GENERAL SERVICES ADMINISTRATION ACQUISITION MANUAL (GSAM)

## Part 503—Improper Business Practices and Personal Conflicts of Interest

### Subpart 503.1—Safeguards

#### 503.101 Standards of conduct.

#### 503.101-3 Agency regulations.

GSA Standards of Conduct appear at 5 CFR 6701.

#### 503.104 Procurement integrity. #### 503.104-3 Definitions. “Federal agency procurement” as used in FAR 3.104 and in this section, also means acquisitions of leasehold interests in real property.

#### 503.104-4 Statutory and related prohibitions, restrictions, and requirements.

The supervisor must remind a departing employee of the post-employment restrictions in FAR 3.104-4(d) and 3.104-8.

#### 503.104-5 Disclosure, protection, and marking of contractor bid or proposal information and source selection information.

(a) Persons authorized access to information.

(1) The following persons may access contractor bid or proposal information and source selection information to accomplish their responsibilities in a procurement action:

(i) Requirements generators, including client agency representatives, and program and technical experts who develop statements of work, specifications or similar documents.

(ii) Contracting personnel supporting you.

(iii) Personnel serving on technical evaluation boards or source selection evaluation boards.

(iv) Supervisors in your chain of command.

(v) Secretarial, clerical and administrative personnel of the contracting activity responsible for the procurement.

(vi) Small Business Technical Advisors.

(vii) Small Business Administration (SBA) personnel who review determinations not to set-aside acquisitions, determine the small business status of offerors under FAR 19.302, process applications for Certificates of Competency under FAR 19.6, review subcontracting plans, or award contracts under the 8(a) program.

(viii) Personnel in the Credit and Finance Section of Region 6 and other personnel who support you in making contractor responsibility determinations.

(ix) Contract auditors in the Office of Inspector General and Regional Inspector General’s offices.

(x) Department of Labor (DOL) personnel who process preaward EEO clearances under FAR 22.805.

(xi) Attorneys in the Office of General Counsel and Regional Counsel’s offices.

(xii) Personnel involved in contract approval.

(2) The Senior Procurement Executive may authorize additional classes of persons access to contractor bid or proposal information or source selection information.

(3) You may authorize access to contractor bid or proposal information or source selection information if necessary to conduct the procurement. This includes release of information to outside evaluators under 515.305-71. Limit access to only that information the person needs to do his or her job.

(4) You may use GSA Form 3617, Record of Authorization of Access to Contractor Bid or Proposal Information or Source Selection Information, to maintain a list of individuals authorized access by the contracting activity.

(b) Procedures for marking and protecting information. Any individual who prepares, makes, or controls contractor bid or proposal information and source selection information must:

(1) Mark documents as prescribed in FAR 3.104-5(c). You may use GSA Form 3611, Cover Page Source Selection Information, as the cover page for a document that contains source selection information. Mark each page of the document if you use this form.

(2) Provide physical security for documents in the office environment during, and after, duty hours.

(3) Secure interoffice mailing of documents by using opaque envelopes, “double wrapping” with more than one envelope, and sealing envelopes securely.

(4) Maintain strict control over oral communications about the acquisition.

(c) Requests for information from Congress. For requests from a member of Congress, see 505.403.

(d) Responsibilities of departing employees. The supervisor must advise each departing employee who participated personally and significantly in a procurement of continuing responsibilities under:

(1) Subsection 27(a) of the Office of Federal Procurement Policy (OFPP) Act (41 U.S.C. 423), which prohibits disclosing procurement information (see FAR 3.104-4(a)).

(2) Subsection 27(d) of the OFPP Act, which establishes post-employment restrictions (see FAR 3.104-4(d)).

(3) Other statutes and regulations concerning prohibited conduct (see FAR 3.104-1(b)).

#### 503.104-9 Contract clauses. ##### Acquisitions Of Leasehold Interests In Real Property, Insert a clause substantially the same as the clause at 552.203-70, Price Adjustment for Illegal or Improper Activity, in solicitations and contracts for and modifications to leasehold interests in real property exceeding $100,000.

#### 503.104-10 Violations or possible violations.

(a) The contracting director is the individual designated under FAR 3.104-10(a)(1) to receive information related to a conclusion that a reported or possible violation has no impact on a procurement.

