**REFERENCE GUIDE**

**RESTRICTIONS ON POST-EMPLOYMENT, NEGOTIATING EMPLOYMENT, AND THE**

**PROCUREMENT INTEGRITY ACT**

U.S. Department of the Interior

Departmental Ethics Office

1849 C Street NW, Room 4251

Washington, DC 20240

\(202\) 208-7960

March 2008

**POST EMPLOYMENT**

**18 U.S.C. § 207**

Post-employment restrictions are found in 18 U.S.C. § 207 and the Office
of Procurement Policy Act Amendments. In no way do they bar any
individual, regardless of rank or position, from accepting employment
with any private or public employer.

Under 18 U.S.C. § 207, there are six prohibitions which may apply:

**207(a)(1) Restrictions that apply to all former employees.** A
lifetime bar which prohibits a former employee from serving as another
person\'s representative to the Government on a case, contractual
matter, or other similar application or proceeding in which he or she
participated personally and substantially while a Government employee.

> \- There are two important limitations to this prohibition which
> prohibit former employees from \"switching sides.\" First, the former
> employee is not restricted unless the matter in which he previously
> participated was (1) a \"particular matter involving specific
> parties\" and (2) is the matter in which he or she now attempts to
> represent another before the Government.
>
> \- This bar requires that the employee had been personally involved in
> the matter in a substantial way.
>
> \- The kind of representation that is prohibited includes not only
> acting as another\'s attorney or agent, but **any kind of
> representative appearance or communication before a federal official
> with intent to influence the United States**. This includes
> promotional and contract representatives.

**207(a)(2) Two-year bar restrictions that apply to former managers and
supervisors.** A two-year bar which prohibits former employees from
serving as another person\'s representative to the Government on a case,
contractual matter, or other similar application or proceeding which was
under his or her management authority in the last year of government
service.

> \- If a former employee is in doubt as to whether a matter was under
> his or her official responsibility, whether it is the same
> \"particular matter\" as that with which he was involved, or whether
> the United States still has an interest in the matter, he or she
> should consult with the appropriate ethics office for guidance.

**207(b) One-year bar restrictions that apply to all former employees.**
One year bar that prohibits former employees from aiding, advising or
serving as another person\'s representative, on the basis of covered
information, concerning any ongoing trade or treaty negotiation in which
he or she had participated personally and substantially during the last
year of government service.

**207(c) One-year bar restrictions that apply to former \"senior
employees.\"**

> Former senior employees are those former employees who occupied any
> position paid at a level of 86.5% or greater of the former level II of
> the Executive Schedule.
>
> For one year after government service in a senior position, no former
> senior employee may knowingly make, with the intent to influence, any
> communication to or appearance before an employee of a department or
> agency in which he served in any capacity during the one-year period
> prior to termination from \"senior\" service, if the communication or
> appearance is made on behalf of any other person (except the United
> States), in connection with any matter concerning which he/she seeks
> official action by the employee.
>
> \- This one-year \"cooling-off\" ban does not require that the former
> employee have ever been involved in the matter that is the subject of
> the communication or appearance.
>
> \- It only prohibits communications to or appearances before employees
> of any department or agency in which he or she formerly served in any
> capacity during the one-year period prior to his or her termination
> from senior service.
>
> \- The matters covered are broader; they needn\'t involve specific
> parties, so the former employee could not, for example, attempt to
> influence general rulemaking, general policy issues or general
> legislation.

**207(d) Two-year bar restrictions which apply only to \"very senior
employees.\"**

> \- Very senior employee means an employee at the Executive Level I.
>
> \- Former very senior employees are prohibited from knowingly making,
> with the intent to influence, any communication to or appearance
> before any individual appointed to an Executive Schedule position or,
> any employee of a department or agency in which the former very senior
> employee served during the one-year period prior to termination from
> Government service.
>
> \- The type of communication or appearance prohibited is one made on
> behalf of any other person (except the United States), in connection
> with any matter concerning which the former very senior employee seeks
> individual action by the individual or employee contacted.

-   The one-year period is measured from the date when an employee
    ceases to be a very senior employee, not from the termination of
    Government service, unless the two occur simultaneously.

**207(f) One-year** **bar relating to Foreign Entities.**

> For one year after leaving Government service, a former senior
> employee may not knowingly aid, advise, or represent a foreign entity,
> with the intent to influence the official actions of any employee of
> any federal agency or department.

**Exception to all post-employment statutes.**

An exception is provided to all of the post-employment statutes when the
post-employment activities are performed:

> \- in carrying out official duties on behalf of the United States or,
>
> \- in carrying out official duties as an elected official of a state
> or local government.

