PART 3 -- IMPROPER BUSINESS PRACTICES AND PERSONAL
CONFLICTS OF INTEREST
TABLE OF CONTENTS
SUBPART 3.1 -- SAFEGUARDS
3.101 Standards of conduct
3.101-3 Agency Regulations
3.101-90 Violations or possible violations
3.104 Procurement integrity
3.104-4 Disclosure, protection, and marking of contractor bid or proposal information and source selection information
3.104-6 Ethics advisory opinions regarding prohibitions on a former official’s acceptance of compensation from a contractor
3.104-9 Contract clauses
SUBPART 3.2 -- CONTRACTOR GRATUITIES TO GOVERNMENT PERSONNEL
3.203 Reporting suspected violations of the gratuities clause
SUBPART 3.3 -- REPORTS OF SUSPECTED ANTITRUST VIOLATIONS
3.301 General
SUBPART 3.5 -- OTHER IMPROPER BUSINESS PRACTICES
203.570 Employment prohibitions on persons convicted of fraud or other DoD contract-related felonies
SUBPART 3.6 -- CONTRACTS WITH GOVERNMENT EMPLOYEES OR ORGANIZATIONS OWNED OR CONTROLLED BY THEM
3.602 Exceptions
SUBPART 3.7 -- VOIDING AND RESCINDING CONTRACTS
3.705 Procedures
SUBPART 3.8 -- LIMITATIONS ON THE PAYMENT OF FUNDS TO INFLUENCE FEDERAL TRANSACTIONS
3.804 Policy
SUBPART 3.9 -- WHISTLEBLOWER PROTECTION FOR CONTRACTOR EMPLOYEES
3.905 Procedures for investigating complaints
3.906 Remedies
SUBPART 3.90 -- ETHICS IN THE PROCUREMENT PROCESS
3.9000 General
PART 3 -- IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST
All transactions that involve the expenditure of public funds require Agency personnel to adhere to the highest ethical standards to protect the public trust. DoD Directive 5500.7, Standards of Conduct, and DoD 5500.7-R, Joint Ethics Regulation, provide extensive Departmental guidance governing this area. Agency personnel shall:
(S-90) Avoid any action, whether or not specifically prohibited by statute or regulation that might result in or reasonably be expected to create the appearance of:
(1) Using public office for private gain;
(2) Giving preferential treatment to any person or entity;
(3) Impeding Government efficiency or economy;
(4) Losing independence or impartiality;
(5) Making a Government decision outside of official channels; or
(6) Adversely affecting the public’s confidence in the integrity of the Government.
(S-91) Avoid conduct that favors a particular contractor. Procurement officials (see FAR 3.104-4) shall operate in an impartial and objective manner throughout the acquisition cycle. Contracting officers shall be free from any exertion of influence to award contracts to or place orders with specific contractors. Promptly report any instances of suspected ethics violations, including the exertion of undue influence to the Agency ethics official or other appropriate channel (DoD 5500.7-R, Joint Ethics Regulation, section 10-200).
(S-92) Ensure the existence and practice of adequate controls over the separation of functions. This includes controls to ensure that a single individual performs only one of the following: initiates the requirement; awards the contract or places the order; and receives, inspects, and accepts the supplies or services. If circumstances preclude such restriction, the person who makes the award or places the order shall not also receive, inspect, and accept the supplies or services.
(S-93) All personnel who participate personally and substantially in acquisition or contracting activity are required to fill out a OGE Form 450, Confidential Financial Disclosure Report. This disclosure helps to ensure that personnel working on acquisitions do not have financial conflicts of interest.
(S-94) The disclosure forms are used by the Agency to determine if a conflict exists for those individuals participating in acquisition or contracting activities. During the course of an acquisition or contracting activity, contracting officers shall identify the participating individuals. Contracting officers, using this listing, shall submit a request to the GC for a review of the individuals’ financial disclosure forms. If an individual is not an annual filer, then the individual shall be required to file an OGE Form 450. The GC shall work with an individual to resolve any conflicts.
(S-95) A financial conflict of interest while performing acquisition or contracting activities could result in personal criminal liability. Although a Government employee’s holdings may not reach the reportable threshold on the OGE 450 or the SF 278, Public Financial Disclosure Report, the law applies to any financial conflict of interest, no matter how small the value.
