What's good for the goose and the gander.The federal government has long imposed unique ethical responsibilities on its employees. Recent convictions surrounding former U.S. Rep. Duke Cunningham's activities and those of Air Force procurement executive Darlene Druyun show that egregious misconduct by public officials will demand punishment under any standard. When government conduct did not rise, however, to the level of a crime, contractors who raised ethical issues or issues of good faith in procurement law matters for decades were met with a burdensome legal presumption that government employees can do no wrong. The sometimes-overreaching assumption that the government always acts in good faith is no longer indisputably the law. Recent court decisions have altered the legal "good faith" presumption that traditionally protected the government and forced contractors to overcome an almost insurmountable burden of proof to show that the government, in fact, had dealt unfairly or unethically in contract or procurement matters. Previously in government contracts litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , government contractors charging bad faith by the government needed "well-nigh irrefragable ir·ref·ra·ga·ble adj. Impossible to refute or controvert; indisputable: irrefragable evidence. [Late Latin irrefr proof" to overcome the strong presumption that government officials always act in good faith. This heavy standard meant contractors alleging bad-faith action or inaction, essentially had to show malice or a specific intent by a government official to injure the contractor. Whether the issue was a government failure to cooperate with the contractor in performance, a termination for default or a claim against the contractor, any improper government conduct was protected by a heavy standard of proof that never shifted the onus back to the government to justify highly questionable conduct. Recently, faced with conduct that raised serious questions of whether the government was treating contractors fairly, several courts have revisited the historical assumption that the government always acts in good faith. While all courts have not yet adopted a more balanced standard, the trend is pointed very clearly in that direction. This trend is important for contractors contemplating litigation that includes issues of bad faith by government officials. For instance, in one case, Tecom Inc. v. U.S., the government reportedly threatened the contractor that if it did not stop documenting the condition of government vehicles--a contract requirement--the government would "kill" the project. The contractor sued, alleging that the government's actions constituted bad faith conduct. In a 51-page opinion, the court reviewed the history of presumptive pre·sump·tive adj. 1. Providing a reasonable basis for belief or acceptance. 2. Founded on probability or presumption. pre·sump government good faith and categorized three types of allegations against government decision-making. The court concluded that the degree of deference to the government depends upon the gravity of the allegation. First, government officials accused of fraud or quasi-criminal wrongdoing wrong·do·er n. One who does wrong, especially morally or ethically. wrong  do in the exercise of official duties still should be accorded
strong presumption of good faith that must be rebutted by "clear
and convincing evidence clear and convincing evidence n. evidence that proves a matter by the "preponderance of evidence" required in civil cases and beyond the "reasonable doubt" needed to convict in a criminal case. (See: beyond a reasonable doubt) ." Second, government officials who perform
discretionary duties regarding policies and are accused of a lack of
good faith (not fraud or crime) do not get the heavy, clear and
convincing evidence "edge." In those cases, a lack of
substantial evidence or gross error would support a contractor's
claim of improper government actions. Third, when the government is not
making formal, discretionary policy Discretionary policy is a term used to describe macroeconomic policy based on the judgement of policymakers as opposed to reliance on rules such as the Taylor rule. decisions, but instead simply is
acting as a party to a contract, the government gets no special,
hard-to-prove-otherwise presumption that it is always cooperating and
never hindering a contractor.
