april 25–27, 2005 phoenix civic plaza/hyatt regency phoenix phoenix, az ncma world congress 2005...
TRANSCRIPT
NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise” 1
April 25–27, 2005Phoenix Civic Plaza/Hyatt Regency Phoenix Phoenix, AZ
Breakout Session # 1009 John H. Young
Vice President, Corporate Contracts and Pricing
Northrop Grumman Corporation
April 27, 2005
1:20 PM
Organizational Conflicts of InterestOrganizational Conflicts of Interest
NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise”
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April 25–27, 2005Phoenix Civic Plaza/Hyatt Regency Phoenix Phoenix, AZ
Our Changing Environment
• Defense Industry Developments Have Impacted the Ability of Industry and Government to Protect Information
– Industry Consolidation
• Fewer Prime Contractors Competing for Major Systems
– Increased Teaming Between Competitors in Order to Meet USG Requirements
– Concurrent Prime & Subcontractor Roles Between Competitors
– Company Business Units Acting as Merchant Suppliers
• Sometimes to Sister Divisions and Competitors of Sister Divisions for the Same Acquisition
NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise” 3
April 25–27, 2005Phoenix Civic Plaza/Hyatt Regency Phoenix Phoenix, AZ
Our Changing Environment (Cont’d)
• Recent Incidents Have Led to:
– Customers Expressing Concerns Over Ability of Companies to Protect Proprietary and Competition Sensitive Information
• Unintentional Disclosures
• Improper Use
– Increased Emphasis on Corporate Governance and Procurement Integrity Requirements
• Congress Still Deliberating Some Rule Changes
– Some Customers Revising and Implementing More Stringent OCI Policies
NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise”
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April 25–27, 2005Phoenix Civic Plaza/Hyatt Regency Phoenix Phoenix, AZ
Firewalls Mitigate OCIs (Per FAR 9.5):Firewall Purpose
• To Ensure Proprietary or Competition Sensitive Information Developed By Another Company or Entrusted to the Company Is Not Used to:
– Realize an Unfair Competitive Advantage
– Unlawfully Impair Competition
– Circumvent Specific Obligations Undertaken by the Company
Concept is SimpleImplementation Complexities
Significant! NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise”
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April 25–27, 2005Phoenix Civic Plaza/Hyatt Regency Phoenix Phoenix, AZ
Gov’t Non-OCI Gov’t Concerns About Access To Competitive Information
Gov’t Concerns About Access To Competitive Information
5 2 4
Company to CompanyAgreements/Contracts
Contracts, Subcontracts, MOUs,MOAs, Teaming Agreements
Contracts, Subcontracts, MOUs,MOAs, Teaming Agreements
34 3 2 1
ConsentDecrees
Gov’t Requirements toEnsure Competition
Gov’t Requirements toEnsure Competition
2 1
Internal Implemented By Business Units (BU)Voluntarily
Implemented By Business Units (BU)Voluntarily
21 425 5 6
Gov’t OCI Mitigation Where ContractorIs Both Supplier and Evaluator
Mitigation Where ContractorIs Both Supplier and Evaluator
BU1BU1 BU2BU2 BU3BU3 BU4BU4 BU5BU5 BU6BU6 BU7BU7
Industry’s Challenge:
NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise” 6
April 25–27, 2005Phoenix Civic Plaza/Hyatt Regency Phoenix Phoenix, AZ
Where OCIs Are More Likely to Occur
• Management Support Services
• Consultant or Other Professional Services
• Contractor Performance of or Assistance in Technical Evaluations
• Systems Engineering and Technical Assistance (SETA) Work Performed by a Contractor That Has an Overall Contractual Responsibility for Development or Production
NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise”
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April 25–27, 2005Phoenix Civic Plaza/Hyatt Regency Phoenix Phoenix, AZ
Common OCI Mitigation Approaches
• Non-Disclosure Agreements
• Controlled access to sensitive information
• Establishment of an employee OCI awareness and compliance program
• Physical separation of employees working on OCI effort
• Organizational separation
• Limitation on personnel transfers
• Separate SETA Work (Contractor) From Decision Making Responsibilities (Government)
NCMA World Congress 2005“Prime Time: Contract Management at the Core of the Enterprise”
We All Have A Personal Responsibility We All Have A Personal Responsibility
In This Changing EnvironmentIn This Changing Environment