The weather has been incredible here in Washington DC! It reminds me of August in Maine, no humidity, temperatures in the high 70’s or low 80’s during the day and in the 60’s at night. Rather than typically draining August swelter, it has been invigorating, even energizing! My boys especially appreciate the weather as they started football practice!
That energy is reflected in the Coalition’s August calendar! This week the Coalition hosted the first in a two part series of webinars focusing on GSA’s e-tools. Tim Dempsey, Systems Chief, MAS Program Office, Office of Acquisition Management at the Federal Acquisition Service (FAS) provided training on GSA Advantage! and e-Buy while Bill Gormley provided insight into the key role GSA’s e-tools play in the competitive federal procurement marketplace. This webinar series is especially timely given that everyone is affected by the end of fiscal year crunch. As the clock ticks in the 4th quarter of the fiscal year, streamlined acquisition through GSA’s e-tools have become vital to agencies seeking to quickly and effectively acquire needed products and services.
The first e-tools webinar was a great success. And, as a result of feedback from the participants, the second e-tools webinar will be expanded from an hour to an hour and a half! The second webinar in the series will be on Thursday, August 22 at 12:30 so there is still plenty of time to sign up.
Also this week, the Coalition hosted a Myth-Busters Roundtable conversation with Joe Jordan, Administrator for Federal Procurement Policy, Office of Federal Procurement Policy, Office of Management and Budget. The conversation focused on contract duplication, strategic sourcing strategies, and how the government can buy smarter. The Coalition thanks Administrator Jordan for his time and willingness to engage in a dialogue around the key challenges and opportunities facing the entire procurement community. Myth-Busters dialogues that promote the exchange of ideas between government and the private sector provide the opportunity to deliver best value to customer agencies and the taxpayer through a more efficient and effective procurement system. The Coalition remains committed to a positive Myth-Busters dialogue!
On August 28, the Coalition will be hosting the Joseph P. Caggiano Memorial Charity Golf Tournament at Whiskey Creek Golf Course. The event benefits wounded veterans and we will have a number of veterans participating in the event. We look forward to honoring Joe through our support of those who have served and sacrificed for our freedom and safety. Our veterans and the organizations that support them, Hope for the Warriors and Operation Second Chance, need your help so support the cause through one of our many sponsorships.
Looking ahead to the fall, our Fall Conference is shaping up nicely. We are gratified with the positive Myth-Busters response from across government affirming participation in the conference! To see our confirmed speakers so far, visit https://thecgp.org/event/fall-training-conference-the-new-federal-market.
Finally, a reminder, the Coalition is accepting nominations for the Excellence in Partnership Awards that will be presented during the conference. For information about the awards and to submit a nomination, please click here.
I can’t believe I am saying this in August but I hope you all are having the same weather we are here in DC! Have a great weekend!
The Coalition’s annual Charity Golf Tournament has even greater meaning as we are now also honoring our good friend and colleague, Joe Caggiano. Joe was not only a 23-year veteran of the federal contracting marketplace but a naval veteran as well. We look to honor his memory and his passionate support of our nation’s heroes through the Joseph P. Caggiano Wounded Veteran Golf Tournament.
How will member participation in the golf tournament support wounded veterans and their families? Hope for the Warriors will use the contributions to provide a full cycle of care to service members, veterans and military families including Employment & Education, Clinical Care Management, Recreational & Athletic Programs, and Community Outreach. Also, by participating in the tournament you will help Operation Second Chance provide emergency financial assistance to wounded, injured and ill veterans, in the form of rent, utilities, daily essential items, travel and morale. These organizations are deeply grateful for your continued support of our heroes!
The tournament will be August 28 at the Whiskey Creek Golf Club in Ijamsville, Md. If you would like to participate as a player, a sponsor, or both – please contact Athena Oliff at email@example.com. A special thank you to our title sponsor, Price Waterhouse Cooper, as well as our event sponsors, Cohn Reznick, Integrity Consulting and Baker Tilly for their generosity in making this event possible.
