Assignment 1 leg 505


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Assignment 1 leg 505

  1. 1. Contracting and Ethics 1Assignment #1 – Contracting and EthicsDJhonna M. JonesLegal 505October 28, 2012Professor James H. Vricos
  2. 2. Contracting and Ethics 2Abstract:Within the confines of this paper we will give our educated opinion of the GAO analysis todetermine whether Aetna Government Health Plans, LLC should be excluded from thecompetitive bid based on an alleged unfair competitive advantage stemming from them hiring aformer Tricare Management Activity employee, their chief of staff, to prepare their proposal.We will also discuss what corrective actions Tricare Management Activity should take to rectifythe situation, and how they will sufficiently reconcile the appearance of impropriety. During thecourse of the assessment we will identify and evaluate the three most critical factors thatheighten the agency’s appearance of impropriety.
  3. 3. Contracting and Ethics 31. Give your educated opinion of the GAO analysis to determine whether Aetna GovernmentHealth Plans, LLC (AGHP), should be excluded from the competitive bid based on an allegedunfair competitive advantage stemming from AGHP’s hiring of a former TMA (TRICAREManagement Activity) employee (the TMA Chief of Staff) to prepare AGHP’s proposal.According to FAR 3.101, “Government business shall be conducted in a manner abovereproach and except as authorized by statute or regulation, with complete impartiality and withpreferential treatment of none. Transactions relating to the expenditure of public funds requirethe highest degree of public trust and an impeccable standard of conduct. The general rule is toavoid strictly any conflict of interest or even the appearance of a conflict of interest inGovernment - contractor Relationships. (GSA, DOD, NASA, 2001-2012)” Based on that, therewas no other conclusion for the GAO to come to. Even the mildest image of improprietybetween a government agency and contractor is frowned upon and grounds for the contract to bevoid. This information justifies AGHP’s Proposal being excluded from the competitive bid base.Simply because Aetna Government Health Plans, LLC made it a policy to hire formerTricare employees it shows that they were indeed prepared to utilize the potential informationand asset that these individuals represent. They themselves stated that they made it policy to hireformer Tricare Management employees feeling that it did not pose a threat to their customerservice goals (Matter of : Health Net LLC, 2009). Upon further review of the case it is alsoapparent that due to the nature of the Aetna corporation structure, it is difficult to even ascertainwhether or not the portion of the company submitting RFPs is being evaluated with accurate pastperformance review or not. It is no wonder that finding former Tricare employees was asurprise if it is so difficult to separate the performances of the sections of the company. Many ofthis companies structure is difficult to lay out for RFP purposes.
  4. 4. Contracting and Ethics 42. Discuss recommended corrective actions for TMA to take.GAO recommended a new evaluation of the offerors’ proposals, hold further discussionsif it deems necessary and make a new source selection decision, consistent with this decision. Asfar as the unfair competitive advantage accusations it was recommended that the contractingofficer perform a thorough review regarding the scope of the former TMA employee’s access tonon public information that could have been an advantage. In addition reimbursing Health Netfor filing the claim for the protest to include their legal fees (Matter of : Health Net LLC, 2009).The previously discussed recommendations are all those that are standard given when afound guilty of violating FAR 3.104 and 9.505. Statutes instated to safeguard the procurementprocess. However the resulting corrective actions where mild and perhaps lenient at best. Theserecommendations, first to hold new evaluations of the offerors’ proposals and hold furtherdiscussions if it deems necessary seems to be a bit redundant. A second evaluation or toreevaluate the proposals may highlight information that was previously missed or missunderstood, and in some cases help to better choose the right contract. On the other hand, therewill be a large amount of funds spent to reevaluate these contracts making them more of ahindrance. The matter of the former TMA employee is one that may not be properly solved.Short of making an example of that individual by firing him as a scapegoat, there is no way toundo the damage done by using his expertise to write Aetna’s RFP.Because this is the “appearance” of impropriety and there is no hard proof that any trueviolations have been committed, it seems criminal penalties were not recommended. On thecontrary the recommendations come off more as a reprimand and civil penalties than anythingelse. This demonstrates that without concrete proof that criminal acts against the FAR had been
  5. 5. Contracting and Ethics 5committed there is no way that those penalties would be issued. However they stillrecommended the reimbursement of all legal fees.3. Explain how your recommendations sufficiently reconcile the appearance of impropriety.The only way to reconcile the appearance of impropriety was for Aetna to reconsidertheir policy of hiring TMA personnel on a regular basis for customer service basis. In addition tothis they must also consider that in hiring these individuals they must not include them orconsider their employment backgrounds when compiling a RFP team. This is considered amajor step when composing a RFP as the FAR does not allow for the appearance of improprietyin government – contractor relationships.In addition to Aetna being more aware of their part in this situation, Health Net must alsoacknowledge that they too must consider that their complacency in reviewing the Aetna RFP wasanother reason for the additional appearance of impropriety. Closer attention to detail andpaying attention to the different aspects of the RFP as is their job would better prevent futureissues of this kind. All of these were suggestions by the GAO in their report.4. Assess the situation, and identify and evaluate the three (3) most critical factors that bolsterthe agency’s appearance of impropriety.The three most critical factors that bolster the agency’s appearance of impropriety wheretheir lack of knowledge concerning the RFP members involvement in non public information,their failure to accurately evaluate the awardees’ past performance information, and to perform areasonable price/cost realism assessment, as provided for in the RFP (Matter of : Health NetLLC, 2009). Those gaps in performance give the appearance of conspiracy between Aetna andHealth Net of a prior agreement to award that RFP to Aetna. Thus the appearance of improprietybetween Government agency and contractor is established.
  6. 6. Contracting and Ethics 6Works CitedEngelbeck, R. M. (2002). Acquisition Management. Vienna: Management Concepts.Feldmen, S. W. (1990). Government Contracts In a Nut Shell. St. Paul: West Publishing Co.GSA, DOD, NASA. (2001-2012). Federal Acquisition Regulation. Washington D.C.: USGovernmnet.Matter of : Health Net LLC, B-401652.3; B-401652.5 (Government Accountability OfficeNovember 4, 2009).OConnor, T. M. (2007). Understanding Government Contract Law. Vienna: ManagementConcepts.Straight, R. L. (2004). Simplified Acquisition Procedures for Federal Purchases. Philadelphia:89th Annual International Supply Management Conference.Williams, T. (2012, 08 26). Preparing Cost Proposals. IRS.Gov . Washington DC, District ofColumbia, United States: IRS.