Government Contracts Legal Forum : Government Contracts Lawyers & Attorneys for Litigation & Counseling

On September 16, 2011, DoD issued a final rule that requires contractors to prominently display fraud hotline posters prepared by the DoD Office of the Inspector General. These posters must be displayed in common work areas within business segments performing work on DoD contracts. The current posters from the DoD IG can be found here and here.

This requirement to display posters applies, unless the contract is for the acquisition of a commercial item, will be performed entirely outside the United States, or does not exceed $5 million. In addition, this requirement must be flowed down to all subcontracts that similarly qualify.

Some government contractors are concerned that this final rule will undermine the role that company hotline posters have in internal contractor compliance and ethics programs. For many in the industry, these company programs have a proven track record of indentifying and addressing improper conduct. There is a concern that the mandatory use of the DoD IG hotline posters may usurp the company’s position as the first line of defense against waste and fraud as well as health and safety issues and, instead, place the DoD IG in that role.
 

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On September 13, 2011, the Office of Government Ethics proposed amendments to the regulation governing the acceptance of gifts by executive branch employees. The purpose of the amendments is to (a) implement the lobbyist gift ban already applicable, by Executive Order of the President, to most political appointees; and (b) impose limits on the use of gift exceptions by all executive branch employees (not merely political appointees).

The proposed rule would render existing exceptions to the gift restrictions inapplicable when the gift giver is both a prohibited source (e.g., a person doing business with the employee’s agency) and a lobbyist or lobbying organization, thus limiting the use of exceptions such as the $20 de minimis exception, the widely attended gathering exception, the social invitation exception, and the exception for meals, refreshments, and entertainment from private entities in a foreign area. Under the proposed amendments, viable exceptions to the gift restrictions would include: gifts based on a personal relationship, discounts and similar benefits, gifts resulting from a spouse’s business or employment, customary gifts provided by prospective employers, gifts authorized by an OGE-approved supplemental regulation, gifts accepted under specific statutory authority, awards and honorary degrees, gifts resulting from an employee’s outside business or employment, and for certain benefits in connection with permissible political activities.

Written comments must be received by OGE before November 14, 2011.
 

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On July 8 the Department of Defense Standards of Conduct Office (SOCO) issued an update to the Encyclopedia of Ethical Failures (EEF), its listing of violations of federal ethics law by government and contractor personnel. The encyclopedia, which is organized by type of violations, including conflicts of interest, misuse of Government equipment, violations of post-employment restrictions, and travel, is a valuable resource for contractors' ethics/compliance officers as it provides insight into the types of violations on which DoD is currently focused. Further, the violations can serve as a reference for employee training and written policies and procedures for companies that sell to the government.

Further, the update announced that the new 2010 Ethics Counselor's Deskbook is available on the SOCO website. The Deskbook includes outlines and instructor presentations for all subjects covered at the annual Ethics Counselor's Course held at the Army JAG School in Charlottesville, VA, as well as valuable reference material. Like the EEF, the Deskbook is a valuable reference tool for contractors' ethics/compliance officers. In other words, if government ethics attorneys think a topic is important, chances are that government contractors should be paying attention.

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