1. Compliance and Ethics Training Overview
Presented by:
Sabri Dogu Abuska
Attorney at Law

2. Present Responsibility
US Government only contracts with “responsible” contractors
Adequate financial resources to perform
Able to comply with delivery or performance schedule
Satisfactory performance record
Satisfactory record of integrity and business ethics
Necessary organization, experience, accounting and operational controls, and technical skills
Necessary production, construction, and technical equipment and facilities
Otherwise qualified and eligible to receive award
9.103  Policy.
(a) Purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only.
(b) No purchase or award shall be made unless the contracting officer makes an affirmative determination of responsibility. In the absence of information clearly indicating that the prospective contractor is responsible, the contracting officer shall make a determination of nonresponsibility. If the prospective contractor is a small business concern, the contracting officer shall comply with Subpart 19.6, Certificates of Competency and Determinations of Responsibility. (If Section 8(a) of the Small Business Act (15 U.S.C. 637) applies, see Subpart 19.8.)
(c) The award of a contract to a supplier based on lowest evaluated price alone can be false economy if there is subsequent default, late deliveries, or other unsatisfactory performance resulting in additional contractual or administrative costs. While it is important that Government purchases be made at the lowest price, this does not require an award to a supplier solely because that supplier submits the lowest offer. A prospective contractor must affirmatively demonstrate its responsibility, including, when necessary, the responsibility of its proposed subcontractors.
  General standards.
To be determined responsible, a prospective contractor must—
(a) Have adequate financial resources to perform the contract, or the ability to obtain them (see (a));
(b) Be able to comply with the required or proposed delivery or performance schedule, taking into consideration all existing commercial and governmental business commitments;
(c) Have a satisfactory performance record (see (b) and Subpart 42.15). A prospective contractor shall not be determined responsible or nonresponsible solely on the basis of a lack of relevant performance history, except as provided in ;
(d) Have a satisfactory record of integrity and business ethics.
(e) Have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them (including, as appropriate, such elements as production control procedures, property control systems, quality assurance measures, and safety programs applicable to materials to be produced or services to be performed by the prospective contractor and subcontractors). (See (a).)
(f) Have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them (see (a)); and
(g) Be otherwise qualified and eligible to receive an award under applicable laws and regulations.
  Application of standards.
(a) Ability to obtain resources. Except to the extent that a prospective contractor has sufficient resources or proposes to perform the contract by subcontracting, the contracting officer shall require acceptable evidence of the prospective contractor’s ability to obtain required resources (see (a), (e), and (f)). Acceptable evidence normally consists of a commitment or explicit arrangement, that will be in existence at the time of contract award, to rent, purchase, or otherwise acquire the needed facilities, equipment, other resources, or personnel. Consideration of a prime contractor’s compliance with limitations on subcontracting shall take into account the time period covered by the contract base period or quantities plus option periods or quantities, if such options are considered when evaluating offers for award.
(b) Satisfactory performance record. A prospective contractor that is or recently has been seriously deficient in contract performance shall be presumed to be nonresponsible, unless the contracting officer determines that the circumstances were properly beyond the contractor’s control, or that the contractor has taken appropriate corrective action. Past failure to apply sufficient tenacity and perseverance to perform acceptably is strong evidence of nonresponsibility. Failure to meet the quality requirements of the contract is a significant factor to consider in determining satisfactory performance. The contracting officer shall consider the number of contracts involved and the extent of deficient performance in each contract when making this determination. If the pending contract requires a subcontracting plan pursuant to Subpart 19.7, The Small Business Subcontracting Program, the contracting officer shall also consider the prospective contractor’s compliance with subcontracting plans under recent contracts.
(c) Affiliated concerns. Affiliated concerns (see “Concern” in  and “Affiliates” in 19.101) are normally considered separate entities in determining whether the concern that is to perform the contract meets the applicable standards for responsibility. However, the contracting officer shall consider the affiliate’s past performance and integrity when they may adversely affect the prospective contractor’s responsibility.
(d) Small business concerns.
(1) If a small business concern’s offer that would otherwise be accepted is to be rejected because of a determination of nonresponsibility, the contracting officer shall refer the matter to the Small Business Administration, which will decide whether or not to issue a Certificate of Competency (see Subpart 19.6).
(2) A small business that is unable to comply with the limitations on subcontracting at may be considered nonresponsible.