(b) If the HCA receives information describing an actual or possible violation, the HCA must take all the following actions:

(1) Refer the matter immediately to the Inspector General.

(2) Determine what action to take on the procurement under FAR 3.104-10(b)–(g).

(3) Notify the Administrator if he or she determines under FAR 3.104-10(f) that urgent and compelling circumstances, or other Government interests, justify the award or modification.

(c) If a contracting officer has not been appointed, the contracting director performs the contracting officer actions defined in FAR 3.104-10.

### Subpart 503.2—Contractor Gratuities to Government Personnel

#### 503.203 Reporting suspected violations of the Gratuities clause.

(a) Under 5 CFR 6701.107 employees must report immediately a suspected violation of the Gratuities clause to each of the following:

(1) You.

(2) Assistant Inspector General for Investigations or the Regional Inspector General for Investigations.

(3) Deputy Standards of Conduct Counselor.

(b) The report must describe the circumstances under which the Gratuities clause has been violated and include all pertinent documents.

(c) The Office of Inspector General will investigate and, if appropriate, forward a report and recommendation to the Department of Justice, the Senior Procurement Executive, or the Office of General Counsel.

#### 503.204 Treatment of violations. (a) The Senior Procurement Executive, or designee, makes determinations under FAR 3.204. The Senior Procurement Executive, or designee, takes all the following actions: (1) Coordinates with legal counsel. (2) Initiates proceedings under FAR 3.204(a) by notifying the contractor that GSA is considering action against the contractor for a violation of the Gratuities clause. Notice is sent by a certified letter to the last known address of the party, its counsel, or agent for service of process. In the case of a business, notice is sent to any partner, principal officer, director, owner or co-owner, or joint venture. (3) Presumes receipt if no return receipt is received within 10 calendar days after mailing the notice.
(b) The contractor has 30 calendar days to exercise its rights under FAR 3.204(b), unless the Senior Procurement Executive, or designee, grants an extension.
(c) If there is a dispute of fact material to making a determination, the Senior Procurement Executive, or designee, may refer the matter to an agency fact-finding official designated by the Chairman of the GSA Board of Contract Appeals. Referrals for fact-finding are not made in cases arising from a conviction or indictment as defined in FAR 9.403. If a referral is made, the fact-finding official takes all the following actions: (1) Gives the contractor an opportunity to dispute material facts relating to the determinations under FAR 3.204(a)(1) and (2). (2) Conducts proceedings under rules consistent with FAR 3.204(b). (3) Schedules a hearing within 20 calendar days of receipt of the referral. The contractor or GSA may request an extension for good cause. (4) Delivers to the Senior Procurement Executive, or designee, written findings of fact (together with a transcription of the proceedings, if made) within 20 calendar days after the hearing record closes. The findings must resolve any material disputes of fact by a preponderance of the evidence.
(d) The Senior Procurement Executive, or designee, may reject the findings of the fact-finding official only if the findings are clearly erroneous or arbitrary and capricious.
(e) In cases arising from conviction or indictment, or in which there are no disputes of material fact, the Senior Procurement Executive, or designee, conducts the hearing required by FAR 3.204(b).
(f) If the Gratuities clause was violated, the contractor may present evidence of mitigating factors to the Senior Procurement Executive, or designee, either orally or in writing, in accordance with a schedule the Senior Procurement Executive, or designee, establishes. The Senior Procurement Executive, or designee, exercises the Government’s rights under FAR 3.204(c) only after considering mitigating factors.

### Subpart 503.3—Reports of Suspected Antitrust Violations

#### 503.303 Reporting suspected antitrust violations.

Report evidence of suspected antitrust violations in acquisitions to the Assistant Inspector General for Investigations or the Regional Inspector General for Investigations. When appropriate, the Office of Inspector General will investigate and prepare a report and recommendation to the Attorney General and to the Senior Procurement Executive for suspension or debarment consideration.

### Subpart 503.4—Contingent Fees #### 503.404 Contract clause. Insert 552.203-5, Covenant Against Contingent Fees, in solicitations and contracts for the acquisition of leasehold interests in real property expected to exceed $100,000.

