ETHICS IN A BLENDED WORKFORCE

DII Best Practices ForumJune 5, 2014

Panel2

MODERATOR: Sandra Evers-ManlyVice President, Corporate Responsibility

Northrop Grumman Corporation

PANELISTS: Joseph McDonald

Vice President, Yoh Federal Services

Day and Zimmermann Company

Steve EpsteinChief Counsel, Ethics and Compliance

The Boeing Company

Blended Workforce

Agenda4

Code of Ethics and Standards of Business Conduct

Business Courtesies Ethics Hotline Protection of Non-public Information ITAR Compliance/Awareness Revolving Door

How our company engages our employees and helps them understand our values.

Code of Ethics and Standards of Business Conduct

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Code of Ethics And Standards of Business Conduct

ALL YOH CONTRACT EMPLOYEES READ, UNDERSTAND, AND ACKNOWLEDGE OUR CODE OF ETHICS AND STANDARDS OF BUSINESS CONDUCT DURING THE ON-BOARDING PROCESS. YOH ALSO HAS ON-GOING COMMUNICATION WITH THE CLIENT MANAGERS AND HUMAN RESOURCES. COLLABORATION IS A KEY TO OUR SUCCESS.

BELOW IS THIS ACTUAL DOCUMENT SHARED WITH OUR CONTRACT EMPLOYEES:

  At Yoh it is imperative that our employees act with honesty and integrity at all times.

These high standards are reflected in Yoh’s Code of Ethics and Standards of Business Conduct.  This Code of Ethics and Standards of Business Conduct presents Standards to help you find an ethical course of action when faced with a dilemma.  These Standards are based on a set of values and principles that address areas of ethical risk.

  The Company’s Code of Ethics is expressed in its vision and values. The Standards

that follow will help you understand your responsibility under our Code — and they will serve as your guide when faced with an ethical issue. While the following cannot cover every ethical problem that you might face, they are meant to help you make informed judgments.

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Code of Ethics And Standards of Business Conduct

Workplace Environment Standard: The Company is committed to providing a safe, environmentally-sound workplace in

which employees are encouraged to excel. As an employee, it is your responsibility to do your best, following procedures to do your job safely, to treat others with respect, and to protect the environment from potential negative effects from our business activities.

Information Reporting and Recording Standard: All Company records, reports, pricing data, invoices and other business documents

must be prepared accurately and honestly. It is a federal crime to present a false claim to the U.S. government knowingly. It is fraud in the private sector. Be sure that any document you prepare is correct. You must also assist any auditor who is checking our records and not block his or her efforts.

Protecting Resources Standard: Property, money and information that belong to the Company or its customers must be

preserved, protected and accounted for. As an employee, you have a duty to be aware of costs, since in working for our customers, cost control is imperative.

 Conflict of Interest  Standard: When you are conducting business and trying to get new business, the interest of the

Company, its employees, its suppliers and its customers must not be in conflict. Your loyalty as an employee must be to the Company. You must avoid any action or behavior that may put you or the Company in a position of conflict of interest or of divided loyalty and you must avoid actions or relationships that might give even the appearance of such conflict.

Corporate Relations Standard: The Company operates in a larger community of business, government and other

organizations and people. You are responsible for being a contributing, law-abiding member of that larger society locally, nationally and internationally. As you go about your business life, you are the Company in relation to those around you. Remember that and behave accordingly.

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Code of Ethics And Standards of Business ConductYour personal commitment to integrity:

During the course of their employment, Yoh employees must adhere to the following:

Agree and acknowledge that neither you nor your family and friends may receive personal gain, beyond compensation paid by YOH to you, from situations or knowledge that result from the work performed by you at the direction of CUSTOMER.

Agree and acknowledge that you are responsible for safeguarding any information, material or equipment in your possession and owned by CUSTOMER, and for using it only for intended purposes.

Agree and acknowledge that, in the course of performing work at the direction of the CUSTOMER, you have an obligation to avoid environmental contamination and for otherwise following all applicable laws, regulations and industry standards for environmental protection.

Agree and acknowledge that any involvement in civic affairs or political activities is a personal choice, and that if you choose to speak out on issues in public, you must make it clear that you are speaking only for yourself, not for YOH or CUSTOMER.

Agree and acknowledge that should you be assigned by CUSTOMER to perform pricing, costing or cost analysis in connection with federal contracts (actual or proposed) certain provisions of either or both of the Truth in Negotiations Act and the Procurement Integrity Act may apply.

Agree and acknowledge that federal and state anti-trust laws govern relationships among competitors and that agreement among competitors on such things as price, other terms of sale, division or allocation of customers and markets and production limits is illegal.  During the course of your assignment with CUSTOMER, you agree to exit from any situation in which discussion turns to such topics and to inform YOH immediately.

Agree and acknowledge that you understand and acknowledge that you may not seek special treatment from either YOH or CUSTOMER by offering something of value in return.

