2024: The FAR, Federal Acquisition Regulations - Part 3

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The FAR:
Federal Acquisition Regulations
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THE FAR
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2024 Webinar Series
THE FAR

2024 Webinar Series
THE FAR
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THE FAR
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2024 Webinar Series - THE FAR
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The FAR – Federal Acquisition Regulations - WEBINAR SERIES 2024
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2024 Webinar Series
THE FAR
FAR PART #3:
Improper Business Practices and Personal Conflicts of Interest
SPEAKER: Margaret Cassidy
FIRM: Cassidy Law
EMAIL: m.cassidy@cassidylawpllc.com

2024 Webinar Series
THE FAR
THE FAR – PART 3

Topics
 What the Government Expects - Standards
 Interacting with Government Persons
 Interacting with Other Businesses
 Whistleblowers
 Ethics and Compliance Programs

What The Government Expects

Standards
“Government business shall be conducted in a manner above
reproach[…]”
Government business shall be done impartially “[…] highest
degree of public trust”
Government contractors must be “responsible”
Communicate and train on ethical standards and how to
comply with government requirements

Overview
 Bribery: Prohibits exchanging something of value for government
action or inaction
 Gifts/Gratuities/Entertainment: Gifts may be prohibited, restricted or
must be disclosed
 Lobbying: Lobbying and business development with the
government may be limited, restricted or must be disclosed
 Conflicts of Interest: Personal, professional and business
relationships with government officials/employees may violate
corruption or conflict of interest laws
 Procurement Laws: Defined process for soliciting work and for
awarding contracts

Disclosures & Certifications
 Mandated to be part of solicitations, contracts,
subcontracts to assure compliance with laws and
regulations
 Swearing under criminal penalty that your being truthful
which means, current, accurate and complete

Mandatory Reporting
 Contractors are required by law to investigate and report certain issues to the
government:
• Violations of criminal fraud and/or conflict of interest laws
• Violations of the False Claims Act
• Significant overpayments to the government
• In connection with the award, performance or close out of a contract or
subcontract
 Therefore, need to investigate when matters arise
 Then determine if report to the government is required

Sanctions for Failing to Report
Contractors are subject to suspension and/or debarment when there is:
 A knowing failure
 By a principal (officer, director, owner, partner, or a person having
primary management or supervisory responsibilities within a
business entity (e.g., general manager; plant manager; head of a
division or business segment; and similar positions)
 To “timely disclose” (undefined)
 ”Credible evidence” to the government

Audits & Reviews
 Government has right to audit contract – invoices,
performance, compliance with regulations
 Prime contractors have same audit rights over
subcontractors
 Identified violations may result in suspension,
debarment, criminal, civil penalties for contractor and for
employees

Interactions With Government Officials

Meals, Gifts, Seminars & Favors
Government employees are prohibited from soliciting or accepting:
 Gifts worth more than $20
 Cash or gift cards
 Meals (except in certain, limited situations)
 Invites to events – even certain seminars (except in limited situations)
 Favors
 Generally anything else as defined by contract
 Contractors must comply with these requirements

Recruiting and Hiring from the Government
 Contractors may not recruit government employees while the
government employees has duties related to that contractor
 Contractors cannot provide the favor of improving the resume or
forwarding the resume
 Improperly recruiting from the government or providing favors may
create an actual or perceived conflict of interest – criminal sanctions
 Once hired, government employees may be restricted from engaging
with the agency where they worked or restricted in compensation, they
may be paid
 Procurement Integrity Act…. Violations are criminal

Personal Conflicts of Interest
Persons are prohibited from working on a government contract if doing so will
impact their financial interests because of certain business or personal
relationships such as:
 Business ownership
 Investments
 Spouse, minor children – business ownership, employment, etc
 Serving as officer, director, partner, consultant, employee
 Negotiating employment

Procurement Integrity Act
 Restricts disclosure of procurement information
 Restricts who can obtain procurement information
 Government officials must report certain contacts concerning possible
non-Federal employment
 Prohibits government officials from accepting compensation from
contractors, in some circumstances

No Federal Funds to Lobby
 Must certify that no federal funds will be used or have been used to influence or attempt to
influence any executive branch employee or any legislative branch employee or elected
Member of Congress in connection awarding a contract.
 Essentially means – cannot use federal funds to “lobby” – but is more broad
 Need to have financial controls to make sure you comply
 Lobbying means communicating with legislative or executive branch officials to influence
government activity – including negotiation and award of federal contracts
- If lobbying – must register as a lobbyist
- Regulations apply to both individuals and organizations.

