Part 6 Mandatory Disclosure Rule

The new Ethics and Compliance Rules make it necessary for you to have business processes and automated systems that can help you: prevent Contract price violations, and manage TAA compliance issues.

The new rule adds to the ethics and compliance rules that were finalized in the Close the Contractor Fraud Loophole Act (P.L. 110-252). This Act requires revision to the Federal Acquisition Regulation (FAR) within 180 days of enactment.

The final rule amends the FAR requiring all Government Contractors whenever, in connection with the award, performance, or closeout of a Government Contract to timely disclose credible evidence of:

• A violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the United States Code
• A violation of the False Claims Act

to the Agency Office of the Inspector General, with a copy to the Contracting Officer. It doesn't matter whether you're the prime contractor or a subcontractor...if there is credible evidence of such violations, disclosure is required.

The rule also adds to the causes for suspension or debarment, knowing failure by a principal (officer, director, owner, partner, or person having primary management or supervisory responsibilities within the business entity), until three years after final payment on any Government Contract awarded to the Contractor, to timely disclose in writing (online, mail, fax, email) to the relevant Agencies' Office of Inspector General (both the IG of the ordering agency and the IG responsible for management of the contract) and to the Contracting Officer, in connection with the award, performance, or closeout of a Government Contract performed by the Contractor or a subcontract awarded thereunder, credible evidence that a principal, employee, agent, or subcontractor has committed:

• A violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 of the U.S. Code
• A violation of the civil False Claims Act
• Significant overpayments on the contract, other than overpayments resulting from contract financing payments as defined in FAR 32.001.Definitions.

Contractors have to report Trade Agreements Act and Price Change violations to the Inspector General and the Contracting Officer on credible evidence that they happened. But here's the rub...Whistle Blowers or the Department of Justice investigators can bring cases against Contractors for an occurrence that the Contractor did not report. There is even a web page to the hot line.

You are now in a regulatory environment which requires disclosure of violations and encourages more people to report violations and share in the substantial penalties. We ask you again, "Do you have business processes and automated systems that will help you prevent Contract Price Violations and manage TAA compliance?"

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Contract Compliance

• Compliance Overview
• Trade Agreements Act
• False Claims and Whistleblowers
• Mandatory EDI Catalog Uploads
• Contract Modifications
• Contractor Report Cards
• Mandatory Dislosure Rule