOath of Office

Officers and Army CiviliansOfficers and Army Civilians““I do solemnly swear/affirm that I will I do solemnly swear/affirm that I will support and defend the Constitution of the support and defend the Constitution of the United States against all enemies, foreign United States against all enemies, foreign and domestic; that I will bear true and domestic; that I will bear true allegiance to the same; that I take this allegiance to the same; that I take this obligation freely, without any mental obligation freely, without any mental reservation or purpose of evasion; and reservation or purpose of evasion; and that I will well and faithfully discharge the that I will well and faithfully discharge the duties of the office upon which I am about duties of the office upon which I am about to enter. So help me God.”to enter. So help me God.”

3131

The Contractor’s OathThe Contractor’s Oath

BOTTOM LINEBOTTOM LINE

3232

GoalsGoals Re-establish the LinesRe-establish the Lines

Recognize when contractors and Recognize when contractors and Federal employees must be Federal employees must be distinguisheddistinguished

3333

ALLOWING “TIME ALLOWING “TIME OFF”OFF”

3434

ALLOWING “TIME OFF”ALLOWING “TIME OFF”

Remember:Remember:• Federal Personnel System rules/regulations are Federal Personnel System rules/regulations are

inapplicable to contractor personnelinapplicable to contractor personnel• Contractor personnel time is “billed” to the Contractor personnel time is “billed” to the

governmentgovernment

Exercise caution:Exercise caution:• Organization DayOrganization Day• Holiday PartyHoliday Party• Off-Site ConferenceOff-Site Conference• TrainingTraining

Coordinate with contracting officerCoordinate with contracting officer Ensure that contractor personnel are informedEnsure that contractor personnel are informed

3535

YOU MAKE THE CALL!YOU MAKE THE CALL! The holiday weekend is fast approaching The holiday weekend is fast approaching

and the officer-in-charge of the and the officer-in-charge of the organization invokes the “59-minute organization invokes the “59-minute rule” for all members of the office – rule” for all members of the office – including the contract support team who including the contract support team who work with the Soldiers and government work with the Soldiers and government employees.employees.

Is it permissible to allow the contractor Is it permissible to allow the contractor personnel to leave 59-minutes before personnel to leave 59-minutes before their scheduled departure time?their scheduled departure time?

3636

ANSWERANSWER

Decisions concerning “time off” are to be Decisions concerning “time off” are to be made by the contractor made by the contractor NOTNOT the the governmentgovernment

Contractor personnel are paid pursuant to Contractor personnel are paid pursuant to the terms of the contract with the Army – the terms of the contract with the Army – not according to federal personnel system not according to federal personnel system rules/regulationsrules/regulations• The contractor employee has no authority to The contractor employee has no authority to

modify the terms of the contractmodify the terms of the contract• Only certain government personnel have the Only certain government personnel have the

authority to modify the terms of the contractauthority to modify the terms of the contract3737

Misuse of Contractor Misuse of Contractor PersonnelPersonnel

3838

Misuse of Contractor PersonnelMisuse of Contractor Personnel

Prohibited Prohibited from directingfrom directing

contractor personnel to:contractor personnel to:

Perform any tasks other than Perform any tasks other than

those in the contract.those in the contract.

3939

Sharing a TaxiSharing a Taxi

A DoD employee and a contractor A DoD employee and a contractor

employee are on employee are on officialofficial travel and travel and

would like to split the cost of a taxi would like to split the cost of a taxi

ride to the airport. This is permissible. ride to the airport. This is permissible.

True/False??True/False??

4040

Sharing the cost of the taxi ride with Sharing the cost of the taxi ride with the contractor is permissible because the contractor is permissible because each traveler would pay his or her each traveler would pay his or her pro-rata share to the neutral provider pro-rata share to the neutral provider of the transportation. of the transportation.

The DoD employee should, however, The DoD employee should, however, consider whether sharing the taxi consider whether sharing the taxi might constitute an appearance of a might constitute an appearance of a conflict of interest. conflict of interest.

TRUE

4141

You Make the CallYou Make the Call

A contractor employee offers toA contractor employee offers to

drive an Army employee to lunch drive an Army employee to lunch

at a restaurant ten miles off-post at a restaurant ten miles off-post

in his personal vehiclein his personal vehicle. .