#### 503.405 Misrepresentations or violations of the Covenant Against Contingent Fees.

Employees who suspect or have evidence of violations of the Covenant Against Contingent Fees clause must report the matter to you as well as to the Office of Inspector General. If appropriate, the Office of Inspector General will forward a report and recommendation to the Department of Justice.

### Subpart 503.5—Other Improper Business Practices #### 503.570 Advertising. #### 503.570-1 Policy. GSA policy precludes contractors from referring to GSA contracts in commercial advertising in a manner that states or implies the Government approves or endorses the product or service or considers it superior to other products or services. The intent of this policy is to prevent the appearance of Government bias toward any product or service.

#### 503.570-2 Contract clause. Insert the clause at 552.203-71, Restriction on Advertising, in solicitations and contracts, including acquisitions of leasehold interests in real property, if the contract amount is expected to exceed the simplified acquisition threshold.

### Subpart 503.7—Voiding and Rescinding Contracts #### 503.702 Definition. “Notice” means a letter sent by certified mail with a return receipt requested to the last known address of a party, its counsel, or agent for service of process. In the case of a business, such notice may be sent to any partner, principal officer, director, owner or co-owner, or joint venturer. If no return receipt is received within 10 calendar days of mailing, receipt is presumed. “Voiding and rescinding official” means the Senior Procurement Executive or designee.

#### 503.705 Procedures. (a) Contracting officer’s actions: (1) If a contract is tainted by misconduct, consult with assigned counsel to determine if the Government has a common law remedy such as avoidance, recision, or cancellation. (2) If the contractor has a final conviction for a violation under 18 U.S.C. 201-224, you may refer the matter to the voiding and rescinding official under FAR 3.705. (i) In the referral, identify the final conviction and include the information required by FAR 3.705(d)(2) through (5). (ii) Coordinate the referral with the Office of Inspector General to determine whether to recommend debarment. (3) You may postpone a decision to exercise the Government’s common law right to void, rescind, or cancel a contract until completion of legal proceedings against the contractor.
(b) Voiding and rescinding official’s actions: (1) The voiding and rescinding official reviews the referral and coordinates with assigned counsel and the contracting activity. (2) If the official decides to declare void and rescind a contract and to recover the amounts expended and the property transferred, the official takes both the following actions: (i) Issues the notice required by FAR 3.705. (ii) Conducts the hearing contemplated by FAR 3.705(c)(3).
(3) In case of a dispute of material fact about the agency decision, the official refers the matter to the fact-finding official designated by the Chairman of the GSA Board of Contract Appeals. The voiding and rescinding official makes this referral if the dispute of fact relates to any of the following: (i) Contracts affected by the final conviction. (ii) Amounts expended and property transferred by the Government under the affected contracts. (iii) Identity and value of any tangible benefits received by the Government under the affected contracts.
(4) The voiding and rescinding official issues GSA’s final decision under FAR 3.705(e) after receiving the fact-finding official’s report, if a referral was made. The voiding and rescinding official may reject the fact-finding official’s findings only if they are clearly erroneous or arbitrary and capricious. (5) The official coordinates the final decision with the contracting activity and provides the activity a copy of the decision.
(c) Fact-finding official’s actions: The fact-finding official takes all the following actions: (1) Gives the contractor an opportunity to dispute material facts. (2) Conducts the proceedings under rules consistent with FAR 3.705(c)(3). (3) Schedules a hearing within 20 calendar days after receiving the referral. The official may grant extensions for good cause at the request of the contractor or GSA. (4) Delivers written findings of fact to the voiding and rescinding official (together with a transcription of the proceeding, if made) within 20 calendar days after the hearing record closes. The findings must resolve any material disputes of fact by a preponderance of the evidence.

### Subpart 503.8—Limitations on Payment of Funds to Influence Federal Transactions

#### 503.806 Processing suspected violations.

Submit evidence of suspected violations of 31 U.S.C. 1352, Limitation on the Use of Appropriated Funds to Influence Certain Federal Contracting and Financial Transactions, to the Assistant Inspector General for Investigation or the Regional Inspector General for Investigation. When appropriate, the Office of Inspector General will investigate and prepare a report and recommendation to the Department of Justice.