Government Contracts Monitor

The Appearance of Partiality or Impropriety: Potentially Damaging Actions

December 11, 2013

Federal employees play an important role in preserving the integrity of Government contracting and assuring fair treatment of contractors. In this regard, violations of ethics rules can trigger bid protests and result in administrative, civil or even criminal penalties.

Among the behaviors that can be challenged are conflicts of interest, including circumstances that could call a government employee’s impartiality into question, such as where a government employee is required to evaluate proposals, one of which was submitted by a friend.

Earlier this year, the Court of Federal Claims addressed the issue of an award allegedly tainted by impropriety or the appearance of impropriety in Command Management Services, Inc., v. United States, No. 12-463 (Fed. Cl. June 4, 2013). There the impropriety allegation was based on contacts between a former Army Sergeant, employed by the awardee, and the chairman of the Source Selection Evaluation Board (SSEB).

According to Command, the “procurement [was] tainted by an apparent or actual impropriety, conflict, unfair competitive advantage[,] or bias occasioned by the [officer’s] assistance to [the awardee],” the presence of which requires “(a) a thorough inquiry by the [CO], followed by [(]b) appropriate ameliorative measures to ensure that [the awardee] enjoys no unfair competitive advantage.” Command argued that the FAR requires disqualification of an offeror where impropriety or the possibility of an unfair competitive advantage in the acquisition process is present.

With respect to the CO’s obligations under the FAR, Section 9.504(a) requires that a contracting officer “(1) [i]dentify and evaluate potential organizational conflicts of interest as early in the acquisition process as possible; and (2) [a]void, neutralize, or mitigate significant potential conflicts before contract award.” FAR 9.504(a). This regulation requires a contracting officer to identify and evaluate potential conflicts in the early stages of the acquisition process. When a possibility of an impropriety or unfair competitive advantage arises, it must be investigated by the contracting agency. Id. If the contracting agency’s investigation confirms there is a significant possibility of impropriety, conflict, or unfair competitive advantage, the agency must fashion and implement ameliorative measures. FAR 9.504-.506.

The FAR requires that “[e]ach individual contracting situation should be examined on the basis of its particular facts and the nature of the proposed contract. The exercise of common sense, good judgment, and sound discretion is required in both the decision on whether a significant potential conflict exists and, if it does, the development of an appropriate means for resolving it.” PAI Corp., 614 F.3d at 1352 (citing FAR 9.505).

In Command, the Court did not find a conflict with respect to most of the interaction between the awardee and the SSEB – but only because this interaction “took place after the contract was awarded and after First Sergeant Lewis’s duties on the SSEB ended.” However, the Court did find some conduct that appeared to create a conflict and that “should be further examined,” specifically because SSEB team members were required to certify (i) they would not discuss evaluation or source selection matters, even after the announcement of the successful contract; and (ii) they would avoid any action, whether or not prohibited, that could result in or create the appearance of loss of independence or impartiality. Id.

The Procurement Integrity Act and the FAR are among the many laws, regulations and policies that guide government employees and contractors alike in the conduct of government procurements. Even the appearance of impropriety or impartiality can cause an award to be set aside. It is important to understand and follow the rules, and to make certain the government and your competitors do too.

Lindsay Simmons is the attorney responsible for the content of this article.

Attorneys

Lindsay Simmons