Compliance &Ethics - Society of Corporate Compliance and Ethics

Compliance & Ethics Professional May/June 2012standards, were wisely added by a varietyof experienced IG’s, agency suspension anddebarment officials, and DOJ representatives.The final FAR package was forwardedin the form of a memorandum from AliceFisher, then Assistant Inspector General forthe Criminal Division at DOJ, to the Officeof Federal Procurement Policy (OFPP) at theOffice of Management and Budget. Afterseveral modifications (including an initialexclusion for overseas contracts insertedat the White House level but subsequentlyeliminated by the 2008 Defense SupplementalAppropriations Bill), the rule was sent out forindustry comment and ultimately adopted.The government seeksethical behavior that flowsfrom a corporate culture ofproviding employees withappropriate tools (e.g., training,reporting mechanisms, andcorporate communications)and encouraging staff to dothe right thing in dealing withgovernment customers.Although some confusion and disagreementstill exist over terms like “credibleevidence,” “timely disclosure,” subcontractor“flow down,” and “full cooperation” withgovernment officials, one thing has becomeabundantly clear: Through disclosure andimproved contractor self-governance, thegovernment is looking for more than just compliance.The government seeks ethical behaviorthat flows from a corporate culture of providingemployees with appropriate tools (e.g.,training, reporting mechanisms, and corporatecommunications) and encouraging staff to dothe right thing in dealing with governmentcustomers.Since the creation of the Defense IndustryInitiative in 1986, the nation’s largest federalcontractors have invested considerableresources in developing comprehensive businessethics and compliance programs. Notableprograms include strong leadership commitmentand “tone at the top,” anonymousreporting hotlines, comprehensive codes ofconduct, and tailored ethics training.Many of these programs started strictlyas compliance activities under the company’sLegal department, aimed at ensuring adherenceto the increasingly complex federalregulations that govern the contracting process.Over time, however, most evolved intocomprehensive, values-based programs thatrecognize legal standards, but aim for evenhigher ethical standards of business conduct.Increased attention to values-based ethicsis due, in part, to statements contained inthe Organizational Sentencing Guidelines,particularly the November 2010 amendmentsthat give credit to companies whichdevelop and maintain an “ethical culture.”As a result, agency contracting officials,Inspectors General, and agency suspensionand debarment officers are focusing greaterattention on mandatory disclosure as one elementof transparency that can demonstratethe presence—or absence—of a corporateethical culture.Suspension and debarment actionsThe Obama Administration, under pressurefrom Congress to weed out governmentcontractors for ethics violations and poorperformance, proposed to suspend or debaralmost as many contractors in 2011 as theBush Administration did during its entiresecond term. 2 Federal agencies are underscrutiny after a series of Congressional72 www.corporatecompliance.org +1 952 933 4977 or 888 277 4977