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Allen: New rules of contract ethics (full version)

Promoting your ethical behavior may actually help your firm win government business

By Larry Allen
Published on August 14, 2006

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Companies selling to the government and the government employees with whom they do business have long been bound by a host of ethical rules designed to ensure fair, transparent government acquisition. Until the past two years, however, these rules were known primarily only to people inside the procurement community. Although largely followed, they were notably ignored in a few high-profile cases. It is those notable exceptions that have brought increased scrutiny to the realm of procurement ethics. Now, it seems, no one can be ethical enough.

In today’s market, contractors and customers feel someone is looking over their shoulder. Even routine decisions are being second-guessed. Not surprisingly, this trend is starting to have an impact on the business of government. Contract professionals are demanding more information from contractors to make it clear that contracting decisions are based on objective criteria. In fact, some professionals will not make a decision until the proposal is reviewed by a group of contracting officers.

Established ethical policies do exist. With some limited exceptions, companies in business with an agency may not provide anything of value to any person involved in the acquisition process. This includes meals, sports tickets, gifts, forbearances and other items that might have the potential to sway the judgment of a government decision-maker.

The official rules of the Senate and the House say that lawmakers and staff members may accept gifts — other than cash or a cash equivalent — that they “reasonably and in good faith believe” to have a value of less than $50 and a cumulative value from one source of less than $100 in a calendar year. A gift worth less than $10 does not count toward the annual limit.

Many individual offices, however, have initiated stricter polices that prohibit the receipt of gifts of any value from an outside source having business before Congress or a federal agency. Some offices are going to extraordinary lengths to avoid even the appearance of unethical behavior. As a result, it may be easier to obtain Redskins tickets this fall than it has been in years.

It is vital that contractors know the policies of the offices and agencies they regularly do business with and develop their own systems to ensure they don’t inadvertently exceed gift ceilings.



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