Last week the Undersecretary of Defense for Acquisition, Technology, and Logistics (USD AT&L) Frank Kendall released a memorandum on “Should Cost Management in Defense Acquisition.” Introduced as part of the DoD’s Better Buying Power 2.0 (BBP 2.0) “should cost” management is the concept that DoD managers should set cost targets below independent cost estimates and strive to achieve them. According to Frank Kendall, “Should cost management is one of these areas and is an important tool to control costs both in the short term and throughout the product life cycle.” Additionally, acquisition managers should routinely assess all cost elements while reasonably attempting to reduce them through cost-benefit considerations. While stressing should cost management, Kendall also warns officials that short-term savings should not come at the expense of long-term “degradation of effectiveness or suitability.” Noting how important this aspect of BBP 2.0 is to the DoD’s effort to control cost, the new memorandum requires that Program Managers (PMs) implement should cost management in all Acquisition Category I, IA, II, and III programs, including related services, regardless of life-cycle phase. Members will have an opportunity to hear more from Frank Kendall about “should cost management” and other DoD cost savings initiatives at the 2013 Fall Conference on October 30. To register or sponsor the training, visit https://thecgp.org/event/fall-training-conference-the-new-federal-market.
A budget constrained environment has led small businesses to increase their efforts to compete in the federal marketplace, reports Government Executive. According to a survey completed by American Express OPEN, while overall bidding has decreased, small businesses have been increasing the amount of money and time they invest in winning federal contracts. On average, these businesses invested $128,638 in 2012 to seek government business, a 49 percent increase from 2010. In addition, the ratio of the number of contracts won to the number of bids submitted has improved for small businesses. The analysis from American Express OPEN noted that, with fewer bidding opportunities, active small business contractors are bidding smarter. The analysis is based on an online questionnaire completed in February and March by 684 small business owners active in federal contracting.
Two protests were filed last Friday against GSA’s One Acquisition Solution for Integrated Services (OASIS) multiple-award contract for complex professional services.
USFalcon of Morrisville, N.C. filed a formal protest with the Government Accountability Office (GAO). GAO has indicated that USFalcon has challenged the terms of the solicitation. However, the GAO is unable to comment on the arguments raised in the protest until the case is completed.
In the second pre-award protest the Voice of Small Business in America (VSBA) filed a protest with GSA directly. VSBA objected to the OASIS unrestricted solicitation’s evaluation criteria at L.5.3.1. Pass/Fail Requirements for Relevant Experience (Primary) Projects. VSBA’s announcement of the protest can be found on its LinkedIn page. According to the discussion on LinkedIn, the group wants “smalls to be able to form joint ventures and get credit for their collective past performance.”
It is not clear whether the protest filings will delay the RFP deadline. The decision is entirely up to GSA based on the merit of the protests filed and other considerations.
GSA released an extensive study this week exploring how to improve the sustainable performance of Federal green buildings while reducing operational costs. The final report, “Living in a High-Performance Building: The Story of EPA’s Region 8 Headquarters” provides details into the five-year research project on the Environmental Protection Agency’s (EPA’s) Wynkoop Building in Denver, Colorado. The building is a demonstration project of GSA’s Office of Federal High-Performance Green Buildings and was designed and constructed through a public-private partnership.
The study is being released 6 years after the Wynkoop Building was completed and occupied in order to assess how it has performed compared with expectations, and how it has responded to the EPA’s needs and the behaviors of the employees inside. The specific areas researched include:
- Water performance
- Data center energy use
- Under-floor air distribution effectiveness
- Daylight effectiveness
- Thermal comfort air quality
- Occupant experience
- Workplace functionality
- Green roof applications
The research was conducted by two national Department of Energy laboratories, academia and public sector organizations.
The final report highlights key insights into how a complex building works over time. It also outlines lessons learned from design, to construction, and sustainability performance. Resources on the project are available on the GSA website, including a full report and a video about the Wynkoop Building in Denver, Colorado.
