NCMA TRAINING: ETHICS Presented by Heidi Timmerman October 4, 2017 - - PowerPoint PPT Presentation

NCMA TRAINING: ETHICS

Presented by Heidi Timmerman October 4, 2017

DISCLAIMER

Opinions expressed are those of the instructor; seek guidance from your Ethics Officer as needed.

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AGENDA

• Why have a corporate ethics policy?
• Exercise 1
• Elements of a Sample Business Ethics Policy
• Exercise 2
• NCMA Ethics Policy

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WHY HAVE AN ETHICS POLICY?

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Why have an ethics policy?

• It’s in the Federal Acquisition Regulation (FAR) and a prerequisite to contracting

with the Government FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(b) (1) Within 30 days after contract award, unless the Contracting Officer establishes a longer time period, the Contractor shall— (i) Have a written code of business ethics and conduct; (ii) Make a copy of the code available to each employee engaged in performance of the contract.

• Have a written policy
• Communicate the

policy

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(2) The Contractor shall— (i) Exercise due diligence to prevent and detect criminal conduct; and (ii) Otherwise promote an organizational culture that encourages ethical conduct and a commitment to compliance with the law.

• Prevent crime
• Promote ethical culture

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(3) (i) The Contractor shall timely disclose, in writing, to the agency Office of the Inspector General (OIG), with a copy to the Contracting Officer, whenever, in connection with the award, performance, or closeout of this contract or any subcontract thereunder, the Contractor has credible evidence that a principal, employee, agent, or subcontractor

• f the Contractor has committed—

(A) A violation of Federal criminal law involving fraud, conflict of interest, bribery,

• r gratuity violations found in Title 18 of

the United States Code; or (B) A violation of the civil False Claims Act (31 U.S.C. 3729-3733).

• Written mandatory

disclosure

• Fraud
• CoI
• Bribery, gratuity
• False claims violation

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(3) (ii) The Government, to the extent permitted by law and regulation, will safeguard and treat information obtained pursuant to the Contractor’s disclosure as confidential where the information has been marked “confidential” or “proprietary” by the

• company. To the extent permitted by law

and regulation, such information will not be released by the Government to the public pursuant to a Freedom of Information Act request, 5 U.S.C. Section 552, without prior notification to the Contractor. The Government may transfer documents provided by the Contractor to any department or agency within the Executive Branch if the information relates to matters within the organization’s jurisdiction.

• Disclosure confidential

(as permitted by law)

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(3)

(iii) If the violation relates to an order against a Governmentwide acquisition contract, a multi-agency contract, a multiple-award schedule contract such as the Federal Supply Schedule, or any other procurement instrument intended for use by multiple agencies, the Contractor shall notify the OIG of the ordering agency and the IG of the agency responsible for the basic contract.

• Multi-agency contracts

means multi-agency disclosure

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(c) Business ethics awareness and compliance program and internal control

• system. This paragraph (c) does not

apply if the Contractor has represented itself as a small business concern pursuant to the award of this contract or if this contract is for the acquisition of a commercial item as defined at FAR 2.101. The Contractor shall establish the following within 90 days after contract award, unless the Contracting Officer establishes a longer time period:

Requirements:

• Ethics program
• Internal control system

Exemptions:

• Small business
• Commercial

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(C) (1) An ongoing business ethics awareness and compliance program. (i) This program shall include reasonable steps to communicate periodically and in a practical manner the Contractor’s standards and procedures and other aspects of the Contractor’s business ethics awareness and compliance program and internal control system, by conducting effective training programs and otherwise disseminating information appropriate to an individual’s respective roles and responsibilities. (ii) The training conducted under this program shall be provided to the Contractor’s principals and employees, and as appropriate, the Contractor’s agents and subcontractors.

• Communicate procedure to

employees

• Training

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(c) (2) An internal control system. (i) The Contractor’s internal control system shall— (A) Establish standards and procedures to facilitate timely discovery of improper conduct in connection with Government contracts; and (B) Ensure corrective measures are promptly instituted and carried out. (ii) At a minimum, the Contractor’s internal control system shall provide for the following: (A) Assignment of responsibility at a sufficiently high level and adequate resources to ensure effectiveness of the business ethics awareness and compliance program and internal control system.

