Policy
Contractors must maintain high ethical standards and implement written codes, training, and controls to prevent and address misconduct in government contracting.
Overview
FAR 3.1002 establishes the policy that government contractors must uphold the highest standards of integrity and honesty in their business dealings. The regulation encourages contractors to implement a written code of business ethics and conduct, supported by an employee training program and an internal control system. These measures should be tailored to the size of the company and the extent of its government contracting activities. The policy emphasizes the importance of systems that enable the timely discovery and disclosure of improper conduct and require prompt corrective action when issues are identified.
Key Rules
- Integrity and Honesty
- Contractors must act with the utmost integrity and honesty in all government contracting activities.
- Written Code of Ethics
- Contractors are encouraged to maintain a written code of business ethics and conduct.
- Ethics Training and Internal Controls
- Contractors should have an employee ethics training program and internal controls that are appropriate for their size and government contracting involvement.
- Timely Discovery and Disclosure
- Systems should be in place to quickly identify and disclose improper conduct related to government contracts.
- Prompt Corrective Action
- Contractors must ensure that corrective measures are instituted and carried out without delay when misconduct is discovered.
Responsibilities
- Contracting Officers: Ensure contractors are aware of and adhere to these ethical standards.
- Contractors: Develop, implement, and maintain a code of ethics, training, and internal controls; promptly address and disclose any improper conduct.
- Agencies: Oversee contractor compliance and address any reported misconduct.
Practical Implications
- This policy exists to foster ethical behavior and accountability in government contracting.
- Contractors must proactively establish and maintain robust ethics and compliance programs.
- Failure to implement these measures can lead to increased risk of misconduct, legal consequences, and loss of government business.