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Is PCI Fracturing Relationships Between Contractors and the Federal Government?

broken_glassWhile there has been a lot of recent buzz over organizational conflicts of interest (OCI), there has been comparatively little attention to the issue of personal conflicts of interest (PCI). Ironically, the PCI issues appear to be potentially more restrictive. These PCI regulations are much stricter on Federal employees than they are on government contracting employees, but not as restrictive as they are on government contracting firms; potentially the biggest loser in this upcoming fight.

Some experts say PCI will fracture relationships between government contractors, government, and employees on both sides.  Basically, if a contractor does a lot of work with the Navy, nothing stops him from taking a job at the Navy, but if a Navy employee does a lot of work with a particular contractor, it’s difficult for him to get a job there due to a possible personal conflict of interest.  Is this a double standard?

Using our previous example, if a contractor were to take a job at the Navy, it would be extremely difficult to award contracts to people he used to work with, or even let his former co-workers take him out to dinner.  Essentially, moving from industry to government requires an executive to severely cut back his ties to the world of industry, despite continuous calls from government for an increased “public/private partnership.”

Imagine if an unhappy, under-performing subordinate at a government contracting firm was up for a job at the Navy.  In that case, the government contractor’s boss wouldn’t be able to pick up a phone and ask the hiring officer not to hire him, even if he was unqualified for the job. This “impartiality” effectively hinders industry’s ability to foster an open dialogue with government and is detrimental to public/private cooperation. Also, if the subordinate should take the job at the Navy, he would be justified in steering contracts away from your firm, to appear impartial, an untenable position from a government contractor’s point of view.

This double standard lacks protection for government contractors and offers protection to government employees.  Government has corrective course of action in this example while government contracting is helpless.

The regulatory gap is about to close on March 10th when the GAO’s Legal team releases its implementation strategy of Federal Acquisition Regulation Case 2008-025, Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions.  Their recommendations will likely shape the interaction between government contractors and federal employees.

This is the first of a five-part series on personal conflicts of interest.  Please comment on this post or direct comments to ellen@executivegov.com.  The rest of the articles in the series will focus on the government, government contractors, government employees, and government contracting employees.

Next week: PCI and the Government

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