What Would You Do? (Excerpt from June/July 1999 Circuit)

At some point in their Northrop Grumman careers, most employees will be called upon to assist in preparing a proposal or negotiating new business. When this happens, it's important to know and understand the rules that govern federal agency procurements and negotiations.

Abuses in the acquisition process during the 1980's resulted in the passage of federal laws that direct how contractors must collect and present information during the federal procurement process. The two most significant laws for the sector's purposes are the Federal Procurement Policy Act (more commonly known as the Procurement Integrity Act), and the Truth in Negotiations Act (TINA).

Test your knowledge of these two laws by answering the following five questions. Since the laws are quite complex, answers are not always obvious. Accordingly, employees should review the relevant training information on these subjects provided on Command Media under the Legal Compliance--Ethics and Business Conduct section. In addition, employees are encouraged to seek out educational opportunities through subject in-house experts and process owners in Contracts, Finance, and Legal.

Question #1:

You are providing financial input on a DoD proposal. Over the past two years you have had professional contact with a federal employee involved with this procurement. You run into the federal official at a little league game and quickly strike up a conversation about work. Can you casually discuss with him the direction of your competitor's submissions and bounce a few numbers off him before finalizing your input?

Question #2:

You are a member of a team writing a proposal for a sole source procurement. Can you discuss information related to your proposal with the federal procurement official?

Question #3:

A consultant is hired to assist your team in the preparation of a federal procurement solicitation. The consultant has previously worked for the two companies your team is competing against for this job. Unbeknownst to you, the consultant has obtained information relative to your competitor's labor rates and has used that information in your proposal. Has a violation occurred, and if so, who's responsible?

Question #4:

In the morning, you meet with customers and agree on a price. Later that evening, as you leave the office to attend the victory celebration, you receive word from one of your suppliers about a drop in the price per unit for a component you included in your cost calculation. Do you report the change in price?

Question #5:

You have been asked by your manager to supply cost data for a contract negotiation. Your manager is clear about what she wants to achieve in this effort. The cost data you supply more closely responds to your manager's desire than what your research and calculations show. Who is responsible for submitting inaccurate information?

Correct answers:

  1. No, competitive procurements should not be discussed even casually, and talking about competitor information is a clear violation of the law.
  2. Yes, the Procurement Integrity Act applies only to competitive procurements.
  3. Yes, and the company is responsible for those who act in its name.
  4. Yes, you should report the change in price to the senior Contracts representative who negotiated the deal as soon as possible.
  5. Both are responsible; employees are required to provide accurate information, and managers have responsibility for the accuracy of information provided by their organizations.