APPENDIX II STANDARDS OF CONDUCT

This appendix was developed using the information already in appendix E of NAVSUP P-487 on the standards of conduct. The material was developed into a training format to make it easier for you to read and understand. Appendix E of NAVSUP P-487 was developed to emphasize the requirement that all ship's store personnel adhere to the standards of conduct contained in DOD Directive 5500.7 and SECNAVINST 5370.2. This appendix is not intended to replace or modify the above instructions or material.

DEPARTMENT OF DEFENSE STANDARDS OF CONDUCT

The Department of Defense (DOD) standards of conduct describes the relationship between ship's store personnel and vendors. All ship's store personnel must observe the highest ethical standards when dealing with vendors. In all areas of the ship's store operation, equal treatment must be given to all vendors and suppliers. Ship's store personnel should be aware that it is strictly forbidden to accept gratuities, gifts, prizes, and so forth, from vendors or to give preferential treatment to vendors in regard to procurement, distribution, stocking, display, or resale of their products.

As a Ship's Serviceman, you must understand that your actions and the decisions you make are closely watched by people in and out of the government. Even though a conflict of interest does not exist in your dealings, you must avoid even the appearance of such a conflict existing in the public's eyes. For example, being hospitable to a friend may be inappropriate if the friend is a contractor's representative and the contractor is involved in an official matter with your command or an official matter that is expected to arise on which you may have to make a decision. This is an example of conflict of interest because your decision on this official matter may be swayed by your friendship with the contractor's representative.

SHIP'S STORE POLICY

Ship's store policy is firm and to the point. Any ship's store personnel who solicit, accept, or agree to accept gratuities in any form from vendors or suppliers or anyone else who deals with the ship's store either directly or indirectly is subject to disciplinary action or, in some cases, criminal prosecution.

Ship's store personnel will also not give preferential treatment to vendors, suppliers, or anyone else in any area including procurement, distribution, stocking, display, or resale of products under any circumstances.

ACTIONS BY NAVRESSO

NAVRESSO has advised all Ship's Store Afloat Catalog vendors and all contractors of the policy and prohibitions. NAVRESSO prepared and developed various signs for display in the ship's store to advise and remind all personnel and vendors of the policy. The ship's store officer must make sure these signs are posted in the ship's store office and any other appropriate area for observance by all ship's store personnel and vendors. Semiannually, the ship's store officer must review DOD standards of conduct with all ship's store personnel and remind local vendors and suppliers of these policies.

SECNAVINST 5370.2

SECNAVINST 5370.2 implements and supplements DOD Directive 5500.7 of 15 Jan 1977 regarding the standards of conduct of personnel in the Department of Defense. This instruction prescribes required standards of ethical conduct governing all personnel of the Department of the Navy; related requirements that apply to all personnel in understanding and executing the standards of conduct; and responsibilities and procedures for monitoring and enforcing compliance with the standards of conduct and related requirements within the Department of the Navy.

The contents of this instruction apply to all naval personnel and, when applicable, to retired naval personnel and members of the Reserve components. Noncompliance with this instruction may result in disciplinary or punitive action. Appropriate administrative measures must be taken to prevent and correct noncompliance to this instruction in a timely manner.

You should become familiar with the following terms because they are mentioned often during our discussion.

Naval Personnel-All civilian officers and employees and all active duty military personnel of the Department of the Navy, including special government employees and personnel of nonappropriated fund instrumentalities.

Gratuity-Any gift, favor, entertainment, hospitality, transportation, loan, any other tangible item, and any intangible benefit; for example, discounts, passes, and promotional vendor training given or extended to, or on behalf of, naval personnel or their spouses, minor children, or households, for which a fair market value is not paid by the recipient or the U.S. Government.

Appropriate Supervisor-Superior within the chain of command who knows the duties of the naval personnel concerned and can best determine whether a conflict of interest exists for such personnel. This person will ordinarily be the immediate superior of the person concerned. Each commanding officer and department head should make sure all personnel know who their appropriate supervisor is.

POLICIES GOVERNING THE CONDUCT OF NAVAL PERSONNEL

Naval personnel must become familiar with the range of their authority and the limitations placed on them concerning activities for which they have responsibility. To do this, they must direct their attention to the prohibitions that apply to the conduct of naval personnel.

Naval personnel are prohibited from making or recommending any expenditures of funds or taking or recommending any action that is known to be a violation of U.S. laws, Executive orders, or applicable directives, instructions, or regulations. If you are in doubt whether your proposed actions or decisions comply to the terms of regulation or law, you should consult legal counsel or, if appropriate, a standards of conduct counselor or deputy counselor to make sure your actions or decisions are the proper and lawful conduct of Navy programs and activities.

