FAR  Federal Acquisition Regulations 

Recent amendments to the Federal Acquisitions Regulations (FAR) require most companies doing business directly or indirectly with the federal government to: (1) adopt a code of business ethics and conduct, and (2) educate all employees regarding the law and the adoption of the code and its policies.

REF:  FAR 3.10, FAR 52.203-13, and FAR 52.203-14 apply to contracts with the government with a value of five million dollars ($5,000,000) or more and they allow for only 120 days from award to perform.

EFFECTIVE:  The regulations require an "effective" awareness program that trains "principals and employees" on your adopted Code of Conduct.  Further the regulations require employers to implement a robust internal audit program. (Compliance)

December 2008 FAR was amended with new rules that provide detailed guidance as to the kind of training and audit programs required for compliance.   In many cases they aligned FAR with similar rules required under Federal Sentencing Guidelines. 

These amendments also require contractors affirmatively disclose whenever they have reasonable grounds to believe there has been a violation of federal law in connection with the award or performance of a government contract.

The complete text of the new FAR requirements can be found at these links:
http://acquistion.gov/far/current/html/Subpart%203_10.html
http://acquistion.gov/far/current/html/52_200_206.html
http://www.regulations.gov/dfmspublic/component/main?main=DocumentDetail&o=09000064807a4de3
 
Employee Awareness and a Robust Internal Audit Program
  Employee Training - should extend to all employees; and represent an "ongoing" effort to ensure that employees both know and understand their obligations under your company's CODE. 

  The regulations go on to require affected contractors to institute internal controls, including "period reviews of company business practices, procedures, policies and internal controls."  This language leaves little room for anything but a robust ethics code of conduct and a program that is absolutely essential for all employers doing even modest business with the federal government. 

   Many of the FAR requirements are similar to programs within the private sector covered under the Federal Sentencing Guidelines and SOX.  FAR programs emphases the need for ongoing programs, as well as the requirement to reach out to all employees.

What does the law require?

    Regarding the CODE of Conduct training, it must be periodic, and appropriate to each individual's duties.  It must go to all "principals and employees" and where appropriate, to all "agents and subcontractors."   When addressing the Internal Control Systems, the amendments identify additional, mandatory elements of an effective program. 

   Adopt a written code of business ethics and conduct

   Provide a copy of the Code to employees; and

   Promote compliance with the adopted Code.

Within 90 days of entering into a government contract:

   Establish an "ongoing business ethics and business conduct awareness program"  for employees; and
  
    Establish an internal control program aimed at:
     
       The timely discovery of improper conduct; and
      
       Ensure corrective measures are promptly instituted and carried out.

Please address your questions or concerns to us and we will be pleased to provide you a quick, confidential review to measure your compliance or risk.