May the employee accept the ride?May the employee accept the ride?

4242

AnswerAnswer

The Army employee may accept the ride if it The Army employee may accept the ride if it fits within one of the exceptions to the gift fits within one of the exceptions to the gift rule. rule.

Caution:Caution: There may be an appearance There may be an appearance problem that requires discussion with an problem that requires discussion with an ethics counselor if, for example, this ethics counselor if, for example, this arrangement occurs frequently or the arrangement occurs frequently or the Army employee is making official decisions Army employee is making official decisions affecting the contractor.affecting the contractor.

4343

Organizational Conflicts Organizational Conflicts of Interestof Interest

4444

What is an Organizational Conflict What is an Organizational Conflict of Interest (OCI)?of Interest (OCI)?

An "organizational conflict of interest" An "organizational conflict of interest"

exists when a contractor is or may be exists when a contractor is or may be

unable or unwilling to provide the unable or unwilling to provide the

government with impartial or objective government with impartial or objective

assistance or advice. assistance or advice.

Creates an actual or potential conflict of Creates an actual or potential conflict of

interest on a current contract or a interest on a current contract or a

potential future procurement. potential future procurement. 4545

The two underlying principles are –

1) Preventing the existence of 1) Preventing the existence of

conflicting roles that might conflicting roles that might

bias a contractor’s judgmentbias a contractor’s judgmentANDAND

2) Preventing unfair 2) Preventing unfair

competitive advantagecompetitive advantage

4646

How Does OCI Arise?How Does OCI Arise? Biased ground rules cases . . . government government

contractor has opportunity to skew a contractor has opportunity to skew a competition in its favorcompetition in its favor

Unequal access to information . . . access to . . . access to non public information that would give it an non public information that would give it an unfair competitive advantageunfair competitive advantage

Impaired objectivityImpaired objectivity . . . government . . . government contractor would be in a position to evaluate contractor would be in a position to evaluate itself or a related entityitself or a related entity

4747

AreasAreas

Providing systems engineering and Providing systems engineering and technical directiontechnical direction

Preparing specification of work statementsPreparing specification of work statements

Access to proprietary informationAccess to proprietary information

Solicitation provisions, waivers and Solicitation provisions, waivers and mitigation plansmitigation plans

4848

Providing Evaluation Services

A contractor A contractor cannotcannot evaluate its own evaluate its own

offers for products or services, or those of offers for products or services, or those of

its competitors, without proper safeguards its competitors, without proper safeguards

to ensure objectivity to protect the to ensure objectivity to protect the

Government’s interests. Government’s interests.

4949

Procurement Integrity Procurement Integrity ActAct

5050

ResourcesResources

41 USC 423 - the current version of 41 USC 423 - the current version of the Procurement Integrity Act went the Procurement Integrity Act went into effect on 1 Jan 97into effect on 1 Jan 97

Implemented by FAR 3.104, DFAR Implemented by FAR 3.104, DFAR Part 203, and AFAR Part 5102Part 203, and AFAR Part 5102

5151

BansBans Disclosing contractor bid or proposal or Disclosing contractor bid or proposal or

source selection information (for source selection information (for competitive procurements)competitive procurements)

Obtaining contractor bid or proposal or Obtaining contractor bid or proposal or source selection information (for source selection information (for competitive procurements)competitive procurements)

Accepting compensation from certain Accepting compensation from certain contractors after leaving Federal contractors after leaving Federal employmentemployment

Discussing non-Federal employment with Discussing non-Federal employment with certain bidders or offerorscertain bidders or offerors 5252

To Whom Does Disclosure Ban To Whom Does Disclosure Ban Apply? Apply?

The disclosure ban applies to:The disclosure ban applies to: Current Federal employees and military Current Federal employees and military

personnelpersonnel Former Federal employees and military Former Federal employees and military

personnelpersonnel Individuals (such as contractor employees) Individuals (such as contractor employees)

who are currently advising the government who are currently advising the government regarding the procurementregarding the procurement

Individuals (such as contractor employees) Individuals (such as contractor employees) who have advised the government regarding who have advised the government regarding the procurement but are no longer doing sothe procurement but are no longer doing so

5353

What Are Not Violations of the What Are Not Violations of the Disclosure Ban?Disclosure Ban?

