Requirements
Contractors must comply with mandatory ethics and disclosure requirements, including timely reporting of violations and overpayments, or risk suspension or debarment.
Overview
FAR 3.1003 outlines mandatory requirements for government contractors regarding business ethics, disclosure of violations, and handling of overpayments. It specifies when contractors must comply with the clauses at FAR 52.203-13 (Contractor Code of Business Ethics and Conduct) and 52.203-14 (Display of Hotline Poster(s)), based on contract conditions. The section also details the obligation to disclose credible evidence of certain violations (fraud, conflict of interest, bribery, gratuity violations, or False Claims Act violations) and significant overpayments, with failure to do so potentially resulting in suspension or debarment. Contracting officers are instructed on how to respond to notifications of possible violations, and agencies are given responsibilities regarding fraud hotline posters, especially for contracts funded with disaster assistance funds.
Key Rules
- Mandatory Ethics and Hotline Poster Clauses
- Contractors must comply with FAR 52.203-13 and 52.203-14 if their contracts meet the conditions in FAR 3.1004.
- Disclosure of Violations
- Contractors must timely disclose credible evidence of certain federal criminal law or False Claims Act violations, or risk suspension/debarment for up to three years after final payment.
- Disclosure of Overpayments
- Contractors must report and remit significant overpayments (excluding contract financing payments) or face suspension/debarment.
- Contracting Officer Actions
- Contracting officers must coordinate with the agency OIG or follow agency procedures if notified of possible contractor violations.
- Fraud Hotline Poster Requirements
- Agencies and OIGs determine the need and content for fraud hotline posters, with special requirements for disaster assistance-funded contracts.
Responsibilities
- Contracting Officers: Coordinate with OIG or follow agency procedures upon notification of violations.
- Contractors: Comply with ethics and hotline poster clauses, disclose violations and overpayments, and remit overpayments.
- Agencies: Oversee fraud hotline poster requirements and ensure compliance for disaster assistance-funded contracts.
Practical Implications
- This section enforces ethical conduct and transparency in government contracting.
- Contractors must have robust compliance programs to detect and report violations and overpayments.
- Failure to comply can result in severe penalties, including suspension or debarment, affecting future contract eligibility.