• Must have internal controls
• To find improper conduct
• Take action when found
• Executive engagement

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(B) Reasonable efforts not to include an individual as a principal, whom due diligence would have exposed as having engaged in conduct that is in conflict with the Contractor’s code of business ethics and conduct. (C) Periodic reviews of company business practices, procedures, policies, and internal controls for compliance with the Contractor’s code of business ethics and conduct and the special requirements of Government contracting, including— (1) Monitoring and auditing to detect criminal conduct; (2) Periodic evaluation of the effectiveness of the business ethics awareness and compliance program and internal control system, especially if criminal conduct has been detected; and (3) Periodic assessment of the risk of criminal conduct, with appropriate steps to design, implement, or modify the business ethics awareness and compliance program and the internal control system as necessary to reduce the risk of criminal conduct identified through this process.

• Vetting
• Monitor results
• Is procedure working?
• Risk management

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(D) An internal reporting mechanism, such as a hotline, which allows for anonymity or confidentiality, by which employees may report suspected instances of improper conduct, and instructions that encourage employees to make such reports. (E) Disciplinary action for improper conduct or for failing to take reasonable steps to prevent or detect improper conduct. (F) Timely disclosure, in writing, to the agency OIG, with a copy to the Contracting Officer, whenever, in connection with the award, performance, or closeout of any Government contract performed by the Contractor

• r a subcontractor thereunder, the Contractor has

credible evidence that a principal, employee, agent, or subcontractor of the Contractor has committed a violation of Federal criminal law involving fraud, conflict

• f interest, bribery, or gratuity violations found in Title 18

U.S.C. or a violation of the civil False Claims Act (31 U.S.C. 3729-3733).

• Anonymous reporting
• Disciplinary actions
• Timely disclosure

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(1) If a violation relates to more than one Government contract, the Contractor may make the disclosure to the agency OIG and Contracting Officer responsible for the largest dollar value contract impacted by the violation. (2) If the violation relates to an order against a Governmentwide acquisition contract, a multi-agency contract, a multiple-award schedule contract such as the Federal Supply Schedule, or any other procurement instrument intended for use by multiple agencies, the contractor shall notify the OIG of the

• rdering agency and the IG of the agency

responsible for the basic contract, and the respective agencies’ contracting officers. (3) The disclosure requirement for an individual contract continues until at least 3 years after final payment on the contract. (4) The Government will safeguard such disclosures in accordance with paragraph (b)(3)(ii) of this clause. (G) Full cooperation with any Government agencies responsible for audits, investigations, or corrective actions.

• Disclosure
• Timely
• To correct federal agent(s)
• Requirements last after

contract PoP

• Cooperation with the

government

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FAR 52.203-13 -- Contractor Code of Business Ethics and Conduct (Oct 2015)

(d) Subcontracts. (1) The Contractor shall include the substance

• f this clause, including this paragraph (d), in

subcontracts that have a value in excess of $5.5 million and a performance period of more than 120 days. (2) In altering this clause to identify the appropriate parties, all disclosures of violation

• f the civil False Claims Act or of Federal

criminal law shall be directed to the agency Office of the Inspector General, with a copy to the Contracting Officer.

.

• Flowdown is required as

specified

• Tell subcontractor where to

report

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Why have an ethics policy?

• Other reasons

– Litigation/Prosecution Avoidance - Without strong ethical values, companies easily drift to the legal edges – Regulatory Freedom - When citizens and governments are aggravated by irresponsible, unethical business behavior, greater regulation and bureaucratic red tape is the result – Public Reputation - Companies that tolerate unethical practices in today’s high-tech era, will almost certainly be exposed – Supplier/Partner Trust - In an era of partnerships, no company is self-sufficient (Successful partnerships are built

• n trust and trustworthiness)

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Why have an ethics policy?

