Message to Industry: ‘Do the Right Thing’
By Susan Warshaw Ebner and Janice M. Menker
Recent headlines have raised concerns about how federal procurements were handled on a variety of levels.
Even if you think you know the rules, they could change or be interpreted differently, affecting the sufficiency of your offer, representations, certifications and ultimately, your performance. Certifications could become outdated, or worse, inaccurate. Profits could be affected.
The self-proclaimed “House Democratic Waste, Fraud and Abuse Truth Squad” introduced a bill entitled the Clean Contracting Act, H.R. 6069 (CCA) last fall. The bill then was referred to various committees for consideration. Some form of the CCA may pass in the 110th Congress.
These proposed changes are a harbinger of things that may come. The CCA proposes changes across the procurement landscape. For example, under the CCA, “commercial items” requiring “minor modifications” to meet federal government requirements or containing “modifications of a type customarily available in the commercial marketplace” would no longer be considered “commercial items.”
Agencies would be prohibited from hiring contractors to perform contract oversight if such contractors, or their related entities, had a conflict of interest relating to the work the contractor would oversee. A contractor’s ability to mitigate an apparent or actual conflict might be eliminated. Both sides of the revolving door would be tightened, and government procurement officials would be forced to disclose contractor job offers made to their relatives to deter corruption. Contractors evidencing a pattern of violating certain laws would be barred from receiving federal contracts. Only contractors affirmatively determined to have a “satisfactory record of integrity and business ethics” could be awarded contracts. These determinations could be protested.
Scope and availability of sole source, other than competitively awarded, flexible contracting, and cost reimbursement procurements would be limited. Plans for these procurements would be required and subjected to audit, Government Accountability Office and/or congressional review. “Monopoly contracts” — a task or delivery order contract of more than $10 million awarded to a single contractor — would be prohibited absent a stated exception. The quantity and dollar value of the work prime and subcontractors could subcontract under cost reimbursement contracts would be limited. Cost contract award fee consideration would be limited, too. More information, down to the task order level, would be captured, subject to agency oversight and audit, and reports to Congress and the public.
The House Reform Committee would be authorized to conduct hearings on waste, fraud and abuse in federal contracts. Whistleblower protections would be enhanced.
Whether or not the CCA is enacted, it is clear the new Congress will expect more from procurement officials and contractors alike. Procurements will be more closely examined; investigations far more likely. In such an environment, contractors — to serve clients and shareholders — need to think about whether current compliance efforts suffice. Do they establish a culture of good business ethics and integrity? Does the message get delivered from the top and passed down through all levels? Are good business ethics and integrity, compliance with applicable laws, enforced by both a carrot and a stick?
A solid corporate and operations ethics culture is good business and can lead to great rewards. Employees and officers conditioned to act with ethics and integrity are more likely to spot potential problems.
Early problem identification enables easier, faster and potentially cheaper problem resolution. Contractors recognizing potential problems at an early stage find more creative solutions to address those problems. Better planning, results in better offers and increases chances of success. Risks are greatly reduced. A compliance culture encouraging early problem identification will enable a contractor to mobilize faster to address problem activities.
The government searches for responsible primes who make good on their promises. Primes seek subcontractors who do the same. Contractors who encourage good business ethics and integrity perform better, and are more desirable to government and prime contractor alike. Whether a small, medium or large business, if you contract with the government, you will benefit from a working compliance program. The bottom line is more business and the satisfaction that comes from knowing you did the right thing.
Susan Warshaw Ebner is special counsel at Buchanan Ingersoll & Rooney P.C. Janice M. Menker is director of government acquisition policy and an ethics officer at Concurrent Technologies Corp. The opinions expressed here are solely those of the authors and are not intended to provide legal advice or represent the view of NDIA or the NDIA Ethics Committee.
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