Academic journal article Journal of Power and Ethics

DOD SOCO Memo, Subject: Guidance on Application of the Procurement Integrity Law and Regulation (August 28, 1998)

Academic journal article Journal of Power and Ethics

DOD SOCO Memo, Subject: Guidance on Application of the Procurement Integrity Law and Regulation (August 28, 1998)

Article excerpt

Standards of Conduct Office

August 28, 1998


SUBJECT: Guidance on Application of the Procurement Integrity Law and Regulation

This memorandum provides guidance on applying the Procurement Integrity restrictions to issues that may arise as you provide advice to your clients. The purpose of this guidance is to foster uniformity of interpretation and application. Remember, however, that even though a procurement integrity restriction may not apply to a given situation, 18 U.S.C. [sections] 207 and 208 may apply. The Procurement Integrity Act (the Act), 41 U.S.C. [section] 423, was revised by Section 4304 of the National Defense Authorization Act for Fiscal Year 1996. Pursuant to implementing regulations published on January 2, 1997, 61 F.R. 226-233, revisions to the Act became effective January 1, 1997.

The Act and its amendments regulate the conduct of Federal employees who are involved in procurements and the administration of contracts. Employees involved in procurements over $100,000 must report contacts with bidders or offerors regarding future employment to their supervisors and Ethic Counselors and must disqualify themselves from further participation if they do not immediately reject the contact. Certain employees who are involved in procurements or the administration of contracts, either of which is valued at $10 million or greater, are prohibited from working for the contractor for a period of one year following their involvement.

In early 1997, the Procurement Integrity Tiger Team (PITT) was formed to propose guidance on interpretation and application of the revised Act for dissemination within the Department of Defense (DoD), and to share information and lessons among the DoD ethics community. The Team, chaired by the DoD Standards of Conduct Office (SOCO), has representatives from the Department of Army SOCO (Office of the Judge Advocate General of the Army), the Department of Navy Office of General Counsel, the Department of Air Force Office of General Counsel and Office of the Judge Advocate General, the Defense Logistics Agency Office of General Counsel, and the National Security Agency Office of General Counsel. The Team also had the assistance of various procurement experts from DoD and the Military Departments.

1. What do we do with the term "procurement official?"

The simple answer is to avoid it. The term is not mentioned in the revised statute or new regulation; instead, the Act and regulation focus on other position descriptions, such as Program Manager, Source Selection Authority, and Administrative Contracting Officer.

2. For program managers, deputy program managers, and administrative contracting officers, to what contractors does the compensation ban extend?

The compensation ban extends only to the prime contractor.

For example, after leaving DoD, a former Program Manager of ABC program may work for a subcontractor on the ABC program, even though he or she dealt with the subcontractor in the

- 2 -role of program manager. However, if in your opinion, a subcontract is a sham or a vehicle established to provide services by individuals for the prime contractor on the ABC program, compensation would be considered "indirect compensation" from the prime, which is restricted by the regulation. (48 C.F.R. [sections] 3.104-4(d) and 3.104-3).

3. Under 48 C.F.R. [section] 3.104-4(d)(2), a former official is not prohibited from accepting compensation "from any division or affiliate of a contractor that does not produce the same or similar products or services as the entity of the contractor that is responsible for the contract."

A. How do we determine what are the "same or similar products or services?"

The answer to this question is extremely fact dependent. As concrete situations are decided, we will issue guidance to provide examples in this area. …

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