Pro-Tech Industry Day December 10, 2012 Erin Frazee DOC Legal Counsel

1. Pro-Tech Industry Day December 10, 2012 Erin Frazee DOC Legal Counsel Organizational Conflicts of Interest

2. Overview NOAA and the Department take potential and actual organizational conflicts of interest seriously We will be monitoring business practices closely, with an eye toward preventing and, if appropriate, mitigating OCIs We will be including OCI clauses and a limitation of future contracting clause in both the solicitation and the contracts The solicitation will require submission of an OCI plan

3. Governing Clauses At a minimum, we anticipate that the final RFP and resulting contracts will contain the following: CAR 1352.209-70 Potential Organizational Conflict of Interest CAR 1352.209-71 Limitation of Future Contracting, with Alts CAR 1352.209-74 Organizational Conflict of Interest

4. Types of OCI FAR Part 9.5 discusses OCIs in detail Three types of OCI: Unequal Access Biased Ground Rules Impaired Objectivity Appearance of OCI is also a concern

5. Unequal Access See FAR 9.505-4 When a contractor requires proprietary information from others to perform a Government contract and can use the leverage of the contract to obtain it, the contractor may gain an unfair competitive advantage unless restrictions are imposed

6. Biased Ground Rules See FAR 9.505-1 and 9.505-2 Arises where a firm, as part of its performance of a government contract, has in some sense set the groundrules for the competition for another government contract by, for example, writing the SOW or providing materials upon which a SOW was based. Energy Systems Group, B-402324, 2010 CPD P 73 (Feb. 26, 2010 Comp. Gen.) With ProTech, as an example, a biased ground rules OCI could arise out of a contractor’s building requirements for the agency, and in another task order being required to respond to those requirements.

7. Impaired Objectivity See FAR 505.3 Contracts for the evaluation of offers for products or services shall not be awarded to a contractor that will evaluate its own offers for products or services, or those of a competitor, without proper safeguards to ensure objectivity to protect the Government’s interests. This could involve a contractor being in a position to evaluate: Its own work That of its partners That of its competitors

8. OCI Plans Each offeror should provide an OCI plan along with its proposal The plans should describe to us: How the offeror plans to avoid the situations discussed previously How the offeror intends to monitor its own activity How the offeror intends to keep the Government notified We expect contractors to be monitoring their work for OCIs across both the domain and task order levels

9. Questions Erin Frazee DOC OGC w: (202) 482-2753 c: (240) 435-5197 efrazee@doc.gov

10. Backup Slides

11. CAR 1352.209-70 - Potential Organizational Conflict of Interest (a) There is a potential organizational conflict of interest. Accordingly: (1) Restrictions are needed. (2) As a part of the proposal, the offeror shall provide the Contracting Officer with complete information regarding previous or ongoing work that is in any way associated with the contemplated acquisition. (b) If award is made to the offeror, the resulting contract may include an organizational conflict of interest limitation applicable to subsequent Government work, at either a prime contract level, at any subcontract tier, or both. During evaluation of proposals, the Government may, after discussions with the offeror and consideration of ways to avoid the conflict of interest, insert a provision in the resulting contract that shall disqualify the offeror from further consideration for award of specified future contracts.

12. CAR 1352.209-71 - Limitation of Future Contracting (a) The following restrictions . . . apply to prevent conflicting roles, which may bias the contractor's judgment or objectivity, or to preclude the contractor from obtaining an unfair competitive advantage in concurrent or future acquisitions. . . . (2) Restrictions: The contractor shall perform systems engineering and/or technical direction, but will not have overall contractual responsibility for the system's development, integration, assembly and checkout, or production. The parties recognize that the contractor shall occupy a highly influential and responsible position in determining the system's basic concepts and supervising their execution by other contractors. The contractor's judgment and recommendations must be objective, impartial, and independent. To avoid the prospect of the contractor's judgment or recommendations being influenced by its own products or capabilities, it is agreed that the contractor is precluded for the life of the system from award of a DOC contract to supply the system or any of its major components, and from acting as a subcontractor or consultant to a DOC supplier for the system or any of its major components.

13. CAR 1352.209-71- Limitation of Future Contracting – Alt I (a)(2)(i) The contractor shall prepare and submit complete specifications for nondevelopmental items to be used in a competitive acquisition. The contractor shall not furnish these items to DOC, either as a prime contractor or subcontractor, for the duration of the initial production contract plus [insert a specific period of time or an expiration date]. (ii) The contractor shall either prepare or assist in preparing a work statement for use in competitively acquiring the [identify the system or services], or provide material leading directly, predictably, and without delay to such a work statement. The contractor may not supply [identify the services, the system, or the major components of the system] for a period [state the duration of the constraint, however, the duration of the initial production contract shall be the minimum], as either the prime or subcontractor unless it becomes the sole source, has participated in the design or development work, or more than one contractor has participated in preparing the work statement.

14. CAR 1352.209-71 - Limitation of Future Contracting – Alt II (a)(2) The contractor shall participate in the technical evaluation of other contractors' proposals or products. To ensure objectivity, the contractor is precluded from award of any supply or service contract or subcontract for the system or its major components. This restriction shall be effective for (insert a definite period of time).

15. CAR 1352.209-71 - Limitation of Future Contracting – Alt III (b) The contractor may gain access to proprietary information of other companies during contract performance. The contractor agrees to enter into company-to-company agreements to protect another company's information from unauthorized use or disclosure for as long as it is considered proprietary by the other company, and to refrain from using the information for any purpose other than that for which it was furnished. For information purposes, the contractor shall furnish copies of these agreements to the Contracting Officer. These agreements are not intended to protect information which is available to the Government or to the contractor from other sources and information furnished voluntarily without restriction.

