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Sunday, December 10, 2023

GAO Says DOD Could Improve Compliance Efforts Related to Former Employees Working for Contractors

Employees who leave the Department of Defense (DOD) to work for DOD contractors may face restrictions designed to protect against conflicts of interest.

Employees who leave the Department of Defense (DOD) to work for DOD contractors may face restrictions designed to protect against conflicts of interest. For example, they are permanently prohibited from attempting to influence their former agency about a project they worked on. 

In 2017, a former product manager for DOD’s Defense Digital Services was seeking employment with Amazon and others while working on the Joint Enterprise Defense Infrastructure cloud contract. The DOD Inspector General determined the official’s failure to disclose, and his false statements about, his employment negotiations and job acceptance with Amazon violated the Federal Acquisition Regulation and ethics rules, and recommended his personnel file be annotated with the violation and that appropriate officials be notified with regard to any security clearance he may seek. The Inspector General also referred the matter to the Department of Justice for prosecution; however, Justice declined to prosecute the case.

A new review by the Government Accountability Office (GAO) has found that DOD has improved its efforts to inform departing employees of post-government employment restrictions through a range of training and processes.

GAO last reported on post-government employment (PGE) issues and the employment of former DOD senior and acquisition officials in 2008. In its assessment of 52 contractors, the watchdog reported that at least 422 individuals could have been working on defense contracts under the responsibility of their former agency, office, or command. In addition, although most contractors reported using a range of practices to ensure awareness of and compliance with PGE restrictions, GAO found that contractors were unable to identify all the former DOD officials who were potentially subject to PGE restrictions.

GAO’s latest review found that DOD does not require contractors to affirm that their employees are in compliance with the latest restrictions. For this review, GAO considered 14 major defense contractors and found that in 2019 they hired about 1,700 recent former DOD senior civilian and military officials, such as a general or admiral, or former acquisition officials. 

The defense contractors use various methods to comply with PGE restrictions and these practices differ by type of contractor. For example, contractors that develop and produce weapon systems reported having more practices in place to promote compliance with PGE restrictions than did contractors that generally provide commercial products and services.

GAO’s September 9 report states that a higher number of former DOD senior or acquisition officials were employed at weapons development contractors, rather than a non weapons development contractor that provides off-the-shelf goods or services. “Our analysis found that Raytheon employed 315 of the former DOD officials covered by our review, while the five non weapons development contractors collectively employed 88 or fewer such officials.”

The report also notes that, similar to what GAO found in 2008, DOD contractors identified fewer former DOD senior and acquisition officials in their employ than the GAO review identified using DOD personnel data and IRS tax data. “Specifically, the 10 contractors that provided personnel data reported they employed 816 potentially covered former DOD officials in 2019, while our analysis of DOD and IRS data for those contractors identified 1,149 individuals.”

In 2011, DOD modified its acquisition regulations to require that contractors—when submitting proposals in response to DOD contract solicitations—represent their employees’ compliance with several PGE restrictions. Congress more recently added restrictions on lobbying by former DOD officials but DOD has not considered incorporating this into its regulations. DOD officials told GAO that the restriction was not identified for potential regulatory action when it was enacted, and they have not considered doing so. Instead, DOD has issued guidance to defense personnel informing them of their responsibilities. However, GAO says DOD may be missing an opportunity to create a shared sense of accountability between the employees and the contractors who hire them, and a means of ensuring that DOD does not do business with companies whose employees violate the lobbying restriction with their employers’ knowledge.

DOD concurred with GAO’s recommendation to assess whether to require contractors to represent their employees’ compliance with the PGE lobbying restrictions as part of a contractor’s proposal for DOD contracts. 

Read the full report at GAO

Kylie Bielby
Kylie Bielby
Kylie Bielby has more than 20 years' experience in reporting and editing a wide range of security topics, covering geopolitical and policy analysis to international and country-specific trends and events. Before joining GTSC's Homeland Security Today staff, she was an editor and contributor for Jane's, and a columnist and managing editor for security and counter-terror publications.

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