Without getting too political, I thought it might be timely to review a FAR clause that appears in many Federal Contracts but probably doesn't get enough attention. Section 3 of the Federal Acquisition Regulations (FAR), Subpart 10, calls for contractors to "conduct themselves with the highest degree of integrity and honesty". It also requires a written code of business ethics and conduct be created within the company. Wouldn't it be nice if politicians were required to abide with FAR 3.10? This clause is usually brought into the contract when the Contracting Officer inserts FAR 52.203-13 into the terms and conditions of the contract. This usually only applies when the contract is more than $5.5 Million and has a period of performance of longer than 120 days. FAR 3.1003 does indicate that the policy of FAR 3.1002 should apply to all Government contractors where the written code may not apply unless the above specified contract thresholds are exceeded. I also think it is still a good idea to impose this clause upon yourself as a business just as good business practice. FAR 3.1003 goes on to say that if a contractor knows 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 or a violation of the civil False Claims Act) that the contractor may be suspended and/or debarred. This includes failure to report these violations in a timely manner. You can see that the penalties are serious and not to be taken lightly. So, why not go ahead and just establish the policy and written programs addressing these issues in the early stages of your business? it is a good business practice and can ease your transition into larger contracts. This is one of the flowdown requirements that you need to be aware to flow down to subcontractors, when applicable. Many small business owners just think that these things are common sense and take them for granted. The government agrees that they should be common sense, but the government doesn't take anything for granted. I think in today's complex business world, with too many reality shows on TV and a growing attitude that the ends justify the means, these type of programs are more and more necessary. If you have difficulty deciding where to start, please don't hesitate to reach out to us at ReliAscent.Read More
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Earlier this week I wrote an article about the declining amount of ethics evident in our society today. I didn't spend enough time relating this directly to DCAA Accounting and DCAA compliance. I wanted to talk just a little bit more about that here.
I saw an article on a news feed the other day that indicated there has been a change in the amount of cheating in business over the last several decades. The article also indicated that the level of cheating in universities is also increasing. It seems that the ends justify the means. Not only have we lost some of our moral fiber in this country, we are seeing this degradation emphasized in schools, business practices and even the media. I think a person only has to watch a small amount of television (not only the news but in the reality type shows) and you can easily see what I'm talking about. Combine this with major scandals in the last 15 years (Enron, the mortgage crisis and the global financial crisis in 2008 to mention a few) and the trend is not pretty. Individuals can have strong moral compasses but the influence of peer groups is overpowering.