Transcript Legal And Business Considerations When Conducting Business

Compliance Developments
Jeff Newman
Overview
 A continued (and increased) focus on compliance
 Recent developments
⁻ Industry-by-industry coverage
 Development of a code of conduct and internal
controls
 Key implementation steps
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Industry Update
 Pharma
 IT
 Education
 Defense & Security
 Financial
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Development of a Code of Conduct and
Internal Controls
 FAR Clause 52.203-13 and revisions to FAR Subpart 9.4
require formal compliance programs.
⁻ FAR 52.203-13 applies to prime contracts &
subcontracts > $5 million (base + options)/performance
120 days+.
⁻ Requirement must be flowed down in all subcontracts
that exceed $5 million and whose performance period is
greater than 120 days.
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Development of a Code of Conduct and
Internal Controls
 FAR Subpart 9.4 applies to all contracts and
subcontracts, regardless of type, size or duration, and
has a three-year “look back” provision
 FAR 52.203-13 requires:
⁻ Written Code of Business Ethics and Conduct (Code)
implemented and available to each employee engaged
in the contract within 30 days after contract award.
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Development of a Code of Conduct and
Internal Controls
⁻ Awareness Program and Internal Control System (for
non-small businesses and non-commercial item
contracts) established within 90 days after contract
award
 As a practical matter, all contractors need internal
control mechanisms because FAR Subpart 9.4 now
includes, as a basis for suspension and debarment, a
“knowing failure” by a principal to timely disclose....
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Key Implementation Steps
 Take the appropriate steps NOW
⁻ Where is your Code?
⁻ Ensure that the components of your Code are suitable
to the size of the company and extent of its involvement
in government contracting.
⁻ Evaluate and incorporate the appropriate internal
controls into your Code.
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Key Implementation Steps
 Maintaining effective compliance practices
⁻ Contracting 101…
⁻ Tone from the top
⁻ Training
⁻ Compliance should be more than avoiding unlawful
conduct … compliance should extend to all aspects and
avenues of government contracting practices.
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Key Implementation Steps
 Take advantage of audits, mini-audits or periodic reviews
 Some initial steps:
⁻ Establish audit team
• Contractor performed or outsourced reviews/audits should be
performed by “detached” evaluators, e.g., principal investigators
under a R&D contract should not be performing the only, or formal,
corporate compliance audit/evaluation.
⁻ Define scope of audit and objectives to be achieved (e.g., areas to
cover and “visions” of company compliance)
⁻ Develop deliverables (e.g., matrix of problem areas and related
risk rating)
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Key Implementation Steps
 Conducting the audit – top-level steps:
⁻ Paper and personnel (and welcome to the 21st century)
⁻ Honest assessment
⁻ Random sampling
⁻ Toot your horn!
⁻ Final deliverable and recommendations
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