FAR Ethics Requirements

In advance of the Federal Acquisition Regulation’s (FAR’s) thirty-year anniversary (coming up on April 1) it seems appropriate to review the ethics compliance and training requirements contained in the FAR. Organizations that fail to meet the requirements can lose existing contracts or lose bids for new contracts, or both.

Part 52, the largest single section of the FAR, addresses ethics compliance and training requirements. All contracting organizations and in some instances their subcontractors or vendors are required to develop and enforce a written code of business ethics. Most organizations that are not categorized as small businesses must provide an ethics hotline or other mechanism for anonymous and confidential reporting, and must offer related ongoing training.  Following is a summary of major ethics requirements found in the FAR; there are other applicable requirements as well.

Contractor Code of Business Ethics and Conduct, Part 52.203-13

All contractors shall:

— Have a written code of business ethics and conduct

— Make a copy of the code available to each employee engaged in performance of the contract

— Exercise due diligence to prevent and detect criminal conduct

— Promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law

— Disclose, in writing, whenever the contractor has credible evidence that a principal, employee, agent, or subcontractor of the contractor has committed a violation of specified laws or regulation

Large businesses and some others as defined in the FAR shall establish:

— An ongoing business ethics awareness and compliance program, to include training programs and other communications methods

— An internal control system, to include suitable assignment of responsibility; periodic reviews of company business practices, procedures, policies, and controls; an internal reporting mechanism, such as an ethics hotline, which allows for anonymity or confidentiality; and other related requirements

Display of Fraud Hotline Poster(s), Part 52.2013-14

Depending in part on the size of the contract, businesses are required to prominently display fraud hotline posters in common work areas and on websites. Copies of fraud hotline posters may be obtained from the relevant government agency or from the Department of Homeland Security.

Contractor Employee Whistleblower Rights and Requirement to Inform Employees of Whistleblower Rights, Part 52.203-17

For a four-year period (July 1, 2013 through January 1 2017) employees working on a Federal Government contract, subcontract or grant are provided enhanced whistleblower protections.

— In general, an employee of a contractor, subcontractor, or grantee may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing information that the employee reasonably believes is evidence of gross mismanagement of a Federal contract or grant, a gross waste of Federal funds, or specified related violations.

— Contractors, subcontractors, and grantees must inform their employees in writing of the rights and remedies provided under this section, in the predominant native language of the workforce.

It is no small task to create and maintain an ethical business environment and to ensure compliance with the FAR’s many sections. Ethical Advocate provides comprehensive ethics and compliance solutions, including ethics and compliance training and confidential and anonymous hotlines, meeting Sarbanes-Oxley (SOX), Federal Acquisition Regulation (FAR), and other regulatory and reporting needs. Please contact us for additional information.