Buzz of the Week: Conflicts of interest: The reality show

There’s nothing like a ready-made case study to crystallize the importance of an issue such as contractor conflicts of

In recent months, vendors have been grumbling about proposed changes to the Federal Acquisition Regulation to address potential conflicts of interest for companies bidding on contracts.

Conflicts of interest come in different flavors. In some cases, a would-be bidder has other contract work that might give them an unfair advantage when submitting a proposal for a new program. Or the opportunity might represent a personal conflict of interest for a key company executive.

Such textbook descriptions came to life last week at the Federal Emergency Management Agency. FEMA suspended a procurement related to the upcoming TopOff 5 national disaster exercise while agency officials investigated problems with the contracting process.

The problem is that a bidder, not officially identified but reported to be Science Applications International Corp., apparently wrote parts of FEMA’s solicitation. SAIC has withdrawn its bid on the contract. SAIC acquired a company in 2006, called Applied Marine Technology, which had received a contract that same year to assist with the TopOff 5 program.
In broad terms, the challenge is coming up with a reasonable process for identifying and responding to potential conflicts of interest.

The Professional Services Council, which represents service contractors, is pushing the federal government to update and simplify its regulations, with a focus on defining the responsibilities of agencies, contracting officers and contractors.
In this rulemaking case, time is of essence, procurement experts say.

It is bad enough that federal contracts continue to grow in scope and value, as agencies look for the most efficient procurement vehicles. Understandably, given the broad scope, every available vendor
is looking to make a bid on these mega-contracts.

Unfortunately, because of ongoing consolidation in the information technology industry, the pool of potential contractors is shrinking, increasing opportunities for conflicts to arise.

In this environment, a failure to navigate the ethical landmines can impede the competitive health of federal contracting.

#2 The straight and NARA
The National Archives and Records Administration wants agencies to use e-mail archiving tools to retain electronic messages that qualify as records needing preservation, and it has issued some guidance to help agencies figure out how to do that.

Federal regulations already require agencies to preserve e-mail messages that meet the definition of records, but using the tools is optional.

But the rub is figuring out which records qualify. An e-mail message from an agency director proposing a new agency policy in draft form? Sure. Your Uncle Louie’s joke about President Bush, Tony Blair and Pope Benedict XVI going into a bar, the kind that he sends even though you’ve repeatedly told him to use your home e-mail address for those? No.
But what about all those notifications that you’ve won millions of euros in a sweepstakes? On the one hand, they’re records of financial transactions. On the other, they’re personal information even though they come to your agency address.

That’s a gray area.

#3 You’d think they’d be masters of it
It might seem odd that the Treasury Department is behind the curve on its financial reporting systems, but it’s true. In fact, the old systems Treasury is using produce data so unreliable that the Government Accountability Office has been unable to give an audit opinion about the federal government’s consolidated financial statement for the past 11 years.

The agency is making progress at modernizing its systems, but we’re wondering: If a business or individual couldn’t provide reliable financial data, would that be grounds for the Internal Revenue Service to forgo an audit? Somehow, we doubt it’s that easy.

#4 Something’s fishy at EPA
The Environmental Protection Agency unveiled a Web site last week aimed at kids. The site teaches them why eating fish is healthy unless they’re full of mercury — the fish, not the children — and how to catch fish. It includes a memory game, which might double as a test for mercury, and a fishing game.

However, the children’s story about a family fishing trip contains so many pictures of scary warning signs about mercury and PCB contamination, the site might send a lot of kids — and their parents — as far from the water as possible.


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