On February 10, 2009, attorneys from Reed Smith’s Global Regulatory Enforcement Group presented a teleseminar titled, “Mission Impossible? Follow the FAR Mandatory Disclosure Rule Without Harming Your Government Contracts Business.” We recommend that all government contractors assess current legal and compliance resources and undertake a self-investigation, including review of their codes of ethics and internal controls. The following checklist is intended to be a convenient reference to supplement the presentation and to guide the conduct a selfinvestigations.
Code of Ethics
Ensure that the company has a written code of ethics that is made a ?? vailable to each employee engaged in performance of government contracts. The code should provide clear directions regarding actions that employees may or may not take, including a duty to report any facts that could support violations of any ethical standards, government overpayments, etc.
- Establish regular ethics training, as well as procedures for testing employees’ comprehension
- Require employees to acknowledge, in writing, the code of ethics and the receipt of ethics training
- Review company compliance programs to determine effectiveness and to assess legal and compliance resources, strengths, and weaknesses
- Establish specific consequences employees will face for violating the code of ethics
- Establish procedures for documenting ethical breaches and adopting plans to prevent future breaches of the same type
- Ensure that Federal Acquisition Regulation (“FAR”) clauses are “flowed down” to subcontractors where required
- Establish procedures to detect overpayments and report (via a hotline or the equivalent) any potential violations
- Establish procedures for conducting and documenting investigations of any ethical violations, overpayments, or similar issues that employees report
- Appoint a senior official to be responsible for coordination of internal investigations
- Ensure disciplinary action is taken for improper employee conduct
- Periodically audit and review business practices and internal controls
- Identify, survey, and obtain certifications from principals regarding their knowledge of information that could trigger a duty to disclose ?
- Create a written protocol for reporting, reviewing, and vetting potential disclosures
- Establish procedures for documenting the rationales underlying decisions to make, or not to make, disclosures in particular cases
- Ensure that the mandatory disclosure process is part of the government contract record retention policy and procedure