SARA panel: Feds, contractors need more ethics guidance

The federal government needs to deal head-on with ethics concerns that have arisen because of the increased presence of private-sector contractors working alongside government employees, according to the final draft report of the Acquisition Advisory Panel.

The panel sought to determine whether contract employees working on federal agency projects should be required to comply with some or all of the ethics rules that apply to government employees. It also raised the issue of how to address potential organizational conflicts of interest and at the same time preserve the confidentiality of proprietary information.

The reliance on federal contractors “has blurred the lines” between governmental and commercial functions and increased the potential for organizational conflicts of interest (OCIs), the panel found.

“The contracting community needs more expansive and detailed guidance for identifying, evaluating and mitigating OCIs,” the report states. The panel noted that although the current FAR language “provides significant leeway” for contracting officers to address OCIs, recent decisions by the Government Accountability Office and the courts “indicate that, in many instances, appropriate investigation and/or analysis is not performed.”

This situation has had a substantial negative impact on agency performance and of the public’s perception of the government procurement process, the panel said. However, it noted that agencies cannot impose ethics requirements on contractor employees or discipline them for violating federal ethics standards.

It recommended that the FAR Council consider developing a standard OCI clause to include in contractor solicitations and contracts that sets forth the contractor’s responsibilities for ethical conduct by its employees and subcontractors.

The panel found that “the existing system of statutes and regulations governing the conduct of federal government employees is adequate to effectively deal with ethical violations.”

Nevertheless, to lessen the chances of ethical violations as a result of the growing reliance upon contract employees, the panel recommended that the Office of Federal Procurement Policy “consider the current governmental and contractor landscape and adopt a set of general principles and best practices for identifying those functions that should be performed by civil servants.”

The panel also urged agencies to ensure that those positions that must be performed by government employees are adequately staffed.

To protect contractors’ confidential and proprietary data more effectively, the panel recommended that the FAR Council provide additional regulatory guidance on access to such information, “including clauses for use in solicitations and contracts regarding the use of nondisclosure agreements, sharing of information among contractors, and remedies for improper disclosure.”