This week, the General Services Administration (GSA) announced that Schedule contractors can now sell to the National Voluntary Organizations Active in a Disaster (NVOAD). NVOAD members can access the Schedules when purchasing for emergency preparedness and disaster relief. According to GSA, there is no modification required at this time in order to accept orders from NVOAD members. A list of NVOAD member organizations is posted at www.nvoad.org/network.
Thank you for joining us for the Part I GSA e-Tools Myth Buster Webinar series, a 4th quarter refresh to increase your market share! Attending Part II ( on August 22) will help you to successfully navigate GSA e-Tools and meet your objective to increase sales. Attendees will have the opportunity to ask questions and learn about how GSA e-Tools benefit your company. You will hear how the Federal market place uses these tools and how you can benefit from this knowledge. Don’t miss the opportunity to hear from a GSA e-Tools domain expert!
Part II – August 22, 12:30 – 1:30pm
- Tim Dempsey, Chief, Systems, Office of Acquisition Management Federal Acquisition Service (FAS)
- Bill Gormley, President, The Gormley Group
- Carolyn Alston , Executive Vice President & General Counsel, The Coalition for Government Procurement
Who Should Attend? GSA Contractors, Business Developers, Marketing Managers, Contract Managers, Sales, and Market Research professionals.
For more details and to register, visit https://thecgp.org/event/gsa-e-tools-myth-buster-webinar. If you have any questions, please contact Athena Oliff at firstname.lastname@example.org or (202) 315-1052.
Gratuities – Cautionary Tales for Contractors and Government Employees
By: Tom Barletta, Partner, Steptoe & Johnson LLP; Fred Geldon, Senior Counsel, Steptoe & Johnson LLP; & Mike Navarre, Special Counsel, Steptoe & Johnson LLP
Recent events demonstrate that government investigators and prosecutors are taking more seriously the ethical regulations that govern gratuities. Cases in point:
- On April 25, 2013, the U.S. Department of Justice issued a press release announcing that a Bureau of Prisons (BOP) employee had pled guilty to a charge of receiving unlawful gratuities. The BOP employee, a supervisory traffic management specialist in the BOP Relocation Services section, was responsible for giving relocating BOP employees a list of approved movers and then referring their move to agents of the chosen carrier. While performing these duties the employee received spa and salon gift cards in the amount of $1,007 and $790 from one carrier’s agent, as well as free moving services from moving companies. The BOP employee was subsequently assessed a fine of $1,500 and placed on probation for 18 months.
- On June 5, 2013, the Washington Post reported that the Internal Revenue Service (IRS) had placed two managers on administrative leave for accepting free food and other gifts in violation of government ethics rules. These violations were discovered during an audit of a years-old conference, at which the managers “allegedly held an after-hours party in their private hotel suites.” It apparently was not clear who gave the managers the food, worth $1,162. Acting Commissioner Danny Werfel said in a statement to the Post that the IRS has started the process of firing the managers.
The basic rules applicable to government employees regarding gratuities are set forth in the Standards of Ethical Conduct for Employees of the Executive Branch (“Standards”), which are codified at 5 C.F.R. § 2635. The Standards generally prohibit federal government employees from accepting gifts from “prohibited sources,” a category that includes, among others, contractors (and employees of contractors) doing business with or seeking to do business with the federal government employee’s agency. 5 C.F.R. §§ 2635.102(k), 2635.203(d).
There are some exceptions, however. For example, under the Standards, federal employees may accept, even from “prohibited sources,” items worth $20 or less, as long as the total value of the gifts from the same source is not more than $50 in a single calendar year (calculated by including a contractor and its employees as a single source). 5 C.F.R. § 2635.204(a). The Standards also include other limited exceptions, such as gifts motivated by family relationships.
The size of the gratuities in the two recent examples discussed above far exceeds these thresholds. In the case prosecuted by the Justice Department, however, the amount at issue was significantly less than amounts usually cited in large corruption cases, and demonstrates that even these (relatively) small violations are attracting the attention of auditors, investigators, and prosecutors.
Although the Standards apply only to government employees who receive gratuities rather than to contractor employees who offer gratuities, contractors can face potential liability in relation to gratuities as well.