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From contractor to government personnel, and from government personnel to contractor personnel

Business Courtesies9

Unique Situation/Challengeof the Blended Workforce

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Government and contractor personnel work side-by-side, usually for a common mission, often on a long-term basis. “One-team” concept obscures legal

differences. Share common overall goal. Consider each other to be friends, colleagues,

and co-workers. Obscures “arms-length” legal relationship that

separates Government personnel and “prohibited sources.”

Business Courtesies11

Challenges: As contractor and government personnel work together,

they exchange personal gifts that are common among colleagues.

However, under government gift rules, contractors are “prohibited sources.” Even personal gifts from contractor employees are gifts from a

“prohibited source.” Contractor business courtesy rules differ from

government gift rules.

Applicable Gift Rules12

Executive Branch Gift Rules: 5 CFR 2635 Subpart B (gifts from outside sources)

Gifts of $20 (other than cash) or less. (Up to $50/year) Gifts based on personal friendship Modest items of food and refreshment (not a meal) Items of little intrinsic value (plaques, greeting cards) for presentation only Meals and refreshments outside of U.S. Free attendance at widely-attended gatherings (“WAG”)

EO 13490 (1/21/09) Ethics Pledge (political appointees) Prohibits:

Gifts of $20 or less Meals and refreshments outside of U.S. Free attendance at widely-attended gatherings (“WAG”)

Contractor business courtesy policies Agency gift acceptance statutes

Gifts to the government agency or office Senate and House gift rules are different.

Gifts13

Examples: Contractor hosts contract kick-off meeting

for entire (government/contractor) team. Serves breakfast.

Government employee’s spouse dies in accident, and office personnel contribute $10 each to fund for flowers.

Gifts14

More examples: Contractor employee and Government

employee carpool to work, rotating driving duties.

Government employee rides with neighbor, who is a contractor, to work daily.

For team training, contractor offers use of its meeting room and graphics department.

Gifts15

George and Bill, Government employees, are friends: fishing, golfing, playing cards. George resigns to work for a contractor, assisting Bill’s branch. They would like to continue their activities together.

Gifts16

Best practices: Establish contact with cognizant government ethics counselor. Ensure everyone recognizes the differences between contractor

and government personnel. We are allies, not partners

Training Include contractor and Government employees in the

same training and communications. Use real examples.

Address common situations before they occur. Brief government supervisors on your business gratuity rules.

Share guidance provided to your employees.

How our company provides an Ethics hotline to our employees and how investigations are handled with our blended workforce, clients and government customers.

Ethics Hotline17

Yoh’s Ethics Hotline

Toll-free helpline:        877-319-0270 

Calls to the Ethics Help Line are answered by a trained communications specialist who will document caller concerns or questions and get them to the Company representative whose job it is to help.  The 800 number is toll-free and has capability for the hearing-impaired

and translation services, if needed.  Outside of the United States, this number is accessible from anywhere

in the world by calling the ATT operator in the country in question.

In addition, employees can also report their concerns via https://dayzim.alertline.com. 

No action will be taken against those who report a suspected violation in good faith. 

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Yoh’s Ethics Hotline19

Any incidents reported to the hotline will by handled by our Subject Matter Expert at Day & Zimmermann All calls are confidential There will be no retributions or reprisals Investigated by a SME outside of the reporting

structure in an independent, objective manner Each Investigation has a documented report

What is the allegation? Who is involved? What is the root cause? What is the course of action? What can we do to prevent this from reoccurring?

Protection of government source selection information, contractor proprietary information and sensitive procurement information.

Protection of Non-Public Information20

Protection of Non-Public Information

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Challenge: Preventing improper disclosure of non-public

information: Government to contractor (source selection

information) Contractor to other contractor (proprietary information) Contractor to Government (proprietary information)

Non-public Information includes: Contractor Bid or Proposal Information (41 USC 423(b)) Source selection information (FAR 2.101) Classified information Information protected by the Privacy Act Proprietary information Information not releasable under FOIA Law enforcement information

Protection of Non-Public Information22

Rules: Privacy Act (5 U.S.C. 552a) Freedom of Information Act (5 U.S.C. 552) Economic Espionage Act (18 U.S.C. 1831-1839) Procurement Integrity Act FAR 3.104-4 Trade Secrets Act 18 U.S.C. 1905 5 CFR 2635.703 Use of non-public information

Protection of Non-Public Information23

Common Inadvertent Violations: Email

Attaching non-public information and replying to all. Forwarding emails containing attachments that include

non-public information. Forwarding emails that include a trail of earlier emails

with non-public information. Leaving non-public information on shared printers.

Protection of Non-Public Information24

More examples: Dropping off non-public information on the

unoccupied desk of the recipient. Using a speaker phone in a cubicle to discuss

non-public information. Speaking loudly when in a cubicle. Presenting non-public information at meetings

when you don’t know everyone who is present. Conference calls (Who is in the room?) Sharing one contractor’s bid information with

another contractor.

Protection of Non-Public Information25

Best Practices: Clearly mark non-public information. Be careful when emailing non-public info.

Ensure you know everyone who is receiving it.

Do not leave non-public information exposed in your office.

Printers!!!!!

