Written by: Beth Bulger, Director HR Services

    When it comes to sound HR Management, you may be wondering whether an ethics/code of conduct is required for government contractors.  So- let me address the topic.

    Amendments to the Federal Acquisition Regulations (FAR) require most companies doing business directly or indirectly with the federal government to adopt a code of business ethics and conduct, an awareness program and internal control mechanisms.

    Government contractors with contracts of $5,000,000 which require 120 days or more to perform are required to comply with the requirement. The FAR regulations are similar to private sector codes of conduct required by the Sarbanes-Oxley Act.

    code of conduct

    Small businesses are subject to the requirements of a written code of conduct, however, they are relieved from the requirement to implement an employee awareness program/internal control system.

    Government contractors who have not implemented a business ethics and conduct awareness program (e.g., small business who are exempt) must display the Department of Homeland Security fraud hotline poster.  Contractors who have implemented a business ethics and conduct awareness program do not need to display agency fraud hotline posters.

    Recommended Next Steps for Government Contractors Include:

    1. Determine whether the business is subject to the final rule
    2. Determine if the business qualifies for the small business exemption
    3. Identify the individuals within the organization who will be responsible for creating the code of ethics and business conduct and for maintaining awareness about the code
    4. Designate a hotline/whistleblower system for employees to report concerns of workplace misconduct.

    Photo courtesy of: Justinbaeder