The federal criminal gratuities statute, 18 U.S.C. § 201, provides for fines or imprisonment for anyone who, for example,
directly or indirectly gives, offers, or promises anything of value to any public official, former public official, or person selected to be a public official, for or because of any official act performed or to be performed by such public official, former public official or person selected to be a public official.
18 U.S.C. § 201(c)(1)(A).
Unlike a bribe, an illegal gratuity does not require an intent to influence; rather, the illegal gratuity only need be given “for or because of” an official act. An illegal gratuity “may constitute merely a reward for some future act that the public official will take (and may already have determined to take), or for a past act that he has already taken.” United States v. Sun-Diamond Growers of California, 526 U.S. 398, 404-405 (1999). There must, however, be a connection, i.e., the government must prove “a link between a thing of value conferred upon a public official and a specific ‘official act’ for or because of which it was given.” Id. at 414.
The risk to contractors is heightened, however, because the line between an acceptable gift and an illegal gratuity is nuanced. For example, in United States v. Hoffmann, 556 F.3d 871, 877 (8th Cir. 2009), the court rejected the defendant’s contention that the Government had failed to prove that he violated the gratuities statute because he did not reasonably believe that the government employee would take an official action and because the government employee never did so. Rather, the court upheld the conviction finding that a “reasonable juror could conclude” that the contractor gave the government project manager a set of golf clubs “to . . . reward future performance.”
The risk to contractors is demonstrated by yet another recent Justice Department announcement in a whistleblower “qui tam” case that included gratuities allegations. On March 7, 2013, DOJ announced that three CIA contractors (American Systems Corporation, Anixter International Inc., and Corning Cable Systems LLC) had agreed to pay $3 million to settle allegations they violated the False Claims Act and Anti-Kickback Act. The announcement included allegations that in pursuit of a 2009 contract the companies had provided gratuities (meals, entertainment, gifts, and tickets to sporting and other events) to CIA employees.
Prohibitions on gratuities applicable to contractors are also incorporated into various FAR provisions. For example, FAR 52.203-13(b)(3) (Contractor Code of Business Ethics and Conduct) requires that contractors “timely disclose, in writing, to the agency Office of the Inspector General, with a copy to the Contracting Officer, whenever, in connection with the award, performance, or closeout of this contract or any subcontract thereunder, the Contractor has credible evidence that a principal, employee, agent, or subcontractor of the Contractor has committed . . . [a] violation of Federal criminal law involving . . . gratuity violations found in Title 18 U.S.C.” In addition, FAR 52.203-3(a) allows the government to terminate a contract if a contractor or contractor employee “[o]ffered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or employee of the Government; and [i]ntended, by the gratuity, to obtain a contract or favorable treatment under a contract.” The government also may recover damages and/or suspend or debar a contractor from federal contracting for violations of this clause. See FAR 3.204(c).
Finally, in addition to potential criminal penalties and suspension and debarment, providing gratuities to government employees can also result in other adverse effects for a contractor, such as negative past performance ratings that could affect current and future business.
In sum, to maintain healthy relationships with their government customers and to protect government employees and themselves from potential liability, contractors should understand the laws and regulations applicable to gratuities to government employees, have a clear policy regarding gratuities (which, for many contractors includes a prohibition on giving gratuities) and provide appropriate education and training to their employees.
Of course, contractors should also be aware of laws and prohibitions that apply in related contexts, including anti-kickback laws that prohibit certain improper payments between prime contractors and subcontractors, the Foreign Corrupt Practices Act, which prohibits certain types of payments to foreign officials, and laws and regulations that regulate payments that can be made to members of Congress and staff.
 “Gifts” include entertainment, favors, discounts, hospitality, transportation, and other things of value. 5 C.F.R. § 2635.203(b).
 The Court in Sun-Diamond also rejected the Government’s contention that the illegal gratuities statute is violated by providing a gift to an official because he is in a position (i) to act favorably at some unknown future time, or (ii) to “build a reservoir of goodwill that might ultimately affect one or more of a multitude of unspecified acts.” Sun-Diamond, at 405.
