Acquisition panel considers ethics in contracting

Members of the Services Acquisition Reform Act Advisory Committee, a group assigned under the 2004 Defense Authorization Act to examine government procurement practices, debated their priorities in a meeting Monday at the Interior Department.

Carl DeMaio, a panel member and president of the Performance Institute, an Arlington, Va.-based think tank, urged chairwoman Marcia Madsen to add ethics and oversight as a separate working group of the panel or as a topic to be addressed by each of the panel's five working groups.

"Ethics and oversight have been lacking," he said, adding that it would also be problematic to add so many internal controls that the government could no longer have the flexibility to shop for bargains.

The Office of Government Ethics sent a public letter to the committee asking panelists to evaluate "whether contractor employees should be subject to some type of ethics laws, rules or practices designed to prevent conflicts of interest and the appearance of conflicts of interest."

The letter pointed out that while government employees are subject to ethics rules, contractors, who perform similar work, are not. The government does not restrict contractors' post-employment opportunities or set gift rules, for example.

"For example, a contractor performing an agency's IT function could accept a free computer at a company-sponsored user conference or meeting, unless such conduct was prohibited by his company's internal policies," the letter stated. It offered several policy options, such as adding ethics rules to the Federal Acquisition Regulation, or requiring ethics provisions in contracts.

Panelist Frank Anderson, president of the Defense Acquisition University, warned of becoming obsessed with ethics. "I'd hate to see us get focused in … on the latest issue," he said, alluding to the Darleen Druyun acquisition scandal at the Defense Department. He added that the panel did not have the power to prevent individuals from using poor judgment, and that there are always going to be misjudgments in government.

Joshua Schwartz, professor of law at George Washington University Law School, agreed. He said that trying to stop all misjudgments would be futile and could result in overregulation.

Ethics concerns were not listed on any of the working groups' initial agendas. The groups, which will focus on the acquisition workforce, commercial practices, performance-based contracting, governmentwide and interagency contacts, small business issues, and the federal workforce, will address issues such as management structure, training needs, definitions of acquisition terms, and data collection.

Madsen, a partner at the law firm Mayer, Brown, Rowe & Maw LLP, said that while she does not consider the current agenda items to be comprehensive, she wants panelists to focus on them. "I'd like to start with the issues we've identified," she said, adding that given limited time and resources, the panel was not going to be able to address every issue.

She said, however, that she welcomed suggestions from committee members as to what issues should be added or deleted.

Madsen also told panelists that she cherishes her dog-eared copy of federal acquisition laws, and that she would try to make a copy to hand out. She called the list of rules "one of my favorite documents."

Some members of the audience, who were not invited to share comments, expressed concerns afterwards. Larry Allen, an executive vice president with the nonprofit Coalition for Government Procurement, which represents contractors, said his members tell him that the current structure of competitions reduces the number of companies that compete.

Procurement officers often discuss what they want with companies prior to issuing a request for proposal, making it difficult for companies that haven't had those conversations to compete, he said. "Half the competition takes place before the RFP," he said.

The next panel meeting will be held March 30. The working groups are expected to meet privately and discuss agenda items in the interim. The panel will invite private sector guests to explain their acquisition approaches in March and April.