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Highlights

Department of Defense (DOD) officials who serve in senior and acquisition positions and then leave for jobs with defense contractors are subject to the restrictions of post-government employment laws, in order to protect against conflicts of interest. Congress required GAO to report on employment of such officials by contractors who received more than $500 million in DOD's 2005 contract awards. In response, this report (1) provides information on how many former DOD employees worked for contractors in 2006 and estimates how many worked on contracts that were related to their former agencies or to their direct responsibilities and (2) identifies the practices used to monitor restrictions and information challenges in monitoring post-DOD employment. To do this work, GAO matched data from DOD for all employees who left DOD over a 6 year period with data from the Internal Revenue Service (IRS) and from 52 contractors; conducted surveys; and interviewed DOD and contractor officials.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To provide greater transparency during the acquisition process given the fact that former DOD officials can and do work on defense contracts related to their prior agencies or their direct responsibilities, the risk of conflicts of interest and the appearance of conflicts of interest, and the need to maintain public trust in the integrity of defense contracting, the Secretary of Defense should direct the Under Secretary of Defense (Acquisition, Technology, and Logistics) to consider the relevant recent statutory changes and determine if changes in procurement policy are needed to impose additional reporting requirements or other requirements to guard against violations of the government's post-employment rules. For example, DOD could consider requiring defense contractors who are awarded a contract, within a set number of days after contract award, to (1) disclose to the contracting officer the names of employees who are certain former DOD officials (e.g., civilian senior executives, high-level military officers, or acquisition officials) who worked on the response to the solicitation and (2) certify that these employees are in compliance with the applicable post-government employment restrictions.
Closed - Implemented
Defense Federal Acquisition Regulation System Case Number 2010-D020, entitled "Representation Regarding Compensation of Former DOD Officials" was published in the Federal Register Vol. 76, No.223, on November 18, 2011 as a final rule, which implements GAO's recommendation. The rule amends the Defense Federal Acquisition Regulations (DFARS) to require offerers to represent whether former DOD officials who are employees of the offerer are in compliance with post-employment restrictions and that all former DOD officials covered by the Procurement Integrity Act are in compliance with post-employment restrictions set forth in DFARS 203.171-3 and DFARS 252.203-7000. It also requires a representation that former DOD employees employed by the contractor are in compliance with additional post-employment restrictions of 18 USC 207 and 5 CFR parts 2637 and 2631 including FAR 3.104.
Department of Defense After assessing the benefits and costs associated with the certification process, DOD should consider whether and to what extent it should apply a similar mechanism throughout the term of the contract. In responding to a recent report we issued on contractor employee personal conflicts of interest, DOD tasked its Panel on Contracting Integrity to examine issues we raised and potential solutions. It may also want to do the same with regard to post-government employment reporting.
Closed - Implemented
Defense Federal Acquisition Regulation System Case Number 2010-D020, entitled "Representation Regarding Compensation of Former DOD Officials" was published in the Federal Register Vol. 76, No.223, on November 18, 2011 as a final rule, which implements GAO's recommendation. The rule requires offerers to submit representations regarding post-government employment at the time of contract award. In so doing, DOD made the determination after consideration not to apply a similar mechanism throughout the term of the contract.

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