What else must the COR know about gratuities and gifts?
- Why must the COR avoid conflicts of interest?
- What does the Procurement Integrity Act restrict?
- How is the Procurement Integrity Act enforced, and what penalties can be imposed for violating it?
- What can the COR or other government officials do if they are concerned that they may have violated the Procurement Integrity Act?
FAR 3.101-2 states:
As a rule, no government employee may solicit or accept, directly or indirectly, any gratuity, gift, favor, entertainment, loan, or anything of monetary value from anyone who:
(a) has or is seeking to obtain government business with the employee's agency,
(b) conducts activities that are regulated by the employee's agency, or
(c) has interests that may be substantially affected by the performance or non-performance of the employee's official duties. Certain limited exceptions are authorized in agency regulations.
There are exceptions for small food items and refreshments, such as soft drinks, coffee, or donuts that are not offered as a part of a meal. However, it is best for the COR to seek advice from government legal counsel or an ethics advisor about specific concerns related to gratuities and gifts.
Why must the COR avoid conflicts of interest?
Government employees cannot hold financial interests that conflict with the conscientious performance of duty. If a COR suspects a conflict of interest, he or she must notify the CO and offer to disqualify himself or herself from the position of COR.
An employee is prohibited by criminal statute from participating personally and substantially in an official capacity in any particular matter in which, to his or her knowledge, he or she, or any person whose interests are imputed to him or her under this statute (e.g., a family member), has a financial interest, if the particular matter will have a direct and predictable effect on that interest. Although this issue is more likely to apply to a member of a source selection evaluation board than a COR, once again, CORs are safest obtaining legal counsel on the details of prohibitions relating to conflicts of interest.
What does the Procurement Integrity Act restrict?
Section 27 of Public Law 100-679, the Procurement Integrity Act, has been legally binding in its current form since January 1, 1997. Its four main provisions pertain to:
A ban against disclosure of procurement information
A ban against obtaining procurement information
A requirement for procurement officers to report employment contacts by or with a competing contractor
A one-year ban for certain personnel against accepting compensation from the contractor.
The Procurement Integrity Act is encapsulated in FAR 3.104.
Participating personally and substantially. "Participating personally and substantially in a federal agency procurement" means active and significant involvement of an individual in any of the following activities directly related to that procurement:
Drafting, reviewing, or approving the specification or statement of work for the procurement
Preparing or developing the solicitation
Evaluating bids or proposals, or selecting a source (i.e., a contractor)
Negotiating price or terms and conditions of the contract
Reviewing and approving the award of the contract.
Restrictions on offers of employment. If an agency official who is participating personally and substantially in a federal agency procurement for a contract in excess of the simplified acquisition threshold (currently $150,000) contacts or is contacted by a contractor who is a bidder or offeror in that federal agency procurement regarding possible non-federal employment for that official, the official shall:
1. Promptly report the contact in writing to his supervisor and to the designated agency ethics official (or designee) of his agency
2. Either reject the possibility of non-federal employment or disqualify himself or herself from further personal and substantial participation in that federal agency procurement until the agency authorizes him or her to resume participation in such procurement, on the grounds that:
(a) The contractor no longer is a bidder or offeror in that federal agency procurement
(b) All discussions with the bidder or offeror regarding possible nonfederal employment have been terminated without an agreement or arrangement for employment.
Post-employment restrictions. Any former agency official may not accept compensation from a contractor as an employee, officer, director, or consultant within a period of one year after serving as a member of a selection board or as the chief of a financial or technical evaluation team for a procurement in which that contractor was selected for award of a contract in excess of $10 million.
Release of proprietary information. The Procurement Integrity Act also prohibits any person who is given authorized or unauthorized access to proprietary or source selection information regarding a procurement from disclosing such information to any person other than one authorized by the head of an agency or a CO.
How is the Procurement Integrity Act enforced, and what penalties can be imposed for violating it?
The Procurement Integrity Act can be enforced through contractual action or by penalties of an administrative, civil, or criminal nature. Penalties can include:
Criminal punishment, including fines and/or five years in prison
Civil penalty of $50,000, plus twice the amount of the illegal compensation offered or received
Organizational penalty of $500,000, plus twice the amount of the illegal compensation offered or received.
What can the COR or other government officials do if they are concerned that they may have violated the Procurement Integrity Act?
Officials or former officials in doubt as to whether they may have violated the Procurement Integrity Act may request advice from the appropriate agency ethics official. To find out who this is, the COR should consult his or her agency's Office of Counsel or the Inspector General's Office, or ask the CO for a counsel reference. The request for an advisory opinion should be in writing and must be signed and dated. It should contain specifics about the procurement, the requestor's role in it, and the contractor involved. The ethics official will issue an opinion within 30 days or as soon thereafter as practicable and will rely on the information provided by the requestor unless there is reason to believe the information is fraudulent, misleading, or otherwise incorrect.