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Gm520 Week 2 Project

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Pick an administrative agency of either the federal or a state government. Find where the current and proposed regulation changes for that agency are located on the Internet. (i.e., the Federal Register or the State Administrative Agency website.) Regulations.gov is a good place to begin your research. Pick one proposed regulation change currently under consideration (if you find one that has already closed out but interests you, you can use that instead) and write the following regarding it:
1. State the administrative agency which controls the regulation.
The proposed regulation change that I chose deals with concerns Organizational Conflict of Interest (OCI) rules within the Federal Acquisition Regulations (FARS). These rules impact the Department of Defense (DOD), the National Aeronautics and Space Administration (NASA) and the General Services Administration (GSA).
2. Explain why this agency and your proposed regulation interests you (briefly).
I chose this rule because it potential affects not only my company but many in the government contracting industry and potentially has great impact for the government as well.
3. Will this proposed regulation affect you or the business in which you are working? If so, how?
Yes, it has the potential to impact our operations and our ability to continue to perform contracted work and to pursue new work. We perform a wide range of Advisory and Assistance Services (A&AS) for all three agencies impacted by the proposed rules. In some cases the rules directly pertain to our work and will limit opportunities in the future. In other cases, particularly where the A & AS services involve conduct of testing and evaluation, the rule is vague or incomplete and leaves significant and perhaps inappropriate room for interpretation by contracting officers. This could potentially lead to a broad range of varying and inconsistent rulings on not only what constitutes an Organizational Conflict of Interest (OCI) but also whether it is avoidable or mitigatable and how.
4. Describe the proposal/change.
This proposed rule change is extensive at 19 pages so this description is at a very summary level.
The FARs apply to 3 unique agencies of the federal government as indicated previously. This proposal seeks to modify the FAR language as it applies to OCI’s in federal acquisition activity for these three agencies.
The proposal was created by a combined council of the Civilian Agency Acquisition Council, the Defense Acquisition Regulations Council, and the Office of Federal Procurement Policy (OFPP) in consultation with the Office of Government Ethics (OGE). The proposal responds to a concern on the part of Congress as articulated in the Duncan Hunter National Defense Authorization Act for fiscal 2009, that, the regulations dealing with acquisition required review and might require further revision as they deal with OCI’s.
The FARs currently deal with OCI’s in subpart 9.5 but congress’ concern is that certain situations which have evolved since subpart 9.5’s creation dating to the introduction of the FARs in 1984 have rendered them incomplete or inadequate. These changes include significant industrial consolidation leading to some large federal contractors having a much broader range of services and products that they provide than in the past, the covered agencies increasing reliance on multiple award and delivery order contracts which allow large amounts of sometimes highly varied work to be awarded to a single contractor or team and the governments increasing reliance on contractors to provide services that include advice or other technical work that is not within the governments capability to perform.
This proposed change responds to these changes in the acquisition landscape by proposing numerous modifications and clarifications of the existing FARs. In summary the changes include
• Reorganizing and moving OCI coverage to a different part of the FARs so that OCI is addressed specifically with related issues as opposed to the current situation where it is included in Business Practices
• Clarification of key terms and provision of more detailed guidance to contracting officers for identifying and addressing OCIs
• Provide standard OCI clauses for tailoring and incorporation by contracting officers
• Address unique policy issues and contracting officer responsibilities associated with OCI’s arising in the context of task and delivery order contracts
Coincidentally with the work on this proposed FAR change, DOD worked a similar but not identical change to the DFARS. Some effort, particular where prescribed by legislation and the superior status of the FARS to the DFARS, was made to align them but some significant differences persist. This Proposed change to the FARs also articulates the current differences between the two proposals.
5. Write the public comment that you would submit to this proposal. If the proposed regulation deadline has already passed, write the comment you would have submitted. Explain briefly what you wish to accomplish with your comment.
Although we generally support the direction and intentions of the councils as represented in this proposed change, we believe there are some changes but mostly additions which can be made to enhance realization of the intended outcome. We have chosen to frame our response in the form of answers to the questions posed on the text of the proposed change with a summary of issues at the end.
It is clear that the changes proposed will go a long way toward promoting better Contracting Officer understanding of situations that conspire to create either actual or perceived conflicts of interest and to provide Cos with more clear alternatives for dealing with OCIs. Our concern however while some topics have been extensively covered others, which are equally important to both the government and industry have been insufficiently or superficially covered. We feel like this is a notable shortcoming because it was quoted as a reason for poor or in some cases the lack of decisions on OCI issues by CO’s since the particular scenario was not covered in examples.
We believe that while the OCI that perceived OCI that arises from unequal access to non public information is adequately covered, the causes of and remedies for situations that result in either an actual or perceived Biased Objectivity are inadequately addressed to the disadvantage of both procuring agencies and industry.
Although our desires for modification are thoroughly detailed in responses to the provided questions, we would like to note that the particular area where contractors provided test and evaluation support to the government needs to be more thoroughly addressed and clarified.
Responses to questions:
A. Do the policy and associated principles set forth in the proposed rule provide an effective framework for evaluating and addressing conflicts of interest?

