Budgeting, source of funds is different from commercial buying:

              - Taxes

              - Grants

              - Donations


Objectives of buying are other than profit:

              - Provide services

              - Maintain facilities

              - Other?


Savings are equally important - a dollar saved is:

·        One more dollar to spend

·        One less dollar to collect from taxpayers


Specifications:  Broad spectrum of items are purchased


Potential for conflicts of interest are great due to diverse

affiliations of various employees


Back door selling in some institutions is difficult to control:

                        - Educational Institutions

                        - Hospitals


Benefactors can cause problems regarding reciprocity, i.e.

expectation of special treatment, for charitable institutions

such as schools and hospitals.

Organization and staffing considerations-

              Same as for commercial world, ie:

                                                     - Qualified personnel

                                                     - Appropriate organizational level

                                                     - Degree of centralization


Politics plays an important role in both public and private

institutional purchasing.

                        Public  - Elected officials

                                     - Taxpayers

                        Private  -  Benefactors

                                       -  Trustees


                        Some institutions have formed purchasing co-ops:

                                  - Educational and Institutional co-op.

                                  - Hospital Bureau

                                  - Joint ventures for mutual use (laundry, etc.)

                        (Similar concept to GSA and DLA schedules)


Some low density, highly technical purchases may require use of outside expertise for preparation and evaluation of solicitation and administration of contract.  Example: ADP/Construction




     - Deals with Public funds

     - Requires:

                        -- Stewardship

                        -- Avoiding conflicts of interest and

                           influence peddling by elected officials


Government Purchasing/Acquisition used to achieve certain

"Socio-Economic" Goals such as:

                                  - Small Business Set-asides

                                  - Minority-Disadvantaged Business Promotion

                                  - Small-Disadvantaged Business Promotion

                                  - Contracts in Labor Surplus areas


In summary, Government/Industry purchasing have similar goals

and objectives to:       - Buy wisely

                                  - Buy timely


Government is susceptible to laws and political (congressional) influence


Taxpayers have the right to do business with their government


The bottom line for industry is profit. For the government, it is stewardship and conforming to the will of the citizens                                          



Note:  Standards of Conduct Regulations and Ethics in Federal Acquisition change often.  The information presented below should be considered general in nature, and not comprehensive.



  1. Disclosing and Obtaining Contractor Bid or Proposal Information or Source Selection Information
    1. A present or former employee of, or person acting on behalf of or advising, the U.S. on a procurement, who has or had access to such information shall not disclose it before the award of the contract to which the information relates. (48 CFR 3.104-4(a))
    2. No person shall knowingly obtain such information before the award of the contract to which the information relates. (48 CFR 3.104-4(b))
  2. Offers of Non-Federal Employment

    An official participating personally and substantially in a procurement for a contract in excess of the simplified acquisition threshold ($100,000) who is contacted by a bidder regarding non-federal employment during the conduct of the procurement shall:
    1. Report the contact to his supervisor and the Agency Ethics Officer in writing; and
    2. Reject the offer; or
    3. Disqualify himself in writing to the Head of the Contracting Activity in accordance with 18 U.S.C. § 208 until authorized to resume on grounds that:
      1. the offeror is no longer a bidder; or
      2. all discussions have terminated without an agreement for employment. (48 CFR 3.104-4(c))
    4. This requirement does not apply after the award of the contract or after the procurement has been canceled, although 18 U.S.C. § 208 would still require disqualification on the part of an employee who is administering a contract.
  3. Accepting Compensation from a Contractor
    1. A former official may not accept compensation from a contractor within a year after he served as the procuring contracting officer, the source selection authority, a member of the source selection evaluation board or the chief of a financial or technical evaluation team for a procurement for a contract in excess of $10 million awarded to that contractor.
    2. The above restriction also applies to a former official who served as program manager, deputy program manager or administrative contracting officer for a contract over $10 million.
    3. It applies to a former official who made a decision to:
      1. award a contract, modification, subcontract, task order or delivery order, in excess of $10 million;
      2. establish overhead or other rates applicable to a contract in excess of $10 million; or
      3. approve issuance of a contract payment or payments in excess of $10 million, or pay or settle a claim in excess of $10 million. (48 CFR 3.104-4(d))
    4. Note that this restriction can apply to decisions made after the award of the contract which need not be competitively awarded. The restriction does not apply to accepting compensation from a division or affiliate of the contractor that does not produce the same or similar product or service.
    5. The one-year prohibition on accepting compensation begins:
      1. on the date of selection of the contractor for a former official who served in a position listed in paragraph A at that time, but not on the date of the award of the contract;
      2. on the date of the award of the contract for a official who served in a position listed in paragraph A at that time whether or not he was serving at the time of selection;
      3. on the last date an official served in a position listed in paragraph B; or
      4. on the date a decision listed in paragraph C was made.
  4. Definitions
    1. Contractor bid or proposal information means information not made available to the public and includes:
      1. cost or pricing data;
      2. indirect costs and direct labor rates;
      3. proprietary information about manufacturing processes, operations or techniques; and
      4. information marked by the contractor as “contractor bid or proposal information.”
    2. Source selection information means information not made available to the public and includes:
      1. bid prices;
      2. proposed costs or prices from bidders;
      3. source selection and technical evaluation plans;
      4. technical evaluations, cost or price evaluations, competitive range determinations, rankings of bids, reports of source selection panels; and
      5. other information marked as “source selection” based on a determination that its disclosure would jeopardize the procurement.
  5. Application
    1. The prohibitions on disclosing and obtaining procurement information, and on handling offers of non-federal employment apply on January 1, 1997 with respect to every federal agency procurement using competitive procedures.
    2. The post-employment restrictions apply to any former official whose federal employment ended on or after January 1, 1997. Those whose employment ended before January 1, 1997 are subject to the prior restrictions. However, an official who made key pre-award decisions on a contract before January 1, 1997 but who did not leave government until after January 1, 1997 is not covered by either the old or the new restrictions,(1) although the provisions of 18 U.S.C. § 207(a) would apply.

