Staying Vigilant - Why Ethical Compliance Under the FAR is Never Complete
by Susan Lavington
FAR, Legal Alerts
All too often, federal contractors let their guard down when it comes to their ethical duties under the Federal Acquisition Regulations (FAR). This is largely because the FAR’s provisions concerning ethical conduct do not provide much specific guidance.
For example, FAR § 52.203-13 requires contractors to have a “written code of ethics”, exercise “due diligence to prevent and detect criminal conduct”, and otherwise “promote and encourage” ethical conduct and compliance with the law. Since violations of your ethical responsibilities can result in suspension, debarment, fines, and even imprisonment, such broad language does not exactly inspire confidence that the regulations will be applied in a consistent and understandable fashion.
Not to worry though. While the regulations themselves are broad, adhering to the following three principles will greatly help to reassure the government that your organization is compliant: (1) approach your ethical obligations systematically; (2) create and maintain records; and, most importantly, (3) stay vigilant.
- Taking a systematic approach to ethical compliance means creating specific internal processes for preventing and responding to suspicious conduct and designating specific management personnel with clearly defined roles. In that regard, you should task a specific individual in management with handling reports of unethical behavior, ensure your employees know who this person is, and specify how such reports are to be moved up the chain of command. Such clearly defined roles and processes are critical because a key aspect of a contractor’s ethical obligations under the FAR is to “timely” report violations to the government.
- You should create and maintain records of all actions taken to further ethical compliance. This is because, as far as any potential government investigator is concerned, steps taken to comply with your ethical obligations carry little weight unless there is a record of them for the investigator to review. For example, if your organization has a meeting or hosts a lecture regarding ethical compliance, designate someone to take the minutes and record who is present. Moreover, when it comes to distributing your code of ethics, make sure to obtain written acknowledgements from all your organization’s employees to verify that they have read and understand its content.
- Finally, and most importantly, stay vigilant! Many contractors believe that once they’ve created a code of ethics, distributed it, and hosted a training session or two, their ethical responsibilities have been met. Unfortunately, as stated above, the task of ethical compliance under the FAR is never over and the more vigilance your organization demonstrates, the less likely the government is to investigate. Therefore, always continue to draft guidance materials and schedule periodic training and information sessions to make sure your employees stay informed regarding their ethical obligations and are on top of current practices and trends. Moreover, establish recurring meetings among management to verify company business practices, procedures, and internal controls for compliance.
Should you have any concerns regarding your organization’s ethical obligations under the Federal Acquisition Regulations, be sure to contact us at https://centrelawg.wpengine.com/contact/.