16. CAR 1352.209-71 - Limitation of Future Contracting – Alt IV (b) The contractor agrees to accept and to complete all issued task orders, and to not contract with Government prime contractors or first-tier subcontractors in such a way as to create an organizational conflict of interest.

17. CAR 1352.209-71 - Limitation of Future Contracting – Alt VI (b) The above restrictions shall be included in all subcontracts, teaming arrangements, and other agreements calling for performance of work which is subject to the organizational conflict of interest restrictions identified in this clause, unless excused in writing by the Contracting Officer.

18. CAR 1352.209-74 Organizational Conflict of Interest (a) Purpose. The purpose of this clause is to ensure that the contractor and its subcontractors: (1) Are not biased because of their financial, contractual, organizational, or other interests which relate to the work under this contract, and (2) Do not obtain any unfair competitive advantage over other parties by virtue of their performance of this contract. (b) Scope. The restrictions described herein shall apply to performance or participation by the contractor, its parents, affiliates, divisions and subsidiaries, and successors in interest (hereinafter collectively referred to as “contractor”) in the activities covered by this clause as a prime contractor, subcontractor, co-sponsor, joint venturer, consultant, or in any similar capacity. For the purpose of this clause, affiliation occurs when a business concern is controlled by or has the power to control another or when a third party has the power to control both.

19. CAR 1352.209-74 Organizational Conflict of Interest, continued (c) Warrant and Disclosure. The warrant and disclosure requirements of this paragraph apply with full force to both the contractor and all subcontractors. The contractor warrants that, to the best of the contractor's knowledge and belief, there are no relevant facts or circumstances which would give rise to an organizational conflict of interest, as defined in FAR Subpart 9.5, and that the contractor has disclosed all relevant information regarding any actual or potential conflict. The contractor agrees it shall make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor's impartiality because of the appearance or existence of bias or an unfair competitive advantage. Such disclosure shall include a description of the actions the contractor has taken or proposes to take in order to avoid, neutralize, or mitigate any resulting conflict of interest.

20. CAR 1352.209-74 Organizational Conflict of Interest, continued (d) Remedies. The Contracting Officer may terminate this contract for convenience, in whole or in part, if the Contracting Officer deems such termination necessary to avoid, neutralize or mitigate an actual or apparent organizational conflict of interest. If the contractor fails to disclose facts pertaining to the existence of a potential or actual organizational conflict of interest or misrepresents relevant information to the Contracting Officer, the Government may terminate the contract for default, suspend or debar the contractor from Government contracting, or pursue such other remedies as may be permitted by law or this contract. (e) Subcontracts. The contractor shall include a clause substantially similar to this clause, including paragraphs (f) and (g), in any subcontract or consultant agreement at any tier expected to exceed the simplified acquisition threshold. The terms “contract,”“contractor,” and “Contracting Officer” shall be appropriately modified to preserve the Government's rights.

21. CAR 1352.209-74 Organizational Conflict of Interest, continued (f) Prime Contractor Responsibilities. The contractor shall obtain from its subcontractors or consultants the disclosure required in FAR Part 9.507-1, and shall determine in writing whether the interests disclosed present an actual, or significant potential for, an organizational conflict of interest. The contractor shall identify and avoid, neutralize, or mitigate any subcontractor organizational conflict prior to award of the contract to the satisfaction of the Contracting Officer. If the subcontractor's organizational conflict cannot be avoided, neutralized, or mitigated, the contractor must obtain the written approval of the Contracting Officer prior to entering into the subcontract. If the contractor becomes aware of a subcontractor's potential or actual organizational conflict of interest after contract award, the contractor agrees that the Contractor may be required to eliminate the subcontractor from its team, at the contractor's own risk.

22. CAR 1352.209-74 Organizational Conflict of Interest, continued (g) Waiver. The parties recognize that this clause has potential effects which will survive the performance of this contract and that it is impossible to foresee each circumstance to which it might be applied in the future. Accordingly, the contractor may at any time seek a waiver from the Head of the Contracting Activity by submitting such waiver request to the Contracting Officer, including a full written description of the requested waiver and the reasons in support thereof.

23. OCI Plans If an Offeror plans to use any organizations (including divisions within the Offeror’s corporate structure) that support or have supported any NOAA or Department of Commerce contracts related to this procurement (either as a Prime Contractor or a Subcontractor) or if the Offeror plans to use any organization that would pose a conflict of interest with current Contractors, the Offeror shall discuss how conflicts of interest, as set forth in Part 9 of the FAR, are resolved.

24. OCI Plans Offerors shall also describe an effective process for the avoidance, identification, and notification to the Government of any prospective OCIs—with an emphasis on describing how the Offeror will effectively manage actual and potential OCIs involving itself, its teammates and Subcontractors.

25. OCI Plans Should an actual, potential, or apparent OCI become evident at any point during the procurement process, whether identified in the OCI Plan or otherwise, the Government reserves the right to request additional information from the Offeror, including a mitigation plan specifically addressing the relevant OCI and any revisions thereto, in order to avoid, neutralize, or mitigate the OCI. The Government may reject the Offeror’s proposal if the Offeror fails to provide an adequate OCI Plan or if the Offeror fails to adequately mitigate an actual, potential or apparent OCI. OCI Plans will be evaluated but not rated.