An exception is provided to all the prohibitions of 18 U.S.C. § 207 for
former employees employed by a recognized Indian tribe when
communicating on behalf of the tribe. This applies to all former
employees, not just Bureau of Indian Affairs employees. In order for
this exception to apply, the former employee must provide written
notification to the head of the department, agency, court, or commission
with which he or she is dealing or appearing on behalf of the tribe of
any personal and substantial involvement he or she may have had as an
employee of the United States in connection with the matter involved.
See 25 U.S.C. § 450i(j).

**Exception for former senior and very senior employees.**

An exception is provided to former senior or very senior employees for
the one-year bans of 18 U.S.C. § 207(c) or (d) when the communication or
appearance is made in carrying out official duties as an employee of and
is made on behalf of:

> \- an agency or instrumentality of a state or local government,
>
> \- an accredited degree-granting institution of higher education as
> defined in section 1201(a) of the Higher Education Act of 1965, or
>
> \- a hospital or medical research organization exempted and defined
> under section 501(c)(3) of the Internal Revenue Code of 1986.

**RESTRICTIONS ON NEGOTIATING EMPLOYMENT**

**18 U.S.C. § 208**

**Federal employees are prohibited** from participating personally and
substantially in an official capacity in any particular matter in which,
to their knowledge, they, or any person or organization with whom they
are negotiating or have any arrangement concerning prospective
employment, have a financial interest, if the particular matter will
have a direct and predictable effect on that interest.

**"Particular Matter"** -- matters that involve deliberation, decision,
or action that is focused on the interests of specific persons or a
discrete and identifiable class of persons. These matters may include a
contract, claim, application, judicial or other proceeding, request for
a ruling or other determination, controversy, investigation, or charge.
A "particular matter" could even include legislation or policy-making
that is narrowly focused on the interests of a discrete and identifiable
group of parties or organizations

i.  A particular matter will have a direct effect on a financial
    interest if there is a close causal link between any decision or
    action to be taken in the matter and any expected effect of the
    matter on the financial interest. An effect may be direct even
    though it does not occur immediately. A particular matter will not
    have a direct effect on a financial interest, however, if the chain
    of causation is attenuated or is contingent upon the occurrence of
    events that are speculative or that are independent of, and
    unrelated to, the matter...

ii. A particular matter will have a predictable effect if there is a
    real, as opposed to a speculative possibility that the matter will
    affect the financial interest. It is not necessary, however, that
    the magnitude of the gain or loss be known, and the dollar amount...
    is immaterial.

**"Personal and Substantial Participation"** -- to participate
"personally" means to participate directly. It also includes the direct
and active supervision of the participation of a subordinate.
Participation is substantial if it is of significance to the matter, and
may occur through decision, approval, recommendation, investigation, or
advice. One act, such as approving a critical step, may be substantial,
but an entire series of peripheral acts may not be.

**"Direct and Predictable Effect"** -- a close, causal link between
**any** action taken on the matter and any expected effect of the matter
on the potential employer's financial interest. An effect may be direct
even though it does not occur immediately, although effects on the
general economy are not direct. There must also be a real, not
speculative, possibility that the matter will affect the financial
interest, but the size of the gain or loss is not relevant.

**"Negotiating**" -- any discussion or communication with another
person, or such person's agent or intermediary, mutually conducted with
a view toward reaching an agreement regarding possible employment. It is
not limited to just discussing specific terms and conditions of
employment in a specific position.

> **REGULATIONS ON PROCUREMENT INTEGRITY**

**Background**

The Procurement Integrity Act, 41 U.S.C. § 423, imposes job searching
restrictions on Federal

employees who have been involved in agency procurements. The act was
significantly amended

by the FY 96 Defense Authorization and is implemented in part 3.104 of
the Federal Acquisition

Regulation (FAR). The Act contains notification and disqualification
requirements for

employees who contact or are contacted by bidders or offerors regarding
non-Federal

employment, and prohibits disclosure of certain information relating to
ongoing procurements.

The Act also contains a provision, discussed in Chapter IV, which bars
certain employees who

were involved in large procurements from employment with certain private
employers for a

period of 1 year. Employees or organizations that violate the
Procurement Integrity Act are

subject to criminal and civil penalties.

**Under 41 U.S.C. § 423**, there are four prohibitions which may apply:

**423 (a) Prohibition on disclosing procurement information.**

(1) A person described in paragraph (2) shall not, other than as
    provided by law, knowingly disclose contractor bid or proposal
    information or source selection information before the award of a
    Federal agency procurement contract to which the information
    relates. In the case of an employee of a private sector organization
    assigned to an agency under chapter 37 of title 5, in addition to
    the restriction in the preceding sentence, such employee shall not
    other than as provided by law, knowingly disclose contractor bid or
    proposal information or source selection information during the
    three-year period after the end of the assignment of such employee.

