DZS/Baker LLC; Morrison Knudsen Corporation, B-281224; B-

B-281224.8 Nov 19, 1999 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Potts: This is in regards to your letter to the Comptroller General dated September 9. A conflict of interest was created that was inconsistent with the requirements of the Federal Acquisition Regulation (FAR) and could not be mitigated. Ohio were unacceptable. We have had a long and positive relationship with your Office. An employee generally is permitted to participate in a particular matter where the otherwise disqualifying interest is in the form of a federal salary and benefits. Although you state that the exemption would not permit an employee to make a determination that will individually or specially affect his own salary and benefits. Where a determination will affect a group of which the employee is a member. View Decision Subject: Letter to OGE Regarding Conflicts of Interest in A-76 Cost Comparisons File: B-281224.8 Date: November 19, 1999 The Honorable Stephen D. Potts Director Office of Government Ethics Suite 500 1201 New York Ave., NW, Washington, DC 20005-3917 Dear Mr. Potts: This is in regards to your letter to the Comptroller General dated September 9, 1999, in which you furnished a copy of Office of Government Ethics (OGE) Memorandum No. DO-99-035, dated September 9. That memorandum addresses our bid protest decision in DZS/Baker LLC; Morrison Knudsen Corp., B-281224 et al., Jan. 12, 1999, 99-1 CPD Para. 19. In that decision, we concluded that where, in a cost comparison study pursuant to Office of Management and Budget (OMB) Circular A-76, 14 of 16 agency evaluators held positions under the study and thus subject to being contracted out, a conflict of interest was created that was inconsistent with the requirements of the Federal Acquisition Regulation (FAR) and could not be mitigated. As a result, we sustained protests challenging the evaluators' conclusion that all private-sector offers to perform base civil operations and maintenance services at Wright-Patterson Air Force Base, Ohio were unacceptable. We have had a long and positive relationship with your Office, and appreciate your thoughts on any matters of common concern. In this case, we disagree with your views on the rules applicable to A-76 studies. You take issue with our decision based on a regulatory exemption, 5 C.F.R. Sec. 2640.203(d), from the general prohibition under 18 U.S.C. Sec. 208(a) against an employee participating personally and substantially in a particular matter in which the employee or other specified person has a financial interest. Under 5 C.F.R. Sec. 2640.203(d), an employee generally is permitted to participate in a particular matter where the otherwise disqualifying interest is in the form of a federal salary and benefits. Although you state that the exemption would not permit an employee to make a determination that will individually or specially affect his own salary and benefits, you state that, where a determination will affect a group of which the employee is a member, the employee generally is permitted to make that determination. It is your position that the exemption thus authorizes federal employees holding positions under an A-76 study to act as evaluators of competing private-sector offers, and that our decision "appears to be contrary to advice that [OGE gives] executive branch employees." In our view, regulatory exemptions to the criminal statute, 18 U.S.C. Sec. 208(a), do not call into question the rationale of our decision in the DZS/Baker case. While 18 U.S.C. Sec. 208(a) provides criminal penalties for some behavior by federal employees, we view it as establishing only a minimum standard for acceptable conduct. As discussed in our decision, the conduct of federal officials in all procurement actions is also governed by the broad ethical standards set forth in the FAR. In this regard, FAR Sec. 3.101-1 states: Government business shall be conducted in a manner above reproach and, except as authorized by statute or regulation, with complete impartiality and with preferential treatment for none. Transactions relating to the expenditure of public funds require the highest degree of public trust and an impeccable standard of conduct. The general rule is to avoid strictly any conflict of interest or even the appearance of a conflict of interest in Government-contractor relationships. While many Federal laws and regulations place restrictions on the actions of Government personnel, their official conduct must, in addition, be such that they would have no reluctance to make a full public disclosure of their actions. We think the plain language of this provision makes it clear that procurement officials are required to do more than merely refrain from violating a criminal statute; they are instructed by FAR Sec.