41 U.S.C. § 2303 — Ethics safeguards related to contractor

Page 72 TITLE 41—PUBLIC CONTRACTS § 2303 (i) was required as an element of per- formance under a contract; and (ii) is needed to ensure the competitive acquisition of supplies or services that will be required in substantial quantities in the future; and (B) the Federal Government and each agency of the Federal Government has an unrestricted, royalty-free right to use, or to have its contractors use, for governmental purposes (excluding publication outside the Federal Government) technical data devel- oped exclusively with Federal funds. (2) REQUIREMENTS IN ADDITION TO OTHER RIGHTS OF THE GOVERNMENT.—The require- ments of paragraph (1) are in addition to and not in lieu of any other rights the Federal Government may have pursuant to law. (d) FACTORS TO BE CONSIDERED IN PRESCRIBING REGULATIONS.—The following factors shall be considered in prescribing regulations under sub- section (a): (1) Whether the item or process to which the technical data pertains was developed— (A) exclusively with Federal funds; (B) exclusively at private expense; or (C) in part with Federal funds and in part at private expense. (2) The statement of congressional policy and objectives in section 200 of title 35, the statement of purposes in section 2(b) of the Small Business Innovation Development Act of 1982 (Public Law 97–219, 15 U.S.C. 638 note), and the declaration of policy in section 2 of the Small Business Act (15 U.S.C. 631). (3) The interest of the Federal Government in increasing competition and lowering costs by developing and locating alternative sources of supply and manufacture. (e) PROVISIONS REQUIRED IN CONTRACTS.—Regu- lations prescribed under subsection (a) shall re- quire that a contract for property or services en- tered into by an executive agency contain ap- propriate provisions relating to technical data, including provisions— (1) defining the respective rights of the Fed- eral Government and the contractor or sub- contractor (at any tier) regarding technical data to be delivered under the contract; (2) specifying technical data to be delivered under the contract and schedules for delivery; (3) establishing or referencing procedures for determining the acceptability of technical data to be delivered under the contract; (4) establishing separate contract line items for technical data to be delivered under the contract; (5) to the maximum practicable extent, iden- tifying, in advance of delivery, technical data which is to be delivered with restrictions on the right of the Federal Government to use the data; (6) requiring the contractor to revise any technical data delivered under the contract to reflect engineering design changes made dur- ing the performance of the contract and af- fecting the form, fit, and function of the items specified in the contract and to deliver the re- vised technical data to an agency within a time specified in the contract; (7) requiring the contractor to furnish writ- ten assurance, when technical data is deliv- ered or is made available, that the technical data is complete and accurate and satisfies the requirements of the contract concerning tech- nical data; (8) establishing remedies to be available to the Federal Government when technical data required to be delivered or made available under the contract is found to be incomplete or inadequate or to not satisfy the require- ments of the contract concerning technical data; and (9) authorizing the head of the agency to withhold payments under the contract (or ex- ercise another remedy the head of the agency considers appropriate) during any period if the contractor does not meet the requirements of the contract pertaining to the delivery of technical data. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3733.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 2302(a) ........ 41:418a(a) (1st sen- tence). Pub. L. 93–400, § 21, as added Pub. L. 98–577, title III, § 301(a), Oct. 30, 1984, 98 Stat. 3074; Pub. L. 99–145, title IX, § 961(d)(2), Nov. 8, 1985, 99 Stat. 704. 2302(b) ........ 41:418a(a) (2d, last sentences). 2302(c) ........ 41:418a(b). 2302(d) ........ 41:418a(c). 2302(e) ........ 