Conduct Prejudicial to the Government

Conduct that is prejudicial to the government tends to injure or impair the attitude of the public toward the government. Whether specifically prohibited or not in this instruction, you should avoid any action that may be prejudicial to the government. Conduct prejudicial to the government might result in or reasonably be expected to create the appearance of the following: 

l Using public office for private gains 

. Giving preferential treatment to any person or entity 

. Impeding government efficiency or economy 

. Losing complete independence or impartiality 

. Making a government decision outside official channels

. Adversely affecting the confidence of the public in the integrity of the government

Personal Judgment

As stated earlier, all naval personnel must adhere strictly to the standards of conduct and related requirements. In some instances, standards are imposed that require you to exercise your own personal judgment. You must consider each of these instances carefully and prepare to account for the manner in which you judged the situation. This is particularly important in a situation that involves acceptance of hospitality or favors from another person or entity who do or are seeking to do business with the Department of Defense.

Dealing with Business and Industry Representatives

No matter where you work or what position you hold, sooner or later you will deal with business or industrial representatives. You must remember when doing so that you are representing the government in these business dealings, and you must make sure that while you handle them, you observe the highest ethical standards. Practices that may be acceptable in the business world may not be acceptable for naval personnel. Avoid placing yourself in the position in which a conflict of interest might arise or be suspected, Such a conflict of interest may arise or appear to arise when you accept gratuities or engage in any activity that would influence or reasonably be interpreted as influencing the strict impartiality that must be maintained in all business relationships involving the government. When these business relations become personal, it becomes difficult for you to maintain the impartiality required in your relations with business or industrial representatives. You should at all times make sure any person doing business or attempting to do business with the DOD, or representing such entities, does not try to gain favor or favorable acceptance from you. You should deny any offers for special treatment from such persons; follow the rule of strict impartiality when dealing with such persons in an official capacity. When you accept gratuities or favors from those who have or seek business dealings with the DOD, it may result in embarrassment to the department and to the naval personnel involved. It may also affect your judgment as the recipient and impair the judgment of the public on the way the government handles its business dealings. It must be stressed that prohibited conflicts and apparent conflicts of interest may sometimes arise even with relationships and transactions that the personnel involved may perceive as unimportant. When in doubt about the propriety of accepting gratuities, attending functions, or accepting other invitations of a hospitable nature, you must refrain.

Preferential Treatment

In all your business dealings with other individuals or firms, special treatment must not be given unless equivalent treatment is also given to other individuals or firms who are justifiably entitled to such treatment.

ACQUIRING CONFLICTING FINANCIAL INTERESTS

Naval personnel must avoid acquiring or retaining financial interest that would disqualify them from performing their duties or responsibilities. The following are some of the more likely situations in which conflicts of interest might arise. Naval personnel have government duties or responsibilities related to business entities- l with which they, their spouse, their minor children, or household members are associated with employees, officers, owners, directors, members, trustees, partners, advisors, or consultants; . with which they, their spouse, minor children, or household members are negotiating or have arrangements for prospective employment; and l in which they, their spouse, minor children, or household members have interest through ownership of stocks, bonds, securities, or other financial arrangements, such as trusts, or through participation in pension or retirement plans.

Membership in Associations

Naval personnel who are members or officers of nongovernmental associations or organizations must avoid activities on behalf of the association or organization that are incompatible with their official government positions. SECNAVINST 5760.4 sets policy for the Department of the Navy regarding participation by naval activities and naval personnel in the activities of private associations.

Equal Opportunity

Naval personnel should scrupulously adhere to the DOD program of equal opportunity regardless of race, color, religion, sex, age, or national origin, according to equal opportunity directives.

Reporting Suspected Violations

Naval personnel who have information that causes them to believe someone has violated the standards of conduct should report such information to their appropriate supervisor. The matter will then be brought to the attention of the person concerned for a possible resolution without further command action unless the command determines that such communication is not likely to resolve the problem or will adversely affect a proper investigation of the matter.

Resolving Violations

The resolution of standards of conduct violations must be accomplished promptly by one or more measures, such as divestiture of conflicting interests, disqualification for particular assignments, changes in assigned duties, termination, or other appropriate action, as provided by statute or administrative procedures. Disciplinary actions must be taken according to established personnel procedures.

REGULATIONS GOVERNING THE CONDUCT OF NAVAL PERSONNEL

As a Ship's Serviceman, you must be familiar with the regulations concerning your everyday conduct. In this section we will discuss the regulations governing the conduct of all naval personnel.

