Transcript OCI Mitigation Planning Glenn Baer National Defense Industrial Association March 2006 Organizational Conflicts of Interest FAR Subpart 9.5 prescribes the limitations Avoid, neutralize, or mitigate.

OCI Mitigation Planning
Glenn Baer
National Defense Industrial Association
March 2006
Organizational Conflicts of Interest
FAR Subpart 9.5 prescribes the limitations
Avoid, neutralize, or mitigate significant potential
Conflicts before contract award.
Contractors have a statutory obligation to disclose
The two underlying principles are-(a) Preventing the existence of conflicting roles that might bias
a contractor’s judgment; and
(b) Preventing unfair competitive advantage. An unfair competitive advantage exists
where a contractor competing for award of any Federal contract possesses
proprietary or source selection information –
The purpose: “level the playing field” in competitive procurement and
to serve as a means of protecting the government’s interest in sole
source procurement.
OCI in today’s environment
The current OCI environment within the defense industrial
base is particularly complex an increasingly exacerbated
by mergers, business consolidations, and evolving small
businesses.
OCI is and will continue to be a major and growing
concern in federal acquisition
Five years ago Industry expecting an OCI “train wreck” unified to
propose regulatory changes that, among other things, promoted
mitigation & waver over recusal and divestiture. Concern was the lack
of clarity in the regulations could threaten effective competition,
provide inequitable disparate treatment of contractors, increase cost,
discourage long term investment, and promote the erosion of
industrial and technological capability.
OCI by the FAR
• 4 Basic Principles of OCI:
– 9.505-1 Providing systems engineering (SE) and technical
direction.
• The contractor that does SE for the development of the
system should not be responsible for production of the
system.
– 9.505-2 Preparing specifications or work statements.
• The contractor that writes the specs shall not participate
in the initial production contract.
– 9.505-3 Providing evaluation services
• A contractor will not participate in evaluation of it’s own
or its competitor’s proposals.
– 9.505-4 Obtaining access to proprietary information
• A contractor can’t use proprietary information supplied
by another contractor to gain an unfair competitive
advantage.
From 9.505-1, 9.505-2, 9.505-3, 9.505-4
The Mitigation Plan Constructs
The practical heart of OCI management
Serves as to overcome a perceived bias in judgment or potential unfair
competitive advantage and preserves the integrity of organizations
objectivity by establishing audible isolation controls intended to
neutralize potential conflicts of interest through:
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Organizational, Physical and Managerial Separation
Financial and Goal Separation
Data Security and Management
Personnel Policies and Certifications
Internal Audit & Reporting
Screening and Task Assignment Monitoring
You must continue to screen past and proposed contract requirements
relationships or financial interest and disclose potential OCI’s and
recognize that potential conflicts might evolve during contract
performance
OCI isolation requirements
Organizational Separation & Managerial
Separation
– Establish “Fire walls” between potentially conflicting
organizations
• Isolate the conflicting workforce identifying roistered
employees move to organizations with like requirements
– Management: Establish two levels of separation to Isolate Sr.
management and to ensure that no pressure or bias is
introduced into the evaluations and recommendations from
other organizations further ensure no subordinate or roster
employee is placed in a compromising position based on an
inappropriate request from senior manager.
Vice Presidents will not be rostered employees,
they have access top level financial and all non
SPI program information to monitor and direct
program performance and deliveries.
OCI isolation requirements
Financial and Goal Separation
Financial or design interest in a particular manufacturing product,
process or vendor can be perceived to impair one’s impartial
objective assistance or advise to the government. Similarly
conflicting performance goals can reward conflicts
• Separate all financial and performance goals such that isolated
workforce does not receive rewards for conflicting requirements.
Common Executive management can have financial roll-up oversight
• Goals and reward systems must be separated between conflicting
organizations. Reward system for those inside and outside the
“firewall” must be separate and not tied to either organizations
successes.
• Separate marketing and business development activities, train sales
and marketing team to understand OCI mitigation
OCI isolation requirements
Physical Separation
• Where possible establish remote facilities for “fire
walled” employees. Establish facility security
controls, pass/ keys access during work and nonwork hours.
• Must physically separate those at common work
sites providing controlled access to “fire walled”
workforce. establish cipher locked workspace
with separate employee identification & security
• Customer site & other facility controls again with
access limited work space can facilitate this
separation
OCI isolation requirements
Data separation & protection
Controlling and protecting data is a critical element of
successful mitigation
– Data access control must be established.
– Isolated employees must operate on separate data
servers to prevent Transfusion.
– Recommend establishing an individual to control
hardcopy, electronic & oral sensitive information
(COI avoidance monitor)
– Must define and understand data types, All must be
considered Sensitive Program information.
• Procurement Sensitive - adversely impact
acquisition planning
• Competition Sensitive - adversely affect the
source selection process
• Proprietary Data - the legal property of the
government, a company or individual
Data protection is the heart of the plan
− Managing Meetings under mitigation plans
In meetings conducted or sponsored by personnel under the
mitigation plan the chairperson shall be responsible for notifying all
meeting participants of the scope of the meetings agenda. Any
handouts, electronic projections, overheads or viewgraphs
presented containing SPI must contain the following notice:
MATERIAL TO BE DISCUSSED TODAY CONTAINS
SENSITIVE PROGRAM DATA ALL _____ PROGRAM AND
OR CONTRACTOR PERSONNEL WHO HAVE NOT
EXECUTED THE REQUIRED CONFIDENTIAL
PROPRIETARY INFORMATION AGREEMENTS MUST
EXCUSE THEMSELFS FROM THIS MEETING IMMEDIATLY
OCI isolation requirements
Personnel Policies and Procedures
– Personnel and mitigation plan policies must ensure
access to all necessary skill competencies both
inside and outside the wall. The plan must address
entrance and exit from the firewall
– Promotion opportunities must be consistent both
within & outside the “firewall”
– Personnel training must be established for all
rostered employees to understand compliance
requirements.
OCI statements & agreements
• Nondisclosure Agreements are must be
executed by roistered employees that will
be inside the “Firewall”
• Compliance Statements are used to
acknowledge training, accept and
understand the plan requirements.
• Debriefing Statement are to understand
continuing obligations
OCI review & revision process
The plan must include internal audit requirements to
monitor enforcement and establish customer reviews
– Internal audit and reporting procedures must be
established in the plan with enforcement controls
that include termination and possible criminal
prosecution. The contractor must encourage self
governance and enforce non-attribution voluntary
disclosures.
– Regular customer briefings are necessary to
established to keep the customer advised of any
mitigation plan controls and to assess any changes
in the business environment or contract tasking that
might introduce a change to the plan.
OCI isolation requirements
Task Order Monitoring
An OCI may not be apparent at the initiation of a Task
order requirement but evolve during performance.
Services requirements are particularly susceptible to
these conditions
– Must screen for potential OCI’s at task
orders initiation and during performance
– Must have a process to screen potentially
conflicting requirements including those of
subcontractors
MITIGATION PLANNING BENEFITS
For the Company
• Expands or retains business in areas that could
otherwise be unavailable.
• Improves employee awareness of OCI issues and
Improves customer confidence.
• Obviously administrative cost can be high and
organizational disruption can be a negative.
For the Agency
• Permits longer term planning and investment by
private industry.
• Increases effective competition for government
requirements.
• Improves agency visibility into potential conflict of
interest.
An issue in developing successful mitigation is always
the timing of when to establish the controls
Questions and Discussion
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