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NMCARS PART 5203 IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST



PART 5203 IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST

SUBPART 5203.1—SAFEGUARDS

5203.101 (FAR 3.101) Standards of conduct.

5203.101-1 (FAR 3.101-1) General.

(a) DoN contracting activities, purchasing offices and contract administration offices (CAOs) are responsible for ensuring that a single individual performs only one of the following functions:

(1) initiation of the requirement;

(2) award of contract or placement of order; and

(3) receipt, inspection, and acceptance of supplies or services.

(b) If circumstances preclude an individual from performing a single function, as a minimum, the individual responsible for the award of a contract or placement of an order should not perform the receipt, inspection and acceptance function.

5203.104 (FAR 3.104) Procurement integrity.

5203.104-7 (FAR 3.104-7) Violations or possible violations.

(a)(1) The CCO is designated, without power of redesignation, as the individual to receive the contracting officer’s report and documentation concluding that there is no impact on the procurement.

(f) Submit agency head notifications to DASN(AP) by email at RDAJ&As.fct@navy.mil with the subject “DFARS 203.104-7 - Contract Award – Urgent and Compelling – Possible Procurement Integrity Act Violation.” Verify receipt by the agency head before authorizing award of the contract or execution of the contract modification.

SUBPART 5203.2--CONTRACTOR GRATUITIES TO GOVERNMENT PERSONNEL

5203.201 (FAR 3.201) Applicability.

This section establishes procedures pursuant to 10 U.S.C. § 2207, FAR Subpart 3.2, and the Gratuities clause in FAR subsection 52.203-3. These procedures are not intended to be an exclusive remedy that would preclude or limit otherwise appropriate criminal or civil action under the United States Code, administrative action, disciplinary action under the Uniform Code of Military Justice, or contractual action, including termination, for any other appropriate reason.

5203.203 (FAR 3.203) Reporting suspected violations of the Gratuities clause.

(a) Within two working days after receiving information indicating that a gratuity (including, but not limited to, entertainment or a gift) may have been offered or given by a contractor or a contractor’s agent or representative to any officer, official, or employee of the Government to obtain a DoN contract or favorable treatment in the awarding, amending, or making of determinations concerning the performance of a DoN contract, a DoN officer, official, or employee must inform the Assistant General Counsel (Acquisition Integrity) (AGC (AI)) and the contracting officer having cognizance over the contract of the potential infraction, unless the contracting officer is suspected to be a party to the gifted or offered gratuity. In that case, the HCA should be informed instead of the contracting officer. Information provided to the AGC (AI) and the cognizant contracting officer or HCA is exempt from Management Information Collection (MIC) reporting requirements as per SECNAV M-5214.1 (Dec. 2005), Part IV, § 7.n. & Part V, § 5.p. Submit the information in the format prescribed at Annex 10.

(b) The contracting officer having cognizance over the contract implicated in the alleged Gratuities clause violation (or the HCA, if the contracting officer is alleged to be a party to the gifted or offered gratuity) shall:

(i) Within five working days after receiving information regarding an alleged violation of the Gratuities clause, provide a written report to the AGC (AI) (exempt from (MIC) reporting requirements as per SECNAV M-5214.1 (Dec. 2005), Part IV, § 7.n. & Part V, § 5.p), including:

(A) The name and address of the contractor;

(B) A summary of any information concerning the suspected violation known to the person making the report, such as the nature and amount of the alleged gratuity and the person to whom it was allegedly offered or given;

(C) The contract number, date, estimated day of completion of performance, a general description of supplies or services procured, dollar amount, status of performance and payment, urgency of requirements, availability of the supplies or services from other sources, and the name of the contracting officer; and,

(D) Copies of any documents available concerning the suspected violation.

(ii) Cooperate and coordinate with the AGC (AI) and the DoN’s Acquisition Integrity Office (AIO) in the investigation and treatment of an alleged violation, including, but not limited to, responding promptly to requests for information.

(iii) Advise AIO of the existence and status of any administrative investigation concerning the alleged violation of which the contracting officer is aware, with an estimated date upon which the report of investigation will be completed, if known. If requested, a copy of the Report of Investigation must be provided to AIO as soon as practicable.

(iv) Comply fully with DFARS Subpart 203.070 “Reporting of violations and suspected violations.”

(c) AIO shall refer the alleged violation to the Naval Criminal Investigative Service for investigation and other appropriate action pursuant to SECNAVINST 5430.107, dated 28 Dec 2005, and 5430.92B, dated 30 Dec 2005, or successor instructions or regulations. AIO may also refer the alleged violation to the Naval Audit Service pursuant to SECNAVINST 5430.92B, dated 30 Dec 2005, or successor instruction or regulation.

