Inviting Federal clients to company events

I have a one word answer for the whole thing -NO!

Reference and comment - https://www.ecfr.gov/current/title-5/chapter-XVI/subchapter-B/part-2635   While others may think there is wiggle room for a different response your scenerio presents if not a conflict "a prohibited source" for the government folks but a potential conflict of interest for the government folks.   All may do as they do but quite honestly just the flavor of your post could give rise to a IG investigation.  "TOPC or COR positions"  "Friends"  "Close" for many years.  Harsh but candid response on my part.

I generally agree with Carl's advice here.  In addition, I hope the company is not charging the government for the cost of the event, which is expressly unallowable entertainment costs under FAR 31.205-14, to include the costs incurred in planning the event which are unallowable directly associated costs.  See FAR 31.206-1(a).

CHILINVLN said:

COR position

I as continue to follow this dawned on me - So invite the COR and not the CO?   Oh wait a minute in truth the COR is the CO by definition of the FAR itself.  Reference FAR 2.101 "Contracting Officer .....The term includes certain authorized representatives of the contracting officer acting within the limits of their authority as delegated by the contracting officer. "

NO! - remains my one word response.

CHILINVLN said:

Question:  Is this acceptable for the organization to do, where does the company draw the line, and what steps would we need to take to reduce/mitigate risk to make this happen?  Do we give them the option to join and charge a fee vs extending an invitation?  Do we just put a statement on the invitation that the event meal has a value less than $25?  Appreciate any advice on this topic.

There's no rule against Company A making the invitation. Just keep in mind that the Government folks you invite are generally required to decline such an invitation. An exception would be if the gratuity would not exceed $20 (not $25) and the sum total of gifts received by the Government employee from Company A over the year would not exceed $50. I have attended such events as a Government employee.

Funny story, somewhat related. A COR I knew used to go golfing with some of the contractors he oversaw. Of course, he would pay his greens fee because having the contractor pay for it would be accepting a gratuity from a prohibited source.

To make the game more interesting, the COR and the contractors would all contribute to a pot of money that would go to the winner. Believe it or not, the COR would win every time. I guess he was just a really good golfer.

CHILINVLN said:

Question:  Is this acceptable for the organization to do, where does the company draw the line, and what steps would we need to take to reduce/mitigate risk to make this happen?  Do we give them the option to join and charge a fee vs extending an invitation?  Do we just put a statement on the invitation that the event meal has a value less than $25?  Appreciate any advice on this topic.

Your question is about is it permissible to invite government personnel.  This comes up a lot with contractors especially around the holiday season.  Several companies, mostly those dealing with specialized consulting, public affairs, research, medicine, education and the like invite government employees as part of a widely attended gathering.  The employee’s supervisor needs to approve it though as being in the agencies interest.

See this DoD document on Holiday guidance and exception 1 under open houses and parties by prohibited sources.  Pretty much all agencies publish something similar

https://dodsoco.ogc.osd.mil/Portals/102/dod_holiday_guidance.pdf

Don Mansfield said:

There's no rule

No rule for the contractor depends on intention.  For a COR there are dang sure rules so why would a contractor even offer?

In light of FAR 3.101-2 there is no debate as to the generalities of the $50 for a COR.   When one is in a position as described in -2  it is not the general rules allowed by 5 CFR that applies it is individual agency regulation that applies.  

Additional reference - 52.203-3

You may of had full faith in your exemplified COR but do you really know?

If I knew of the instance I would have reported and let others figure out intent.  Reference FAR 3.203.

Likewise with regard to the same COR there is this (reference below) at page 26, if that COR was DoD.

USA001435-22-DPC.pdf

The government organization should have ethics standards and training regarding this topic. we had annual training on this subject. Thus, if you want to find out if such events are proper, you could ask the KO. It would be a pure no no in my former, DOD Army Agency.

The company I used to work with had 100% of its business from the federal government.  They were extremely careful about ethics because any violation could mean the end of the business.  The usual holiday party was backed by local and ethics opinions by just about every agency.  They all pretty much followed what I quoted in the DoD source.  They also encouraged any invitee to check with their respective ethics officer if there was any doubt.

As a government employee I was offended by the implication a $25 dollar gift would influence me.

C Culham said:

Likewise with regard to the same COR there is this (reference below) at page 26, if that COR was DoD.

