Friday, October 26, 2018

Contractor Code of Business Ethics - A Reminder

We've written concerning this matter a couple of times but it bears repeating because some contractors have forgotten the requirement. What requirement? The requirement found in FAR (Federal Acquisition Regulations) 3.10, Contractor Code of Business Ethics and Conduct.

This particular section begins with an overall policy: Government contractors must conduct themselves with the highest degree of integrity and honesty and should (not must) have a written code of business ethics and conduct. To promote compliance with such a code, contractors should (not must) have an employee business ethics and compliance training program and an internal control system that (i) is suitable to the size of the company and extent of its involvement in Government contract, (ii) facilitates timely discovery and disclosure of improper conduct in connection with Government contracts and (iii) ensures corrective measures are promptly instituted and carried out.

The foregoing was general policy guidelines. There's more however. There is a "must" provision. All Government contractors, regardless of size, must display a Hotline Poster (see FAR 52.203-14). Your contracting officer will tell you which one to post and where to obtain it. The Hotline poster must be prominently displayed in a common work area. It can also be displayed on an employee website. There is another "must" provision that applies to contracts greater than $5.5 million with period of performances greater than 120 days - a written code of conduct.

This written code of business ethics and conduct must be made available to every employee. Contractors must exercise due diligence to prevent and detect criminal conduct and otherwise promote an organization culture that encourages ethical conduct and a commitment to compliance with the law. Further details can be found in FAR 52.203-13, Contractor Code of Business Ethics and Conduct.

Contracting officers are responsible for enforcing these provisions (see FAR 42.302(a)(71).

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