Affiliations and Financial Interest

Naval personnel must not engage in any personal, business, or professional activity nor receive nor retain any direct or indirect financial interest that places them in a position of conflict between their private interests and the public interests of the United States related to the duties or responsibilities of their official positions. For the purpose of this prohibition, the private interests of a spouse, minor child, and any household member are treated as private interests of the naval personnel.

Unless otherwise expressly authorized by action taken under 18 USC 208(b), all naval personnel who have or acquire an affiliation or a financial interest that creates a conflict or appearance of a conflict with their official duties must report the possible disqualifying interest to the appropriate supervisor who will resolve the matter according to SECNAVINST 5370.2. If it is determined that the individual should be disqualified from participation in any official activities that are related to the conflicting interest, a formal disqualification notice must be sent to the concerned individual's appropriate supervisor and immediate subordinates. If the individual cannot adequately perform his or her official duties after such disqualification, he or she must discontinue such involvement or be removed from that position.

Naval personnel need not disqualify themselves under this section for holding shares of a widely held diversified mutual fund or regulated investment company. Such holdings are exempted as being too remote or inconsequential to affect the integrity of the services of government personnel.

Using Inside Information

Naval personnel must not use, directly or indirectly, inside information to further a private gain for themselves or others if that information is not generally available to the public and was obtained by reason of their DOD positions.

Using Naval Positions

Naval personnel must not use their official positions to induce, restrain, dominate, or in any manner unlawfully influence any person, including subordinates, to provide any benefit, financial or otherwise, to themselves or others.

Dealing with Present and Former Military and Civilian Personnel

Naval personnel must not knowingly deal on behalf of the government with present or former government personnel, military or civilian, whose participation in the transaction would be in violation of a statute, regulation, or policy set forth in SECNAVINST 5370.2. While all applicable prohibitions are within the prohibitions of this paragraph, attention is directed to the prohibition on retired Regular officers selling to the government through the department in which they hold a retired status, 18 USC 281; the prohibition on former personnel acting as an agent or attorney for anyone other than the United States in connection with claims against the government, 18 USC 207; and the prohibition on paying appropriated funds to retired Regular officers who are selling to certain government agencies, 37 USC 801(c).

Commercial Soliciting by Naval Personnel

To eliminate the appearance of coercion, intimidation, or pressure from rank, grade, or position, full-time naval personnel, except special government employees and Reserve enlisted personnel on active duty for training, are prohibited from making personal commercial solicitations or sales to DOD personnel who are junior in rank or grade, at anytime, on or off duty.

This limitation includes, but is not limited to, the solicitation and sale of insurance, stocks, mutual funds, real estate, and any other commodities, goods, or services. This prohibition does not apply to the one-time sale by an individual of his or her own property or privately owned dwelling, or to the off-duty employment of naval

personnel as employees in retail stores or other situations not including solicited sales.

In regard to solicitation by civilian personnel, the limitation applies only to solicitation of personnel under the supervision, at any level, of the solicitor.

Assignment of Reserve Personnel for Training

Naval personnel who are responsible for assigning Reserves for training must not assign them to duties in which they will obtain information that could be used by them or their private sector employers to gain unfair advantage over civilian competitors.

Gratuities

Except as discussed later in this section, naval personnel and their spouses, minor children, and members of their households must not solicit, accept, or agree to accept any gratuity for themselves, members of their families, or others, either directly or indirectly from, or on behalf of, a defense contractor. A defense contractor is a person or other entity that fulfills one or more of the following criteria:

. Is engaged in or seeks business or financial relations of any sort with any DOD component 

l Conducts operations or activities that are either regulated by a DOD component or significantly affected by DOD decisions 

l Has interests that may be substantially affected by the performance of the official duties of DOD personnel

This general prohibition does not apply to the situations below:

(1) The continued participation in employee welfare or benefit plans of a former employee when permitted by law and approved by the appropriate standards of conduct.

(2) The acceptance of unsolicited advertising or promotional items that are less than $5 in retail value.

(3) Trophies, entertainment, prizes, or awards for public service or achievement or given in games or contests that are clearly open to the public or that are officially approved for naval personnel participation.

(4) Things available to the public (such as university scholarships covered by DOD Directive 1322.6 and free exhibitions by Defense contractors at public trade fairs).

(5) Discounts or concessions extended throughout the Navy and Marine Corps that are realistically available to all naval personnel.

(6) Participation by naval personnel in civic and community activities when the involvement of Defense contractors is remote from the business purposes of any contractor who is sponsoring, supporting, or participating in the activity (for example, participation in a little league or Combined Federal Campaign luncheon that is subsidized by a Defense contractor).