(d) The reporting procedure set forth in this Subpart 5203.203 is not exclusive. The AGC (AI) may commence a proceeding pursuant to Subpart 5203.204 concerning a suspected violation of the Gratuities clause involving any DoN contract regardless of the source of the information.

5203.204 (FAR 3.204) Treatment of violations.

(a) General.

(1) Authority to provide notices, conduct hearings, and make findings of fact and conclusions of law concerning alleged violations of the Gratuities clause, including whether a violation of the Gratuities clause has occurred, has been delegated to the AGC(AI), without power of redelegation.

(2) The AGC (AI) shall make recommendations to the Deputy Assistant Secretary of the Navy (Acquisition and Procurement) (DASN(AP)) with respect to terminating the contractor’s right to proceed under the contract and assessing exemplary damages.

(b) If the AGC (AI) has determined that a violation has occurred, authority to determine whether to terminate the contractor’s right to proceed under the contract, and, if so, whether to assess exemplary damages and in what amount, has been delegated to DASN(AP).

(c) To the extent practicable, the AGC (AI) will make findings of fact, conclusions of law, and recommendations to DASN(AP) before the initiation of any debarment proceeding against the contractor concerning the same conduct. See FAR Subpart 9.4.

(d) Notification.

(1) If the AGC (AI) determines that there is credible evidence that a violation of the Gratuities clause has occurred, he or she may commence a proceeding pursuant to this Subpart by providing written notice to the contractor alleged to be liable for the purported violation.

(2) The notification advising the contractor of the alleged Gratuities clause violation shall:

(i) Describe the suspected violation in sufficient detail to reasonably apprise the contractor of the alleged violation;

(ii) State the potential penalties for a violation of the Gratuities clause;

(iii) State that the contractor may obtain a copy of the entire evidentiary record (with the exception of redactions made to protect personally identifiable information, such as social security numbers, dates of birth, and financial account numbers), subject to the payment of the reasonable cost of any transcript, by written request made to the AGC (AI). Upon the contractor’s written request, the AGC (AI) shall advise the contractor of the general nature of any redacted information;

(iv) Inform the contractor that it may refute the allegations set forth in the notice. The contractor may refute the allegations and provide in person, in writing, or through one or more representatives any information the contractor wishes to have considered concerning penalties for a violation of the Gratuities clause. The contractor may submit documentary evidence and arguments. If the contractor requests a hearing, at that hearing, the contractor may confront any person the DoN presents on the matter and present witnesses at the contractor’s own expense;

(v) State that the contractor has 30 calendar days from receipt of notice to submit written matters refuting the allegations and to request a hearing. Any timely submissions by the contractor will become part of the evidentiary record; and,

(vi) Advise the contractor that if a hearing is requested, a list of any witnesses the contractor wishes to present and a concise statement of each witness’s relevance to the hearing shall be delivered to the AGC (AI) or other person designated by the AGC (AI) no later than five calendar days after the AGC (AI) grants the hearing request.

(3) The AGC (AI) shall ensure that the notice to the contractor is delivered by hand or sent by registered or certified mail, or another, similar commercial means.

(e) Hearing.

(1) The AGC (AI) shall schedule any hearing for a date not later than 15 calendar days after the AGC (AI)’s receipt of the contractor’s request, unless the contractor requests a later date not to be more than thirty days after the AGC (AI)’s receipt of the hearing request. The AGC (AI) may grant the request for a later date if the AGC (AI) determines that the request is reasonable. The AGC (AI) shall inform the contractor by email of the hearing date, if the contractor so requests and provides an email address for that purpose when requesting a hearing.

(2) Hearings shall be conducted at the offices of the AGC (AI) or other location designated by the AGC (AI) as follows:

(i) Hearings shall be as informal as practicable, consistent with principles of fundamental fairness, and non-adversarial in nature.

(ii) The DoN will be represented by one or more attorneys from the Office of the General Counsel.

(iii) The AGC (AI) and the DoN representative(s) may ask questions of the contractor or its representatives making the presentation.

(vi) The contractor or its representatives and the DoN’s representatives shall have an opportunity to present information relevant to the facts at issue, including witness testimony. If jointly requested by the contractor and the DoN, the AGC (AI) may permit a witness to appear by videoconference or other electronic means rather than in person. Witnesses will be sworn in and reminded of the official nature of the proceeding and that they are subject to criminal prosecution for any false testimony. Witnesses are subject to cross-examination. The AGC (AI) may ask questions of any witness.

