Our 1099 Employee now works for Fed Gov on the same project... COI?

What was the person’s “key personnel position” role and how does that relate to their current “key inspection position” role? The person wasn’t an employee of your company. Are they now unfairly treating your company? 

I had a friend who was the “office engineer” (contract admin role) in one of our ten Corps of Engineers Resident Offices on the construction of the Tennessee-Tombigbee Waterway, which was a major Civil Works Project in the 1980’s.

He was previously employed on one of the several large construction prime contracts under that Resident Office. They weren’t happy.

They later submitted a claim on the contract. He knew all the facts about the situation.  Of course, he advised the KO during the claims review. The claim had no merit.

Boomer635 said:

I believe there is a conflict of interest here;

You are talking about a COI of a government employee.  The FAR does not cover this except in regard to FAR 3.1, particularly the Procurement Integrity Act.  Most COI regulations are found in the Government-wide Ethics Regulation.  What ethics rule to you think this individual may have violated?

Typically, the gov't looks for potential organizational conflicts of interest (OCIs) from the standpoint of whether the federal employee's work on an acquisition could call into question the integrity of the procurement process.  This is most often looked at w/r/t source selections.  If a federal employee on a source selection could have a monetary interest imputed to them via a potential offeror, that needs to either be mitigated satisfactorily or remove that person from the acquisition.  For example, the federal employee's spouse is an employee of a potential offeror - if that offeror wins the award, the federal employee stands to benefit by virtue of their spouse's employment.  Even if they will not actually profit from the award, the appearance of an impropriety can sometimes be enough.  I don't see anything like that in your facts.

It doesn't sound like the former independent contractor has any financial interest in your company such that their actions now as a federal employee call into question their performance and, thereby, the gov't's actions.  I don't think there'd be an issue even if they had been an actual employee of your company.

The only thing I can see a potential complaint would be what Joel asked - is the gov't treating you unfairly now, and is it tied to the employee's performance of their duties?  I think even if the working relationship you with that employee ended poorly, you'd have a tough time validating their current actions are being done out of spite.

joel hoffman said:

What was the person’s “key personnel position” role and how does that relate to their current “key inspection position” role? The person wasn’t an employee of your company. Are they now unfairly treating your company? 

I had a friend who was the “office engineer” (contract admin role) in one of our ten Corps of Engineers Resident Offices on the construction of the Tennessee-Tombigbee Waterway, which was a major Civil Works Project in the 1980’s.

He was previously employed on one of the several large construction prime contracts under that Resident Office. They weren’t happy.

They later submitted a claim on the contract. He knew all the facts about the situation.  Of course, he advised the KO during the claims review. The claim had no merit.

The person was a Site Safety and Health Officer (SSHO) responsible for being on site during all repairs.  The individual now performs QA for the agency.  This individual now inspects the work for the same personnel he used to support on the contractor side.  I am hearing from the field that the great relationship we historically had with the QA, may not be as positive as it had been previously, and most inspection comments provided by this person are not supported by the scope, specs, etc.   

When I read the DoD Code of Ethics for COI it appears to revolve around actual or the appearance of some financial gain, which would not be the case here.  We have an issue that may be real or the perception of an impartiality issue.

Retreadfed said:

You are talking about a COI of a government employee.  The FAR does not cover this except in regard to FAR 3.1, particularly the Procurement Integrity Act.  Most COI regulations are found in the Government-wide Ethics Regulation.  What ethics rule to you think this individual may have violated?

I understand that when I left the government, I had a "cooling off" period of two years before I could actively pursue work from the program I used to be on, and a ban on any contracts that I worked on as a gov employee.  However, I am not seeing something similar under the DoD code of ethics for the other way around.... when a contractor goes to the Government.   The sticking point I also have is that a 1099 employee is technically an independent contractor (i.e., subcontractor) and does a code of ethics apply to them as it is a quasi-employer/employee relationship.   I don't want to take my concerns to the contracting officer, if a COI is not supported, but my team feels strongly that the inspector is not impartial and may hold animosity towards our company from the previous relationship.

bosgood said:

Typically, the gov't looks for potential organizational conflicts of interest (OCIs) from the standpoint of whether the federal employee's work on an acquisition could call into question the integrity of the procurement process.  This is most often looked at w/r/t source selections.  If a federal employee on a source selection could have a monetary interest imputed to them via a potential offeror, that needs to either be mitigated satisfactorily or remove that person from the acquisition.  For example, the federal employee's spouse is an employee of a potential offeror - if that offeror wins the award, the federal employee stands to benefit by virtue of their spouse's employment.  Even if they will not actually profit from the award, the appearance of an impropriety can sometimes be enough.  I don't see anything like that in your facts.

It doesn't sound like the former independent contractor has any financial interest in your company such that their actions now as a federal employee call into question their performance and, thereby, the gov't's actions.  I don't think there'd be an issue even if they had been an actual employee of your company.

