PCI and Contractors: Uncertainty and Doubt

2 mins read

A lot of ambiguity exists in personal conflicts of interest regulations for contractors.  The rules are not well defined and vary from agency to agency.  Take a look at the chart below:


Bribery and graft are obviously verboten, but there is a lot of grey area when it comes to “personal financial gain.”  At a major integrator, Systems Engineering and Technical Assistance (SETA) contractors could be advising government customers on goods and services provided by their own company.  Where are the concrete rules for impartiality?

Unfortunately, they don’t exist, and that lack of guidance can have serious consequences.

Take this example from 2006: “A Navy contractor employee at the Space and Naval Warfare Systems Center pled guilty in 2006 to accepting bribes from a freight forwarding company. In exchange for awarding freight transportation contracts to the company, this contractor employee received items valued at more than $10,000, including extravagant dinners, concert and NASCAR tickets, weekends at a bed-and-breakfast inn, jewelry, and “spa days” at a department store. Investigators discovered that coincidentally, the freight company’s business was virtually nonexistent before this contractor employee began awarding the company contracts that eventually totaled over $700,000. The contractor employee was sentenced to a year in prison and ordered to help repay the government $84,000.”

$10,000 might sound like a lot, and this guy wound up in prison because of it, but the regulations he was prosecuted under also apply to trips to corporate-sponsored events, speaking engagements, even nice dinners.  If $10,000 worth of NASCAR tickets, spa weekends, and nice dinners can land you in prison for a year and cost you $84,000, government executives are going to be a lot more reluctant to break bread at all with industry leaders.

Next week: PCI and Government Employees

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