The Office of Government Ethics is challenging a Comptroller General decision banning federal employees from evaluating a contractor's proposal if the employees were competing against the contractors in a public-private competition.
In a memorandum issued this month, OGE Director Stephen D. Potts said that allowing employees to evaluate contractor proposals during public-private competitions does not constitute a financial conflict of interest.
Potts said an exemption to conflict of interest rules under Section 208 of Title 18 in the U.S. Code permits "an employee to make determinations that would affect an entire office or group of employees, even though the employee is a member of the group. Under those circumstances, employees who participate in matters connected with [Office of Management and Budget Circular A-76] procedures, including the evaluation of bids and proposals, are not in violation of Section 208(a)."
Potts' memorandum throws into question a Jan. 12 Comptroller General ruling that the Air Force had violated conflict of interest rules by allowing 14 employees to evaluate the technical aspects of a contractor's proposal. The employees would have lost their jobs if the contractor's bid was accepted.
The Comptroller General decision did not discuss Section 208 nor the exemption Potts cited in his memorandum.
"We believe that these were significant omissions that may well have affected the conclusion in that case," Potts said.
In an effort to cut costs by $11.2 billion by 2006, the Defense Department is holding public-private competitions for work currently performed by 230,000 civilian employees. Using procedures laid out in OMB Circular A-76, contractors submit bids, which are compared to an estimate of how much it would cost to keep the work in-house. To a lesser degree, agencies outside DoD have also used A-76 procedures for public-private competitions.
In his January ruling, Comptroller General David M. Walker said the Air Force employees had an obvious financial stake in whether the contractor's proposal was accepted, so they couldn't be allowed to evaluate the proposal. But Potts' memorandum said that under the exemption to Section 208, conflict of interest rules only prevent an employee from making determinations "that would individually and specially affect his own salary and benefits."
John Melody, a General Accounting Office attorney, said GAO has received the OGE memorandum, but is still deciding what position the Comptroller General will take on the Section 208 exemption.
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