41:418a(d). In subsection (a), the words ‘‘Federal Acquisition Regulation’’ are substituted for ‘‘single system of Gov- ernment-wide procurement regulations as defined in section 403(4) of this title’’ because section 3(a)(1) of the Office of Federal Procurement Policy Act Amendments of 1988 (Public Law 100–679, 102 Stat. 4055) substituted ‘‘Federal Acquisition Regulation’’ for ‘‘single system of Government-wide procurement regulations’’ in section 6 of the Office of Federal Procurement Policy Act (Pub- lic Law 93–400, 88 Stat. 797, 41:406) and because section 3(c) of the Office of Federal Procurement Policy Act Amendments of 1988 (102 Stat. 4056) struck section 4(4) of the Office of Federal Procurement Policy Act (88 Stat. 797, 41:403(4)), as amended by section 4 of the Of- fice of Federal Procurement Policy Act Amendments of 1983 (Public Law 98–191, 97 Stat. 1326), which had defined ‘‘single system of Government-wide procurement regu- lations’’. § 2303. Ethics safeguards related to contractor conflicts of interest (a) DEFINITION.—In this section, the term ‘‘rel- evant acquisition function’’ means an acquisi- tion function closely associated with inherently governmental functions. (b) POLICY ON PERSONAL CONFLICTS OF INTER- EST BY CONTRACTOR EMPLOYEES.— (1) DEVELOPMENT AND ISSUANCE OF POLICY.— The Administrator shall develop and issue a standard policy to prevent personal conflicts of interest by contractor employees per- forming relevant acquisition functions (in- cluding the development, award, and adminis- tration of Federal Government contracts) for or on behalf of a Federal agency or depart- ment. (2) ELEMENTS OF POLICY.—The policy shall— (A) define ‘‘personal conflict of interest’’ as it relates to contractor employees per- forming relevant acquisition functions; and Page 73 TITLE 41—PUBLIC CONTRACTS § 2303 (B) require each contractor whose employ- ees perform relevant acquisition functions to— (i) identify and prevent personal con- flicts of interest for the employees; (ii) prohibit contractor employees who have access to non-public government in- formation obtained while performing rel- evant acquisition functions from using the information for personal gain; (iii) report any personal conflict-of-in- terest violation by an employee to the ap- plicable contracting officer or contracting officer’s representative as soon as it is identified; (iv) maintain effective oversight to verify compliance with personal conflict- of-interest safeguards; (v) have procedures in place to screen for potential conflicts of interest for all em- ployees performing relevant acquisition functions; and (vi) take appropriate disciplinary action in the case of employees who fail to com- ply with policies established pursuant to this section. (3) CONTRACT CLAUSE.— (A) CONTENTS.—The Administrator shall develop a personal conflicts-of-interest clause or a set of clauses for inclusion in so- licitations and contracts (and task or deliv- ery orders) for the performance of relevant acquisition functions that sets forth— (i) the personal conflicts-of-interest pol- icy developed under this subsection; and (ii) the contractor’s responsibilities under the policy. (B) EFFECTIVE DATE.—Subparagraph (A) shall take effect 300 days after October 14, 2008, and shall apply to— (i) contracts entered into on or after that effective date; and (ii) task or delivery orders awarded on or after that effective date, regardless of whether the contracts pursuant to which the task or delivery orders are awarded are entered before, on, or after October 14, 2008. (4) APPLICABILITY.— (A) CONTRACTS IN EXCESS OF THE SIMPLIFIED ACQUISITION THRESHOLD.—This subsection shall apply to any contract for an amount in excess of the simplified acquisition thresh- old (as defined in section 134 of this title) if the contract is for the performance of rel- evant acquisition functions. (B) PARTIAL APPLICABILITY.—If only a por- tion of a contract described in subparagraph (A) is for the performance of relevant acqui- sition functions, then this subsection applies only to that portion of the contract. (c) BEST PRACTICES.—The Administrator shall, in consultation with the Director of the Office of Government Ethics, develop and maintain a re- pository of best practices relating to the preven- tion and mitigation of organizational and per- sonal conflicts of interest in Federal con- tracting. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3735.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 2303(a) ........ no source. 2303(b), (c) 41:405c(a), (c). Pub. L. 110–417, [div. A], title VIII, § 841(a), (c), Oct. 14, 2008, 122 Stat. 4537, 4539. In this section, the words ‘‘relevant acquisition func- tions’’ are substituted for ‘‘acquisition functions close- ly associated with inherently governmental functions’’ because of subsection (a). In subsection (b), the words ‘‘Not later than 270 days after the date of the enactment of this Act’’ are omit- ted because of section 6(f) of the bill. In subsection (b)(4)(A), the words ‘‘Except as provided in subparagraph (B)’’ are omitted as unnecessary. Statutory Notes and Related Subsidiaries PREVENTING ORGANIZATIONAL CONFLICTS OF INTEREST IN FEDERAL ACQUISITION Pub. L. 117–324, Dec. 27, 2022, 136 Stat. 4439, provided that: ‘‘SECTION 1. SHORT TITLE. ‘‘This Act may be cited as the ‘Preventing Organiza- tional Conflicts of Interest in Federal Acquisition Act’. ‘‘SEC. 2. PREVENTING ORGANIZATIONAL CON- FLICTS OF INTEREST IN FEDERAL ACQUISI- TION. ‘‘(a) IN GENERAL.