New Ethics & Compliance Rules for Contractors
By Seth Berenzweig, Managing Partner, Albo & Oblon, LLP
The government has adopted major changes to rules governing contractor ethics and compliance programs, which modify parts of the Federal Acquisition Regulations (”FAR”). These new rules became effective on December 12, 2008, and contain the most significant changes in the regulatory landscape for contractors in several years. This article provides a brief overview of the changes, and provides guidance on how contractors can adopt training programs and gain a competitive business advantage.
There are four major types of changes to the FAR that require contractor compliance:
- Mandatory disclosure - A contractor must disclose procurement fraud and overpayments, or risk debarment or suspension;
- Code of Business Ethics and Conduct - A contractor must also have a written Code of Business Ethics and Conduct;
- Ethics training - If a contract exceeds $5 million and has a performance period longer than 120 days, then the contractor must have an ongoing ethics and compliance training program, unless the contractor is a small business;
- Internal controls - If a contract exceeds $5 million and has a performance period longer than 120 days, then the contractor must also have a system of internal controls to prevent, detect, and remedy procurement fraud, unless the contractor is a small business. Read more