(7) Social activities engaged in by officers in command and other naval officials, or their representatives, with local civil leaders as part of community relations programs of the Department of the Navy according to SECNAVINST 5720.44.

(8) The participation of naval personnel in widely attended gatherings of mutual interest to government and industry, sponsored or hosted by industrial, technical, and professional associations (not by individual contractors), provided that they have been approved according to DOD Instruction 5410.20.

(9) Situations in which participation by naval personnel at public ceremonial activities of mutual interest to industry or local communities and the Department of the Navy serves the interest of the government and acceptance of the invitation is approved by the commanding officer or other head of the activity to which the invited personnel are attached.

(10) Contractor-provided transportation, meals, or overnight accommodations in connection with official business when arrangements for government or commercial transportation, meals, or accommodations are clearly impractical and the individual reports the circumstances in writing to his or her appropriate supervisor as soon as possible.

(11) Attendance at promotional vendor training sessions when the vendor's products or systems are provided under contract to DOD and the training is to facilitate the use of those products or systems by naval personnel.

(12) Attendance or participation of naval personnel in gatherings, including social events such as receptions, that are hosted by foreign governments or international organizations, provided that the acceptance of the invitation is approved by the commanding officer or other head of the activity to which the invitee is attached or, when there is doubt as to the propriety of acceptance, by higher authority, (See SECNAVINST 1650.1 for further information pertaining to gifts from foreign governments.)

(13) Customary exchanges of gratuities between naval personnel and their friends and relatives or the friends and relatives of their spouses, minor children, or members of their household where the circumstances make it clear that it is that relationship rather than the business of the persons concerned that is the motivating factor for the gratuity and where it is clear that the gratuity is not paid for by any entity.

(14) Situations in which, in the sound judgment of the individual concerned or his or her superior, the government's interest will be served by naval personnel participating in activities otherwise prohibited. In any such case, a written report of the circumstances must be made by the individual or his or her appropriate supervisor in advance of acceptance or, when an advance report is not possible, within 48 hours after acceptance, to the appropriate supervisor, if he or she is not otherwise aware of the acceptance, and to the appropriate standards of conduct counselor or deputy counselor.

Naval personnel who receive gratuities, or have gratuities received for them in circumstances not in conformance with the standards of this section, must promptly report the circumstances to the appropriate supervisor for a determination as to the proper disposition. The appropriate supervisor must consult with the standards of conduct counselor or deputy counselor. Procedures with respect to recruit officer training command (ROTC) staff members are set forth in DOD Directive 1215.8.

Receipts in Connection with Official Travel

The acceptance of accommodations, subsistence, or services, furnished in kind, in connection with official travel from sources other than those prohibited from our previous discussion is authorized only when the individual is to be a speaker, panelist, project officer, or other bona fide participant in the activity attended and when such attendance and acceptance is authorized by the order-issuing authority as being in the overall government interest.

Except as noted above, naval personnel may not accept personal reimbursement from any source for expenses incident to official travel, unless authorized by their commanding officer or the head of their activity, consistent with guidance by the appropriate standards of conduct counselor (pursuant to 5 USC 4111 or other authority). Rather, reimbursement must be made to the government by check payable to the Treasurer of the United States. Personnel will be reimbursed by the government according to regulations related to reimbursement, In no case may naval personnel accept reimbursement, either in kind or in cash, that is extravagant or excessive in nature.

When accommodations, subsistence, or services in kind are furnished to naval personnel by nongovernment sources, appropriate deductions must be reported and made in the travel per diem, or other allowance payable.

Prohibitions of Contributions or Presents to Superiors

Naval personnel must not solicit a contribution from other DOD personnel for a gift to an official superior, make a donation or a gift to an official superior, or accept a gift from other DOD personnel subordinate to themselves. This requirement, however, does not prohibit gifts or contributions of nominal value on special occasions, such as marriage, illness, transfer, or retirement, provided any gifts acquired with such contributions do not exceed a reasonable value.

Use of Government Facilities, Property, and Manpower

Naval personnel must not directly or indirectly use, take, dispose of, or allow the use, taking, or disposing of, government property leased to the government, for other than officially approved purposes. Government facilities, property, and manpower (such as stationery, stenographic and typing assistance, Mimeograph, and chauffeur services) must be used only for official government business. Naval personnel have a positive duty to protect and conserve government property. These provisions do not prevent the use of government facilities for approved activities in furtherance of naval community relations, provided they do not interfere with military missions or government business. See SECNAV-INST 5720.44 for community relations guidance.

