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Barry McVay's FEDERAL CONTRACTS DISPATCH

DATE: March 30, 2000

FROM: Barry McVay, CPCM

SUBJECT: Federal Acquisition Regulation (FAR); Procurement Integrity Rewrite

SOURCE: Federal Register, March 29, 2000, Vol. 65, No. 61, page 16757

AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA)

ACTION: Proposed Rule

SYNOPSIS: It is proposed that FAR 3.104, Procurement Integrity, be rewritten in plain language as required by the June 1, 1998, presidential memorandum "Plain Language in Government Writing."

DATES: Submit comments on or before May 30, 2000.

ADDRESSES: Interested parties should submit written comments to the General Services Administration, FAR Secretariat (MVRS), 1800 F Street, NW, Room 4035, Attn: Ms. Laurie Duarte, Washington, DC 20405. Cite FAR case 1998-024 in all correspondence related to the proposed rule. Address e-mail comments to farcase.1998-024@gsa.gov.

FOR FURTHER INFORMATION CONTACT: Paul Linfield, Procurement Analyst, 202-501-1757.

SUPPLEMENTAL INFORMATION: FAR 3.104, Procurement Integrity, implements prohibitions, restrictions, and other requirements of the Procurement Integrity Act that are placed on certain agency officials who participate in federal procurements. This proposed rule seeks to improve FAR 3.104 by reorganizing and simplifying its text.

However, other statutes and regulations also govern the conduct of government employees. In particular, Office of Government Ethics (OGE) regulations provide guidance on other prohibitions that also apply to government employees who participate in procurement activities during the conduct of a federal procurement. While FAR 3.104 does not implement these other statutes and regulations, it is very important for federal employees to be aware of these other statutes and regulations because an employee can be subject to criminal and administrative penalties for engaging in prohibited conduct.

Therefore, the proposed rule also revises FAR 3.104 to alert agency officials that they may be precluded from participating in a procurement by these other statutes and regulations even if they are not "participating personally and substantially" in the procurement as defined in FAR 3.104. In general, the prohibitions in OGE's regulations involve accepting bribes or gifts, seeking employment, and other similar activities (particularly Title 5 of the Code of Federal Regulations (CFR), Section 2635.604, Disqualification While Seeking Employment, and Section 2635.606, Disqualification Based on an Arrangement Concerning Prospective Employment or Otherwise After Negotiations). In certain circumstances, an employee will be considered by the OGE regulations to be participating personally and substantially in a procurement even though, according to the Procurement Integrity Act and FAR 3.104, he or she is not.

Besides simplifying and clarifying the language of FAR 3.104, the following are the major changes being proposed:

• The definition of "source selection information" would be moved from FAR 3.104-3, Definitions, to FAR 2.101, Definitions.
• FAR 3.104 would be completely reorganized as follows:
• FAR 3.104-3, Definitions, would be redesignated as FAR 3.104-1, Definitions. Besides moving "source selection information" to FAR 2.101, the definitions of "contract" and "federal agency" would be deleted.
• FAR 3.104-2, Applicability, would be removed.
• FAR 3.104-1, General, would be redesignated as FAR 3.104-2, General. The most significant change would be in paragraph (b)(2), which currently points out that "Section 208 of Title 18, United States Code, and 5 CFR 2635 preclude a government employee from participating personally and substantially in any particular matter that would affect the financial interests of any person from whom the employee is seeking employment." To this would be added the following: "An employee who engages in negotiations or is otherwise seeking employment with an offeror or who has an arrangement concerning future employment with an offeror must comply with the applicable disqualification requirements of 5 CFR 2635.604 and 2635.606. The statutory prohibition in 18 U.S.C. 208 also may require an employee's disqualification from participation in the acquisition even if the employee's duties may not be considered 'participating personally and substantially,' as this term is defined in 3.104-1."
• FAR 3.104-4, Statutory and Related Prohibitions, Restrictions, and Requirements, would be redesignated as FAR 3.104-3. The most significant change would be the addition of the following as paragraph (c)(2), which addresses "actions required of agency officials when contacted by offerors regarding non-Federal employment" (the current text of paragraph (c) would be redesignated as paragraph (c)(1)): "Conduct that complies with subsection 27(c) of the [Procurement Integrity] Act may be prohibited by other criminal statutes and the Standards of Ethical Conduct for Employees of the Executive Branch. (See 3.104-2(b)(2).)" Also, paragraph (d), which addresses the one-year prohibition on former official's acceptance of compensation from a contractor that received $10,000,000 based on the decision of the official, would include the information currently in FAR 3.104-8, Calculating the Period of Compensation Prohibition.
• FAR 3.104-5, Disclosure, Protection, and Marking of Contractor Bid or Proposal Information and Source Selection Information, would be redesignated as FAR 3.104-4. Several cross-references to the definition of "source selection information" in FAR 2.101 would be added (see above).
• FAR 3.104-6, Disqualification, would be redesignated as FAR 3.104-5. Paragraph (a), which currently addresses the use of an agent by a government official to contact a bidder or offeror, would be revised to read "employment contacts between an offeror (including its agent or intermediary) and an agency official (including his or her agent or intermediary) that might not require disqualification under 3.104-3(c)(1)(ii) still may require disqualification under other statutes and regulations. (See 3.104-2(b)(2).)"
• FAR 3.104-7, Ethics Advisory Opinions Regarding Prohibitions on a Former Official's Acceptance of Compensation from a Contractor, would be redesignated as FAR 3.104-6.
• FAR 3.104-10, Violations or Possible Violations, would be redesignated as FAR 3.104-7.
• FAR 3.104-11, Criminal and Civil Penalties, and Further Administrative Remedies, would be redesignated as FAR 3.104-8.
• FAR 3.104-9, Contract Clauses, would be revised to add that solicitations and contracts for commercial items are not to include the clauses at FAR 52.203-8, Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity, and FAR 52.203-10, Price or Fee Adjustment for Illegal or Improper Activity.

In addition, references to the "source selection information" definition in FAR 2.101 are added in several places (such as paragraph (e) of FAR 4.802, Contract Files, and paragraph (a)(5) of FAR 15.404-2, Information to Support Proposal Analysis), and several cross-references to the redesignated subsections of FAR 3.104 are changed as well.

FOR FURTHER INFORMATION CONTACT: Barry McVay at 703-451-5953 or by e-mail to BarryMcVay@FedGovContracts.com.

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