(S-96) Acquisition or contracting activities include: drafting, reviewing or approving a specification; drafting, reviewing, or approving a statement of work; preparing or issuing a procurement solicitation; preparing or developing a procurement or purchase request; negotiating to establish the price or terms and conditions of a contract or an out-of-scope contract modification; evaluating bids or proposals; selecting sources; conducting negotiations; or reviewing and approving the award of a contract or contract modification, and certification of funds and invoices. 41 U.S.C. 423(p)(3)(A).
(S-97) Aside from an employee’s personal holdings there are three other ways in which a Government employee may have a financial conflict of interest. First, the holdings of an employee’s spouse, minor child, or general partner are imputed to the employee. Second, service of a Government employee as an officer, director, trustee, general partner, or employee in an outside organization could constitute a financial conflict of interest. Third, negotiating or having any arrangement concerning prospective employment may create a financial conflict of interest.
(S-98) Contact the Regulatory/GC’s office concerning questions on this issue.
3.104-4 Disclosure, protection, and marking of contractor bid or proposal information and source selection information.
(a) The HCA is delegated the authority to authorize access to sensitive procurement information (e.g., proprietary or source selection information) when necessary for the conduct of the procurement.
(S-90) All DISA personnel who have access to sensitive acquisition information must ensure proper handling of such information in order to maintain the integrity of the acquisition process. Unclassified sensitive acquisition information shall only be distributed on a “need to know” basis.
(S-91) Communications networks such as DISANet and Internet may be vulnerable to unauthorized access. Accordingly, whenever practicable, avoid the electronic transmission of unclassified sensitive acquisition information via e-mail, LAN, etc., in favor of more secure alternatives.
3.104-6 Ethics advisory opinions regarding prohibitions on a former officials acceptance of compensation from a contractor.
(a) Written request for an advisory opinion shall be submitted to the DISA Designated Agency Ethics Official (DAEO). The ethics advisory opinions shall be maintained in the files of the DAEO issuing the opinions.
3.104-7 Violations or possible violations.
(a)(1) Forward determinations of “no impact,” along with appropriate documentation, through the local legal counsel and the HCO for concurrence/non-concurrence by the HCA. Upon concurrence, the HCA, in coordination with DISA GC, shall notify the HCO and authorize the contracting officer to proceed with award.
(2) The HCA, in coordination with DISA GC, shall promptly notify the HCO with the reasons for non-concurrence and shall direct the contracting officer to withhold award.
(b) Prior to submission to the designated official, the local counsel shall recommend as to the appropriate action.
(g) The designee is DISA PLD. Submit all documentation under an appropriate cover sheet marked as follows:
PROCUREMENT SENSITIVE
REQUIRES SPECIAL HANDLING
DO NOT LEAVE UNATTENDED
SECURE WHEN NOT IN USE
(S-90) Contractor personnel suspecting a violation of the Procurement Integrity Act are encouraged to contact the contracting officer or the DISA Inspector General with a written allegation containing the elements specified in FAR 3.904.
(S-90) The designee under FAR 52.203-10, Price or Fee Adjustment for Illegal or Improper Activity, is the DISA GC. Submit requests for determination of violation through the legal counsel for signature signed by the HCA.
SUBPART 3.2 — CONTRACTOR GRATUITIES TO GOVERNMENT PERSONNEL
3.203 Reporting suspected violations of the gratuities clause.
(S-90) Report suspected violations through the local counsel and HCO to the DISA GC and the HCA. The designee is the DISA GC.
SUBPART 3.3 — REPORTS OF SUSPECTED ANTITRUST VIOLATIONS
(S-90) Report suspected antitrust violations through the local counsel and HCO to the DISA GC and the HCA.
SUBPART 3.5 — OTHER IMPROPER BUSINESS PRACTICES
203.570 Prohibitions on persons convicted of fraud or other DoD contract-related felonies.
(a) The designee is the Vice Director, DISA. Submit waiver requests through DISA PL2.
SUBPART 3.6 — CONTRACTS WITH GOVERNMENT EMPLOYEES OR ORGANIZATIONS OWNED OR CONTROLLED BY THEM
The HCA is the designee who may authorize an exception to the policy in FAR 3.601.
