Lessons learned from latest ethics violation.

• Author: D'Agostino, L James
• Position: Ethics Corner

The Defense Department's inspector general's office in January reported instances of noncompliance with the Federal Acquisition Regulation, and recommended remedial action to improve the Army Logistics Civil Augmentation Program IV (LOGCAP IV) support contract.

This report confirms two primary policy themes of increasing importance to the current procurement system; an understaffed and underfunded acquisition work force; and conflicts of interest, particularly organizational conflicts of interest.

The program in the broadest sense is an Army initiative to administer contingency operations through logistics support contracts. It comprises four contracts. Three for performance contractors who would compete for and perform individual task orders; and a fourth to plan and develop task order performance work statements for task orders under the LOGCAP IV performance contracts.

This arrangement ironically was instituted to avoid the potential conflict of interest of having one of the three performance contractors plan and draft and then bid on the same performance work statements.

Premised on an interpretation of the scope of the support contract that the inspector general deemed untenable, the support contractor was directed in two ways to perform work outside the scope of the contract.

The first was performing under proper task orders, but performing work for non-LOGCAP contracts. The second, an individual task order for base closure assistance team support, was entirely out of scope because it was in direct support of Multi-National Corps-Iraq, not logistics officials, as prescribed in the support contract performance work statement.

Government acquisition officials responsible for the support contract also failed to establish a sufficiently detailed quality assurance surveillance plan as required by FAR Subpart 46.4, and the award fee plan was unnecessarily vague.

These two "out of scope" problems work surfaced several concerns. First, apart from violating the Competition in Contracting Act, 41 U.S.C. [section] 253, allowing contractors to perform out of scope work on existing contracts bypasses competition and likely cost savings to the government. Second, the support contractor had a clear competitive insider advantage on non-Army logistics work when it has drafted the performance work statement. Third, the contractor received access to others' proprietary information creating potential violations of the FAR and the Trade Secrets Act, 18...