Economic Logistics 1

Introduction

There are many organizations in which the external assistance is required to carry out

the functioning of the organization. Most of the times this type of assistance is

conducted with other sectors or fields through contractors. In this type of organizations

where such interactions are prevailing it becomes very necessary for the employees of

the government organizations to comprehend the true nature of this sort of relationship

between contractors and government organization . The employees of such contractors

are also important in this chain as they are the people who carry out many of such

transactions. This relationship is very tricky and poses many potential risks upon the

government under certain circumstances. These contractors form an important part of

the team and their importance cannot be denied at any cost (Register, 2011).

Similarly these relations also greatly depend upon the nature of the organization which

is working in collaboration with such contractors. The same issue can have a varied

connotation for a military or civil organization as different rules apply for both of them.

So this employee contractor relationship is very important and tricky at the same time so

it never turns out to be very simple team work rather involves a lot of complications and

challenges simultaneously. In order to deal with this issue there are certain rules set up

by every organization and they train their managers for that accordingly. Previous

practices are also of great use for new people to deal with contractors in a successful

manner. This field must be dealt very professionally and no personal relations should be

developed in order to work in a professional setting and get best out of this partnership

(Register, 2011) (Mosley, 2002).

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Types of Contractors

Mainly the contractors can be categorized into two main types which are referred as

personal service contractors and non personal service contractors.

Personal Service Contractors

The situation in which the employees are hired through competition and then appointed

then the contractors are referred as personal service contractors. The rules of the

organization apply to these contractors and they have to abide by them just like the rest

of the employees of the organization.

Non Personal Service Contractor

The non personal service contractors who personally make a contract to provide certain

goods or services to the organization but they do not come under any sort of

supervision or rules of the organization. They are just bound to fulfill what they have

committed on agreed terms and conditions by both parties (Register, 2011).

Economic Logistics 3

The employees of the government are needed to acquire complete and comprehensive

knowledge of all the requirements and rules and regulations to deal with the contractors.

They are ought to keep the relationship with these contractors beyond any sort of

accusation and reproach. The government of the United States expects each

government employee to work and deal with the contractors by strictly observing the

statutes present in the Constitution . Each employee is expected to work by adhering to

the principles and ethical standards devised in the Constitution under Joint Ethics

Regulation (Hutton, 2007).

Guidelines

Here we outline some of the general guidelines which can be helpful for the

government employees while dealing with the contractors.

DO:

It has to be kept in mind that these contractors are not government employees and are

not bound under the rules of the any organization. The working areas and domains of

these contractors must be outlined clearly which will prove to be precluding any type of

personal touch in the relationship between the government employees and the

contractors. Proper record keeping of e-mails and other related documents. The
Economic Logistics 4

employees of the contractors must be well identified and should be dealt with due

respect. All the legislative requirements must be met religiously in all dealings. The

contractors are likely to get certain benefits while working with organizations which are

often tolerated by the organizations (Hutton, 2007).

The government employees are required to observe any sort of violation by the

contractors or their personnel with vigilance and must report it to the relevant authorities

in time.

Any sort of institutional information which is confidential in nature must not be revealed

to the contractors . They must be kept limited to their domain of work and should not be

allowed to interfere in other issues. No irrelevant people should be allowed to deal with

them or their personnel other than the authorized officials or their team.

DON’T

The government officials dealing with the contractors working with their institutions

must not try to influence the contractors in their domains like selection of personnel or

their dealing with the outside institution or people in any respect.

They must not interfere in the work area of the contractors or their personnel and should

not try to supervise them at their own (Chaplain, 2007). The personnel of contractor

must not be used interchangeably with the government employees for any reason. No

intervention should be made in the chain of command of the contractors rather they
Economic Logistics 5

should be allowed to work in their own way so that ultimately they can be solely held

responsible for their deliverance of work. They should hire and fire their personnel at

their own and rate their personnel by themselves. Out of scope work should never be

demanded from the contractor or their personnel at any cost otherwise it may cost the

compromise of the quality of actual task.

ORGANIZATIONAL CONFLICT OF INTEREST

The organizational conflict of interest or OCI emerges in the situation when a contractor

is not capable of rendering an unbiased to the organization with whom it is working or

may intentionally present objectively impaired work which has been contracted at the

time of contract. The contractor may intend to seek advantage deliberately by using

unfair means. The contractor can start taking this sort of unfair advantage right from the

time when he sets ground rules for the procurement of any sort of future advantage.

The essence of organizational conflict of interest can be felt when the contractor

displays a divided loyalty. This is the time when the government officials dealing with

these contractors must discover any sort of violence of the terms of contract and sort it

out in time in collaboration with other allied institutions (Chaplain, 2007).

The organizational conflict of interest can be broadly categorized into three main

categories:

 Biased ground rules

 Unequal access

 Impaired objectivity

Unequal access
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Unequal access renders undue competitive advantage to the contractors especially in

the situations when the information of the contract is not open to other contractors who

are competing and they become successful in grabbing the contract .

Impaired objectivity

The impaired objectivity is observed to be performed by the contractors in the situations

where they are supposed to evaluate or assess themselves or their relevant entities.

Biased ground rules

The biased ground rules are observed most commonly in the situations when the

contractors note down SOW, while performing system engineering or render their

efforts in providing technical directives.

The OCI must be avoided in real or apparent terms so that the trust of the tax payer

community and the contractors in the government organizations is maintained.

Whatever decisions are made or implemented must be made transparent , based on

fact and figures which can be verified at any stage . There must not be any sort of

hidden personal or organizational gains .

WAYS TO DEAL WITH OCI

The OCI s must be dealt in a sensible manner and should be avoided to occur in

apparent or potential form by eliminating the portion of the contract where conflict is

likely to take place.

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If any potential OCI has been noted down or observed then all necessary actions must

be taken to avoid it. The unfair competitive advantage must be eradicated at each and

every level.

If there comes a situation when the OCI is not possible to be avoided hen the

government officials must try to mitigate it and bring it to an acceptable level where the

risk factor is minimum. However the government interest must not be compromised at

any cost and the efforts of mitigation may include the developing the firewalls.

Conclusion

There are many tasks in the functioning of many government organizations which are

not possible to be supported by the organizations themselves so they require

assistance from outside contractors. This relationship has to be dealt in a very tactful

manner to get real benefit of it instead of indulging in unnecessary conflicts . For a

successful dealing the officials dealing with these contractors have to keep in mind that

they are not government employees. They must not interfere in their domain of work

and should not try to influence their performance or the working of their personnel rather

wait for the final deliverance for which they can hold them accountable if it s not up to

the mark or the desired standard.

Economic Logistics 8

Bibliography
Chaplain, C. (2007). Defense Contracting: Additional Personal Conflict of Interest Safeguards .. Diane
Publishing Co.

Hutton, J. P. (2007). Contingency Contracting: Improvements Needed in Management of Contractors .

Diane Publishing Co.

Mosley, R. A. (2002). The Code of Federal Regulations of the United States of America. Office of Fedral
Registrer.

Register, O. o. (2011). Code of Federal Regulations, Title 48, Federal Acquisition Regulations ... Govt
Printing Office.