Procurement Integrity Restrictions

MANUAL GUIDE, Acquisition Management, CDC-10
DATE OF ISSUE: February 21, 2004
CIO CONTACT: Procurement and Grants Office
MATERIAL SUPERSEDED: None

PURPOSE
POLICY
REQUIREMENTS
PROHIBITED CONDUCT
PENALTIES

Exhibit: CONFLICT OF INTEREST GUIDELINES

I. PURPOSE

This policy provides information and guidelines to help avoid a conflict of interest or the appearance of a conflict of interest during the acquisition process and serves to remind CDC Program and other personnel of certain restrictions on conduct when interacting with vendors, contractors and potential contractors.

II. POLICY

CDC/ATSDR business shall be conducted in a manner above reproach and, except as authorized by statute or regulation, with complete impartiality and with preferential treatment for none. Transactions relating to the expenditure of public funds require the highest degree of public trust and an impeccable standard of conduct. The general rule is to avoid strictly any conflict of interest or even the appearance of a conflict of interest in Government-contractor relationships. While Federal laws and regulations place restrictions on the actions of Government personnel, their official conduct must, in addition, be such that they would have no reluctance to make a full public disclosure of their actions. (Federal Acquisition Regulation 3.101) Additional conflict of interest guidelines are provided in the Exhibit to this policy.

III. REQUIREMENTS

The following laws govern activities of Federal employees during the acquisition process:

Standards of Conduct

Federal Acquisition Regulation--Release of Information (FAR 5.4)
A high level of business security must be maintained in order to preserve the integrity of the acquisition process. When it is necessary to obtain information from potential contractors and others outside the Government for use in preparing Government estimates, contracting officers shall ensure that the information is not publicized or discussed with potential contractors.
Department of Health and Human Services (45 C.F.R. 73, Sec. 73.735-201(a) (PDF-50K)
Employees and special Government employees shall be responsible for observing all generally accepted rules of conduct and the specific provisions of law and the regulations of this part that apply to them. They are required to become familiar with these regulations, and to exercise informed judgments to avoid misconduct or conflicts of interest. They shall secure approvals when required and file financial disclosure reports or statements in accordance with the provisions of this part. Failure to observe any of these regulations may be cause for disciplinary action. Some of the provisions are required by law and carry criminal penalties that are in addition to any disciplinary action that could be taken. When employees have doubts about any provision, they should consult their supervisor, personnel office, or the Department Ethics Counselor or a deputy counselor.

IV. PROHIBITED CONDUCT

Procurement Integrity Act (41 U.S.C. 423; FAR 3.104)

Prohibition on disclosing procurement information
1. A person described in paragraph (2) shall not, other than as provided by law, knowingly disclose contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.
2. Paragraph (1) applies to any person who:
  1. is a present or former official of the United States;
  2. or a person who is acting or has acted for or on behalf of;
  3. or who is advising or has advised the United States with respect to, a Federal agency procurement;
  4. and by virtue of that office, employment, or relationship has or had access to contractor bid or proposal information or source selection information.
Prohibition on obtaining procurement information
A person shall not, other than as provided by law, knowingly obtain contractor bid or proposal information or source selection information before the award of a Federal agency procurement contract to which the information relates.

V. PENALTIES

Contract Recision or Voiding—FAR 3.700 and 3.703
If there has been an agency head determination that contractor bid or proposal information or source selection information has been disclosed or received in exchange for a thing of value, or for the purpose of obtaining or giving anyone a competitive advantage in the award of a Federal agency procurement contract, FAR Subpart 3.703 requires Federal agencies upon receiving information that a contractor or a person has engaged in conduct constituting a violation of subsection 27(a) or (b) of the Office of Federal Procurement Policy Act (41 U.S.C. 423), to consider rescission of a contract with respect to which—
1. The contractor or someone acting for the contractor has been convicted for an offense punishable under subsection 27(e)(1) of the OFPP Act; or
2. The head of the agency, or designee, has determined, based upon a preponderance of the evidence that the contractor or someone acting for the contractor has engaged in conduct constituting such an offense. (FAR 3.703)
Criminal and Civil Remedies—41 U.S.C. 423
1. Criminal penalties
  Whoever engages in conduct constituting a violation of subsection (a) or (b) of this section for the purpose of either--
  1. exchanging the information covered by such subsection for anything of value, or
  2. obtaining or giving anyone a competitive advantage in the award of a Federal agency procurement contract, shall be imprisoned for not more than 5 years or fined as provided under Title 18, or both.
2. Civil Penalties
  The Attorney General may bring a civil action in an appropriate United States District Court against any person who engages in conduct constituting a violation of subsection (a), (b), (c), or (d) of this section. Upon proof of such conduct by a preponderance of the evidence, the person is subject to a civil penalty.
  
