1. Contracting and Ethics 1
Assignment #1 – Contracting and Ethics
DJhonna M. Jones
Legal 505
October 28, 2012
Professor James H. Vricos

2. Contracting and Ethics 2
Abstract:
Within the confines of this paper we will give our educated opinion of the GAO analysis to
determine whether Aetna Government Health Plans, LLC should be excluded from the
competitive bid based on an alleged unfair competitive advantage stemming from them hiring a
former Tricare Management Activity employee, their chief of staff, to prepare their proposal.
We will also discuss what corrective actions Tricare Management Activity should take to rectify
the situation, and how they will sufficiently reconcile the appearance of impropriety. During the
course of the assessment we will identify and evaluate the three most critical factors that
heighten the agency’s appearance of impropriety.

3. Contracting and Ethics 3
1. Give your educated opinion of the GAO analysis to determine whether Aetna Government
Health Plans, LLC (AGHP), should be excluded from the competitive bid based on an alleged
unfair competitive advantage stemming from AGHP’s hiring of a former TMA (TRICARE
Management Activity) employee (the TMA Chief of Staff) to prepare AGHP’s proposal.
According to FAR 3.101, “Government business shall be conducted in a manner above
reproach and except as authorized by statute or regulation, with complete impartiality and with
preferential treatment of none. Transactions relating to the expenditure of public funds require
the highest degree of public trust and an impeccable standard of conduct. The general rule is to
avoid strictly any conflict of interest or even the appearance of a conflict of interest in
Government - contractor Relationships. (GSA, DOD, NASA, 2001-2012)” Based on that, there
was no other conclusion for the GAO to come to. Even the mildest image of impropriety
between a government agency and contractor is frowned upon and grounds for the contract to be
void. This information justifies AGHP’s Proposal being excluded from the competitive bid base.
Simply because Aetna Government Health Plans, LLC made it a policy to hire former
Tricare employees it shows that they were indeed prepared to utilize the potential information
and asset that these individuals represent. They themselves stated that they made it policy to hire
former Tricare Management employees feeling that it did not pose a threat to their customer
service goals (Matter of : Health Net LLC, 2009). Upon further review of the case it is also
apparent that due to the nature of the Aetna corporation structure, it is difficult to even ascertain
whether or not the portion of the company submitting RFPs is being evaluated with accurate past
performance review or not. It is no wonder that finding former Tricare employees was a
surprise if it is so difficult to separate the performances of the sections of the company. Many of
this companies structure is difficult to lay out for RFP purposes.

4. Contracting and Ethics 4
2. Discuss recommended corrective actions for TMA to take.
GAO recommended a new evaluation of the offerors’ proposals, hold further discussions
if it deems necessary and make a new source selection decision, consistent with this decision. As
far as the unfair competitive advantage accusations it was recommended that the contracting
officer perform a thorough review regarding the scope of the former TMA employee’s access to
non public information that could have been an advantage. In addition reimbursing Health Net
for filing the claim for the protest to include their legal fees (Matter of : Health Net LLC, 2009).
The previously discussed recommendations are all those that are standard given when a
found guilty of violating FAR 3.104 and 9.505. Statutes instated to safeguard the procurement
process. However the resulting corrective actions where mild and perhaps lenient at best. These
recommendations, first to hold new evaluations of the offerors’ proposals and hold further
discussions if it deems necessary seems to be a bit redundant. A second evaluation or to
reevaluate the proposals may highlight information that was previously missed or miss
understood, and in some cases help to better choose the right contract. On the other hand, there
will be a large amount of funds spent to reevaluate these contracts making them more of a
hindrance. The matter of the former TMA employee is one that may not be properly solved.
Short of making an example of that individual by firing him as a scapegoat, there is no way to
undo the damage done by using his expertise to write Aetna’s RFP.
Because this is the “appearance” of impropriety and there is no hard proof that any true
violations have been committed, it seems criminal penalties were not recommended. On the
contrary the recommendations come off more as a reprimand and civil penalties than anything
else. This demonstrates that without concrete proof that criminal acts against the FAR had been

5. Contracting and Ethics 5
committed there is no way that those penalties would be issued. However they still
recommended the reimbursement of all legal fees.
3. Explain how your recommendations sufficiently reconcile the appearance of impropriety.
The only way to reconcile the appearance of impropriety was for Aetna to reconsider
their policy of hiring TMA personnel on a regular basis for customer service basis. In addition to
this they must also consider that in hiring these individuals they must not include them or
consider their employment backgrounds when compiling a RFP team. This is considered a
major step when composing a RFP as the FAR does not allow for the appearance of impropriety
in government – contractor relationships.
In addition to Aetna being more aware of their part in this situation, Health Net must also
acknowledge that they too must consider that their complacency in reviewing the Aetna RFP was
another reason for the additional appearance of impropriety. Closer attention to detail and
paying attention to the different aspects of the RFP as is their job would better prevent future
issues of this kind. All of these were suggestions by the GAO in their report.
4. Assess the situation, and identify and evaluate the three (3) most critical factors that bolster
the agency’s appearance of impropriety.
The three most critical factors that bolster the agency’s appearance of impropriety where
their lack of knowledge concerning the RFP members involvement in non public information,
their failure to accurately evaluate the awardees’ past performance information, and to perform a
reasonable price/cost realism assessment, as provided for in the RFP (Matter of : Health Net
LLC, 2009). Those gaps in performance give the appearance of conspiracy between Aetna and
Health Net of a prior agreement to award that RFP to Aetna. Thus the appearance of impropriety
between Government agency and contractor is established.

6. Contracting and Ethics 6
Works Cited
Engelbeck, R. M. (2002). Acquisition Management. Vienna: Management Concepts.
Feldmen, S. W. (1990). Government Contracts In a Nut Shell. St. Paul: West Publishing Co.
GSA, DOD, NASA. (2001-2012). Federal Acquisition Regulation. Washington D.C.: US
Governmnet.
Matter of : Health Net LLC, B-401652.3; B-401652.5 (Government Accountability Office
November 4, 2009).
O'Connor, T. M. (2007). Understanding Government Contract Law. Vienna: Management
Concepts.
Straight, R. L. (2004). Simplified Acquisition Procedures for Federal Purchases. Philadelphia:
89th Annual International Supply Management Conference.
Williams, T. (2012, 08 26). Preparing Cost Proposals. IRS.Gov . Washington DC, District of
Columbia, United States: IRS.