The interest in bidding on federal work, considering the new American Recovery and Reinvestment Act (Stimulus Bill) has attracted many new bidders to federal procurements. Federal contractors need to take note of the recent Business and Ethics compliance provisions of the Federal Acquisition Regulations. Any contractor receiving a government contract in excess of $5 million with a duration of 120 or more days shall:
- Adopt a written code of business ethics and conduct and make its “available to each employee during the covered contract;
- Exercise “due diligence” to prevent and detect criminal conduct;
- Promote an organizational culture that encourages ethical conduct and compliance;
- Make a timely written disclosure to the agency inspector general with a copy to the contracting officer whenever the contractor as “credible evidence: of a violation of the Civil False Claims Act or a federal criminal law involving fraud, conflict of interest, bribery or gratuity violations.
Every contractor (except for small business) must establish a business ethics and awareness program and an internal control system within 90 days of contract award. The contractor’s system and program shall include:
- Reasonable steps to communicate standards, procedures and provide training;
- An internal control system that includes standards and procedures to facilitate timely discovery of improper conduct, periodic assessments of criminal conduct, reporting mechanisms such as a hotline and disciplinary action for improper conduct for failing to prevent or detect improper conduct;
- Disclosure of improper conduct to the federal government. Not only must the contractor comply with these business and ethics provisions, these provisions must be included in subcontracts in purchase orders in excess of $5 million and 120 day’s duration.
In addition, the contractor must verify subcontractor and supplier compliance. The Associated General Contractor’s (AGC) Federal Government Contractor Ethics And Compliance Programs, tool kit and guidance publication includes generic ethics and compliance programs. This sample program assists contractors to navigate these complex and new regulatory waters.