(2) Paragraph (1) applies to any person who-

    A.  is a present or former official of the United States, or a
        person who is acting or has acted for or on behalf of, or who is
        advising or has advised the United States with respect to, a
        Federal agency procurement; and

    B.  by virtue of that office, employment, or relationship has or had
        access to contractor bid or proposal information or source
        selection information..

**423(b) Prohibition on obtaining procurement information.**

> A person shall not, offer than as provided by law, knowingly obtain
> contractor bid or proposal information or source selection information
> before the award of a Federal agency procurement contract to which the
> information relates.

**423(c) Actions required of procurement officers when contacted by
offerors regarding non-Federal employment.**

(1) If an agency official who is participating personally and
    substantially in a Federal agency procurement for a contract in
    excess of the simplified acquisition threshold contacts or is
    contacted by a person who is a bidder or offeror in that Federal
    agency procurement regarding possible non-Federal employment for
    that official, the official shall\--

    A.  promptly report the contact in writing to the official's
        supervisor and to the designated agency ethics official (or
        designee) of the agency in which the official is employed; an

    B.  i.  reject the possibility of non-Federal employment; or

        ii. disqualify himself or herself from further personal and
            substantial participation in that Federal agency procurement
            until such time as the agency has authorized the official to
            resume participation in such procurement, in accordance with
            the requirements of section 208 of title 18 and applicable
            agency regulations on the grounds that---

            I.  the person is no longer a bidder or offeror in that
                Federal agency procurement; or

            II. all discussion with the bidder or offeror regarding
                possible non-Federal employment have terminated without
                an agreement or arrangement for employment..

**423(d)** **Prohibition on former official's acceptance of compensation
from contractor.**

(1) A former official of a Federal agency may not accept compensation
    from a contractor as an employee, officer, director, or consultant
    of the contactor within a period of one year after such former
    official---

    A.  served, at the time of selection of the contactor or the award
        of a contract to that contractor, as the procuring contracting
        officer, the source selection authority, a member of the source
        selection evaluation board, or the chief of a financial or
        technical evaluation team in a procurement in which that
        contractor was selected for award of a contact in excess of
        \$10,000,000;

    B.  served as the program manager, deputy program manager, or
        administrative contacting officer for a contract in excess of
        \$10,000,000 awarded to that contractor; or

    C.  personally made for the Federal agency---

        i.  a decision to award a contract, subcontract, modification of
            a contract or subcontract, or a task order or delivery order
            in excess of \$10,000,000 to that contactor.

        ii. a decision to establish overhead or other rates applicable
            to a contract or contracts for that contractor that are
            valued in excess of \$10,000,000;

        iii. a decision to approve issuance of a contact payment or
             payments in excess of \$10,000,000 to that contractor; or

        iv. a decision to pay or settle a claim in excess of
            \$10,000,000 with that contractor.

(2) Nothing in paragraph (1) may be construed to prohibit a former
    official of a Federal agency from accepting compensation from any
    division or affiliate of a contractor that does not produce the same
    or similar products or services as the entity of the contractor that
    is responsible for the contract referred to in subparagraph (A),
    (B), or (C) of such paragraph.

(3) A former official who knowingly accepts compensation in violation of
    this subsection shall be subject to penalties and administrative
    actions as set forth in subsection (e) of this section.

(4) A contractor who provides compensation to a former official knowing
    that such compensation is accepted by the former official in
    violation of this subsection shall be subject to penalties and
    administrative actions as set forth in subsection (e) of this
    section.

(5) Regulations implementing this subsection shall included procedures
    for an official or former official of a Federal agency to request
    advice from the appropriate designated agency ethics official
    regarding whether the official or former official is or would be
    precluded by this subsection from accepting compensation from a
    particular contractor.

**423(e) Penalties and administrative actions.**

(1) **Criminal penalties --** whoever engages in conduct constituting a
    violation of subsection (a) or (b) of this section for the purpose
    of either

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(A) exchanging the information covered by such subsection for anything
    of value, or

(B) obtaining or giving anyone a competitive advantage in the award of a
    Federal agency procurement contract, shall be imprisoned for not
    more than 5 years or fined as provided under title 18, or both.

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(2) **Civil penalties**

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(A) each knowing violation of any of the four key provisions -- up to
    \$50,000 per violation and administration actions.

(B) Up to \$50,000 per violation plus twice the amount of compensation
    an individual received or offered for the prohibition conduct.

(C) Up to \$500,000 per violation plus twice the amount of compensation
    an organization received or offered for the prohibition conduct.

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(3) **Administrative actions**

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(A) Cancellation of the procurement

(B) Disqualification of offeror (if no award yet)

(C) Rescission of the contract

(D) Suspension or debarment of the contractor

(E) Initiation of an adverse personnel action

(F) Any other action in the best interest of the Government