Response: No, it provides a good start however it lacks in completeness and thoroughness to account for the increasingly broad range of conflicts and mitigations that CO’s are currently confronted with.

B. Is the definition of ‘‘organizational conflict of interest’’ sufficiently comprehensive to address all potential forms of such conflicts?

Response: No. On the topic of unequal access to public information we believe that sufficient coverage has been achieved. However, though Biased Objectivity is mentioned, the range of possibilities and acceptability’s is neither thorough nor complete. Cases where a contractor supports evaluation of its own or a competitors products requires further analysis and guidance. This is especially necessary where the contractor does not produce any final evaluation but supports government assessors with technical evaluation and test reporting leaving data evaluation and coordinated evaluation of test results and composition of test and assessment reports to government and therefore ostensibly unbiased agencies.

Additional guidance is required as well in the area of Multi Award Task Order (MATO) contracts or Indefinite Delivery Indefinite Quantity (IDIQ) contracts. In each case it is suggested that CO’s should review eligibility of contractors at award based upon potential OCI’s. History and practical application with these extremely large contracts has shown that discretion should be exercised at the Delivery Order or Task Order level and not at the overarching contract level. CO’s are able to make the same decisions at the DO or TO level with respect to OCI’s while accomplishing a high degree of competition with non conflicted work.

C. Do the enumerated techniques for addressing OCIs adequately address the Government’s interests? Are any too weak or overbroad? Are there other techniques that should be addressed?

Response: No, techniques both for addressing and assessing are inadequately addressed. An original argument for updating these rules was that the situations and scenarios offered to CO’s for evaluation and assessment were insufficiently broad and detailed resulting in CO’s taking inappropriate or in some cases no action because the particular situation they were faced with was not addressed in the scenarios. There is another layer of understanding required in nearly all areas which will benefit protection of the government’s interests while ensuring that the government has adequate technical assistance which is competitively acquired. This further layer of detail should address different levels of contractor involvement and the uniqueness of situations where government agencies are the reviewers or end users of the advice or support. With a more thorough coverage of these situations, clearer guidance on where avoidance, or mitigation are acceptable solutions and which of actions or combinations of actions are seen as sufficient for mitigation when mitigation is appropriate.

D. Does the rule adequately address the potential conflicts that may arise for companies that have both advisory and production capabilities? What, if any, improvements might be made?

Response: No, see answers to previous questions.

E. Do the proposed solicitation provisions and contract clauses adequately implement the policy framework set forth in the proposed rule? For example, is a clause limiting future contracting an operationally feasible means of resolving a conflict? Would it be beneficial and appropriate for this information generally to be made publicly available, such as through a notice on FedBizOpps? Do the solicitation provisions and contract clauses afford sufficient flexibility to help an agency meet its individual needs regarding a prospective or actual conflict?

Response: No. Again, we feel the proposed provisions are adequate or nearly so with respect to Unequal Access but are inadequate with respect o Biased Objectivity. More detailed explanation and suggestions are offered above. We expect that a more thorough coverage of this second important OCI area will yield provisions and clauses that will support the intended protections.