The only thing I can see a potential complaint would be what Joel asked - is the gov't treating you unfairly now, and is it tied to the employee's performance of their duties?  I think even if the working relationship you with that employee ended poorly, you'd have a tough time validating their current actions are being done out of spite.

As you stated, the Code of Ethics appears to hinge on some form of monetary gain, directly or indirectly, real or perceived.  I will tread cautiously and will send an email to the contracting officer, without our inspection concerns, that makes the gov aware that there may be a perceived COI.  I am not going to mention that a gov employee may, or may not, have an axe to grind, as it probably isn't pertinent, nor can I prove it.  If I am lucky, maybe the contracting officer or agency ethics counselor will connect some dots that I don't see and help mitigate the appearance of a COI.

Joel, Retreadfed and Bosgood,  I thank each of you for your incite on this issue.

Boomer635 said:

Joel, Retreadfed and Bosgood,  I thank each of you for your incite on this issue.

Boomer, I hope I didn’t incite you! 🤪 I think you meant “insight” 🤠

However, you believe that: 

Boomer635 said:

…most inspection comments provided by this person are not supported by the scope, specs, etc.

They may or may not be attitude problems but could be performance issues. I recommend that you document and at least discuss the differences of fact or opinion with a COR or other government official orally plus formally in writing. Like you said, they government might be able to connect the dots. Good luck!!

Boomer635 said:

Your thoughts

The individual may not realize that they may have a responsibility to declare the possible impartiality.   Lots of thoughts on the route you might take to express your concerns.  Leaving it to your imagination.

https://www.ecfr.gov/current/title-5/chapter-XVI/subchapter-B/part-2635/subpart-E

Boomer635 said:

The person was a Site Safety and Health Officer (SSHO) responsible for being on site during all repairs.  The individual now performs QA for the agency.  This individual now inspects the work for the same personnel he used to support on the contractor side.  I am hearing from the field that the great relationship we historically had with the QA, may not be as positive as it had been previously, and most inspection comments provided by this person are not supported by the scope, specs, etc.

You may have rights to sue this person for tortious interference with contractual relations with the government. You would need to consult an attorney. In general, you would need to prove that without a factual basis, he acted in a way that was purposely meant to cause harm to your company. It is a tough road but your attorney may find a basis to send a letter to him which could make him request a new job assignment with the government.

Proving purposeful intent can be difficult…

It may just be lack of competence and/or inexperience in the job.

joel hoffman said:

Proving purposeful intent can be difficult…

It may just be lack of competence and/or inexperience in the job.

That might be his defense, but it would not go well for him at all to maintain such a defense.

The continuing discussion reminded me of the below.  Long decision but the portion regarding "Bad Faith" while not directly spot on may be of interest.

https://www.cbca.gov/files/decisions/2013/HYATT_03-15-13_1789, 1845, 1929, 1930__ALK_SERVICES_INC.PDF

C Culham said:

The continuing discussion reminded me of the below.  Long decision but the portion regarding "Bad Faith" while not directly spot on may be of interest.

https://www.cbca.gov/files/decisions/2013/HYATT_03-15-13_1789, 1845, 1929, 1930__ALK_SERVICES_INC.PDF

I don't think it was smart of the government to assign this person the job they did. It has the appearance of being inappropriate. I think a case can be made against the government. It does not look like an accident that:

"The person was a Site Safety and Health Officer (SSHO) responsible for being on site during all repairs.  The individual now performs QA for the agency.  This individual now inspects the work for the same personnel he used to support on the contractor side."

Neil Roberts said:

That might be his defense, but it would not go well for him at all to maintain such a defense.

Not so fast my friend.  When I worked for the government, I successfully used government incompetence as a defense against various complaints in administrative proceedings.

Neil Roberts said:

The person was a Site Safety and Health Officer (SSHO) responsible for being on site during all repairs.  The individual now performs QA for the agency.  This individual now inspects the work for the same personnel he used to support on the contractor side."

The contractor’s site safety and health position generally doesn’t encompass the quality assurance duties of the government QA position or (usually) the corresponding quality control duties of the contractor. 

However, all QA personnel in the USACE (Corps of Engineers), as well as any other USACE site personnel have the duty to enforce the contract safety requirements. If the QA person has knowledge of unsafe contractor practices, they can and should act accordingly.

I don’t see any “conflict of interest” here, unless the QA person is treating the contractor unfairly, acting in bad faith, arbitrarily or capriciously, etc. (e.g., an obvious vendetta).

If Boomer believes that the QA person is wrongly interpreting the contract requirements, Boomer should raise that and any other behavioral issues to the appropriate government representatives and/or the KO.

Neil Roberts said:

That might be his defense, but it would not go well for him at all to maintain such a defense.

In a conflict of interest law suit? Sure it would. That’s not conflict of interest.

