08-12
Procurement Information Circular
December 22, 2008
CONTRACTOR ETHICS
PURPOSE: This Procurement Information Circular (PIC)
is issued to call attention to the new contractor ethics requirements and to
advise acquisition personnel of their roles and responsibilities in
implementing the programs and processing reports of violations under the
program.
BACKGROUND: Over the past
year, two significant FAR rules related to contractor ethics have been
issued. In November of 2007, the FAR was
revised to require contractors to establish a written code of business ethics
and conduct. Furthermore, on December
12, 2008, the Contractor
Business Ethics Compliance Program and Disclosure Requirements went into
effect, requiring contractors to report criminal violations and
overpayments.
Under the fist rule, contractors
are required to:
-
-
Establish a
written code of business ethics (FAR 52.203-13)
-
Establish an
internal control system that facilitates timely discovery of improper conduct
in connection with Government contracts and ensures that corrective action is
taken.
-
Train their
employees in business ethics; promote business ethics awareness
The second rule builds upon the
first by additionally requiring contractors to:
- Timely disclose any
violations of Federal criminal law involving
fraud, conflict of interest, bribery, or gratuity violations found in Title 18
of the United States Code; or a violation of the civil False Claims Act (31
U.S.C. 3729-3733) to the Agency Office of the Inspector General, with a copy to
the contracting officer.
-
Timely
disclose and remit any significant overpayments made by the Government.
GUIDANCE: Successful
implementation of these rules will require the joint efforts of all those
involved in the contracting process. The
regulations require contractors to report criminal violations to the Agency
Office of the Inspector General (OIG).
Within NASA, the Acquisition Integrity Program (AIP) in the Office of
General Counsel will work with the OIG, Procurement Office and DOJ to
coordinate remedies and recommend actions.
Contracting Officers (COs) and Contracting Officer Technical
Representatives (COTRs) play an important role in relaying reports of
violations that they may receive to the OIG and the AIP and in supporting the
Agency investigations. COs and COTRs
shall coordinate any contractor ethics issue or criminal violation with the
designated AIP attorney at their Center.
The NASA FAR Supplement will be amended (NFS 1803-104) to reference
NASA’s internal process for coordinating the investigations. The process to be followed is specified in
NPD 2086.
It is
important to note that the reporting procedures for overpayments differ from
those for criminal violations. In the
case of overpayment, the Contracting Officer is the primary point of contact
and is responsible for determining the causes for overpayment and collecting
the repayment. Overpayments may be the
result of administrative errors or automated system glitches. They are not necessarily indicative of
unethical behavior but
The new rule also includes contractual remedies when contractors fail to comply. Failure by a principal to timely disclose violations of Federal laws of significant overpayments may be cause for suspension and debarment. Similarly, failure to disclose and the violations themselves should be considered when conducting past performance evaluations.
EFFECTIVE DATE: This PIC is effective as dated and shall remain in effect until canceled or superseded.
HEADQUARTERS CONTACTS: Leigh Pomponio, Office of Procurement, Contract Management Division, (202) 358-0592, e-mail: Leigh.Pomponio@nasa.gov.
James A. Balinskas
Director, Contract Management Division
DISTRIBUTION:
PIC List