2 Breakout Session # 907 Bill Hemphill, Manager, Government Compliance, Siemens Building Technologies, Inc. Time4:30 to 5:30 pm Starting a Government Compliance (GC) Program

3 The Nature of the Firm Grown by acquisition and revenue Complementary to construction industry Three product lines (matrixed divisions): –Fire Safety—active and passive systems –Building Automation—environmental control –Security Systems—active and passive syst. Heavily commercial (about 95%) Sales: 100+ field offices reporting to 19 districts reporting to three regions

4 GC--My Definition GC: A process compliance paradigm that insures that a firm meets its commitments to its government customers at all levels: –US Federal Government –State governments –County governments –Municipal governments My efforts focused on the Federal Government –More detailed and regularly applied regulations –Recurring huge dollar opportunities

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10 Six Components of GC Codification Training Communication Auditing and measuring Reporting Revision

11 Codification Set up rules and procedures interpreting the FAR and supplements into a culturally understandable form. We initially set up the procedures in a contract-maturity chronology Stress the “living document” characteristic Current version maintained electronically –SBT’s procedures are on my intranet website

12 Procedures Family Tree GP Government Contracting Overview GP Solicitations GP Terms and Conditions GP Contracts GP Government Agency Audits GP Contract Close-Out GP GSA Contracts GP Government Compliance Program GP Central Government Contract Files

13 Training Two mandatory annual phases involved: –Education phase to enlighten workforce on contemporary issues and concerns –Testing phase to document participants, training received, and test scores Training is starting out offering this electronically –Because of the size, availability, and geographic dispersion of the personnel

14 Communication Intranet Government Compliance website –FAQs –Procedures –Other pertinent data (SBSP, links, etc.) Periodic electronic newsletter Topic-specific memos FAC summaries and impact analysis Letters from corporate Executives

15 Communication (con’t.) Periodic news items, compliance memos Shared visit findings Audit awareness and lessons learned Engage executive management Non-training presentations at the district or regional sales meetings Engaging peripheral disciplines: QA, Procurement, Finance, Operations

16 Audit/Measurement Field site visits to insure compliance with –Training –Internal procedures –FAR and supplements Audit contract files Interview key personnel Do one-on-one training Possibly a mini test in the future

17 Reporting Write timely reports upon completion of site visits –Direct to highest level required by findings –If warranted write a compliance violation report –Document findings and keep notes for two years Follow-up with business unit if corrective action is recommended

18 Corrective action categories (severity) Where and when Detail what was discovered and corrective action Response by offending group

19 Corrective Action Categories Deviation—minor impact divergence from SBT or Government procedures Minor Discrepancy—more serious, and requires corrective action response Major Discrepancy—very serious, with immediate imposed corrective action, and longer term corrective action in coordination with a corporate Executive

20 Revision Revise procedures based upon: –Site visits –Unsolicited field recommendations –Reorganization –FAR changes –Audits Communicate the fact that there have been changes, for credibility

21 Nature of Compliance COMPLIANCE UNDERSTAND CURRENT SYSTEM CULTURE CONTRACT EXECUTION PROCEDURES (CHANGE) TRAINING (CHANGE)

22 Contact Information Bill Hemphill Office: The antithesis to change is extinction” C. Darwin Those who fail to learn the lessons of History are doomed to forever repeat them” G. de Santayana