Photo of Peter J. Eyre

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.