Information already disclosed publicly or Information already disclosed publicly or made available to publicmade available to public

Information disclosed by contractors. Information disclosed by contractors. TheyThey are are notnot prohibited from disclosing their own prohibited from disclosing their own bid or proposal information.bid or proposal information.

Source Selection Info disclosed, pursuant to a Source Selection Info disclosed, pursuant to a proper request, to Congress, the Comptroller proper request, to Congress, the Comptroller General, or the inspector general (provided General, or the inspector general (provided the SSI or CBPI is highlighted and notice the SSI or CBPI is highlighted and notice given that disclosure is restricted by PIA.)given that disclosure is restricted by PIA.)

5454

Penalties for Disclosing or Obtaining Penalties for Disclosing or Obtaining SSI or Contractor Bid or Proposal infoSSI or Contractor Bid or Proposal info

+

And………..5555

5656

Administrative ActionsAdministrative Actions Cancellation of the procurement.Cancellation of the procurement. Disqualification of an offeror.Disqualification of an offeror. Suspension or debarment of the Suspension or debarment of the

contractor.contractor. Initiation of an adverse personnel Initiation of an adverse personnel

action.action. Any other action in the best interest Any other action in the best interest

of the Government.of the Government.

5757

Seeking EmploymentSeeking Employment

5858

Applicable Applicable

Procurement Integrity ActProcurement Integrity Act

18 U.S.C. Section 20818 U.S.C. Section 208

Joint Ethics Regulation Joint Ethics Regulation

Standards of Ethical Conduct for Standards of Ethical Conduct for Executive Branch EmployeesExecutive Branch Employees

5959

““Seeking Employment”Seeking Employment” 5 C.F.R.2635.603(b)5 C.F.R.2635.603(b) You are “seeking employment” when You are “seeking employment” when

you:you:• engage in negotiationsengage in negotiations• make unsolicited employment contactmake unsolicited employment contact

includes sending resume (up to 2 includes sending resume (up to 2 months)months)

• respond to unsolicited proposal (except respond to unsolicited proposal (except unconditional rejection) unconditional rejection)

6060

DisqualificationDisqualificationTo avoid violation:To avoid violation:

• Take no actionTake no action• Written noticeWritten notice to to

supervisor (JER 2-204)supervisor (JER 2-204)• Supervisor response:Supervisor response:

Written Written Recusal Recusal Copy to Ethics Counselor & Copy to Ethics Counselor &

subordinatessubordinates6161

Post-Government Post-Government Employment RestrictionsEmployment Restrictions

6262

Post-Government Employment Post-Government Employment RestrictionsRestrictions

Representational RestrictionsRepresentational Restrictions18 U.S.C. § 20718 U.S.C. § 207

Prohibits representing another before U.S. Prohibits representing another before U.S. Government with intent to influenceGovernment with intent to influence• Lifetime banLifetime ban• 2-year ban2-year ban• 1-year cooling-off period for senior 1-year cooling-off period for senior

employeesemployees• 1-year ban on senior employees 1-year ban on senior employees

representing foreign entitiesrepresenting foreign entities

6363

Government Purchase Cards Government Purchase Cards

SCENARIO: No one in your office enjoys SCENARIO: No one in your office enjoys drinking from the office water fountain. drinking from the office water fountain. The water is often warm and sometimes The water is often warm and sometimes has a weird metallic taste to it. One day has a weird metallic taste to it. One day Director H2O orders you (after taking a Director H2O orders you (after taking a large gulp of warm, metallically water large gulp of warm, metallically water from the fountain) to buy a couple cases from the fountain) to buy a couple cases of bottled water with your GPC for the of bottled water with your GPC for the office. office.

QUESTION: May you buy bottled waterQUESTION: May you buy bottled water??

6464

AnswerAnswerBottled water generally does not materially Bottled water generally does not materially contribute to an agency’s mission contribute to an agency’s mission accomplishment and is generally a personal accomplishment and is generally a personal expense. expense.

GAO- Sanctioned Exception Where Water is GAO- Sanctioned Exception Where Water is Unpotable: Agencies may use appropriated Unpotable: Agencies may use appropriated funds to buy bottled water where a building’s funds to buy bottled water where a building’s water supply is unwholesome or unpotable. water supply is unwholesome or unpotable.

