Partnering and U.S. Federal Law

This article was first published by the U. S. Army’s Operations Support Command’s Office of Counsel in an effort to increase awareness of the
Partnering conflict management tool in the U.S. Army and around the world.


While partnering itself does not effect the legal or contractual rights of the parties, it is not

without its legal concerns, and certainly should not be conducted without the participation and

guidance of counsel. Included in this paper are some of the legal concerns that should be

considered when engaging in a partnered contract, and are areas where legal guidance can be

most beneficial.

1. Partnering is not an exception to the Competition in Contracting Act.
Partnering does not allow the Government to meet

with members of industry for the purpose of dividing up future Government requirements. While

many in private industry meet with their collective suppliers to discuss the most efficient means of

dividing up workload and protecting supplier base, the Competition in Contracting Act prohibits

restricting sources for Government requirements unless a Justification and Approval document is

signed in accordance with The Federal Acquisition Regulation Part 6.

2. Partnering is not an exception to Antitrust statutes.
Similar to 1 above, the Government,

nor its suppliers can use the concept of Partnering to divide up government workload by means of

teaming agreements, mergers, joint ventures, or otherwise, when doing so would violate the

Antitrust provisions of statute.

3. Partnering does not allow for violation of the Procurement Integrity Act or other statutes

relating to communications with contractors.
As Government and contractor personnel begin

to communicate and share more information, care should be taken that government personnel do

not release information prohibited by the Procurement Integrity Act or other statutes. Of concern

would be: a) proprietary information, b) classified information, c) pre-procurement information,

d) source selection information, e) constructive changes to the contract, and f) employment

discussions. Discussions with and training by counsel relating to all ethical issues can be very

important.

4. Partnering does not provide for the acceptance of gifts and gratuities by contractors.
As

Government and contractor personnel form a closer working relationship, it is quite common for

small gratuities to be shared among team members. Counsel should provide clear guidance as to

what can, and can not, be shared or transferred between contractor and Government personnel.

While team hats, pins, mugs, or other team emblems are encouraged to promote team synergy,

counsel should be consulted to ensure funding and gratuity violations do not occur.



5. Partnering does not allow for improper use of Government property.

As team members

begin to focus more on achievement of mutual goals, improper use of government property by the

contractor can be easily overlooked. For example, if the contractor needs transportation to

quickly perform a contract task, it may seem appropriate to simply provide him with an accessible

Government vehicle. Counsel should provide guidance as to what can and can not be done

relating to use and sharing of government property in contract performance, and can be consulted

as to how to structure contracts and relationships to facilitate contract performance by use of

Government property.



6. Partnering does not require the relinquishing of contractual rights.

Some contractors

believe that the government must “give in” on requested changes or waivers “in the spirit of

partnering”. Partnering does not require the government to take any action that is against its own

interest, or to “give in” to the contractor to maintain a good relationship. Such a request by the

contractor is a bad faith attempt to gain an advantage in the relationship. If the Government were

to “give in” when it is not otherwise in its best interest, the relationship becomes a “win-lose”

relationship. Partnering encourages only the “win-win” relationship. This means that while we do

not have to accept all changes or waivers proposed by a contractor, we will listen to, and work

with the contractor to achieve the best possible solutions to problems. If the best solution for the

government is to terminate, then that right still exists. By clarifying the purpose of partnering,

and by stressing the protection of contractual rights, counsel can reassure the parties that this the

partnering charter does not effect the legal rights of the parties to perform as agreed.

Many times, good contract administration requires that the government work with the contractor

to achieve successful project performance. However, some may believe that such cooperation

may jeopardize our rights to T4D (for example, encouraging performance past the required

delivery date may waive the delivery date and our right to terminate). When the contracting

officer suspects that joint problem solving may jeopardize the rights of the government, counsel

should be consulted to develop proper language to protect the rights of the government

notwithstanding our attempts to assist performance. Standard cure notice or show cause letters

can be redrafted to fit a specific situation to provide more flexibility in contract administration.

Innovative legal support will be necessary for the PCO to venture outside the traditional arms

length approach to contract enforcement.


7. Partnering does not require the elimination of case building documentation.

One of the

main purposes of partnering is to avoid destructive disputes and litigation. While partnering has

proven to reduce paperwork and “CYA” documentation, the government should not abandon the

development of required contract file documents, or eliminate the accurate recording of facts.

Such records are still necessary should litigation occur. Even in the absence of litigation, accurate

factual records are one of the best ways to avoid confusion and misunderstandings that often lead

to disputes. Counsel can assist in determining the proper type and amount of documentation

necessary to protect the government’s interests, and where documentation can be reduced.



8. Partnering is not without its opponents.

Many individuals may misunderstand the purpose

of partnering, or may believe that the relationships between Government personnel and

contractors has crossed over proper bounds. IG investigations may be lodged by Government

employees or competing contractors who believe that the Government is violating ethical rules. It

is important for counsel to not only provide clear guidance relating to ethical rules up front, but to

also encourage the use of proper partnering to achieve more efficient and effective programs.

Such encouragement will show contracting officials that they will not be abandoned and

defenseless when claims of impropriety are lodged by those who do not understand the process.


9. Partnering is not without its mistakes.
As we reduce resources and try innovative concepts

to improve, mistakes will be made. Clear guidance from counsel at the beginning of the process is

the best means to avoid such mistakes. However, when they do occur, counsel must recognize

that change involves risk, and those who stick their necks out to try partnering will need support

when mistakes are made. Counsel should not scold or punish those who make innocent mistakes.


10. Partnering anticipates the use of Alternative Disputes Resolution (ADR) techniques.

ADR has been mandated for consideration by both congress under the Administrative Disputes

Resolution Act and by Executive Order. The use of ADR is governed to some extent by statute.

Counsel should be involved in providing guidance on both the statutory restrictions on ADR use,

and the practical considerations for implementation.


11. Partnering should not be confused with other legal relationships established with

contractors.
Partnering has been confused in the past with teaming agreements, direct sales

contracts, Cooperative Research and Development Agreements, unsolicited proposals,

establishment of a mobilization base, and other forms of government/private sector relationships.

Counsel can provide guidance and training to distinguish between the various binding and non-

binding relationships that the government may create with industry. Many relationships, such as

those mentioned above, can create legally enforceable rights and responsibilities on the parties.

Clarifying the proper legal or non-legal relationship to be established in a given circumstance can

be critical to avoid misunderstandings and the improper establishment of enforceable rights

between the parties.


As demonstrated above, the participation of counsel in the implementation of partnering

can be most beneficial in promoting effective and legally compatible Government-contractor

relationships. Counsel should be brought into the partnering process early to ensure counsel

understands the intent of the partnered relationship, and to provide guidance on how to protect

the parties from violation of law and loss of rights. With the support of the legal community,

partnering will be more widely accepted, and will result in fewer risks and mistakes for the

government contracting community.

                        author

David C. DeFrieze

David C. DeFrieze is an Attorney/Advisor and ADR Coordinator at the H.Q. Operational Support Command of the US Army. MORE >

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