• Other reasons

– Customer Loyalty - Quality, cost, availability, and other factors are not enough to maintain customer loyalty -- Customers are also looking at the reputation of the company – Employee Performance - People produce best in an open, creative, ethical environment -- Companies that have a poor reputation have difficulty attracting and retaining top talent – Personal Pride - Employees benefit from ethical culture

–It’s the right thing to do!

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EXERCISE 1

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Exercise #1

Scenario: Procurement for office supplies You are a Subcontract Administrator for a large government contractor and have recently been assigned a large IDIQ Acquisition for office supplies. Estimated annual value is ~$200K per year for 5 years. You have been instructed to compete the opportunity and have a cross-functional source evaluation board including the President’s Administrative Assistant, Ms. Susie Efficiency. As you are preparing your bid list, you notice that the incumbent vendor’s (Coffee Central) representative is now Ms. Sandra Efficiency-Smith.

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ELEMENTS OF A SAMPLE BUSINESS ETHICS POLICY

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Sample Ethics Policy

• 1. Purpose and Goal

a) Ethical b) Applicable Laws c) Rules and Regulations d) Integrity

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Sample Ethics Policy

• 2. Provide resources for employees

a) Company reps to seek out b) Hot Lines c)

Regulation references

d) Training

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Sample Ethics Policy

• 3. Reporting – give venues

a) Manager b) Ethics Officer c)

President/CEO

d) Audit Officer e) General Counsel f)

Hotlines

g) Federal personnel

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Sample Ethics Policy

• 4. Ethical Decision Making Process

a)

What regulations, and/or laws are involved? Align?

b)

How might an improper response affect the company and/or me, now or in the future?

c)

What are the impacts of the decision?

d)

Does it uphold my personal standards and principles?

e)

Is it consistent with company values, policies and operating procedures?

f)

How comfortable would I be explaining my actions in front of national television news cameras?

g)

How comfortable would I be if my decision was published in the newspaper?

h)

Would I do the same thing if a loved one, boss or friend were watching?

i)

What and who should I consult with for additional information, assistance

• r advice?

j)

Do I have an obligation to report the situation to others?

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Sample Ethics Policy

• 5. Accepting Gifts and Payments

a) Employees should not accept from any source a gift or gratuity that is offered or seems to be offered because of your position b) Employees should not ask for or accept anything of value if you have reason to believe, or it may be construed that the person or entity giving the gift:

• Has or is trying to obtain a contract or other financial relationship
• Has interests that may be substantially affected by your performance or

nonperformance or your official duties

• Is trying to influence any official actions you may take

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Sample Ethics Policy

• 6. Giving Gifts and Payments

a) Employees may not

• Make loans, guarantee loans, or make illegal payments to

government employees

• Offer or give any type of gift or form of entertainment to a

government employee

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Sample Ethics Policy

• 7. Customary Business Courtesies

a) Employees may

• Accept modest customary business courtesies
• Modest gifts or entertainment

‒ The costs of any modest gifts or entertainment are expressly unallowable and cannot be charged to government contracts

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Sample Ethics Policy

• 7. Customary Business Courtesies (7a. con’t)
• Accept modest customary business courtesies on an infrequent or
• ne-time basis provided the courtesies meet one of the following

criteria

– Payment for a modest lunch or dinner on infrequent occasions in the course of a business meeting – Unsolicited advertising novelty or promotional item, such as pens, pencils, notepads, or calendars – Free transportation in customary form (e.g., taxi ride) on official business – Modest gifts, entertainment, or amenities, such as food or refreshments

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Sample Ethics Policy

• “Modest” is defined as gifts, entertainment, or amenities of $25 or less per
• ccasion not to exceed $50 in a year from one source
• Two good questions to ask yourself when considering the acceptance of a

gift are:

– Is the gift so excessive that it would cause me to feel embarrassed by accepting it? – Can the gift be shared with work colleagues?

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Sample Ethics Policy

• 8. Offered to public

a) Employees may utilize offerings to general public.

