Ethics office launches inquiry into procurement practices

The Bush administration has launched an informal inquiry into potential conflicts of interest and ethical problems involving federal agencies and the companies that do business with them.

In an Aug. 30 letter to attorneys and ethics officials in 19 government agencies that was obtained by Government Executive, the Office of Government Ethics asked for comments on "whether federal contractors raise conflicts of interest problems or concerns and, if so, whether such problems can be best solved by applying regulations" to the contractors.

The letter also asked the attorneys' opinions on whether ethics rules should be included in contracts and if changes to federal purchasing regulations are necessary.

Chief among the questions raised was whether having corporate employees work alongside government employees "may cause the lines between the public and private sectors to blur" and if "the public is able to distinguish between the contractors who work in [a] federal agency and federal employees."

"In many agencies, federal employees and contractor personnel work side-by-side on the same projects," wrote Office of Government Ethics Director Amy Comstock in the letter. "Yet there are different 'ethics' rules for these employees. Does this make sense?"

Comstock also asked the officials if laws and rules currently applied to federal contractors are "adequate." She asked if there should be a "mandatory code of conduct" established for companies and what rules should comprise that code.

Comstock also wanted to know what conflict of interest and ethics rules agencies have in place now, and how they handle problems when they arise. She asked about the advantages and disadvantages of handling such problems on a case-by-case basis versus writing ethics provisions into contracts or creating new regulations.

The Office of Government Ethics held a meeting with the recipients of the memo on Sept. 17, a spokesman for the office said. He wouldn't discuss details of the discussion or why the office has moved to contact agency attorneys directly about its concerns. Officials invited to the meeting who were contacted for this report didn't respond to requests for comment.

Government contractors and agency managers are likely to react negatively to the ethics probe. One procurement executive, who asked to remain anonymous, said it was "potentially very troubling" that these discussions might reflect a desire by the administration to restrict the interactions between companies and the federal managers who write and award contracts. Office of Federal Procurement Policy Administrator Angela Styles has questioned whether more light needs to be shed on the government-contractor relationship.

The procurement executive countered that notion, saying, "In the business functions of government we need to be more businesslike, not more 'sovereign'-like…. I fear that in order to prove we are not in bed with contractors and [to] demand corporate responsibility, we are going to put rules in place that will make it much more difficult to do business, or will deter businesses from doing business with the government."