SUBPART 3.7 — VOIDING AND RESCINDING CONTRACTS
(a) Reporting. Report the facts concerning a final conviction for any violation of 18 U.S.C. 201-224 to the designee, DISA GC and the HCA within 10 work days of learning of final conviction. Submit reports through local counsel and the HCO.
SUBPART 3.8 — LIMITATIONS ON THE PAYMENT OF FUNDS TO INFLUENCE FEDERAL TRANSACTIONS
(S-90) Forward copies of contractor disclosures to DISA PL2, for submission to the Office of the USD(AT&L).
SUBPART 3.9 — WHISTLEBLOWER PROTECTIONS FOR CONTRACTOR EMPLOYEES
3.905 Procedures for Investigating Complaints.
(b) The Designee is the HCA.
(a) The HCA, based on the report of the Inspector General, and in coordination with the DISA GC, shall recommend the appropriate action to the Director, DISA.
SUBPART 3.90 — ETHICS IN THE PROCUREMENT PROCESS
(a) The Agency ethics official is the DISA General Counsel.
(b) In order to ensure the public trust given to federal employees, it is imperative that Agency personnel not accept any gratuities provided in connection with the performance of official duties (see Section 7 of the Office of Federal Procurement Policy Act [41 U.S.C.423], as amended, and Joint Ethics Regulations (JER), DoD 5500.7-R). The definition of gratuities includes attendance at conferences and contractor demonstrations.
(c) Every attempt should be made by federal employees to preclude the appearance of a potential unfair advantage that may be obtained by a vendor hosting a gathering of mutual interest to Government and industry. In addition, such attendance may appear to create a bias toward the particular vendor’s products or create the perception that the training allowed for undue vendor influence over Agency acquisitions. Any attendance at such gatherings must be balanced with the Government’s need to become knowledgeable about products and technological developments.
(1) Personnel may participate in gatherings of mutual interest to Government and industry when the host is an industrial, technical, or professional association (not an individual defense contractor or commercial firm), provided that these gatherings have been approved in accordance with 32 CFR Part 237a. Participation in industrial events of national and international interest requires advance approval by the Assistant Secretary of Defense (Public Affairs).
(2) When a determination has been made that attendance at a widely attended gathering is in the interest of the Agency because it shall further Agency programs or operations, an employee may accept an offer of free attendance at all or appropriate parts of the gathering. A gathering is widely attended if it is open to members from throughout a given industry or profession, or if those in attendance represent a range of persons interested in a given matter. Free attendance may include waiver of all or part of a conference or other fee or the provision of food, refreshments, entertainment, and instruction materials furnished to all attendees as an integral part of the event. It does not include travel expenses, lodgings, entertainment collateral to the event, or meals taken other than in a group setting with all other attendees.
(3) Attendance by personnel at contractor demonstrations must be considered on a case-by-case basis. Permission to attend such gatherings must take into consideration whether the demonstration is available to the general public, as well as whether or not the personnel who wish to attend the demonstration are involved “personally and substantially” in activities relating to a specific procurement. Under normal circumstances, the attendance at a competing contractor’s facility is prohibited if the procurement process has begun. A competing contractor, with respect to any procurement of property or services, means any entity legally capable of entering into a contract or subcontract in its own name that is, or is reasonably likely to become, a competitor for or recipient of a contract or subcontract under such procurement, and includes any other person acting on behalf of such an entity; the term also includes the incumbent contractor in the case of a contract modification.
(4) Attendance at vendor-hosted gatherings may also create a need to contact other vendors as to availability of similar demonstrations to allow the Government to obtain a balanced understanding of the market. This contact, along with subsequent attendance at other, similar vendor hosted gatherings, shall enable the Government to obtain a balanced understanding of the market.
(5) If, as a result of a market survey conducted to identify sources, an announcement is placed in the “FedBizOpps” that states that site visits and/or product demonstrations may be conducted with all interested offerors, attendance may be authorized to those potential competing contractors offering such visits and/or demonstrations.
(6) Prior to scheduling any such visit or demonstration as enumerated in the foregoing paragraphs, it must be coordinated with the activity’s legal counsel and the cognizant contracting officer. Coordination with the legal counsel and the contracting office should occur at the earliest possible point of the planning stage to preclude unnecessary efforts by any interested party.