Andrew Mitton

On Septe­mer 22, 2009 the GAO released its report on the com­pli­ance and ethics pro­grams of 57 gov­ern­ment con­trac­tors each with yearly con­tracts over $500 mil­lion.  The report didn’t find any star­tling con­clu­sions.  It found that all of these large con­trac­tors had pro­grams in place — a code of con­duct, ethics aware­ness pro­grams, and inter­nal con­trols.  It would be inter­est­ing to see how many con­trac­tors below this amount have pro­grams in place.

The chal­lenges for gov­ern­ment con­trac­tors that were dis­cov­ered in this study are deter­min­ing whether manda­tory dis­clo­sure is required, expand­ing the pro­gram to meet the growth of the com­pany, check­ing whether sub­con­trac­tors have their pro­grams in place, and uti­liz­ing sub­con­trac­tors in for­eign coun­tries with dif­fer­ent standards.

The report ends with four recommendations.

1. Imple­ment new DFARS giv­ing DCMA and other con­tract­ing offi­cials respon­si­bil­ity to ver­ify the imple­men­ta­tion of con­trac­tor ethics programs.
2. DOD IG’s office should deter­mine the need for dis­play­ing the DOD fraud hot­line posters.
3. DOD IG’s office should deter­mine the con­tent of the poster includ­ing revis­ing the poster to inform con­trac­tor employ­ees of their fed­eral whistle­blower protections.
4. If there is a need for the posters, amend DFARS to require dis­play posters regard­less of whether con­trac­tor has its own posters.

It appears that these changes wont affect the large con­trac­tors.  They have the resources to adapt to the changes in the law.  The biggest chal­lenges are more than likely with smaller con­trac­tors.  Once the DCMA starts review­ing con­trac­tors, they will more than likely find that many con­trac­tors either don’t have pro­grams or that their pro­grams are inadequate.