(1.)   An official who serves in a post-award position or makes post-award decisions after January 1, 1997 would be subject to the one-year bar even on a contract that was awarded before January 1, 1997.



       FAR 9.508 -- Examples.


The examples in paragraphs (a) through (i) following illustrate situations in which questions concerning organizational conflicts of interest may arise. They are not all inclusive, but are intended to help the contracting officer apply the general rules in 9.505 to individual contract situations.

(a) Company A agrees to provide systems engineering and technical direction for the Navy on the powerplant for a group of submarines (i.e., turbines, drive shafts, propellers, etc.). Company A should not be allowed to supply any powerplant components. Company A can, however, supply components of the submarine unrelated to the powerplant (e.g., fire control, navigation, etc.). In this example, the system is the powerplant, not the submarine, and the ban on supplying components is limited to those for the system only.

(b) Company A is the systems engineering and technical direction contractor for system X. After some progress, but before completion, the system is canceled. Later, system Y is developed to achieve the same purposes as system X, but in a fundamentally different fashion. Company B is the systems engineering and technical direction contractor for system Y. Company A may supply system Y or its components.

(c) Company A develops new electronic equipment and, as a result of this development, prepares specifications. Company A may supply the equipment.

(d) XYZ Tool Company and PQR Machinery Company, representing the American Tool Institute, work under Government supervision and control to refine specifications or to clarify the requirements of a specific acquisition. These companies may supply the item.

(e) Before an acquisition for information technology is conducted, Company A is awarded a contract to prepare data system specifications and equipment performance criteria to be used as the basis for the equipment competition. Since the specifications are the basis for selection of commercial hardware, a potential conflict of interest exists. Company A should be excluded from the initial follow-on information technology hardware acquisition.

(f) Company A receives a contract to define the detailed performance characteristics an agency will require for purchasing rocket fuels. Company A has not developed the particular fuels. When the definition contract is awarded, it is clear to both parties that the agency will use the performance characteristics arrived at to choose competitively a contractor to develop or produce the fuels. Company A may not be awarded this follow-on contract.

(g) Company A receives a contract to prepare a detailed plan for scientific and technical training of an agency's personnel. It suggests a curriculum that the agency endorses and incorporates in its request for proposals to institutions to establish and conduct the training. Company A may not be awarded a contract to conduct the training.

(h) Company A is selected to study the use of lasers in communications. The agency intends to ask that firms doing research in the field make proprietary information available to Company A. The contract must require Company A to --

(1) Enter into agreements with these firms to protect any proprietary information they provide and

(2) Refrain from using the information in supplying lasers to the Government or for any purpose other than that for which it was intended.

(i) An agency that regulates an industry wishes to develop a system for evaluating and processing license applications. Contractor X helps develop the system and process the applications. Contractor X should be prohibited from acting as a consultant to any of the applicants during its period of performance and for a reasonable period thereafter.



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