And the contractor should be raising every issue of incorrect interpretation of contract requirements to the appropriate government personnel (e.g., the QA rep’s supervisors). If a contractor sued one of our QA reps without doing that, I can guarantee they would likely never again win a best value contract award.  it could possibly become a responsibility issue and would also likely be reflected in the performance rating.

joel hoffman said:

I can guarantee they would likely never again win a best value contract award.

I am reminded that a contractor shall be given the opportunity to address adverse past performance if not given the opportunity to do so previously.  FAR 15.306

As such I reason in a best value procurement kicking a contractor to the curb for pursuing such an action on a previous contract is past performance.  Therefore I also reason that if a contractor is not  given the opportunity to address their action and it is considered it will simply depend on the rules and history.

joel hoffman said:

In a conflict of interest law suit? Sure it would. That’s not conflict of interest.

Joel, this is what lawsuit I said: "tortious interference with contractual relations with the government." Admitting one is incompetent or inexperienced could result in loss of employment and injury to one's own reputation.

joel hoffman said:

And the contractor should be raising every issue of incorrect interpretation of contract requirements to the appropriate government personnel (e.g., the QA rep’s supervisors). If a contractor sued one of our QA reps without doing that, I can guarantee they would likely never again win a best value contract award.  it could possibly become a responsibility issue and would also likely be reflected in the performance rating.

It is a good idea to put the employee and the government on notice with a letter. However I am not aware that failing to do so means the lawsuit is not permitted to be filed. This can be discussed with their attorney. I am more bothered with your guarantee. Looks like another potential lawsuit in the making.

On 11/18/2023 at 10:21 AM, Neil Roberts said:

Joel, this is what lawsuit I said: "tortious interference with contractual relations with the government." Admitting one is incompetent or inexperienced could result in loss of employment and injury to one's own reputation.

Neil, of course anyone can be sued by someone else at any time.  However, as I am sure you know, that does not mean that the suit is proper.  If a government employee is sued for an alleged tort done in his/her official capacity, the government can step in and file a motion to have the government substituted as the defendant.  In that case, the provisions of the Federal Tort Claims Act come into play.  Further, it would be the government who asserts the incompetence of the employee as part of its defense if it gets that far.

Wow.  This discussion evolved into multiple mentions of lawsuits.  That should be the very last resort.  The prudent thing to do is start with a conversation with the COR and perhaps PM.  Listen to their reactions and positions.  You may resolve things at that level.  If not you can request a meeting with their boss.  In any case, involve the contracting officer.  One other step is requesting a meeting with senior agency management.  In all circumstances, I would start with the introduction that my company wants to do the best possible job for the agency but we are facing some difficulty with inspection.   Finally if I wasn’t satisfied, a letter setting forth my company’s position and requesting a formal response comes last.

Of course, a lawsuit is an option but not something I would recommend based on what’s been said.  First I think the grounds is a stretch.  Second, I think most government personnel would want to resolve it before that happens.  Finally it can harm receiving future business.  I won’t get into arguments here whether that’s possible or fair, but it’s reality.

formerfed said:

This discussion evolved into multiple mentions of lawsuits.  That should be the very last resort.

I agree.  Further, instead of a lawsuit, a claim might be the better course of action if the matter cannot be resolved through communications with the agency.  If the inspector is holding you to an unreasonable standard or one that is not authorized by the contract and that is costing the contractor money, a constructive change might have occurred that gives the contractor the right to an REA/claim.

@Retreadfed  good thought/suggestion.

@retreadfed;@formerfed, several of the things you say are reasonable. I did not recommend immediate filing of anything but if an eventually come down to suing, what is wrong with the poster finding out now that there may be a legal recourse and "not just" talking to the government as a recourse? Some individuals, governments and companies become reasonable about negotiating and discussing disputes only after they are sued.

Retreadfed said:

Neil, of course anyone can be sued by someone else at any time.  However, as I am sure you know, that does not mean that the suit is proper.  If a government employee is sued for an alleged tort done in his/her official capacity, the government can step in and file a motion to have the government substituted as the defendant.  In that case, the provisions of the Federal Tort Claims Act come into play.  Further, it would be the government who asserts the incompetence of the employee as part of its defense if it gets that far.

...and the government may not step in, claiming that the individual's conduct was so egregious as to have been out of scope to acting in an official capacity.

Retreadfed said:

However, as I am sure you know, that does not mean that the suit is proper.

...and I am sure you know that filing a suit does not mean it is improper.

On 11/17/2023 at 2:13 PM, Retreadfed said:

Not so fast my friend.  When I worked for the government, I successfully used government incompetence as a defense against various complaints in administrative proceedings.

The situation here would be the government employee, under oath, in a court trial, admits he or she was incompetent or inexperienced, despite the fact that he or she took this specific job. That doesn't seem like that is what you are specifically talking about.

Neil Roberts said:

Some individuals, governments and companies become reasonable about negotiating and discussing disputes only after they are sued.

Amen or a claim is filed.  These things tend to focus the mind.