Proper coordination among HR, legal and BD is needed to understand post-employment restrictions and possible conflicts before they derail your contracting opportunities, write Scott Flesch and Joshau Drew of the law firm Miller & Chevalier. Current and former government employees have a wealth of knowledge and experience that provides a critical advantage in the private sector. Their professional relationships within agencies, as well as their insight and perspective, are invaluable resources for companies seeking U.S government engagement and opportunities. Getting that ‘insider’ on the team to help shape a proposal effort is a no brainer from a corporate perspective.
However, rushing the recruitment and onboarding of these candidates can create significant exposure if human resources, legal, compliance, and/or business development teams (i.e., capture or proposal) do not properly coordinate, collect information, and analyze risks before extending an offer of employment. Moreover, failing to properly vet a candidate may endanger a company’s opportunity on the project in question, as well as future opportunities, ironically undermining the rationale for the hiring.
Some of these risks arise from the numerous ethical requirements and restrictions on what government employees can and cannot do after leaving public service. The inclusion of former government employees on projects and proposal compilation can also create organizational conflicts of interest and an appearance of an unfair competitive advantage that can lead to a company’s exclusion from a federal contracting opportunity. The first step in avoiding this calamity is to understand the restrictions placed on current and former government employees before extending an offer of employment.
The main post-government employment restrictions are found in 18 U.S.C. § 207. Under this statute, certain federal employees are restricted from representing a non-government entity before the federal government for specific periods of time. The length of the restriction depends on the matter, the federal employee’s involvement, and position. For example, where a federal employee had personal and substantial involvement in a particular matter, the representational restriction is a lifetime ban, while other restrictions only require a one- or two-year “cooling-off” period. Some additional restrictions apply to “senior” former government officials even if they were not intimately involved in a particular project or procurement.
Sections § 203 and 205 of Title 18 contain additional prohibitions for federal employees of executive agencies. These include a prohibition on receiving compensation derived from their contractor-employer’s representational activities before executive and judicial branches of the government, where the government was a party to or had an interest in the representational activity, and which occurred while the former employee was still an employee of the government. Former government employees may also be restricted from acting on behalf of an entity in connection with certain matters in which the government is a party (or has a direct and substantial interest) that were pending while the employee worked for the government. Importantly, this prohibition applies regardless of whether the former employee participated in the matter while employed by the government.
Like former employees of an executive agency, former legislative branch officials and employees may be prohibited by 18 U.S.C. § 207 from lobbying current congressional employees. Former members and “senior” staff are prohibited from representing, aiding, or advising foreign governments and political parties with the intent to influence the federal government.
Department of Defense (DoD) officials are subject to additional restrictions. Section 847 of the 2008 National Defense Authorization Act (NDAA) requires certain current or former DoD officials to request and receive a written opinion regarding the applicability of post-employment restrictions. Commonly known has the ‘PGE’ Opinion letter, this government produced opinion letter should be a required submittal from candidates who have received one from the DoD or their civilian government agency.
Military officers have additional restrictions. Sections 203 and 205 of Title 18 also prohibit military officers from representing their new employer to the government while on terminal or transition leave. In addition, section 1045 of the 2018 NDAA prohibits former senior DoD military and civilian officials from engaging in lobbying activities related to the entire DoD. This restriction applies to direct communications with covered DoD officials as well as “behind-the-scenes” preparation and planning to assist others with these types of communications. Of note, civilian employees that are on prolonged administrative leave (e.g., deferred resignation program or ‘DRP’) remain employees of the U.S. government while on leave and will have significant restrictions on their activity while still employed by the government.
The Procurement Integrity Act, 41 U.S.C. §§ 2101 et seq., includes restrictions on post-government employment with certain federal contractors. Government employees that have participated in a procurement or in the administration of a contract valued over $10 million may not accept compensation for one year from a contractor that seeks to do business with the employee’s former agency.
Similarly, the Federal Acquisition Regulations (FAR) that govern federal procurement contracts require that government business “shall be conducted in a manner above reproach” and “with complete impartiality and with preferential treatment for none.” FAR 3.101 requires contracting officers to strictly avoid any conflict of interest or even the appearance of a conflict of interest in government and contractor relationships. FAR 9.505 prescribes limitations on contracting by avoiding, neutralizing, or mitigating OCIs. This scrutiny may extend to non-public information the candidate had access to while a federal employee. Importantly, recent court decisions have affirmed that it is the contractor’s responsibility to mitigate actual, potential, or apparent conflicts of interest arising from post-government employment.
Given the myriads of statutes and regulations, and the fact-specific analysis required, contractors should ensure there is a fulsome and comprehensive screening process in place prior to hiring a former government employee for federal contract work. Investigating each candidate’s work history, access to non-public information, and credentials are critical in assessing the full complement of applicable restrictions and potential personal and organizational conflicts of interests. To be effective, such processes depends on close communication and coordination between business units, the recruiting team, compliance and other stakeholders. For senior hires or candidates from procurement-heavy roles, early consultation with the legal team can help ensure that the new employer gets the benefits of the former federal employee’s experience and expertise while avoiding unintended pitfalls.
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