E.  Relationship to Existing Statutes and Regulations, Including the Clinger/Cohen Act Ban on New Certifications That Are Not Required by Law

Comment: Two respondents concluded that there was no need for this rule because (1) the Congress already addressed the concerns underlying the GAO report by enacting section 847 of the NDAA for FY 2009 (Pub. L. 110-417, enacted October 14, 2008); (2) FAR subpart 3.10, Contractor Code of Business Ethics and Conduct, already requires contractors to monitor post-employment compliance with 18 U.S.C. 207; and (3) the responsibility for post-employment compliance should rest primarily with former DoD employees. One of these respondents stated that the representation violates the Clinger/Cohen Act ban on new contractor certifications that are not required by law.

Response:

(1) Section 847 of the NDAA for FY 2008 is entitled "Requirements for Senior Department of Defense Officials Seeking Employment with Defense Contractors." The provision applies to defense contractors by prohibiting such contractors from knowingly providing compensation to a former DoD official "within two years after such former official leaves (DoD), without first determining that the former official has sought and received (or has not received after 30 days of seeking) a written opinion from the appropriate ethics counselor regarding the applicability of post-employment restrictions to the activities that the former official is expected to undertake on behalf of the contractor." While there is some relationship to section 847, the representation in the rule addresses the broader arena of post-employment restrictions (see paragraph A in the Background section of this notice for the listing). Further, the prohibition against providing compensation (section 847) was implemented by adding the clause at DFARS 252.203-7000, Requirements Relating to Compensation of Former DoD Officials (see the interim rule at 74 FR 2408, dated January 15, 2009, and the final rule at 74 FR 59913, dated November 19, 2009; DFARS Case 2008-D007).

(2)  There is some relationship to FAR subpart 3.10. However, the FAR policy (FAR 3.1002(b)) states that contractors "should have a written code of business ethics and conduct" and "should have an internal control system." (A contractor is not required to have an internal control system unless the procurement is over $5 million and it is not a small business concern (see FAR 3.1004(a) and 52.203-13(c)(2)). Further, the proposed rule is applicable exclusively to DoD procurements, and it is narrower than FAR subpart 3.10, in that it is concerned exclusively with post-employment restrictions for former DoD officials.

(3)  The former DoD employee should be primarily responsible for his or her compliance with post-employment restrictions. However, businesses should support the highest ethical standards (see FAR 3.1002(a)) and should not hire former DoD officials who have not complied with the law or assign them to work on projects that are barred to them by the nature of their DoD assignments. The representation at DFARS 252.203-7005 in the final rule is intended to ensure that DoD does business with companies that are committed to the highest ethical standards.

(4)  The Clinger/Cohen Act prohibited the creation of contractor certifications that are not required by law. The FAR and DFARS regularly employ the distinction between a representation and a certification, and representations have regularly been deemed not subject to the Clinger/Cohen Act ban.