"Procurement integrity" is a phrase that boils down to common sense rules of fair play in contracting. As an ethical standard of conduct, procurement integrity applies equally to federal employees and contractors. The phrase gains notoriety whenever a federal employee or contractor are caught with their hands in the federal cookie jar. For most contractors supplying commercial off-the-shelf products, however, procurement integrity should not pose a major compliance problem.
Contracting agencies are charged with a public trust. Funded with taxpayer dollars, agencies are supposed to give all bidders an equal chance at winning federal business by awarding to the lowest-priced vendor meeting the government's minimum needs. Unlike the commercial sector, where almost anything short of a bribe is allowed when trying to lure new accounts, agencies are required to follow strict guidelines in soliciting and awarding contracts. Indeed, the government's ethical standards of conduct differentiate it from the commercial marketplace.
Contracting Officers are federal officials. In the same way that a Congressman isn't allowed to accept a bribe to influence legislation, Contracting Officers and other agency personnel aren't allowed to accept gratuities from bidders angling for award. Nor are contractors supposed to offer gifts, solicit insider information, or offer employment to federal procurement officials. These actions could influence the award of an order, which wouldn't be fair to the other contractors playing it straight.
To help advise procurement officials about what's permissible and what's illegal behavior, almost every agency has published a standard of conduct applicable to its employees. These standards differ slightly from agency to agency, so that the standards applying to Department of Defense employees are slightly different than the standards for General Service Administration workers. For a contractor to know precisely what's allowable, the vendor must know the rules of the particular agency involved.
Luckily, all of the differing standards of conduct have a common, overlapping ethical core of proper behavior. Based on guidelines published by the Office of Government Ethics (OGE), these standards prohibit federal employees from soliciting or accepting any "gratuity." In turn, "gratuity" is generally defined as "any gift, favor, entertainment, hospitality, transportation, loan, any other tangible item, and any intangible benefits, including discounts, passes, and promotional vendor training, given or extended" to federal employees.
There are exceptions. Federal workers may accept social courtesies, such as coffee, doughnuts, and refreshments of nominal value. Government employees may participate in widely attended gatherings of mutual interest to the government and industry sponsored by universities or technical associations.
Where a free lunch is not the main event, procurement officials may accept food and drink from a contractor when it will facilitate work. When traveling, federal workers may accept a vendor's transportation, meals, or lodging when alternatives are impracticable. Inexpensive promotional items that are less than $20 in retail value may also be accepted, although the value of such gifts should not exceed $50 over the course of a year.
Common sense is your best guide. Offer a procurement official a simple lunch while he is visiting your facility, but don't take him out to the best restaurant in town for a three-martini feast. Give a contracting officer a pen or mug with your company's logo, but don't give her a mini-cam for Christmas. If a federal employee is concerned about the propriety of a vendor's conduct, then he or she should either refuse the gift or insist on paying for it.
Excerpted below are the OGE's standards of ethical conduct. While the standards of ethical conduct govern agency personnel, they serve as a guideline to contractors to show what is, and is not, permissible. The point is not to place agency personnel in difficult situations.
Ethical Standards of Conduct
1) Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws and ethical principles above private gain.
2) Employees shall not hold financial interests that conflict with the conscientious performance of duty.
3) Employees shall not engage in financial transactions using nonpublic Government information or allow the improper use of such information to further any private interest.
4) An employee shall not ... solicit or accept any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the
employee's agency, or whose interests may be substantially affected by the performance or nonperformance of the employee's duties.
5) Employees shall put forth honest effort in the performance of their duties.
6) Employees shall not knowingly make unauthorized commitments or promises of any kind purporting to bind the Government.
7) Employees shall not use public office for private gain.
8) Employees shall act impartially and not give preferential treatment to any private organization or individual.
9) Employees shall protect and conserve Federal property and shall not use it for other than authorized activities.
10) Employees shall not engage in outside employment or activities, including seeking or negotiating for employment, that conflict with official Government duties and responsibilities.
11) Employees shall disclose waste, fraud, abuse, and corruption to appropriate authorities.
12) Employees shall satisfy in good faith their obligations as citizens, including all just financial obligations, especially those -- such as Federal, State, or local taxes -- that are imposed by law.
13) Employees shall adhere to all laws and regulations that provide equal opportunity for all Americans regardless of race, color, religion, sex, national origin, age, or handicap.
14) Employees shall endeavor to avoid any actions creating the appearance that they are violating the law or the ethical standards set forth in this part. Whether particular circumstances create an appearance that the law or these standards have been violated shall be determined from the perspective of a reasonable person with knowledge of the relevant facts.
5 Code of Federal Regulations 2635.101 (1999)
Part Two
