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Federal Acquisition Regulations Require Mandatory Reporting of Ethical Violations

Published by on January 8, 2009

This post is a reminder to government contractors of two sets of recent Federal Acquisition Regulations (“FAR”) regarding ethics policies.  More after the break. The first regulation was effective December 24, 2007.  This regulation contains provisions regarding the requirement for contractors to have a written code of business ethics and conduct and an ethics and […]

This post is a reminder to government contractors of two sets of recent Federal Acquisition Regulations (“FAR”) regarding ethics policies.  More after the break.

The first regulation was effective December 24, 2007.  This regulation contains provisions regarding the requirement for contractors to have a written code of business ethics and conduct and an ethics and compliance training program to facilitate timely discovery and disclosure of improper conduct in connection with government contracts.  A copy of the 2007 regulation is here

The second regulation was effective December 12, 2008.  A copy of the final rule is here.  This rule contains the more onerous provision regarding mandatory disclosure of misconduct: 

A contractor may be suspended and/or debarred for knowing failure by a principle to timely disclose to the government, in connection with the award, performance, or close-out of a government contract performed by the contractor or a subcontract awarded thereunder, creditable evidence of a violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title XVIII of the United States Code or a violation of the Civil False Claims Act.

The rule goes on to provide that a knowing failure to timely disclose credible evidence of any of the above violations is a cause for suspension and/or debarment until three years after final payment on a contract.

Government contractors should take immediate steps to determine if the above regulations are applicable to their situation and, if so, to immediately put in place the required ethics training and monitoring programs necessary to ensure compliance.

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