January 13, 2009

MANDATORY ETHICS REQUIREMENTS:
A SEA CHANGE FOR FEDERAL CONTRACTORS

For the second time in as many years, the US government has implemented new requirements for contractor ethics and compliance programs.

Acknowledging the requirements are a "sea change" for contractors, the government now requires all federal contractors—including those based outside the US—to have a written Code of Ethics and Business Conduct and to disclose certain criminal violations on past and current contracts to the government.

In addition, companies with sizable federal contracts (i.e., greater than $5 million) must meet heightened requirements for ethics compliance programs, particularly in terms of training systems and internal control systems.

The new rules went into effect on December 12, 2008, so many companies are now updating their ethics programs to ensure compliance with the new rules.

For our readers, we have prepared a PowerPoint briefing summarizing the new rules and offering specific recommendations for companies to consider when implementing the rules. Click here to be linked to the briefing.