Protection of Non-Public Information26

More best practices: Before forwarding an email, check the entire

email chain and attachments. Be careful if you use social media, e.g.,

Facebook, Twitter, blogs, third links. Establish agreed-upon procedures for handling

and reporting of improper disclosures. Who should be notified.

How do we train and maintain awareness.

ITAR Compliance/Awareness

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Awareness & Understanding of ITAR

International Traffic in Arms Regulations

You are receiving this communication because you may be working at the direction of a Yoh customer who is a defense contractor, and to the extent you are assigned to support that customer's defense contracts, whether domestic or foreign, there are some things you need to know about the International Traffic in Arms Regulations (22 CFR Chapter I, Subchapter M, Parts 120-130) or "ITAR," for short.

The ITAR, administered by the Department of State's Directorate of Defense Trade Controls (DDTC), provides the following definitions: A U.S. Person is, among other things, a person who is a lawful permanent resident of the United

States (ITAR Para 120.15) Thus, foreign nationals, if they have permanent resident alien status, are U.S. Persons for ITAR purposes, as, of course, are U.S. citizens.

A Foreign Person is, among other things, a person who is not a lawful permanent resident of the United States (ITAR Para 120.16).

Export means, among other things, sending or taking a defense article out of the United States in any manner, except by mere travel outside of the United States by a person whose personal knowledge includes technical data, and disclosing (including oral or visual disclosure) or transferring technical data to a Foreign Person, whether in the United States or abroad (ITAR Para 120.17(a)).

A Defense Article is any item or technical data designated in the United States Munitions List (ITAR Para 120.6).

Technical Data is information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of a Defense Article (ITAR Para 120.10)

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Awareness & Understanding of ITAR

Here is what you need to know about how the ITAR may interface with your work assignment with a defense contractor:

 1. You can determine if the project you are assigned to by Yoh's customer involves something

on the USML in two ways: You can ask your Yoh monitor, or, having determined the scope of the project to which you are assigned, you can go the following website, click on the USML and make the determination yourself: www.pmddtc@state.gov.

 2. There may be some other indications that you are working on a project involving something on the USML: Drawings and documentation may carry a legend, such as Caution, ITAR-controlled Data; or U.S. Persons and Foreign Persons may be badged differently.

3. If it is determined that you are working on a project that involves something on the USML, consider this: If you are in a meeting in which a Foreign Person is present and you are asked to provide, or you

volunteer to provide, information that rises to the level of Technical Data, and you do so, you have just made an export, and so has your employer, the Yoh Company!

You and your employer have also made an export if, in that same meeting, you show a Foreign Person a drawing or any other form of hard-copy documentation which meets the definition of Technical Data; or if, independent of that meeting, you email, mail, or send by courier, Technical Data to a Foreign Person, wherever located, or convey Technical Data by telephone conversation to a Foreign Person, wherever located.

4. Whether your export is in violation of the ITAR depends on whether Yoh, or Yoh's customer, has obtained the requisite approvals from DDTC authorizing you to take any of the actions described above. If neither of these approvals are made known to you before you speak in the meeting, or send the email or hold the telephone conversation, don't do it! You will put your employer in violation of the ITAR

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Employment discussions and hiring of government personnel by contractors and contractor personnel moving to the government.

Revolving Door30

Revolving Door31

Challenge: It is soooo easy for government employees

to discuss potential employment with contractor employees with whom they work.

Since many contractor jobs mirror government jobs, it is easy to retire from the government, and return as a contractor.

Revolving Door32

Rules: 18 USC 208 (Employment negotiations)

No negotiations without disqualification. 5 CFR 2635. Subpart F (Seeking

employment) No “seeking employment” without

disqualification. 5 CFR 2635.603 defines “seeking employment”

and gives examples. 18 USC 207 (Post-employment restrictions)

Revolving Door33

Procurement Integrity Act (FAR 3.104-3) One-year ban on employment for procurement officials

involved in awards of $10M or more. Requires disqualification and reports for employment

discussions with procurement officials. EO 13490 (1/21/09) Ethics pledge

Applicable to political appointees. Contractor rules on conflicts of interest

Contractor employees seeking employment with Government may create a conflict of interest.

Revolving Door34

Examples: Government office supervisor, over coffee,

notes she plans to retire, and asks contractor supervisor if she could get a job with the contractor.

Government employee, after hearing that a contractor co-worker is leaving, asks if he can apply for the contractor’s position.

Revolving Door35

Best Practices: Train contractor personnel regarding

disqualification requirements triggered by “innocent” employment discussions. Give examples of discussions that trigger

disqualification. Ensure contractor employees know how to handle

such discussions. Give them an ap for such situations

Remind personnel involved in procurements of Procurement Integrity Act restrictions and required reports.

Remedies36

Tailor training for workplace issues. Include everyone in work center (especially those who

do not attend annual training.) Emphasize that contractors are prohibited sources

Alliance v partnership Contractors are under great pressure to say “yes”

Create workplace culture of open communications Communicate with contractor ethics officials

We’re all in the same boat. Involve ethics officials in planning events. What can government do to reduce these risks? What can contractors do to reduce these risks?

Questions37