6565

ContractorsContractors

SCENARIO: SCENARIO: You are the administrative staff supervisor for an organization. The receptionist for your organization is a contractor employee. He has worked in support of the organization for 2 years and has done a terrific job. He has decided to pursue a college education and has asked you for a letter of recommendation discussing his job performance & work ethic. He intends to include the letter of recommendation with his college application.

QUESTION: May you write the letter of recommendation?

6666

AnswerAnswerImpermissibleImpermissible to give preferential treatment to any to give preferential treatment to any non-federal entity. Would need to do the same for non-federal entity. Would need to do the same for all other contractor employeesall other contractor employees

The terms of the contract control contract provides The terms of the contract control contract provides for the proper method to provide information on for the proper method to provide information on performance awards.performance awards.

Discuss with contracting officer.Discuss with contracting officer.

6767

CONTRATORSCONTRATORS

Scenario: Commander Lewis gave out Scenario: Commander Lewis gave out

coins to contract employees during an officecoins to contract employees during an office

award day?award day?

Did Commander Lewis do anything wrong?Did Commander Lewis do anything wrong?

6868

ANSWERANSWER

Coins purchased with appropriated funds shall not be presented to contractor personnel.”

DA Memo 600-70, para. 5d(2)DA Memo 600-70, para. 5d(2)

Coins purchased with personal funds are okay!Coins purchased with personal funds are okay!

6969

Government ResourcesGovernment Resources SCENARIO: While you are SCENARIO: While you are

driving home from work driving home from work your tire blows out. A gas your tire blows out. A gas station a block away station a block away replaces the tire right replaces the tire right away. You are so thrilled away. You are so thrilled that the problem is solved that the problem is solved so easily that you so easily that you inadvertently use your inadvertently use your Government travel card to Government travel card to pay. Later, when you get pay. Later, when you get the bill for the card you the bill for the card you immediately pay in full.immediately pay in full.

•QUESTION: Is there a problem here?

7070

Correct AnswerCorrect AnswerMisuse of Government Misuse of Government

travel cards and purchase travel cards and purchase

cards has received cards has received

considerable congressional considerable congressional

and media scrutiny in recent and media scrutiny in recent

years.years.

Even when employees have paid off their charges, agencies have taken administrative or disciplinary action.

More misuse:•Cash advances•Vehicle lease agreements•Motor vehicle repair•Long term lease of land or building•Nordstrom, Macys, Neiman Marcus

7171

Post-Government ServicePost-Government ServiceEmployment Restrictions Employment Restrictions

SCENARIO: SCENARIO: Found You!, IncFound You!, Inc., is the ., is the contractor for the ABC program. You contractor for the ABC program. You interact with the ABC division of interact with the ABC division of Found You!Found You! on technical matters and evaluate their on technical matters and evaluate their product. Right before a meeting to discuss product. Right before a meeting to discuss a product, a ABC employee unexpectedly a product, a ABC employee unexpectedly mentions that mentions that Found You!Found You! is looking for a is looking for a manager in a new division, DEF, completely manager in a new division, DEF, completely separate from ABC. You tell him you’re separate from ABC. You tell him you’re going to talk to your ethics counselor ASAP going to talk to your ethics counselor ASAP and then get back to him with your decision. and then get back to him with your decision. You then proceed with the meeting. You then proceed with the meeting.

QUESTION: QUESTION: Did you do the right thing?Did you do the right thing?

7272

AnswerAnswerOnce you have engaged in a conversation such as just Once you have engaged in a conversation such as just

described, you are considered to be described, you are considered to be seeking seeking

employmentemployment with the company. with the company.

7373

Duty. Honor. Government Duty. Honor. Government Contracts.Contracts.

Who you gonna call?

LTC Denise Council-Ross: 703-681-3334;denise.council-ross@hqda.army.mil

Duane Zezula: 703-681-5408; duane.zezula@hqda.army.milCOL Scott Lind: 703-681-9158; scott.lind@hqda.army.mil

ETHICS

7474

ConclusionConclusion

Duty. Honor. Government Contracts. Duty. Honor. Government Contracts.

Any questions??7575