– Loans from banks or other financial institutions that are unrelated to company business activities and that are offered on customary terms to finance proper and usual activities of employees, such as home mortgage loans – Discounts and similar benefits offered to the general public

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Sample Ethics Policy

• 9. Engaging in Political Activities

a) To avoid potential conflicts and reduce political disruption at work, it is the policy to minimize the role of politics and political expression in the workplace b) The workplace is not an appropriate forum for employees to disseminate their political views in a public fashion c) Encourage involvement and participation in civic affairs and the political process d) However

• Must be on own time using own resources
• Must not imply company backing – make it clear you are acting on your own

behalf

• May not use work time
• Cannot display signs or political messages in work area

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Sample Ethics Policy

10.Keeping Accurate Records

a) Employees are responsible for ensuring that all information recorded and reported as a part of daily job duties is complete, truthful, and accurate b) Should not make any false statements or entries in any records or correspondence c) No undisclosed or unrecorded fund may be established for any business purpose d) All employees creating records are responsible for their preservation e) Only destroy records in accordance with records policy f) Inappropriate alteration, concealment, or omission of relevant information in company records is prohibited

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Sample Ethics Policy

• 11. Safeguarding Assets

a) Employees of a government contractor have an obligation to the American taxpayer to efficiently manage any assets and property with which we work b) Must secure sensitive information or easily transportable tools when not using them c) Must report the loss, damage, destruction, suspected theft of assets

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Sample Ethics Policy

• 12. Conflict of Interest

a) Money or gifts to or from supplier or customer b) Using company/customer information for financial gain c) Direct or indirect financial interest in firm that has or seeks relationship with employer’s firm – vendor, customer, competitor d) Involvement with selection process or transactions when family member is competing – employment, vendor

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Sample Ethics Policy

• 13. Using Inside Information - Two simple rules:

a) Do not use non-public information for personal gain and b) Do not pass along such information to someone else who has no need to know

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Sample Ethics Policy

• 14. Procuring Goods and Services - Goal is to foster and

promote fair, ethical, and legal trade practices

a) Consider first the interests of the company and our clients b) Buy without prejudice; try to obtain the best value for the dollar spent c) Consider all competitive bidders equally and regard each transaction on its own merits d) Keep all procurement information confidential e) Subscribe to and work for honesty and truth in buying and selling while maintaining confidentiality

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Sample Ethics Policy

• 15. Maintaining Confidentiality

a)

All personal, business, proprietary and/or sensitive employee information to which you have access must be safeguarded for confidentiality

b) Information of a personal, business, proprietary and/or sensitive employee

nature may be disclosed only on a “need-to-know” basis, which means there is a legitimate business reason to have part or all of such information

c)

Requests for information should be routed to the proper department for response in accordance with policy

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Sample Ethics Policy

• 16. Upholding the Law

a) Complying with the law is a minimum standard b) It is your responsibility to understand and follow both company policies and the federal, state and local laws that apply to your work situation c) Company is subject to MANY laws and regulations

• Become familiar with the ones relevant to your work
• Ask for advice and counsel

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Sample Ethics Policy

• 17. Maintaining a Healthy and Professional Work Environment

a) Acts that create a hostile or offensive work environment, including violent behavior; threats of physical violence; possession of weapons contrary to company policy; and possession, use or distribution of alcohol, illegal drugs or other controlled substances will not be tolerated b) It is critical that the workplace be free from unlawful discrimination and harassment

• f any kind

c) It is critical that our work environment support honesty, integrity, respect, trust, responsibility and citizenship d) It is all of our responsibility to foster a healthy and professional work environment

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EXERCISE 2

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Exercise #2

Scenario: You are a customer contract administrator for a small business government contractor. Your firm won a $1M FFP contract for 1 year. It has 12 clear deliverables in the SOW. You were already paid $500K and the

• ther $500K is due at the end of the contract.

Half way through the year you discover that only deliverables 1 and 2 were completed. When you call the PM, you are told that the COTR decided he does not need deliverables 3 through 8, but he has had no discussions with the C.O.. What do you do?

