University Obligations under the Office of
Federal Procurement Policy Act (41 U.S.C. 423)
FEDERAL PROCUREMENT POLICY
A New Law on Procurement Integrity with Substantial Penalties for Violations
In 1988, Congress amended the Office of Federal Procurement Policy Act to add a new section entitled "Procurement Integrity." (The section was further amended in 1989.) The new section prohibits certain actions by government officials and employees and by employees of potential contractors (including research universities) in the procurement of federal contracts over $100,000. It also requires certain individuals involved in a contract procurement to certify that they are aware of and will abide by the law. Violations of the law may trigger substantial civil and criminal penalties--fines up to $100,000 for an individual and up to $1,000,000 for an institution; prison terms up to 5 years for any "officer, employee, representative, agent, or consultant" of a potential contractor who "knowingly and willfully" violates the law. The interim regulations implementing the law went into effect on December 1, 1990.
Potential Impact at the University of Michigan
The new law applies to federal contracts as opposed to federal grants. Thus the vast majority of faculty proposals for external research sponsorship will not be affected. We estimate, however, that perhaps 40-60 contract bids per year will fall under the purview of the new law. If you anticipate involvement in the preparation of a bid for a federal contract or contract modification above the $100,000 threshold, please read on.
Requirements under the Law
During the drafting of federal implementing regulations for the new law, representatives of research universities attempted to eliminate the onerous requirement for personal certifications by faculty members and research administrators. Unfortunately, they were unsuccessful. Under the regulations, before submitting a bid for a contract over $100,000, the university must insist upon certifications by all faculty members, other employees, and consultants who participated in the preparation of the bid.
A copy of the certification form that captures what is required by law is provided on the following page. Beginning immediately, the University--through its DRDA Project Representatives--will require signed certifications by all faculty members, department administrators, and others who may reasonably be interpreted to have been "personally and substantially" involved in the particular proposal for a contract or contract modification over $100,000. The contract proposal cannot go forward without the required certifications. False certification, punishable by federal law, may also be grounds for University action. We seek your help in making this process work as smoothly as possible, yet fulfill in a responsible way the unavoidable institutional and individual obligations.
In those cases in which the University subcontracts a portion of a federal contract it has been awarded, the University will ask the subcontractor to submit an appropriate certification. The University may also be required to submit certifications for subcontracts in which it engages, even though the dollar value may be below the $100,000 threshold.
Unusual Situations that Might be Constrained by Law
Faculty members should be aware that when they work with federal agencies in developing the parameters for an agency procurement effort, under certain situations, they may be ineligible to participate with any eventual contractor or subcontractor in the performance of the research. The Office of the General Counsel will be available to help interpret a faculty member's position under the law.
Protection for Individuals who Report Suspected Violations
University employees who, in conformance with the required certification, come forward in good faith with violations or suspected violations of the law are protected from retaliation by their employer under The Michigan Whistleblowers' Act (MCLA 15.361 et seq.)
Source for Additional Advice or Information
For additional information on the law or on how it might affect you, please consult with your DRDA Project Representative or with the Office of the General Counsel.
Office of Federal Procurement Policy Act.
I. Section 3.104 of the Federal Acquisition Regulations (FAR)* requires that any University employee or representative who has participated "personally and substantially" in the preparation of a bid for a contract in excess of $100,000 or in a contract modification in excess of $100,000 certify to the university that he or she is familiar with and will comply with three requirements. In brief, these requirements prohibit (l) any discussion of future employment or business opportunity with the agency procurement official, (2) any gift to the agency procurement official, or (3) any request for or receipt of proprietary or protected source selection information from any agency official or employee prior to the award of the contract. The relevant portion of this regulation is on the back of this form.
II. In addition, the regulations require certification that the University employee will report immediately any information concerning a violation or possible violation of the three requirements above or of the requirements that apply to federal agency procurement officials or to other government officials and employees. For the purposes of implementing this federal requirement, possible violations should be reported to the Office of Contract Administration. The prohibitions that apply to federal employees are also reproduced on the back of this form.
Your signature on this form certifies that you are aware of these federal procurement integrity requirements and agree to comply with them. It also certifies that you are not currently aware of any violation of these requirements, or if you have knowledge of such violations, that the nature of the violation is described below.
The University will not submit a contract bid to the sponsor if any individual who participated in the bid preparation fails to sign this certification form.
False certification, punishable by federal law, may also be grounds for University action.
* FAR section 3.104 implements section 27 of the Office of Federal Procurement Policy Act (41 U.S.C. 423) and has an effective date of 12/1/90.
Federal Acquisition Regulations, Section 3.104-3: Statutory prohibitions
(a) Prohibited conduct by competing contractors. During the conduct of any federal agency procurement of property or services, no competing contractor or any officer, employee, representative, agent, or consultant of any competing contractor shall knowingly--
(l) Make, directly or indirectly, any offer or promise of future employment or business opportunity to, or engage directly or indirectly, in any discussion of future employment or business opportunity with, any procurement official of such agency, except as provided in 3.014-6(b)*;
(2) Offer, give, or promise to offer or give, directly or indirectly, any money, gratuity, or other thing of value to any procurement official of such agency; or
(3) Solicit or obtain, directly or indirectly, from any officer or employee of such agency, prior to the award of a contract any proprietary or source selection information regarding such procurement.
(b) Prohibited conduct by procurement officials. During the conduct of any federal agency procurement of property or services, no procurement official of such agency shall knowingly--
(l) Solicit or accept, directly or indirectly, any promise of future employment or business opportunity from, or engage, directly or indirectly, in any discussion of future employment or business opportunity with, any officer, employee, representative, agent, or consultant of a competing contractor, except as provided in 3.104(a)*;
(2) Ask for, demand, exact, solicit, seek, accept, receive, or agree to receive, directly or indirectly, any money, gratuity, or other thing of value from any officer, employee, representative agent, or consultant of any competing contractor for such procurement; or
(3) Disclose any proprietary or source selection information regarding such procurement directly or indirectly to any person other than a person authorized by the head of such agency or the contracting officer to receive such information.
(c) Disclosure to unauthorized persons. During the conduct of any federal agency procurement of property or services, no person who is given authorized or unauthorized access to proprietary or source selection information regarding such procurement shall knowingly disclose such information, directly or indirectly, to any person other than a person authorized by the head of such agency or the contracting officer to receive such information.
(d) Restrictions resulting from procurement activities of Government officers or employees who are or were procurement officials. No individual who, while serving as an officer or employee of the Government or member of the Armed Forces, was a procurement official with respect to a particular procurement may knowingly--
(1) Participate in any manner, as an officer, employee, agent or representative of a competing contractor, in any negotiations leading to the award, modification, or extension of a contract for such procurement; or
(2) Participate personally and substantially on behalf of the competing contractor in the performance of such contract.
[The two restrictions on Government officers or employees listed above apply "during the period ending 2 years after the last date such individual participated personally and substantially in the conduct of such procurement or personally reviewed and approved the award, modification, or extension of any contract for such procurement."]
*The language of 3.104-6(a) and 3.104-6(b) is available upon request.
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