F. Is there a need for additional guidance to supplement the proposed
FAR coverage of OCIs (e.g., guidance addressing the management of OCI responsibilities? If so, what points should the guidance make?

Response: Yes. Undoubtedly the second area of Biased Objectivity should be more thoroughly addressed in the manner suggested in previous responses.

G. Is the framework presented by this proposed rule preferable to the framework presented in the DFARS. Proposed Rule 2009–D015 published in the Federal Register on April 22, 2010 (75 FR 20954–20965)? Why or why not?

Response: No, not at this stage. The DFAR proposal does a more thorough job of addressing the Biased Objectivity situation and goes farther in an effort to illustrate a broad range of potential scenerio’s for CO’s to consider. Additionally, the DFARS proposal is more deferential to the significant body of recent case law on the subject.

Would some hybrid of the two proposed rules be preferable?

Response: Yes absolutely, if it took into account the detail addressed in the DFARs proposal and clearly reconciled the differences.

H. Are there certain types of contracts, or contracts for certain types of services, that warrant coverage that is more strict than that provided by the proposed rule?
6. Provide the "deadline" by which the public comment must be made. (If the date has already passed, please provide when the deadline was).
Deadline for submission of comments was 27 June 2011
7. Answer the following questions.
a. Once you have submitted your comment, what will you be legally entitled to do later in the promulgation process (if you should choose to do so)? (See the textbook's discussion of the Administrative Procedure Act.)

Once the comments are collected by the agency or agencies they must decide on one of three course of action based on an assessment of how extensive the changes are that are required.
If they assess that there are no significant changes required they can adopt the changes as published. In this case the only recourse you have is to challenge the rule in court on one of the basis’ addressed in part b. of the question
The second possibility if that they will consider and incorporate the suggestions in which case the agency will most likely publish an update for a second round of comments to ensure that they got it right. In this case you will have a second opportunity to comment and or approve the changes.
The final possibility is that the agency may withdraw the changes altogether on the basis that they are too extensive or expensive or disruptive. In this case of course no action would be required.
b. If the proposal passes, identify and explain the five legal theories you could use in an attempt to have the regulation declared invalid and overturned in court.
If the proposal passes, potential recourse for a party who feels that they have been disadvantaged by the new rule is to bring suit on one several basis’ or positions. These are, that that the rule is arbitrary and capricious, that the regulation is not based upon substantial supporting evidence, that the proscribed APA requirements have not been followed, that it is not constitutional, or that the regulation exceeds the authority of the agency putting it in place (also called ultra vires).
Arbitrary and capricious – A claimant who feels they have been harmed by a rule may seek to prove that the rule is Arbitrary and capricious which essentially means that there is some other motivation likely in play resulting in a law that is an abuse of authority or discretion or may be in violation of some other law or regulation. This generally applies to informal rulemaking. The agency must show credible evidence to support the basis of the proposed rule. Absent this evidence there may be basis for a suit on these grounds.
Substantial evidence test – although similar to the Arbitrary and Capricious test in that a show of evidence is required, this is more substantial in that it applies to formal and hybrid rulemaking and in contrast to the arbitrary and capricious test, the Substantial evidence test requires that more convincing evidence exists in support of the regulation than against it.
Compliance with APA requirements – APA requirements dictate that federal agency rulemaking and modification follow a prescribed process which includes notice and publication of proposed rules and opportunity for public comment. Failure to comply with this process represents viable grounds for a court challenge.
Constitutionality – If a party believes that any rule is unconstitutional it of course may be challenged on these grounds.
Ultra vires – This basis for court action is rooted in the assertion that an agency has exceeded its authority in rulemaking on the basis of its enabling act.
c. Which of these challenges would be the best way to challenge the regulation you selected for this assignment if you wanted to have the regulation overturned and why?
Although none are a perfect fit, it seems that the substantial evidence test would be the best choice for this situation. Because the proposed rules are intended to enhance the benefit to the government, at showing the modification could provide greater benefit to the government would seem to be a potential use of this theory. If the argument could also show that the proposed additional change would mutually benefit government and industry in an enhanced way, it would seem that there would even be a more credible basis for consideration of this approach.

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