3. FAR Now Requires Compliance and Ethics Program
Recent additions:
Code of Business Ethics and Conduct
Hotline Poster Display
Eventhough these clauses not applicable for contractors and subcontractors performing entirely outside the US many none US Construction Companies undertaking contracts for US Department of Defense and Department of State are establishing such programs for the benefits such programs are offering to the US Gov. Contarctors (there are pending proposals to require these clauses for work performed outside the US)

4. Benefits of an Effective Compliance and Ethics Program
Embed ethics into the organizational culture
Early detection/correction of problems
Preserve brand/protect reputation
Increased employee morale and retention
Meet regulatory requirements

5. Administrative Compliance
Requires Contractor to implement a Contractor Responsibility Program/Compliance and Ethics Program
Appoint an Ethics Program Director
Implement a:
Code of Conduct
Training program for administrative, managerial, and supervisory employees on the subjects of business ethics and contracting with the U.S. Government and
Government Contracting Policies and Procedures Manual
Hotline for reporting suspected misconduct

6. Government Contracting Policies and Procedures Manual
Serves as a guide for providing professional services during all phases of design, as well as the preparation of contract documents and claims related to construction projects for the US Government
Applies to both prime contracts and subcontracts
U.S. Government standards of conduct
Contract formation
Contract administration
Performance Issues
Terminations
Disputes/Claims
Audits and Investigations

7. Code of Business Ethics and Conduct
The Code of Ethics and Business Conduct (the “Code”) states the core principles and values that govern the conduct of Company’s business
The Code affirms Contractor’s commitment to compliance with the letter and spirit of applicable law and regulation
The Code is in 6 sections:
Company Mission Statement and Core Values
Purpose and Use of the Code of Corporate Ethics
Compliance with US Laws, Regulations, and Company Policies
Professional Integrity and Ethics
Respect for Our Family and Customers
Community and Good Citizenship
  Contractor Code of Business Ethics and Conduct.
As prescribed in (a), insert the following clause:
Contractor Code of Business Ethics and Conduct (Dec 2007)
(a) Definition.
“United States,” as used in this clause, means the 50 States, the District of Columbia, and outlying areas.
(b) Code of business ethics and conduct.
(1) Within 30 days after contract award, unless the Contracting Officer establishes a longer time period, the Contractor shall—
(i) Have a written code of business ethics and conduct; and
(ii) Provide a copy of the code to each employee engaged in performance of the contract.
(2) The Contractor shall promote compliance with its code of business ethics and conduct.
(c) Awareness program and internal control system for other than small businesses. This paragraph (c) does not apply if the Contractor has represented itself as a small business concern pursuant to the award of this contract. The Contractor shall establish within 90 days after contract award, unless the Contracting Officer establishes a longer time period—
(1) An ongoing business ethics and business conduct awareness program; and
(2) An internal control system.
(i) The Contractor’s internal control system shall—
(A) Facilitate timely discovery of improper conduct in connection with Government contracts; and
(B) Ensure corrective measures are promptly instituted and carried out.
(ii) For example, the Contractor’s internal control system should provide for—
(A) Periodic reviews of company business practices, procedures, policies, and internal controls for compliance with the Contractor’s code of business ethics and conduct and the special requirements of Government contracting;
(B) An internal reporting mechanism, such as a hotline, by which employees may report suspected instances of improper conduct, and instructions that encourage employees to make such reports;
(C) Internal and/or external audits, as appropriate; and
(D) Disciplinary action for improper conduct.
(d) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (d), in subcontracts that have a value in excess of $5,000,000 and a performance period of more than 120 days, except when the subcontract—
(1) Is for the acquisition of a commercial item; or
(2) Is performed entirely outside the United States.

8. Ethics Program Director
Oversees and monitors the implementation of Company’s Compliance and Ethics Program (“the Program”)
Ensures that the Program, and Code of Conduct, are periodically revised to reflect changes in laws, regulations, and policies
Coordinates training related to the Program
Responds to reports of problems and to Hotline calls and letters
Independently investigates reports of suspected violations and coordinates any necessary corrective actions

9. Ethics Program Director (cont’d)
Oversees and facilitates compliance with:
U.S. procurement laws, rules, and regulations
Company’s policies and procedures
Hotline oversight and monitoring:
Ensures adequate investigation and propose resolution of all complaints received
Reports all alleged improprieties and investigations to the U.S. Army
Sends Quarterly Reports on Company’s Compliance and Ethics Program to the Army
3 month intervals
Generally reports on progress of training efforts and responding to hotline calls

