More than ever, if you are doing business with the federal government, you need to be an ethical company and have your policies reflect it.  The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued a final rule (FAR 3.10) effective December 24, 2007, amending Federal Acquisition Regulations (FAR) to address requirements for a contractor code of business ethics and conduct.  Prior to this, there were no prior FAR requirements for a contractor code of ethics or compliance program.

These changes impact tens of thousands of companies – public, private, foreign and domestic.  The new rule affects all new federal contracts over $5 million with a duration exceeding 120 days (excluding commercial contracts and contracts performed entirely outside of the US) and requires contractors to have:

– A written code of ethics and business conduct in place and distributed to applicable employees within 30 days of contract award

An employee ethics and compliance training program in place within 90 days of contract award and

– An internal control system such as a hotline to promote compliance with the code of ethics and business conduct within 90 days of contract award.
These codes and systems extend to applicable subcontractors and require:

* “Establishing an internal reporting mechanism such as a hotline, allowing for anonymity or confidentiality, such as an employee hotline” with procedures encouraging employees to make reports of suspected instances of improper conduct
* Timely discovery and disclosure of improper conduct
* Corrective measures, including disciplinary action that are promptly implemented
* Periodic reviews of company business practices, procedures, policies, and internal controls for compliance with the contractor’s code of ethics and business conduct and the special requirements of government contracting
* Internal and/or external audits
Ethical Advocate’s (EA) government contractor whistleblower service represents the most effective and recognized solution for reporting malfeasances, especially fraud. The 2008 Association of Certified Fraud Examiner’s (ACFE) Report to the Nation indicates that (anonymous) employee tips are by far the most effective method to discover risk events.

EA’s reporting application has been certified as the country’s first and only Federal Information Security Management Act (FISMA) compliant third-party hotline. Compliance with FISMA is mandated by law for government contractors to protect the confidentiality, integrity and availability of information and systems that support the operations and assets of government agencies.

EA’s servers are in one of the most (if not the most) secure hosting facility in the United States and the only hosting company focused on delivering secure, robust IT infrastructure management and hosting services specifically engineered to help federal agencies (including DOJ, DOD, and DHS) and commercial entities achieve the most stringent security posture.

EA provides government contractors worldwide, multi-lingual, 24/7/365 availability through its call center.

It is critical for government contractors to ensure their ethics and compliance programs are consistent with the new regulations. Having a good compliance program is no longer simply a good idea—it’s the law.

Contact Ethical Advocate:

888/ETHICS 6