SEC. 841. ETHICS SAFEGUARDS RELATED TO
CONTRACTOR CONFLICTS OF INTEREST.
(a) Policy on Personal Conflicts of Interest by Employees of
Federal Government Contractors- Not later than 270 days after
the date of the enactment of this Act, the Administrator for
Federal Procurement Policy shall develop and issue a standard
policy to prevent personal conflicts of interest by contractor
employees performing acquisition functions closely associated
with inherently governmental functions (including the
development, award, and administration of Government contracts)
for or on behalf of a Federal agency or department.
(1)
ELEMENTS OF POLICY- The policy required under subsection (a)
shall--
(A)
provide a definition of the term `personal conflict of
interest' as it relates to contractor employees performing
acquisition functions closely associated with inherently
governmental functions; and
(B) require each contractor whose employees perform
acquisition functions closely associated with inherently
governmental functions to--
(i)
identify and prevent personal conflicts of interest for
employees of the contractor who are performing such
functions;
(ii) prohibit contractor employees who have access to
non-public government information obtained while
performing such functions from using such information for
personal gain;
(iii) report any personal conflict-of-interest violation
by such an employee to the applicable contracting officer
or contracting officer's representative as soon as it is
identified;
(iv) maintain effective oversight to verify compliance
with personal conflict-of-interest safeguards;
(v) have procedures in place to screen for potential
conflicts of interest for all employees performing such
functions; and
(vi) take appropriate disciplinary action in the case of
employees who fail to comply with policies established
pursuant to this section.
(2)
CONTRACT CLAUSE-
(A)
The Administrator shall develop a personal
conflicts-of-interest clause or a set of clauses for
inclusion in solicitations and contracts (and task or
delivery orders) for the performance of acquisition
functions closely associated with inherently governmental
functions that sets forth the personal conflicts-of-interest
policy developed under this subsection and that sets forth
the contractor's responsibilities under such policy.
(B) Subparagraph (A) shall take effect 300 days after the
date of the enactment of this Act and shall apply to--
(i)
contracts entered into on or after that effective date;
and
(ii) task or delivery orders awarded on or after that
effective date, regardless of whether the contracts
pursuant to which such task or delivery orders are awarded
are entered before, on, or after the date of the enactment
of this Act.
(3)
APPLICABILITY-
(A)
Except as provided in subparagraph (B), this subsection
shall apply to any contract for an amount in excess of the
simplified acquisition threshold (as defined in section
4(11) of the Office of Federal Procurement Policy Act (41
U.S.C. 403(11)) if the contract is for the performance of
acquisition functions closely associated with inherently
governmental functions.
(B) If only a portion of a contract described in
subparagraph (A) is for the performance of acquisition
functions described in that subparagraph, then this
subsection applies only to that portion of the contract.
(b)
Review of Federal Acquisition Regulation Relating to Conflicts
of Interest-
(1)
REVIEW- Not later than 12 months after the date of the
enactment of this Act, the Administrator for Federal
Procurement Policy, in consultation with the Director of the
Office of Government Ethics, shall review the Federal
Acquisition Regulation to--
(A)
identify contracting methods, types and services that raise
heightened concerns for potential personal and
organizational conflicts of interest; and
(B) determine whether revisions to the Federal Acquisition
Regulation are necessary to--
(i)
address personal conflicts of interest by contractor
employees with respect to functions other than those
described in subsection (a); or
(ii) achieve sufficiently rigorous, comprehensive, and
uniform government-wide policies to prevent and mitigate
organizational conflicts of interest in Federal
contracting.
(2)
REGULATORY REVISIONS- If the Administrator determines pursuant
to the review under paragraph (1)(B) that revisions to the
Federal Acquisition Regulation are necessary, the
Administrator shall work with the Federal Acquisition
Regulatory Council to prescribe appropriate revisions to the
regulations, including the development of appropriate contract
clauses.
(3) REPORT- Not later than March 1, 2010, the Administrator
shall submit to the Committees on Armed Services of the Senate
and House of Representatives, the Committee on Homeland
Security and Governmental Affairs in the Senate, and the
Committee on Oversight and Government Reform of the House of
Representatives a report setting forth such findings and
determinations under subparagraphs (A) and (B) of paragraph
(1), together with an assessment of any revisions to the
Federal Acquisition Regulation that may be necessary.
(c) Best
Practices- The Administrator for Federal Procurement Policy
shall, in consultation with the Director of the Office
Government Ethics, develop and maintain a repository of best
practices relating to the prevention and mitigation of
organizational and personal conflicts of interest in Federal
contracting.
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Ethics safeguards for employees under
certain contracts for the performance of acquisition functions
closely associated with inherently governmental functions (sec.
832)
The committee recommends a provision that would require that each
Department of Defense (DOD) contract (or task or delivery order)
in excess of $500,000 that calls for the performance of
acquisition functions closely associated with inherently
governmental functions include a contract clause addressing
potential personal conflicts of interests of contractor employees
who will be responsible for the performance of such functions.
The required contract clause would require covered contractors to
prohibit employees from conducting work for DOD with respect to a
program, company, contractor, or other matter in which the
employees have a financial interest; obtain and review financial
disclosure statements from employees; prohibit employees from
accepting gifts from companies affected by work that they are
performing for DOD; prohibit employees from using non-public
government information for personal gain; take appropriate steps
to enforce these requirements; and promptly report any violations
to the appropriate contracting officer.
The provision requires DOD to develop an appropriate definition
of the term `financial interest' that is similar to the
definition in statutes and regulations applicable to federal
employees. The committee expects the implementing regulations to
encompass both direct and indirect financial interests, as well
as both actual and apparent conflicts of interest.
In March 2008, the Government Accountability Office (GAO) issued
a report entitled `Additional Personal Conflict of Interest
Safeguards Needed for Certain DOD Contractor Employees.' GAO
determined that contractor employees often work alongside DOD
employees and perform critical acquisition tasks, such as the
development of contract requirements, advising or assisting on
source selection, and making award-fee determinations.
Yet, DOD lacks a Department-wide policy requiring safeguards
against personal conflicts of interest by such contractor
employees. GAO recommended that DOD institute such safeguards and
reported that this recommendation was supported by DOD oversight
officials, officials of the Office of Government Ethics, members
of an expert panel on contracting, and many program managers. The
provision recommended by the committee would require DOD to
implement the GAO recommendation. |
SECTION 821--POLICY ON PERSONAL
CONFLICTS OF INTEREST BY EMPLOYEES OF DEPARTMENT OF DEFENSE
CONTRACTORS
This section would require the Secretary
of Defense to develop a policy to prevent personal conflicts of
interest in defense contracts. This section also would require a
standard contract clause for inclusion in all solicitations and
contracts to implement such policy. The committee is concerned
that contractor employees who work side-by-side with government
employees are not subject to the same conflict of interest
provisions as government employees. In the current environment of
increased reliance on contractors to meet mission requirements
for the Department of Defense, the committee finds this situation
problematic. Both the Acquisition Advisory Panel, established
under section 1423 of the National Defense Authorization Act for
Fiscal Year 2004 (Public Law 108-136), and the Government
Accountability Office recommended the development of policies to
address personal conflicts of interest. Furthermore, this section
would require the Department's Panel on Contracting Integrity,
established by the section 813 of the John Warner National
Defense Authorization Act for Fiscal Year 2007 (Public Law
109-364), to consider and make recommendations on the feasibility
of applying federal procurement integrity regulations to
contractor personnel.
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