Use of Civilian and Military Titles or Position in Connection with Commercial Enterprise

All naval personnel, except special government employees, are prohibited from using their grade, rank, title, or position in connection with any commercial enterprise or in endorsing any commercial product. This does not prevent author identification for materials published according to DOD procedures. A commercial enterprise is any entity that engages in activities that produce income as defined in Int. Rev. Code of 1954 61, and that has not been exempted from paying income taxes pursuant to Int. Rev. Code of 1954, 501(a).

All retired military personnel and all members of Reserve components, not on active duty, are permitted to use their military titles in connection with commercial enterprises, provided that they indicate their Inactive Reserve or Retired status. If, however, such use of military titles in any way casts discredit on the Department of the Navy or the Department of Defense or gives the appearance of sponsorship, sanction, endorsement, or approval by the Department of the Navy or the Department of Defense, it is prohibited. In addition, commanders of overseas installations may further restrict the use of titles including use by retired military personnel and members of Reserve components, not on active duty, in overseas areas.

Outside Employment of DOD Personnel

Naval personnel must not engage in outside employment or other outside activity, with or without compensation, that interferes with, or is not compatible with, the performance of their government duties, that may reasonably be expected to bring discredit on the government or the Department of the Navy, or is otherwise inconsistent with the requirements of this instruction, including the requirements to avoid actions and situations that reasonably can be expected to create the appearance of conflicts of interests.

Enlisted naval personnel on active duty may not be ordered or authorized to leave their post to engage in a civilian pursuit, business, or professional activity if it interferes with the customary or regular employment of local civilians in their art, trade, or profession.

Active duty Regular officers of the Navy and Marine Corps may not be employed by any person furnishing naval supplies or war materials to the United States. If such an officer is so employed, his or her entitlement to pay ceases for so long as he or she is so employed.

Off-duty employment of military personnel by an entity involved in a strike is permissible if the person was on the payroll of the entity before the beginning of the strike and if the employment is otherwise in conformance with the provisions of this instruction. After a strike begins and while it continues, no military personnel may accept employment by that involved entity at the strike location.

Naval personnel are encouraged to engage in teaching, lecturing, and writing. Naval personnel, however, must not, either for or without compensation, engage in activities that are dependent on information obtained as a result of their government employment, except when the information has been published or is generally available to the public, or it will be made generally available to the public and the official authorized to release such information to the public gives written authorization for the use of nonpublic information on the basis that the use is in the public interest.

Civilian Presidential appointees in the Department of the Navy must not receive compensation or anything of monetary value for any consultation, lecture, discussion, writing, or appearance, the subject matter of which is devoted substantially to naval responsibilities, programs, or operations or that draws substantially from official material that has not become part of the body of public information.

Gambling, Betting, and Lottery

While on government owned, leased, or controlled property, otherwise while on duty for the government, naval personnel must not participate in any gambling activity, including a lottery or pool, a game for money or property, or the sale or purchase of a number slip or ticket. The only exceptions are for activities that have been specifically approved by the Secretary of the Navy.

Indebtedness

Naval personnel must pay their just financial obligations in a timely manner, particularly those imposed by laws (such as federal, state, and local taxes), so that their indebtedness does not adversely affect the government as their employer. The Department of the Navy is not required to determine the validity or amount of disputed debts.

RESPONSIBILITIES FOR ACTIONS

The basic responsibility for complying with the requirements of this instruction rests with individual personnel concerned, but the primary responsibility for ensuring such compliance must rest with officers exercising command or similar authority over personnel. Each commanding officer or head of a command, a bureau, an office, or an activity is specifically responsible for the following actions: l Review applicable information contained in SECNAVINST 5370.2 to all naval personnel within his or her organization at least semiannually, in a manner that will ensure familiarity and compliance with the pertinent provisions of this instruction by all personnel. (This is a continuing requirement and is in addition to the initial briefing required.)

. Establish and execute the procedures and controls established in this instruction so that all naval personnel within the organization who are required to file confidential statements of affiliations and financial interests (DD Form 1555) do file them in a timely manner, and that such statements are promptly and carefully reviewed. 

. Make determinations pursuant to SECNAVINST 5370.2 and 18 USC 208(b) with respect to disqualification of personnel within the organization from performing duties in which they have conflicts or apparent conflicts of interests.

. Make sure reservists detailed to perform active duty for training at the organization are assigned duties that will minimize the possibility that they may obtain information that could be used by them or their employers to gain an unfair advantage over civilian competitors.

. Receive and take prompt and appropriate action on reports concerning acceptance of gratuities or other violations of SECNAVINST 5370.2 or related statutes by personnel within the organization.

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