This third category marks a breakthrough for contractors confronted by government contracting officials who do not adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. their implied duties of good faith inherent in every contract. No longer can a government official act with impunity in making contract administration decisions because the reasonableness standard now is the same for both parties. No longer is the government entitled to a preferential presumption. In short, to prove a breach of the duty of fair dealing, a contractor now no longer needs to prove that the government acted in bad faith motivated by ill will. Rather, government actions or inaction will be judged by a reasonableness standard involving the particular contract and the surrounding circumstances. One guiding principle of the Federal Acquisition Regulation is to "conduct business with integrity, fairness, and openness." The FAR also requires contracting officers to "ensure that contractors receive impartial, fair, and equitable treatment." To date, however, ethics scrutiny and ethics codes focus almost exclusively on the government contractor. To apply ethics and the duty of good faith and fair dealing more evenhandedly e·ven·hand·ed adj. Showing no partiality; fair. e  ven·hand , a code of business conduct coveting
both parties to a government contract is under study by a task force of
the American Bar The American Bar is a drinking establishment at the Savoy Hotel in London.Opened in 1898 when cocktail were being first introduced to London. The term American Bar comes from the 1930s when cocktails were first gaining popularity in the United States. Association's public contract law section. This code, by making fairness and integrity a two way street, would enhance the public's confidence in our public procurement system by bringing balance to the process. Consistent with recent legal rulings, good faith and fair dealing would be expected of all parties, including contractors, subcontractors, federal, state, and local government contracting officials, and all of their respective agents, auditors, attorneys, and other representatives. No longer will preferential presumptions trump telltale facts. Actual bad faith by government officials is relatively rare, but it happens, and making government officials accountable when it does occur is essential to the integrity of our procurement system. The developing case law which increasingly measures government contracting officials' decisions by commercial standards, should encourage government lawyers and procurement officials to approach their dealings with contractors as equals with everyone playing by the same set of rules. NDIA NDIA National Defense Industrial Association NDIA New Doha International Airport (Qatar) ETHICS COMMITTEE ethics committee A multidisciplinary hospital body composed of a broad spectrum of personnel–eg, physicians, nurses, social workers, priests, and others, which addresses the moral and ethical issues within the hospital. See DNR, Institutional review board. John D. Illgen Vice President, Northrop Grumman Northrop Grumman Corporation (NYSE: NOC) is an aerospace and defense conglomerate that is the result of the 1994 purchase of Grumman by Northrop. The company is the third largest defense contractor for the U.S. Simulation Technologies Corporation Tofie M. Owen Jr. Senior Vice President for Corporate Development, SAIC SAIC - http://saic.com. James L. Pierce Consultant (Former Chairman & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , ARINC ARINC Aeronautical Radio, Inc. ARINC Aircraft Radio Incorporated ARINC Aeronautical Research Incorporated Inc.) Thomas W. Rabaut President, BAE Systems Land and Armaments BAE Systems Land & Armaments was created on June 24 2005, following the completion of BAE Systems' acquisition of United Defense and its merger with BAE Systems Land Systems. The L&A group is a subsidiary of BAE Systems Inc. Joe R. Reeder, Esq. Attorney, Greenberg Traurig LLP LLP - Lower Layer Protocol Lawrence A. Skantze General Lawrence Albert Skantze is a retired United States Air Force four star general and was commander, Air Force Systems Command at Andrews Air Force Base, Maryland. Skantze was born in 1928, in the Bronx, New York. Gen., USAF (Ret.) W. John Stoddart Executive Vice President and President Defense, Oshkosh Truck Corporation William Usher Maj. Gen., USA (Ret.), President, National Correlation Working Group TRUSTEES Dr. Vincent J. Ciccone President & CEO, RASco Inc. Mary E. Lacey Program Executive Officer, National Security Personnel System James McAleese Principal, McAleese & Associates Lewis A. Palumbo Senior Vice President, U.S. Business Development, Raytheon Company NDIA LEADERSHIP Chairman of the Board Tofie M. Owen Jr. Senior Vice President for Corporate Development, SAIC Vice Chairman of the Board Hal Yoh The Day and Zimmermann Group, Inc. Senior Staff Lawrence P. Farrell Jr., Lt. Gen., USAF (Ret.) President, Chief Executive Officer, and Publisher Barry D. Bates Bates , Katherine Lee 1859-1929. American educator and writer best known for her poem "America the Beautiful," written in 1893 and revised in 1904 and 1911. , Maj. Gen., USA (Ret.) Vice President, Operations James E. McInerney Jr., Maj. Gen., USAF (Ret.) Vice President, Membership & Chapters Peter M. Steffes Vice President, Government Policy Bronislaw P. Prokuski Jr., Col., USAF (Ret.) Vice President, Business Operations Secretary/Treasurer Dino Pignotti Vice President, Advertising Paul Greenberg Maj. Gen., USA (Ret.) Vice President Emeritus Affiliates David Chesebrough AFEI AFEI Association For Enterprise Integration President Frederick L. Lewis, Rear Adm., USN (Ret.) NTSA NTSA National Training Systems Association NTSA National Tuberous Sclerosis Association NTSA National Technical Services Association NTSA National Training and Simulation Association NTSA National Traffic Safety Administration President Jane M. Walter Women In Defense President Paul Greenberg, Maj. Gen., USA (Ret.) Executive Director Precision Strike Association William R. Usher, Maj. Gen., USAF (Ret.) President, National Correlation Working Group Dorn McGrath is a senior shareholder with the Greenberg Traurig law firm. D. Michael Kelleher,, a retired Army brigadier general. provided insights for this article. The opinions expressed here are solely those of the author and are not intended to provide legal advice or represent the view of NDIA or the NDIA Ethics Committee. |
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