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Policies and Procedures for Federal Contractors
Presenters: Rebecca Kehoe, Manager
Watkins Meegan Government Contracting Group
David Black, Partner Holland & Knight Government Contracts Practice Group
AGENDA • Goals: Corporate vs. Federal • What are Policies, Procedures and Controls? • Why Do Federal Contractors Need Them? • How Do They Help Achieve the Goals? • Which Ones are Important to Have? • What does the Federal Government Require? • What are Best Practices for your Compliance
Program? • Questions?
Goals: Corporations vs. Federal Government
Corporations:
Goals
Efficiency & Profit
Federal Government
Goals:
Mission & Compliancy
What’s in the Overlap?
Corporations: • Policies • Procedures • Controls
Federal Government: • Law, Regulations and
Guidance – Code of Federal Regulations – Federal Acquisition Regulations – OMB
What are Policies, Procedures and Controls?
• Policies: – Guidelines by which employees are to conduct themselves
and conduct business for their employer
• Procedures: – The steps to be taken by the employee to ensure the
Policies are being implemented
• Controls: – The steps taken by the employer to ensure the employees
are meeting the requirements of the Policies and Procedures
Pre-2007: Voluntary Compliance & Disclosure 2007: Mandatory Code of Conduct 2008: Mandatory Disclosure 2008: Mandatory Compliance Program 2009: FCA Amendments 2010: Proposed OCI Regs 2010: Proposed PCI Regs
Why Do Federal Contractors need Policies, Procedures and Controls?
July 2009: DCAA revises audit guidance to review contractor compliance programs
Why Do Federal Contractors need Policies, Procedures and Controls?
Sept 2009: GAO recommends DFARS amendment to authorize DCMA to review compliance programs
Plus, another unique risk when the Government
is your customer . . .
Why Do Federal Contractors need Policies, Procedures and Controls?
Why Do Federal Contractors need Policies, Procedures and Controls?
I violated FAR 3.104-3(b)
How do Policies, Procedures and Controls Help to Achieve the Goals?
Corporations: • Improved Efficiency • Improved Morale • Enhance Profit
Federal Government: • Compliance with Law
and Regulations • Enhance Efficiency • Focus on Mission
What Policies Should Federal Contractors Consider?
Sourcing Human Resources
Business Dev.
Financial Mgmt.
Contract Performance
Compliance Program Control
Ethics
FINANCIAL MANAGEMENT
Accounting Policy FAR Part 30 – Cost Accounting Standards (CAS) Administration FAR Part 31 – Contract Cost Principles and Procedures
– Proper segregation of costs-Direct vs. Indirect and Job cost – Allocation of indirect costs – Accumulation of costs under General Ledger control – Timekeeping System / Labor Distribution – Exclusion of Unallowable Costs – Costs by Contract Line Item (when applicable) – Policies and Procedures to ensure proper and adequate billings – Generally Accepted Accounting Principles (GAAP) compliant
FINANCIAL MANAGEMENT
Purchasing Policy • Competition vs. sole source justification • Record keeping • Prime Contract flowdown clauses and provisions • Debarred, suspended, ineligible vendor certification • Processing Changes/Modifications • Government Property Administration • Representations and Certifications • Small Business Subcontracting • Subcontract Management/Administration/Close-Out
FINANCIAL MANAGEMENT
Estimating Policy FAR Sub-Part 15.4 – Contract Pricing
– Cost Estimate Development • Summary of Total Cost by Element
– Cross-referenced to each line item • Breakdown of Labor (FAR 15.408, Table 15-2 II.B.)
– Hours – Rates and Costs by Appropriate Category
• Consolidated Priced Bill of Materials – Types, Quantities, Cost – FAR 15.408, Table 15-2 II.A.
– Monitoring/Internal Audit and Training
BUSINESS DEVELOPMENT
• Restrictions on Requesting Source Selection
Information and Contractor Bid & Proposal Information
• Restrictions on Gratuities and Bribes
• Restrictions on Employment Discussions with Federal Employees
BUSINESS DEVELOPMENT
• Organizational Conflict of Interest: Assessment, Disclosure, and Mitigation
• Foreign Corrupt Practices Act
• Subcontractor Kickbacks
• Restriction on Contingent Fees
• Limitation on Payments to Influence Certain Federal Transactions
GSA SCHEDULES
• Price Reductions Clause Reporting and Compliance
• Industrial Funding Fee Reporting and Compliance
CONTRACT PERFORMANCE
• Timekeeping • Quality Assurance • Intellectual Property and Data Rights Marking
and Protection • National Industrial Security Program
Operating Manual • Export Controls (ITAR) • Contractor Past Performance Information
SOURCING
• Buy American Act and Trade Agreements Act
Compliance
• Berry Amendment Restrictions
• Small Business Subcontracting Program Compliance
• Mandatory FAR Clause Flowdown Requirements
• Restrictions on Subcontractor/Vendor Gratuities
HUMAN RESOURCES
• Applicability of Labor Laws to Federal
Acquisitions (FAR Part 22) • Safety
– Personal – Facility – Information
• Equal Employment, Nondiscrimination, and Affirmative Action Requirements
• Child and Convict Labor
HUMAN RESOURCES
• Service Contract Act Requirements (if
applicable) • Employment Eligibility Verification • Drug-Free Workplace Requirements • Whistleblower Protections for Contractor
Employees • Post-Federal Employment Restrictions
Applicable to Former Federal Employees
ETHICS POLICY
• Code of Conduct
• Business Ethics Awareness and Compliance Program and Internal Control System
• Hotline Poster
• Mandatory Disclosure of Certain Violations
ETHICS POLICY
• Responding to Government Investigations and Inquiries
• Civil False Claims Act (applicable to most functional areas and business processes)
• Personal Conflicts of Interest
BEST PRACTICES
I think purchasing Is a key risk area for us.
Compliance Program CONTROL FRAMEWORK
• Assign overall responsibility at a sufficiently high level
• Establish roles and responsibilities for key compliance functions
• Regular “up the chain” reporting to the Board or Audit Committee
• Provide sufficient resources to run the program
Compliance Program KEY CONTROL FUNCTIONS
• Identify key risk areas
• Establish Policies and procedures in key risk areas
• Communicate with employees about the program
• Train employees who face specific risks
• Identify and Periodically Audit business processes that pose key risks
Compliance Program KEY CONTROL FUNCTIONS
• Establish Internal reporting of questions and concerns (anonymous hotline)
• Promptly respond to internal reporting
• Investigate and discipline violations
• Timely Mandatory Disclosure to the government
• Keep good records of the program
• Periodic review of the program
