Personal Conflicts of Interest and “Inherently Governmental” Functions

What does the PCI picture look like from the government’s perspective? The GAO describes DoD contractor employees as “closely supporting inherently governmental functions” but notes that some DoD officials have a different perspective.

Program managers that the GAO interviewed say contractor employees provide “technical” input into the decision-making process as opposed to direct involvement in the decisions themselves.  In fact, out of 21 DoD offices reviewed by the GAO, “at 15 of these offices, contractor employees outnumber DOD employees and the percentage of contractor employees in the remaining offices ranges from 19 to 46 percent.”

The GAO report on PCI says “Federal Acquisition Regulation (FAR) defines contractor participation in the evaluation of contract proposals as one of those functions that may approach being in the inherently governmental function category.”  The report also notes that “no department-wide or FAR policy obliges DOD offices using contractor employees to require that they be free from personal conflicts of interest.”

So the last report leading up to the GAO legal team’s recommendation on Federal Acquisition Regulation Case 2008-025, due out March 10^th, explicitly links a concept with no definition, “inherently governmental,” to personal conflicts of interest.

The question is: will new PCI regulations shut contractors out of the acquisition process by expanding the definition of “inherently governmental?”

From the perspective of some in Washington, that might not be a bad idea.  Congressman Jim Moran (D-VA) for one.  He told ExecutiveBiz last year, “We tipped that balance in the last few years by outsourcing inherently governmental work, in my opinion.  That’s why I support Secretary Gates’ effort to establish 20,000 more acquisition personnel as an example, 9,000 new positions and 11,000 converted from contracting positions.  The acquisition process is inherently governmental.  It should not have been contracted out, so we are going to bring it back in.”

His colleague Congressman Gerry Connolly (D-VA) from the neighboring 11th Congressional District in Virginia concurs.  He told ExecutiveBiz, “There are some functions, like acquisition, that are properly brought inside government.”  He went on, “Streamlining regulations is something Congress wants to do to level the playing field and rationalize the current process.”

Next week, PCI from the Contractors’ point of view.