Monday, March 14, 2011

Hotline Poster Requirments may be Expanded

We've discussed  the FAR required contractor code of business ethics and conduct and displaying "hotline" posters a number of times in this blog (for example, go here and here). When it comes to displaying hotline posters, if you have a contract greater than $5 million, you need to display a specific hotline poster from whatever governmental agency awarded your contract. FAR, however, contains an exemption for contractors who have implemented a business ethics and conduct awareness program, including a reporting mechanism, such as a hotline poster. Those contractors need not display any agency hotline posters.

Recently, the DoD Inspector General (who administers the DoD Hotline) found that the exemption for contractors with business ethics and conduct awareness programs,
"...has the potential to make the DoD hotline program less effective by ultimately reducing contractor exposure to DoD IG fraud hotline posters and diminishing the means by which fraud, waste, and abuse can be reported under the protection of Federal whistleblower protection laws. Some contractor's posters may not be as effective as the DoD poster in advertising the hotline number, which is integral to the fraud program.
Or, to state this another way, the DoD IG is concerned that contractors with business ethics and conduct awareness programs are trying to resolve issues in-house and do not make it convenient for employees to seek redress outside of the organization.

Last week, DoD proposed to eliminate this exemption so that all contractors (with $5 million contracts) must display the hotline poster irrespective of whether they have business ethic and conduct awareness programs. This revision will affect only DoD contracts but as often happens, may ultimately extend to all Agencies. The comment period for this proposal ends May 11, 2011.

We have always recommended that contractors prominently display hotline posters in common work areas in business segments performing work under Government contracts whether required to or not. Its cheap and easy and demonstrates a propensity to ethical conduct. The posters can be ordered free (or downloaded) from the DoD IG website.

By the way, both the current contract requirement and the proposed revision requires that company websites used as a method of providing information to employees also display electronic versions of the poster.

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