Lobbying
Definition: Communicating with the government (legislature and executive branches) to
influence government activity – including negotiation and award of a federal contract
 Subject of communications must:
• Include an attempt to influence or
• Be in support of a subsequent or ongoing lobbying contact
 Registration of “lobbyists” required, based on time and spending thresholds with respect
to “lobbying activities”
 Periodic reporting required on all qualifying activity
 Regulations apply to individual lobbyists and to organizations employing lobbyists
(organization is that lobbyist’s “client”)

Not Just the FAR …
Other Legal Requirements
 Procurement Integrity Act 41 U.S.C. 2104
 Criminal Conflict of Interest Laws, 18 U.S.C. 208
 Government Ethics Regulations, 5 CFR Part 2635
 State laws and regulations

Corruption
Offering, promising, exchanging something of value for the
purpose of obtaining or retaining business or a government
advantage by:
 Influencing an act or decision to include NOT acting
 Securing any improper advantage
NOTE:
 U.S. laws reach internationally – U.S. Foreign Corrupt Practices
Act
 Do not have to complete the corrupt act to be liable

Interacting With Other Businesses

Collusive Bidding & Kickbacks
Collusive Bidding:
 Agreeing not to bid or to withdraw bid
 Collaborating to “designate” bid winner through pricing
 Rotating low bidder
 Dividing market – geographically, by agency
 Exclusive dealing
Kickbacks:
 Arrangement between contractors to provide something of value to another contractor in exchange for
favorable treatment in bidding process
 Eg: low interest loans, favorable pricing
Independent Pricing:
 Must certify that your pricing is independent
 Arrived at pricing independently from any agreements with other contractors or bidders

Procurement Integrity
 Prohibits disclosing or receiving procurement information before its publicly available or before contract award
 Cannot disclose, receive or even have access to:
• Bid or proposal information
• Source selection information
 Contractors procurement sensitive information must be marked
 Examples of protected information:
• A contractors’ cost or pricing data
• Government budget or cost estimates for procurements
• Government source selection plans
• Any material that is marked proprietary and sensitive
• Tools, methodologies or data that a business creates – intellectual property
 BUYING IN: A type of procurement integrity ….
• Submitting a low price with plan to increase work or price over the life of the contract or on future work
• Government must look out for it

Operationalizing the Requirements

Ethics & Compliance Program
 Written code of conduct
 Culture promoting integrity and compliance
 Ethics and compliance program owner with sufficient authority and resources
 Policies and procedures to enable compliance and integrity
 Training and communication on policies and procedures
 Method for employees or others to raise concerns – to include anonymously
 Must provide written notice to employees about reporting to government
 Discipline for violating policies and procedures
 Method to assess risk of non-compliance
 Internal controls to prevent and detect illegal activity
 Review of program effectiveness

Protecting Whistleblowers, FAR 3.9
 Contractors cannot discharge, demote or discriminate against an employee as retaliation
for being a whistleblower
 Employees can file complaints with the Inspector General of the agency involved when
retaliation occurs
 The Inspector General investigates complaints and provides written reports of findings
 Contractors cannot require employees to sign confidentiality agreements or restrict their
right to report fraud, waste and abuse related to a federal contract
 Be sure you have required Whistleblower posters in your offices or on your intranet!

Practical Tips
 TRAINING: Then - require employees to certify that they have complied with your policies on recruiting and
hiring
 SUBCONTRACTS: Include ethics and compliance requirements as clauses, including certifications
 PRIMES: You are responsible for your subcontracts, chose them well – due diligence and monitor them
 MEALS, GIFTS, ETC.: Have an approval process, have finance be on look out
 PROTECTING INFORMATION: Mark your materials – always!
 RECRUITING & HIRING: Make sure you know when engaging with a government person, have application
include disclosures that the government person complies
 PERSONAL CONFLICTS: Make sure your employees understand and disclose
 REPORTING CONCERNS: Encourage your employees to talk to you!
FINALLY: JUST BECAUSE YOUR CO, COTR ANYONE SAID YOU CAN DO IT… DOES NOT MEAN YOU CAN DO
IT!

2024 Webinar Series
THE FAR
THANK YOU FOR ATTENDING!
FAR PART #3:
Improper Business Practices and Personal Conflicts of
Interest
SPEAKER: Margaret Cassidy
FIRM: Cassidy Law
EMAIL: m.cassidy@cassidylawpllc.com

2024 Webinar Series
THE FAR
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2024 Webinar Series
The FAR:
Federal Acquisition Regulations
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2024: The FAR, Federal Acquisition Regulations - Part 3

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2024: The FAR, Federal Acquisition Regulations - Part 3