Ethics in Government Contracting: Time for a Change?

Recent media reports of corruption in government contracting has resulted in a damaged reputation for the profession, government agencies, and government contractors. The problem seems to be the failure to establish clear ethical guidelines. The results of such failure results in ruined reputations, fines, imprisonment, delayed or terminated government programs, and additional costs to taxpayers.

In the April 2010 issue of Contract Management, William Sims Curry, makes several suggestions for the improvement of and development of guidelines for “acceptable limits on gratuities” within the government contracting field.

As a professional in the financial industry for the past three years, I was shocked to learn that current standards for ethical conduct and guidelines for gift giving/ receiving do not exist for contractors and government agencies. Perhaps there are several lessons to be learned from existing FINRA, NASD, and State Department of Insurance regulations which guide and establish annual maximum gift amounts as well as guidelines and reporting standards for “conflicts of interest”.

Sims (2010), concluded that a “zero tolerance gratuity policy” was “impractical,” nonetheless, should be a goal for government contractors, officials, and agencies during the contracting/ subcontracting process. Sims (2010) stated,

“[p]rogress towards zero tolerance with respect to gratuities could be achieved if government agencies would reward contractors that implement effective zero tolerance gratuity practices by providing added consideration with respect to source selection decisions and profit negotiations. Such incentives are presently provided by the federal government by rewarding contractors that establish effective management systems and implement effective social contracting practices [see (FAR) 15.404-4 and (FAR) 15.304” (p. 56-57)

What are your thoughts and feelings on existing ethical guidelines for government contracting as they pertain to “gratuities”? Is it ethical at all or should a “zero-tolerance” policy be implemented? What is your personal experience (good or bad) with the giving and accepting of “gratuities”?