FAR Part 3 Summary Improper Business Practices & Personal Conflicts of Interest.
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Transcript of FAR Part 3 Summary Improper Business Practices & Personal Conflicts of Interest.
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FAR Part 3 Summary
Improper Business Practices & Personal Conflicts of Interest
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FAR 3.1 Safeguards
• Standards of Conduct – no conflict of interest or even the appearance of one in Gov’t-contractor relationships
• No government employee may solicit or accept, directly or indirectly, any gratuity, gift, favor, etc from anyone seeking business with the employee’s agency or who is regulated by the employee’s agency
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FAR 3.1 Safeguards
• Insert 52.203-2, Certificate of Independent Pricing in all FFP or FP/EPA solicitations over the simplified acquisition threshold (SAT)
• Procurement Integrity Definitions (3.104-1)• “Participating personally & substantially in a
Federal agency procurement”• “Official” = an officer, employee, member of
uniformed services, special gov’t employee
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Procurement Integrity Act Prohibitions (41 USC 423)
• Must not knowingly disclose or unlawfully obtain contractor bid or proposal or source selection information before the award
• Former federal official may not accept compensation from a contractor for 1 year after the official served as the PCO, SSA or chief of evaluation team –contracts > $10M
• Must reject an offer of possible non-Federal employment or disqualify themselves from further participation in the procurement
• Must report the contact in writing
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Disclosure, Protection, Marking Contractor Information
• Mark contractor bid or proposal sensitive information as “Source Selection Information – See FAR 2.101 & 3.104”
• Source Selection information defined in FAR 2-101, 9 areas are listed
• Civil and criminal penalties for failure to comply with Procurement Integrity Act
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FAR 3.2 Contractor Gratuities to Government Personnel
• Clause 52.203-3, Gratuities, in solicitations/ contracts over the SAT except personal svcs
• Prohibits contractor offering/giving gratuity to an officer, official or employee of the government
• Violation remedies: terminate contractor’s right to proceed, debarment or suspension, & assess damages if DOD appropriations used
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FAR 3.3 Suspected Antitrust Violations
Contracting personnel shall report and refer possible anti-trust violations to the Attorney General & agency debarment office, e.g.,:
• Existence of industry price list or agreement• Sudden change from competitive bidding to
identical bidding• Simultaneous price increases or “follow-the-
leader” pricing
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Possible Evidence of Antitrust Violations
• Rotation of bids or proposals • Division of the market: certain competitors bid
low for certain contracts and high on others or for certain products or geographic areas
• Establishment by competitors of a collusive price estimating system
• Filing of a joint bid by two or more competitors when at least one has sufficient ability to perform the contract
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Possible Evidence of Antitrust Violations
• Any incident suggesting direct collusion among competitors, such as identical calculation or spelling errors in two or more offers
• Assertions by the employees, former employees or competitors of offerors, that an agreement to restrain trade exists
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FAR 3.4 Contingent Fees
• Contingent fee means any commission, percentage, brokerage or other fee that is contingent upon the success a person or concern has in securing a gov’t contract
• Law requires in each negotiated contract a warranty by the contractor against contingent fees – FAR 52.203-5 “Covenant Against Contingent Fees” in all sol/contracts over SAT except for commercial items
• Violations: reject bid/proposal, annul contract, suspend/debar, report to DOJ IAW agency regs
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FAR 3.5 Other Improper Business Practices
• Minimize opportunity for “buying-in” by seeking price commitments covering as much of the entire program as is practical
• Anti-Kickback Act of 1986 – deter subcontractors from making payments to contractors for the purpose of improperly obtaining or rewarding favorable treatment
• Clause 52.203-7, “Anti-Kickback Procedures” in sol/contracts over SAT except commercial items
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FAR 3.6 Contracts with Government Employees or Their Organizations
• CO shall not knowingly award a contract to a government employee or a business or organization owned or controlled by government employee(s)
• Exception per FAR 3.602 if agency head or designee determines there is a most compelling reason and government’s needs cannot be otherwise met
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FAR 3.7 Voiding & Rescinding Contracts
• Applies to contracts related to final conviction for bribery, conflict of interest, disclosure or receipt of contractor bid or proposal or source selection information OR agency head determination of violation
• Agency may declare void and rescind contract and recover amounts expended, and may consider debarment or suspension
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FAR 3.7 Notice of Proposed Action
As a minimum, agencies shall provide:• A notice of proposed action to declare void and
rescind the contract, via certified mail• A 30 calendar day period after receipt of the notice
for the contractor to submit pertinent information before final decision is made
• Opportunity for a hearing• Official shall issue a written Notice of Proposed
Action & after consideration of all additional information, issue a Final Agency Decision
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FAR 3.8 Limitation on Payments to Influence Federal Transactions
• “Covered Federal action” means awarding any Federal contract, grant or loan, entering into a cooperative agreement, or making modifications to these instruments
• 31 USC 1352 prohibits a recipient of a Federal contract, grant, loan or CA from using appropriated funds to pay anyone for influencing an officer or employee of any agency or Member of Congress
• Exceptions: Agency & legislative liaison by own employees, Professional & technical services
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FAR 3.8 Continued
• CO shall obtain certifications as required by clause 52.203-11, “Certification & Disclosure Regarding Payments to Influence Certain Federal Transactions,” in solicitations over SAT
• CO shall include clause 52.203-12, “Limitation on Payments to Influence Certain Federal Transactions,” in solicitations/contracts over the SAT
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FAR 3.9 Whistleblower Protections for Contractor Employees
• Government contractors shall not discharge, demote or discriminate against an employee for reprisal for disclosing information to an authorized official of an agency, DOJ or Member of Congress, relating to a violation of law related to a contract or competition
• Aggrieved employee may file an IG complaint• IG shall investigate & report to complainant,
contractor and the HCA (head of the contracting activity)
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Whistleblower Protection (continued)
• If valid finding of reprisal is found, HCA may order the contractor to take action to abate the reprisal, order them to reinstate the person, and/or order them to pay the complainant a fair compensation amount
• If contractor fails to comply the HCA shall ask the DOJ for enforcement of such order
• Similar remedies apply to the Recovery Act
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FAR 3.10 Contractor Code of Business Ethics and Conduct
• Contractors should have a written code of business ethics & conduct and must conduct themselves with the highest degree of honesty and integrity
• Clauses: 52.203-13, “Contractor Code of Business Ethics & Conduct,” contracts > $5M and performance 120 days or more
• 52.203-14, “Display of Hotline Poster(s)” for noncommercial contracts over $5M performed entirely outside the United States
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FAR 3.11 Preventing COI for Contractor Employees Performing Acquisition
• Applies to contractor employees performing acquisition functions closely associated with inherently governmental functions
• Can include supporting or providing advice for acquisition planning, determining what the government will buy, developing contract documents, evaluating proposals, awarding, administering & terminating contracts, and contract cost determinations
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Contractor Personal COI (cont.)
• A contractor’s “personal conflict of interest” is a financial interest, personal activity or relationship that could impair the employee’s ability to act impartially and in the best interest of the Government in performing under the contract
• Gov’t policy requires contractors to identify and prevent personal COI via use of 52.203-16, “Preventing Personal Conflicts of Interest,” in solicitations/contracts over the SAT that require these kinds of duties