USA001435-22-DPC.pdf

That reference prohibits it except when an exception exists - the $20 limit is an exception

https://www.govinfo.gov/content/pkg/CFR-2011-title5-vol3/pdf/CFR-2011-title5-vol3-sec2635-203.pdf

formerfed said:

That reference prohibits it except when an exception exists - the $20 limit is an exception

I would offer that you have misread.  

The FAR at 3.101-2 requires an explicit exception that must be contained in "agency" regulation.  There are no FAR supplements that state an exception.  The exception that you hang your hat on is a CFR regulation that applies to government employees in general not those as identified in FAR 3.101-2.  The COR direction of DOD that I cited is clear on this difference.

To my point please show me an agency specific regulation that states a CO or their delegated COR may accept a "gift" inclusive of entertainment from a contractor with whom that CO and/or does official business with?

As additional reference READ (emphasis added) 5 CFR § 2635.205.

After thinking about this more, a COR is in a different situation.  But I don’t see anything specific prohibiting them. 

Common sense would say a COR just not accept anything from a contractor they are monitoring.  But the original question is about inviting government employees in general. Somehow we got on a tangent about CORs and not about the question in general.  However I don’t see anything specifically prohibiting it.  See this DoD COR Guidebook, part 2.10.

https://www.acq.osd.mil/dpap/policy/policyvault/USA002477-17-DPC.pdf

 It states CORs are prohibited from accepting a gift that may influence their decisions, it also notes Government personnel may accept gifts in other circumstances and CORs should consult ethics officials.  Also look at the slide on page 5.

formerfed said:

Somehow we got on a tangent about CORs

The OP said this - 

CHILINVLN said:

the client may be in a TPOC or COR position.

And this..

CHILINVLN said:

These are clients who we directly and indirectly support on Federal contracts

The FAR is explicit at 3.101-2 about  "no Government employee may solicit or accept,"  (emphasis added) and this **"**from anyone who (a) has or is seeking to obtain Government business with the employee’s agency, (b) conducts activities that are regulated by the employee’s agency, or (c) has interests that may be substantially affected by the performance or nonperformance of the employee’s official duties." (emphasis added).

formerfed said:

See this DoD COR Guidebook, part 2.10.

Which says this - “gift” includes “any gratuity, favor, discount, entertainment, hospitality, loan, forbearance, or other item having monetary value." (emphasis added). 

and then goes on to say - "FAR Subpart 3.101-2 provides basic guidance about accepting gifts from contractor personnel: do not accept any gratuity, gift, favor, loan, entertainment, or anything of value from a prospective or current contractor, unless a regulatory exception or exclusion applies." (emphasis added).

So again please point in the direction of a regulatory exception or exclusion.   

You want it to be okay for a COR, or another government employee, to accept a gift from a prohibited source (aka contractor).  Especially one that is the subject of the OP that has been - " folks we consider "friends" and have been close to for years."  Reference this quote from 5 CFR 2635.203 "

"Prohibited source means any person who:

(1) Is seeking official action by the employee's agency;

(2) Does business or seeks to do business with the employee's agency;

(3) Conducts activities regulated by the employee's agency;

(4) Has interests that may be substantially affected by the performance or nonperformance of the employee's official duties; or

(5) Is an organization a majority of whose members are described in paragraphs (d)(1) through (4) of this section."

It is not okay "Think" some more!

Quote

the client may be in a TPOC or COR position

If it’s a TPOC or COR position, I agree that person should not go.  I said that in the preceding post above.  But regardless a person just needs to ask their ethics official.  That’s what the 2.10 section quote in the DOD COR Handbook says that I provided the link too.

On 8/4/2023 at 6:52 AM, CHILINVLN said:

Question:  Is this acceptable for the organization to do, where does the company draw the line, and what steps would we need to take to reduce/mitigate risk to make this happen?  Do we give them the option to join and charge a fee vs extending an invitation?  Do we just put a statement on the invitation that the event meal has a value less than $25?  Appreciate any advice on this topic.

Apparently, your company has no written policy and perhaps should generate one now. This subject is difficult and may depend on federal general/agency rules. Your company should give lots of thought to how your company perceives itself and how it will be perceived by employees, potential and existing customers and others. For example, you left out suppliers.  My suggestions is you obtain legal counsel to thoroughly review and provide advice for each such event.

Neil Roberts said:

Apparently, your company has no written policy and perhaps should generate one now.

Most especially if the contracts eluded to in the opening post are contracts that exceed $6million in value as one would think that FAR 52.203-13 is in the contract(s).