Déjà Vu: Another FAR Rule On Contractor Codes Of Business Ethics And Conduct


The Federal Register of November 23 published a final rule (http://www.crowell.com/PDF/FAR-Rule-On-Contractor-Codes_Federal-Register_11-23-07.pdf), effective December 24, which adds new features to the FAR mandating specified contractor standards of conduct (except for commercial item contracts and contracts to be performed entirely outside the United States), for new contracts expected to exceed $5 million (base plus option year value) and performance of 120 days or more (including flow down to subcontractors of the same value and performance duration). The mandated standards of conduct include (i) having a written code of business ethics and conduct; (ii) providing a copy of the code to all employees performing the contract; (iii) promoting compliance with the code; and (iv) except for small businesses, establishing an ongoing business ethics and conduct awareness program and an internal control system which facilitates timely discovery of improper conduct in connection with Government contracts and ensures prompt corrective actions (such program to include periodic reviews of company business practices, a "hotline," internal and/or external audits, and discipline for improper conduct).