(v) Documents and testimony not ordinarily admissible under legal rules of evidence may be received subject to the discretion of the AGC (AI) and will be given appropriate weight. The AGC (AI) may exclude from the evidentiary record irrelevant, immaterial, or unduly repetitive information presented by the contractor or the DoN.

(3) A verbatim transcript of the hearing shall be made and shall become part of the evidentiary record. Additional documentary materials or comments the AGC (AI) permits the contactor or the DoN to submit at or following the hearing must become part of the evidentiary record. Any materials permitted to be submitted after the hearing by the contractor or the DoN representative(s) must be provided on the same day to the AGC (AI) and the DoN representative (s) or the contractor, as applicable. The contractor or the DoN, as applicable, shall have five business days from receipt to submit comments to the AGC (AI) on any permitted post-hearing submissions made by the other party.

(f) Findings, conclusions, and recommendations.

(1) The AGC (AI) shall make all findings of fact and conclusions of law relevant to whether a violation of the Gratuities clause occurred, including the dollar value of any gratuity, and all findings of fact, conclusions of law, and recommendations relevant to whether the contractor’s right to proceed under the contract should be terminated, and, if so, whether an assessment of exemplary damages is appropriate and in what amount. These findings, conclusions, and recommendations shall be based on the preponderance of the evidence found in the evidentiary record. The decision of the AGC (AI) as to whether a violation of the Gratuities clause has occurred will be the DoN’s final decision.

(2) If the contractor does not timely request a hearing, the AGC (AI) shall make the findings of fact, conclusions of law, and recommendations on the basis of the written record.

(3) The AGC (AI) may permit the contractor and the DoN to submit proposed findings of fact, conclusions of law, and recommendations by the date specified by the AGC (AI). The AGC (AI) also may require the contractor and the DoN to submit stipulated findings of fact and conclusions of law.

(4) The AGC (AI) shall issue a written decision no more than 60 days after the later of the completion of the hearing or the AGC (AI)’s receipt of all documentary submissions. If the AGC (AI) concludes that the Gratuities clause was violated, the decision shall include the findings of fact and conclusions of law that the AGC (AI) relied upon and the findings, conclusions, and recommendations relevant to whether the contractor’s right to proceed under the contract should be terminated, and, if so, whether an assessment of exemplary damages is appropriate and in what amount.

(5) If the AGC (AI) determines that a violation of the Gratuities clause occurred, he or she shall submit the evidentiary record and his or her written decision to DASN(AP).

(g) Contract Actions.

(1) DASN(AP) shall determine whether to terminate the contractor’s right to proceed under the contract, and, if so, whether to assess exemplary damages and in what amount. The decision of DASN(AP) shall be the final decision of the DoN with respect to whether to terminate the contractor’s right to proceed under the contract, and, if so, whether to assess exemplary damages and in what amount. DASN(AP) shall reach a decision within 45 calendar days after receipt of the evidentiary record and written decision of the AGC (AI).

(2) Written notice of the decision of DASN(AP), together with the written decision of the AGC (AI), shall be provided to the contractor promptly by hand delivery, registered or certified mail, or other similar commercial means.

SUBPART 5203.6—CONTRACTS WITH GOVERNMENT EMPLOYEES OR ORGANIZATIONS OWNED OR CONTROLLED BY THEM

5203.602 (FAR 3.602) Exceptions.

The HCA, without power of redesignation, may authorize exceptions.

SUBPART 5203.8—LIMITATIONS ON THE PAYMENT OF FUNDS TO INFLUENCE FEDERAL TRANSACTIONS

5203.806 (DFARS PGI 203.8) Processing suspected violations.

Submit Lobbying Disclosure Act Violation reports to DASN(AP) by email at RDAJ&As.fct@navy.mil with the subject “DFARS PGI 203.8—Lobbying Disclosure Act Violation Report."

SUBPART 5203.9—WHISTLEBLOWER PROTECTIONS FOR CONTRACTOR EMPLOYEES

5203.903 (DFARS 203.903) Policy.

(5) When notified of a complaint of reprisal described in DFARS 5203.903(1), the contracting officer shall notify the Office of General Counsel by email at aio@navy.mil with a courtesy copy to

DASN(AP) by email at Policy@navy.mil with the subject “DFARS 203.903 – Notification of a

Complaint of Reprisal.”

SUBPART 5203.10—CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT

5203.1003 (FAR 3.1003) Requirements.

(b) Notification of possible contractor violation. In addition to the actions required by FAR 3.1003(b), the contracting officer shall provide a copy of the notification, within 10 days of receipt, to the Acquisition Integrity Office by email at aio@navy.mil with the subject “FAR 3.1003 – Possible Contractor Ethics Violation.”

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