 The Justice Department also alleged that the companies improperly received source selection information from a CIA employee to whom they had provided gratuities.
Join the Coalition for the 2013 Fall Training Conference!
How has the federal market changed in the wake of sequestration? Find out at the Coalition’s 2013 Fall Training Conference – The New Federal Market. You can expect active presentations and discussions regarding long term changes in what, how and from whom agencies acquire services and products. The agenda also includes a number of breakout sessions that address new developments in government-wide acquisition programs.
Confirmed Featured Speakers
- Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics – Department of Defense
- Major General Wendy M. Masiello, Director of Contracting – Air Force
- Kathleen Turco, Chief Financial Officer – Veterans Health Administration
- Anne Rung, Chief Acquisition Officer – General Services Association
- Troy Cribb, Chief Counsel for Government Affairs – Senate Homeland Security & Government Affairs Committee
Click here for more information and to register.
Show your support for education and training of the acquisition workforce and constructive dialogue between government and industry. Click here to see our available sponsorships or call Athena Oliff at 202-315-1052 to discuss your participation.
CIO Council Gets a New Look
Last week, the White House announced the reorganization of the Federal Chief Information Officers (CIO) Council. The change is designed to increase the ability of the Council to deliver high priority projects. The Council’s six major committees and 29 subcommittees are being consolidated into three core committees focused on innovation, information security and identity management, and portfolio management. Each committee will report to a 14 member executive committee, led by federal CIO Steven VanRoekel, which will review all council projects to ensure they align with the administration’s priorities. The executive committee will also approve funding.
For more details on the reorganization of the CIO Council, visit https://cio.gov/wp-content/uploads/downloads/2013/08/CIO-Council-Reorganization.pdf.
DISA Plans Analytic Cloud System
The Defense Information Systems Agency (DISA) is advancing plans to create an analytical cloud environment providing cybersecurity and cloud-based enterprise service for Department of Defense agencies, reports FCW. Named “Acropolis,” the system will utilize big data to detect, analyze and respond to cyber threats and enhance situational awareness. A set of slides released from the Industry Day held on August 9 notes that DISA plans on releasing the RFP during the first quarter of FY 2014 and make the award in the fourth quarter of FY 2014. According to Mark Orndorff, DISA program executive officer for mission assurance and network operations, DISA will model their effort based on the techniques and technologies of the National Security Agency’s system.
Strategic Sourcing Working Group Open to Members
The Coalition is establishing a multi-industry Strategic Sourcing Working Group to work on the association’s strategic sourcing strategy moving forward. Current Federal Strategic Sourcing Initiative (FSSI) BPAs that cover the membership include OS2 for office supplies, Print Management Services and SmartBuy. FSSI contract vehicles in development include Janitorial and Sanitation products; Maintenance, Repair and Operations products; and OS3 for office supplies. The government is looking to establish more FSSI contracts in FY2014.
Members interested in getting involved in the Strategic Sourcing Working Group, please contact Roy Dicharry at email@example.com. We will have our first meeting on September 5th at 2pm at Mayer Brown LLP (1999 K Street, N.W. Washington, DC 20006).
Imaging Equipment Meeting with Navy CIO
Members of the Coalition’s Imaging Equipment Committee have been invited to attend a meeting with the Department of Navy featuring Chief Information Officer, Terry Halverson. The meeting is being coordinated with the Defense Logistics Agency (DLA) Document Services as part of the new initiative by the DLA to manage the Navy and Marine Corps imaging fleet (multi-function devices, printers, fax machines, scanners). More details will be announced in the coming weeks to the Imaging Equipment Committee.
DoD Final Rule on Fundamental Research Information
The Department of Defense (DoD) published a final rule last week amending the Defense Federal Acquisition Regulation Supplement (DFARS). The rule revises DFARS 252.204-7000 to implement guidance provided on the release of fundamental research. The new rule, effective August 8, 2013, ensures that the Department does not restrict the release of fundamental research results unless the research is classified for reasons of national security or otherwise restricted by applicable Federal statutes, regulations, or executive order.