By Stacey McCoy, Senior Editor
Monday April 2, 2007

Anyone involved in federal contracting should be paying attention to the rumblings about ethics reforms coming from the Hill because contracting could be getting a serious overhaul if several recently proposed ethics changes are put in place. Two big reform ideas that have come out of the new ethics focused Congress are the Accountability in Contracting Act and a Federal Acquisition Regulation, which are designed to curb wasteful spending on contracts and increase transparency and oversight.

Typically it is agencies that bear the burden of stricter oversight, but abuse is often encouraged by contractors who have significantly less oversight. This of course by no means is saying that all agencies or contractors are unethical, but merely that some use loopholes to their advantage, which can often result in wasteful spending.

To try to rein in the behavior of contractors, to bring more quality and accountability to the whole process, the Civilian Acquisition Regulations and Defense Acquisition Regulations Councils jointly proposed the “Contractor Code of Ethics and Business Conduct” regulation this past February. Under the regulation, eligible federal contractors will have to develop a code of ethics and business conduct within 30 days of the contract award date, and establish an employee ethics and compliance training program within 90 days. Finally, they will have to post a fraud hotline poster from the Office of Inspector General, for anyone who wants to report an ethics violation. If this is put into effect, the mandated practices will apply only to contractors with contracts over $5million, although it probably would not hurt smaller companies to adopt them as well.

More recently, the Accountability in Contracting Act was introduced to Congress by Representative Waxman, which is designed to curb the abuse of spending on contracts by federal agencies. If passed, this bill will limit the number and length of no-bid contracts. If agencies do award no-bid contracts they will have to limit the length to eight months and publicly justify their need for such a contract. In addition, agencies will have to justify overcharges of more than $1 million to Congress. Finally, agencies will be required to commit 1% of their procurement budgets to the oversight and planning of contracted projects.

These reforms will bring more quality to government services and less wasteful spending that will free up money for more useful projects.

For further information, contact Ecompex’s Communications Manager, Jesse Lake at jesse.lake@ecompex.com

Citations

“Federal Acquisition Regulation; FAR Case 2006-7, Contractor Code of Ethics and Business Conduct”. Federal Register. Vol. 72., No. 32 (February, 16, 2007).

Waxman, Henry A. Accountability In Contracting Act. H.R. 1362 (March 6, 2007).

U.S. House of Representatives, Committee on Government Reform. (June 2006) Dollars Not Sense: Government Contracting Under the Bush Administration.