CFCM Professional Ethics & Conduct 3 — Questions and Answers
Question 1: Under FAR 3.101-1, what is the foundational standard for contractor and Government conduct in federal contracting?
- Contracts must maximize profit for both parties
- Contractors and Government employees must conduct business honestly and impartially, avoiding any appearance of impropriety (Correct answer)
- All contract disputes must be resolved through arbitration
- Only contracting officers have ethical obligations under federal law
Correct answer: Contractors and Government employees must conduct business honestly and impartially, avoiding any appearance of impropriety
FAR 3.101-1 establishes that both Government and contractor personnel must deal fairly, honestly, and avoid any appearance of impropriety.
Question 2: A contractor's employee learns that a competitor's bid amount was improperly disclosed before award. Under NCMA's Code of Ethics, what should the contract manager do?
- Use the information to lower their own bid and win the contract
- Immediately report the disclosure to appropriate authorities and refuse to use the information (Correct answer)
- Keep the information confidential but refrain from using it
- Notify only the company's legal department without reporting to the Government
Correct answer: Immediately report the disclosure to appropriate authorities and refuse to use the information
NCMA's Code of Ethics requires contract managers to report improper disclosures and refuse to benefit from them.
Question 3: Which statute specifically criminalizes a Government employee's receipt of a gratuity from a contractor with intent to influence an official act?
- The Truth in Negotiations Act
- 18 U.S.C. § 201 (Bribery of Public Officials) (Correct answer)
- The Procurement Integrity Act
- The False Claims Act
Correct answer: 18 U.S.C. § 201 (Bribery of Public Officials)
18 U.S.C. § 201 prohibits bribery of public officials, including the giving or receiving of gratuities intended to influence official acts.
Question 4: A contracting officer's representative (COR) accepts a free dinner from a contractor during contract performance. Under the Standards of Ethical Conduct for Employees of the Executive Branch, this is:
- Acceptable if the dinner costs less than $50
- Permissible if disclosed in writing to the ethics official
- Generally prohibited as an improper gift from a prohibited source (Correct answer)
- Allowed as a customary business practice
Correct answer: Generally prohibited as an improper gift from a prohibited source
5 C.F.R. Part 2635 generally prohibits executive branch employees from accepting gifts from prohibited sources, including contractors with whom they deal.
Question 5: What is the primary purpose of the Contractor Code of Business Ethics and Conduct required under FAR 52.203-13?
- To maximize contract profits through ethical pricing
- To ensure contractors promote an organizational culture of ethics and have mechanisms for detecting and reporting violations (Correct answer)
- To establish a formal grievance process for subcontractors
- To replace agency-specific ethics regulations
Correct answer: To ensure contractors promote an organizational culture of ethics and have mechanisms for detecting and reporting violations
FAR 52.203-13 requires contractors to promote ethical cultures and maintain internal controls for detecting and reporting violations of federal law.
Question 6: Under the post-employment restrictions of 18 U.S.C. § 207, what is a 'cooling-off' period intended to prevent?
- Former officials from earning excessive salaries in the private sector
- Former officials from improperly leveraging inside government knowledge to assist private entities before their former agency (Correct answer)
- Contractors from hiring government employees for two years after contract award
- Federal employees from working for any defense contractor
Correct answer: Former officials from improperly leveraging inside government knowledge to assist private entities before their former agency
Post-employment restrictions prevent former officials from using their government positions and inside knowledge to benefit private parties before their former agencies.
Question 7: A contract manager discovers that their company submitted a certified cost or pricing data package containing a known error that overstated costs. The most appropriate immediate action is to:
- Wait until contract closeout to address the discrepancy
- Disclose the defective data to the contracting officer and initiate a price adjustment (Correct answer)
- Correct the error internally without notifying the Government
- Seek legal counsel before taking any action for at least 90 days
Correct answer: Disclose the defective data to the contracting officer and initiate a price adjustment
The Truth in Negotiations Act (TINA) and FAR 15.408 require disclosure of defective cost or pricing data; prompt disclosure and price adjustment is the ethical and legal obligation.
CFCM Professional Ethics & Conduct 3
Under FAR 3.101-1, what is the foundational standard for contractor and Government conduct in federal contracting?