Beyond Reproach: The Incumbent's Bind

Government Services Insider 2004
Stuart Gilman

This article is reprinted with permission from Government Services Insider January 2004.

Editor's Note:

Each issue will contain this advice column prepared by the Ethics Resource Center that addresses an issue of concern to the industry.

Concern:

"Our firm is as straight as they come, but I get uneasy when I see how we exploit current contracts for our own use. We gain, passively, inside knowledge of the follow-on opportunities and recompetes, even though the clients try to wall us off from this information. It's just what happens when you're the incumbent or on site. Our company has a self-proclaimed strong ethics program, but it is almost silent on this issue. How can we stay out of trouble?"

Response by the Ethics ResourceCenter:

For government contractors, inside information, whether passive or active, is a disaster waiting to happen. Depending on the knowledge gained you could be financially punished under the terms of the contract, found civilly liable, lose the contract or be debarred. In extreme cases there are actual criminal penalties. All of this is bad news, and the legal reasons to manage this issue seem fairly obvious.

Obeying the law in this area is not enough, however. Ethical behavior means being proactive when confronted with a values conflict. It is not a valid excuse that you pick up the information passively --an accidental e-mail, water fountain conversation, or document dropped on your desk. How you handle this situation determines the ethical climate of your organization.

Ethically you have an obligation to ensure fairness in the procurement and contracting process. Fairness --an even playing field --is critical to the gov-ernment because it gives the American people confidence that their tax monies (that's us, too!) are being expended wisely.

Fairness is also good for you and your company. Most companies believe that they provide the best product for the fairest price. That is what makes the market place work. Inside information undermines this process. It makes peo-ple lazy, and ultimately leads to shoddy products and a lackadaisical attitude toward the customer. As expensive as a lost contract might be, you can never buy your reputation back. Once that has vanished the marketplace is incredibly unforgiving when it comes to letting you re-establish your brand.

This answers why you should do the right thing but how do you know what the right thing is? Consider these questions:

Do you tell the procurement or contracting official?

Many companies are afraid to do so for fear of being excluded from competition. This might indeed be the result; how-ever, procurement officials can take into account the transparency of the company and determine "no harm, no foul." Non-disclosure doesn't get you there.

Do you affirmatively help the agency and department build better walls?

Absolutely. Your willingness to do so prevents others from exploiting weak systems and also testifies to your integrity. People prefer to work with honest people.

What are the consequences of doing nothing?

You will create a culture where passive dishonesty is part of the culture. Eventually this catches up with organizations and often destroys them. Enron, Worldcom and Tyco make the news, but many other companies destroyed by ethical failures don't even make the obituary page.

*Dr. Stuart Gilman, the author, is president of the Ethics Resource Center in Washington, DC. The Center helps organizations to create ethical work environments through education, research, training and global partnerships. Dr. Gilman can be reached at ethics@ethics.org.