—Not later than 18 months after the date of the enactment of this Act [Dec. 27, 2022], the Federal Acquisition Regulatory Council shall revise the Federal Acquisition Regulation— ‘‘(1) to provide and update— ‘‘(A) definitions related to specific types of orga- nizational conflicts of interest, including unequal access to information, impaired objectivity, and bi- ased ground rules; ‘‘(B) definitions, guidance, and illustrative exam- ples related to relationships of contractors with public, private, domestic, and foreign entities that may cause contract support to be subject to poten- tial organizational conflicts of interest, including undue influence; and ‘‘(C) illustrative examples of situations related to the potential organizational conflicts of interest identified under this paragraph, including an exam- ple of the awarding by a Federal regulatory agency of a contract for consulting services to a contractor if employees of the contractor performing work under such contract are permitted by the con- tractor to simultaneously perform work under a contract for a private sector client under the regu- latory purview of such agency; ‘‘(2) to provide executive agencies with solicitation provisions and contract clauses to avoid or mitigate organizational conflicts of interest, for agency use as needed, that require contractors to disclose informa- tion relevant to potential organizational conflicts of interest and limit future contracting with respect to potential conflicts of interest with the work to be performed under awarded contracts; ‘‘(3) to allow executive agencies to tailor such solic- itation provisions and contract clauses as necessary to address risks associated with conflicts of interest and other considerations that may be unique to the executive agency; ‘‘(4) to require executive agencies— ‘‘(A) to establish or update as needed agency con- flict of interest procedures to implement the revi- sions to the Federal Acquisition Regulation made under this section; and ‘‘(B) to periodically assess and update such proce- dures as needed to address agency-specific conflict of interest issues; and ‘‘(5) to update the procedures set forth in section 9.506 of the Federal Acquisition Regulation to permit Page 74 TITLE 41—PUBLIC CONTRACTS § 2304 contracting officers to take into consideration pro- fessional standards and procedures to prevent organi- zational conflicts of interest to which an offeror or contractor is subject. ‘‘(b) EXECUTIVE AGENCY DEFINED.—In this section, the term ‘executive agency’ has the meaning given the term in section 133 of title 41, United States Code.’’ DEADLINE FOR ISSUANCE OF STANDARD POLICY Pub. L. 111–350, § 6(f)(1), Jan. 4, 2011, 124 Stat. 3854, provided that: ‘‘The requirement in section 2303(b)(1) of title 41, United States Code, to issue a policy shall be done not later than 270 days after October 14, 2008.’’ REVIEW OF FEDERAL ACQUISITION REGULATION RELATING TO CONFLICTS OF INTEREST Pub. L. 110–417, [div. A], title VIII, § 841(b), Oct. 14, 2008, 122 Stat. 4539, provided that: ‘‘(1) REVIEW.—Not later than 12 months after the date of the enactment of this Act [Oct. 14, 2008], the Admin- istrator for Federal Procurement Policy, in consulta- tion with the Director of the Office of Government Eth- ics, shall review the Federal Acquisition Regulation to— ‘‘(A) identify contracting methods, types and serv- ices that raise heightened concerns for potential per- sonal and organizational conflicts of interest; and ‘‘(B) determine whether revisions to the Federal Acquisition Regulation are necessary to— ‘‘(i) address personal conflicts of interest by con- tractor employees with respect to functions other than those described in subsection (a) [now 41 U.S.C. 2303(b)]; or ‘‘(ii) achieve sufficiently rigorous, comprehensive, and uniform government-wide policies to prevent and mitigate organizational conflicts of interest in Federal contracting. ‘‘(2) REGULATORY REVISIONS.—If the Administrator de- termines pursuant to the review under paragraph (1)(B) that revisions to the Federal Acquisition Regulation are necessary, the Administrator shall work with the Federal Acquisition Regulatory Council to prescribe appropriate revisions to the regulations, including the development of appropriate contract clauses. ‘‘(3) REPORT.