News

Final Rule Issued on "Contractor Business Ethics Compliance"

November 14, 2008
The FAR Council on November 12 issued a final rule on its "Contractor Business Ethics Compliance Program and Disclosure Requirements." The rule becomes effective on December 12, 2008. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to amplify the requirements for a contractor code of business ethics and conduct, an internal control system, and disclosure to the Government of certain violations of criminal law, violations of the civil False Claims Act, or significant overpayments. This final rule amends the Federal Acquisition Regulation to require Government contractors to:
  • Establish and maintain specific internal controls to detect and prevent improper conduct in connection with the award or performance of any Government contract or subcontract; and
  • Timely disclose to the agency Office of the Inspector General, with a copy to the contracting officer, whenever, in connection with the award, performance, or closeout of a Government contract performed by the contractor or a subcontract awarded thereunder, the contractor has credible evidence of a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code; or a violation of the civil False Claims Act (31 U.S.C. 3729 3733).
The rule also provides as cause for suspension or debarment, knowing failure by a principal, until 3 years after final payment on any Government contract awarded to the contractor, to timely disclose to the Government, in connection with the award, performance, or closeout of the contract or a subcontract thereunder, credible evidence of
  • Violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code;
  • Violation of the civil False Claims Act; or
  • Significant overpayment(s) on the contract, other than overpayments resulting from contract financing payments as defined in FAR 32.001, Definitions.
To view a copy of the final rule click here.
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