  An individual who engages in such conduct is subject to a civil penalty of not more than $50,000 for each violation plus twice the amount of compensation that the individual received or offered for the prohibited conduct. An organization that engages in such conduct is subject to a civil penalty of not more than $500,000 for each violation plus twice the amount of compensation that the organization received or offered for the prohibited conduct.
3. Administrative Actions
  If a Federal agency receives information that a contractor or a person has engaged in conduct constituting a violation of subsection (a), (b), (c), or (d) of this section, the Federal agency shall consider taking one or more of the following actions, as appropriate:
  1. Cancellation of the Federal agency procurement, if a contract has not yet been awarded.
  2. Rescission of a contract when:
    
    the contractor or someone acting for the contractor has been convicted for an offense punishable under paragraph
    
    or the head of the agency that awarded the contract has determined, based upon a preponderance of the evidence that the contractor or someone acting for the contractor has engaged in conduct constituting such an offense.
  3. Initiation of suspension or debarment proceedings for the protection of the Government in accordance with procedures in the Federal Acquisition Regulation.
  4. Initiation of adverse personnel action, pursuant to the procedures in Chapter 75 of Title 5 or other applicable law or regulation.
  If a Federal agency rescinds a contract pursuant to subparagraph (b)(ii), the United States is entitled to recover, in addition to any penalty prescribed by law, the amount expended under the contract.

VI. REFERENCES

EXHIBIT

Conflict of Interest Guidelines

If CDC program/project personnel interact with non-federal personnel in the identification and formulation of their program/project requirement, the following guidelines should be followed to help avoid a conflict of interest or the appearance of a conflict of interest:

Development of government requirements should come from knowledgeable program/project personnel who understand their areas of responsibility, know what is required to operate in their areas, but don’t have the government capacity to perform.
Many disputes arise over so-called “constructive” changes. Constructive changes are informal or implied changes that are deemed to have the same effect as a formal change ordered by a contracting officer. Any conduct by the contracting officer or his or her authorized agents that has the effect of prescribing new or different work than required under the contract may be a constructive change. This may entitle the contractor to additional payment, additional time for delivery or performance, or both.
If a Program or Senior Official agrees to meet with a contractor or potential contractor, certain precautions should be taken:
1. The contractor should send a letter, facsimile, or e-mail stating the name of his/her firm, what he/she wants to talk about and whether he/she has any current contracts or intends to submit a proposal on any solicitations that require interface with the Department or CDC.
2. Program should inform the contracting officer of the meeting. If the subject of the meeting appears to deal with an ongoing solicitation or a project prior to its being issued to the general public, prior to the meeting, program and PGO should agree on the CDC’s position on the matter.
3. Take notes during the meeting that reflect the topics of the discussion. The notes should be given to the contracting officer for inclusion in a record file.
4. Commitments should not be made. Statements should not be made that could be construed as committing the government to a particular acquisition strategy or purchase.
5. Do not offer assistance or advice. Government personnel cannot advise a business representative that an attempt will be made to influence another person or agency or give preferential treatment to their concern in the award of future contracts. Suggestions could be construed as requests to take action, giving rise to a potential claim against the government.
6. Do not provide advance procurement information. Information on acquisition priorities, specifications, source selections criteria, and the like must be released to all prospective contractors at the same time through appropriate channels (acquisition or source selection).
7. Do not encourage the contractor to send follow-up information. This is to preclude the contractor from viewing the request as a request to submit an “unsolicited proposal” to the government.
8. Avoid the appearance of favoritism. If you meet with one contractor or potential contractor on a matter, you must give other similarly situated contractors (the competitors) the same opportunity.
9. Do not meet with contractors or potential contractors about an acquisition once the solicitation has been released. Contractors should use normal procurement channels while the procurement is pending. If you are a part of a specific source selection (to include having appointed the Source Selection Authority), do not meet with the contractor or prospective contractor(s) at all.
10. Be careful not to direct the contractor to take action beyond the scope of the contract or consent to a change in contract requirements. Additionally, avoid statements that could be used in support of a contractor’s position against the government. (Such statements could lead to your deposition and testimony as part of the litigation.)
11. Avoid discussing matters that are the subject of current litigation or criminal investigation. Do not meet with contractors involved in suspension or debarment actions.
12. The law may restrict certain former government employees in their dealings with the government for a limited period time. For additional specific information, contact your ethics counselor.

If a CDC employee encounters a situation that he or she is unsure how to resolve, they should contact their contracting officer, legal advisor, or Ethics Counselor.

Page last modified: August 26, 2006