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Proposed rule would establish contractor code of ethics

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A new rule has been proposed which would require contractors to establish a code of ethics and put internal controls in place to detect and prevent improper conduct in contracting.

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council jointly proposed the rule, which would amend the Federal Acquisition Regulation. The Justice Department had requested the proposal.

The councils had previously proposed a rule that would address the requirements for a contractor code of ethics and business conduct. Although the councils still plan to issue a final rule based on that proposal and the responses it elicited, the Justice Department’s request goes beyond it. The new proposed rule covers additional aspects of contractor ethics.

The new elements include:
• Adding the contractor’s record of integrity and business ethics as relevant past performance information.
• Exempting small businesses from requirements for a formal ethics awareness program and internal control system to reduce the burden on small firms.

Suspending or debarring contractors from government work for not reporting violations of federal criminal law — including violations by other companies — in connection with the award or performance of a federal contract.

The proposed rule, published November 15th in the Federal Register, is open for public comment until Jan. 14.

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