New ethics language needed for 'at-risk' federal contracts

Federal contracts that pose potential conflicts of interest, or possible misuse of insider information, should be addressed with new model language to be added to the Federal Acquisition Regulation, according to a proposal from the Administrative Conference of the United States that is slated for a vote on June 17.

The conference is an independent agency that advises on federal administrative and contracting rules. It is meeting in a plenary session on June 16 - 17 to vote on more than a dozen proposals regarding contracting, e-rulemaking and video conferencing.

In a 16-page document on the contractor ethics proposal released on its website, the conference defined two categories of contracts that would be addressed by new language promulgated in federal procurement rules by the Federal Acquisition Regulatory Council.

The model language would apply “when negotiating or administering contracts that pose particular risks of government contractor employee personal conflicts of interest or misuse of non-public information,” the proposal states.

To ensure that the model provision is not excessively burdensome or costly to contractors, the conference specified that it is to be applied only to Personal Conflict of Interest-Risk and Information-Risk Contracts.

The personal conflict of interest category is defined as including contracts that engage in the following activities involving inherently or nearly inherently governmental work:

• Developing agency policy or regulations.
• Providing “alternative dispute resolution services on contractual matters, legal advice involving interpretation of statutes or regulations, significant substantive input relevant to agency decision-making; or professional advice for improving the effectiveness of federal management processes and procedures."
• Serving as the primary authority for managing or administering a project or operating a facility.
• Preparing budgets, and organizing and planning agency activities.
• Supporting substantive acquisition planning or research and development activities.
• Evaluating another contractor’s performance or contract proposal.
• Assisting in the development of a statement of work or in contract management.
• Participating as a technical advisor to a source selection board or as a member of a source evaluation board (i.e., boards designed to select or evaluate bids or proposals for procurement contracts).

In addition, the model language would apply to information-risk contracts, which are defined as contracts in which certain employees  receive access to information relating to an agency’s deliberative processes, management operations or staff that is not generally released to the public.

It also applies to contracts in which certain employees will have access to trade secrets, non-public financial  information, or other non-public information that could be exploited for financial gain, and contracts in which certain employees will have access to personally-identifying or other non-public personal information, such as Social Security numbers, bank account numbers or medical records.