10. Ethics Program Director (cont’d)
Investigates allegations of violations of:
Administrative Compliance Agreement
Code of Conduct
Government Contracting Manual
other matters that raise questions about Company’s “present responsibility”

11. Ethics Program Director (cont’d)
At end of each investigation, provides written report to Company’ Directors and U.S. Department of the Army;
substance of the allegations
evidence from the investigation
findings
recommendations
Ethics Prog. Dir. is also available for consultation on any questions concerning the company’s business practices or employee responsibilities, including required reporting of improprieties
Think of him as a resource

12. Employee Hotline
For reporting suspected instances of improper conduct to the Ethics Program Director, such as:
Fraud, waste, abuse
Violation of the terms of a Government contract
Violation of the terms of the Administrative Compliance Agreement
Violation of the Code of Conduct or Government Contracting Manual.
All employees have an affirmative duty to report suspected violations of the Administrative Compliance Agreement, or improprieties regarding Government contracting and/or operations to Ethics Program Director within three (3) days of discovery.
Hotline notification poster located at employee work and break areas
  Display of Hotline Poster(s).
As prescribed in (b), insert the following clause:
Display of Hotline Poster(s) (Dec 2007)
(a) Definition.
“United States,” as used in this clause, means the 50 States, the District of Columbia, and outlying areas.
(b) Display of fraud hotline poster(s). Except as provided in paragraph (c)—
(1) During contract performance in the United States, the Contractor shall prominently display in common work areas within business segments performing work under this contract and at contract work sites—
(i) Any agency fraud hotline poster or Department of Homeland Security (DHS) fraud hotline poster identified in paragraph (b)(3) of this clause; and
(ii) Any DHS fraud hotline poster subsequently identified by the Contracting Officer.
(2) Additionally, if the Contractor maintains a company website as a method of providing information to employees, the Contractor shall display an electronic version of the poster(s) at the website.
(3) Any required posters may be obtained as follows:
Poster(s) Obtain from ______________ _________________ ______________ _________________
(Contracting Officer shall insert—
(i) Appropriate agency name(s) and/or title of applicable Department of Homeland Security fraud hotline poster); and
(ii) The website(s) or other contact information for obtaining the poster(s).)
(c) If the Contractor has implemented a business ethics and conduct awareness program, including a reporting mechanism, such as a hotline poster, then the Contractor need not display any agency fraud hotline posters as required in paragraph (b) of this clause, other than any required DHS posters.
(d) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (d), in all subcontracts that exceed $5,000,000, except when the subcontract—
(1) Is for the acquisition of a commercial item; or
(2) Is performed entirely outside the United States.

13. Employee Hotline (cont’d)
Reports may be made anonymously - anonymous reports will be acted on the same as those made by identified persons
The Ethics Program Director shall ensure that each call is adequately investigated and resolved.
The hotline number is (from ) and # (from and ).
Reports may also be sent to Mr./Msr at Companny office,located at the following address

14. Compliance Officers
Monitor employee compliance with the policies and procedures set forth in the Manual
Report to Ethics Program Director
Located at project sites where tyhe Company is performing Government contracts
Company will consider such compliance when making decisions concerning personnel decisions, including compensation
Undertake and complete compliance audits in order to ensure the Code and Manual are implemented

15. Cooperation in Investigations
Company will cooperate fully with all internal and Government investigative authorities. When deemed necessary, will:
Make available any of its employees for interview to evaluate:
Future compliance with federal procurement policies and regulations; and
Maintenance of the high level of business integrity and honesty required of a Government contractor
Produce documents, records, and supporting material for examination, inspection, audit and reproduction as they relate to any report, allegation, or complaint of suspected wrongdoing and
Allow Government authorities full access to Company’s facilities, both in the Company’s country and at other locations of Government contract performance.

16. Business Relationships with Suspended or Debarred Entities
Company and its Affiliates
shall not knowingly form a contract with, purchase from, or enter into any business relationship with any individual or business entity that is listed by the General Services Administration (GSA) on the Excluded Parties List System (EPLS) as debarred, suspended, or proposed for debarment
shall make reasonable inquiries into the status of my such potential business partner, to include, at a minimum, review of the EPLS