—Not later than March 1, 2010, the Ad- ministrator shall submit to the Committees on Armed Services of the Senate and House of Representatives, the Committee on Homeland Security and Govern- mental Affairs in the Senate, and the Committee on Oversight and Government Reform [now Committee on Oversight and Accountability] of the House of Rep- resentatives a report setting forth such findings and de- terminations under subparagraphs (A) and (B) of para- graph (1), together with an assessment of any revisions to the Federal Acquisition Regulation that may be nec- essary.’’ § 2304. Conflict of interest standards for consult- ants (a) CONTENT OF REGULATIONS.—The Adminis- trator shall prescribe under this division Gov- ernment-wide regulations that set forth— (1) conflict of interest standards for persons who provide consulting services described in subsection (b); and (2) procedures, including registration, cer- tification, and enforcement requirements as may be appropriate, to promote compliance with the standards. (b) SERVICES SUBJECT TO REGULATIONS.—Regu- lations required by subsection (a) apply to— (1) advisory and assistance services provided to the Federal Government to the extent nec- essary to identify and evaluate the potential for conflicts of interest that could be preju- dicial to the interests of the United States; (2) services related to support of the prepara- tion or submission of bids and proposals for Federal contracts to the extent that inclusion of the services in the regulations is necessary to identify and evaluate the potential for con- flicts of interest that could be prejudicial to the interests of the United States; and (3) other services related to Federal con- tracts as specified in the regulations pre- scribed under subsection (a) to the extent nec- essary to identify and evaluate the potential for conflicts of interest that could be preju- dicial to the interests of the United States. (c) INTELLIGENCE ACTIVITIES EXEMPTION.— (1) ACTIVITIES THAT MAY BE EXEMPT.—Intel- ligence activities as defined in section 3.4(e) of Executive Order No. 12333 or a comparable definitional section in any successor order may be exempt from the regulations required by subsection (a). (2) REPORT.—The Director of National Intel- ligence shall report to the Intelligence and Ap- propriations Committees of Congress each January 1, delineating the activities and orga- nizations that have been exempted under para- graph (1). (d) PRESIDENTIAL DETERMINATION.—Before the regulations required by subsection (a) are pre- scribed, the President shall determine if pre- scribing the regulations will have a significantly adverse effect on the accomplishment of the mission of the Defense Department or another Federal agency. If the President determines that the regulations will have such an adverse effect, the President shall so report to the appropriate committees of the Senate and the House of Rep- resentatives, stating in full the reasons for the determination. If such a report is submitted, the requirement for the regulations shall be null and void. (Pub. L. 111–350, § 3, Jan. 4, 2011, 124 Stat. 3736.) HISTORICAL AND REVISION NOTES Revised Section Source (U.S. Code) Source (Statutes at Large) 2304(a) ........ 41:405b(a). Pub. L. 100–463, title VIII, § 8141, Oct. 1, 1988, 102 Stat. 2270–47. 2304(b) ........ 41:405b(b). 2304(c) ........ 41:405b(d). 2304(d) ........ 41:405b(e). In this section, the text of 41:405b(c) is omitted as ob- solete. In subsection (a), before paragraph (1), the words ‘‘The Administrator shall prescribe under this division Government-wide regulations’’ are substituted for ‘‘Not later than 90 days after October 1, 1988, the Adminis- trator of the Office of Federal Procurement Policy shall issue a policy, and not later than 180 days there- after Government-wide regulations shall be issued under the Office of Federal Procurement Policy Act (41 U.S.C. 401 et seq.)’’ to eliminate obsolete words. In subsection (b), before paragraph (1), the words ‘‘the following types of consulting services’’ are omitted as unnecessary. In subsection (c)(2), the words ‘‘Director of National Intelligence’’ are substituted for ‘‘Director of Central Intelligence’’ because of section 1081(a) of the Intel- ligence Reform and Terrorism Prevention Act of 2004 (Public Law 108–458, 50 U.S.C. 401 note). The words ‘‘each January 1’’ are substituted for ‘‘no later than January 1, 1990, and annually thereafter to eliminate obsolete and unnecessary words. The words ‘‘exempted