Ethics in Government Procurement
There are seven statutory exceptions to contract without providing for full and open competition. Select two of those authorities and discuss (in your own words) the rationale for using the exception. The Competition in Contracting Act (CICA) of 1984 requires that all acquisitions be made using full and open competition. Seven exceptions to using full and open competition are specifically identified in FAR Part 6. Written justification must be provided when utilizing any of these exceptions.
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Additionally, depending on the dollar value of the purchase, the exception, along with supporting documentation, must be certified and approved at certain levels. Two of the seven statutory exceptions include: • Only one responsible source and no other supplies or services – If the government has a requirement for which only one source is capable of providing due to the uniqueness or high degree of specialization, or for which there is not a suitable substitute, or for which other sources have been deemed inadequate (in terms of compatibility, quality, service, support, etc) then this exception could apply.
Authorized or require by statute – Several laws require that certain procurement opportunities be offered to organizations such as the Federal Prison Industries, Agencies for the Blind and Severely Disabled, or Government Printing and Binding. • National Security – When disclosure of the government’s needs would compromise national security, the government is authorized to limit competition. However, this exception is not to be utilized simply because the acquisition is classified or because access to classified material is necessary to submit an offer. 2. Market Research: a.
What are the two broad categories of market research? Differentiate between the two. • Strategic (Market Surveillance) – not necessarily aimed at a specific procurement action but rather utilized to gain a general knowledge and sense of the market; gather and analyze data on a continual basis • Tactical (Market Investigation) – tailored and detailed investigation of the market aimed at specific procurement action; collect, evaluate, and analyze information to meet agency needs b. Identify three sources for conducting market research. • Internet •
Government websites/government databases Trade journals/professional organizations 3. What is the role of contracting in the acquisition planning process? The role of contracting in the acquisition planning process is to ensure the acquisition complies with statutory and regulatory requirements. Additionally, contracting personnel will ensure that the acquisition plan reflects appropriate acquisition streamlining techniques and a sound business approach to buying the needed goods and services. Other contracting roles include (but are not limited to): • Issuance of the solicitation •
Evaluation of proposals, audits, and field reports Negotiation process • Contract selection type, preparation, review, and clearance • Contract award • Contract management The contract specialist serves as the principal business advisor and principal agent for the government, and is responsible for developing the solicitation, conducting the source selection process and managing the resultant contract and business arrangement. They also research contracts in the marketplace to identify general business practices, such as commercial terms and conditions, contract type, bid schedule breakout, and the use of incentives. 4.
Conflict of Interest comes in two varieties: personal and organizational. Identify two potential situations which may allude to a conflict of interest and the mitigation strategies you would employ. As stated in the FAR, “Government business shall be conducted in a manner above reproach…with complete impartiality and with preferential treatment for none. ” Although a particular situation may not necessarily be in violation of governmental ethics, the general rule of thumb is to avoid even the appearance of a conflict of interest between government employees and potential/existing contractors.
According to the “14 Rules of Government Service” covered in class, government employees should not hold financial interests that conflict with official duties. This situation could create the potential for the government employee to act in a manner that would provide him/her with personal gain while undermining the interests of solicitors and maybe even the government. In order to avoid this situation, any government employee holding financial interests in an organization seeking business with the government (of which that employee could directly affect) should be removed from the acquisition process.
Another rule/ethic governing government employees is to not engage in or seek outside employment or activities that conflict with one’s official duties. Government employees are prohibited from participating personally and substantially in any particular mater that would affect the financial interests of any person with whom the employee is negotiating or has an arrangement regarding prospective employment.
When a Government employee begins negotiating employment with a contractor, the employee is disqualified from participating in matters that could affect the contractor’s financial interest and should therefore be removed from the cquisition process. 5. Differentiate between Statement of Work (SOW), Performance of Work Statement (PWS), and Statement of Objectives (SOO) (in your own words). Statement of Work – a detailed description of the work/tasks to be performed during the life of a project. It should describe the purpose of the project; identify what tasks are to be performed; identify who will be performing the tasks; and specify timelines for progress/completion. A statement of work should answer the fundamental questions of Who, What, When, Where, and How.
Performance Work Statement – specifies the government’s requirement for services in terms of the required results rather than the “how” of performance. A PWS provides the contractor with a description of what the government wants but does not stipulate how the results will be achieved. However, it does provide measurable performance standards and acceptable quality levels for each outcome. Statement of Objectives – an alternative approach to the PWS, this document specifies the government’s broad objectives and focuses on the outcome or final product rather than the methods used.
A SOO provides the contractor the flexibility to develop cost-effective solutions and the opportunity to propose creative and innovative alternatives to meet required objectives. 6. Far 16 describes several contract types and gives an explanation of when it is appropriate to use each type. Let’s concentrate on Cost Plus Incentive Fee Contracts: a. When is it appropriate to use CPIF? When determining contract type, the goal is to select one that will assign reasonable risk to the contractor and provide the contractor with the greatest incentive for efficient and economical performance.
When it is not possible to use a Firm Fixed Price contract, a contract with objectively measurable incentives should be considered (performance based contract). Performance-based contracting focuses on results, not just best efforts, and involves structuring all aspects of an acquisition around the purpose of the work to be performed. This type of contracting allows the contractor the flexibility of determining the most cost-effective way of meeting the government’s requirement. One type of performance based contract is a cost plus incentive fee (CPIF) contract.