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Deliverables:

Plan Meeting

• 3. Report
• 4. Website Upgrades
• 5. Meeting
• 6. Meeting
• 7. Report
• 8. Report
• 9. Meeting
• 10. Training Document
• 11. Final Website
• 12. Report

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Exercise #2

$500K payment $500K payment We are here COTR says #3, 4, 5, 6, 7 and 8 are no longer needed

NCMA CODE OF ETHICS

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NCMA Code of Ethics

• 1. Strive to attain the highest professional standard of job

performance, to exercise diligence in carrying out one's professional duties, and to serve the profession to the best of one’s ability.

• 2. Conduct oneself in such a manner as to bring credit

upon the profession, as well as to maintain trust and confidence in the integrity of the contract management process.

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NCMA Code of Ethics

• 3. Avoid engagement in any transaction that might conflict
• r appear to conflict with the proper discharge of one's

professional duties by reason of a financial interest, family relationship, or any other circumstances.

• 4. Comply with all laws and regulations that govern the

contract management process in the jurisdictions in which one conducts business, including protection of competition-sensitive and proprietary information from inappropriate disclosure.

• 5. Keep informed of developments in the contract

management field, utilizing both formal training and ad hoc means, to continuously increase knowledge, skill, and professional competence.

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NCMA Code of Ethics

• 6. Share one’s knowledge and experience openly to

contribute to the development of other professionals, improve performance quality, and enhance public perception of the profession.

• 7. Not knowingly influence others to commit any act that

would constitute a violation of this code.

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SIGNING PARTY

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BACK-UP SLIDES FOLLOW

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52.203-13 (Oct 2015) Definitions

• (a) Definitions. As used in this clause—
• “Agent” means any individual, including a director, an officer, an employee, or an independent Contractor,

authorized to act on behalf of the organization.

• “Full cooperation”—
• (1) Means disclosure to the Government of the information sufficient for law enforcement to identify the

nature and extent of the offense and the individuals responsible for the conduct. It includes providing timely and complete response to Government auditors’ and investigators' request for documents and access to employees with information;

• (2) Does not foreclose any Contractor rights arising in law, the FAR, or the terms of the contract. It does not

require—

• (i) A Contractor to waive its attorney-client privilege or the protections afforded by the attorney work product

doctrine; or

• (ii) Any officer, director, owner, or employee of the Contractor, including a sole proprietor, to waive his or her

attorney client privilege or Fifth Amendment rights; and

• (3) Does not restrict a Contractor from—
• (i) Conducting an internal investigation; or
• (ii) Defending a proceeding or dispute arising under the contract or related to a potential or disclosed

violation.

• “Principal” means an officer, director, owner, partner, or a person having primary management or

supervisory responsibilities within a business entity (e.g., general manager; plant manager; head of a division or business segment; and similar positions).

• “Subcontract” means any contract entered into by a subcontractor to furnish supplies or services for

performance of a prime contract or a subcontract.

• “Subcontractor” means any supplier, distributor, vendor, or firm that furnished supplies or services to or for

a prime contractor or another subcontractor.

• “United States,” means the 50 States, the District of Columbia, and outlying areas.

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Prescription 3.1004(a)

• 3.1004 Contract clauses.
• (a) Insert the clause at FAR 52.203-13, Contractor Code of Business Ethics and

Conduct, in solicitations and contracts if the value of the contract is expected to exceed $5.5 million and the performance period is 120 days or more.

• (b)(1) Unless the contract is for the acquisition of a commercial item or will be

performed entirely outside the United States, insert the clause at FAR 52.203-14, Display of Hotline Poster(s), if—

• (i) The contract exceeds $5.5 million or a lesser amount established by the

agency; and

• (ii)(A) The agency has a fraud hotline poster; or
• (B) The contract is funded with disaster assistance funds.
• (2) In paragraph (b)(3) of the clause, the contracting officer shall—
• (i) Identify the applicable posters; and
• (ii) Insert the website link(s) or other contact information for obtaining the agency

and/or Department of Homeland Security poster.

• (3) In paragraph (d) of the clause, if the agency has established policies and

procedures for display of the OIG fraud hotline poster at a lesser amount, the contracting officer shall replace “$5.5 million” with the lesser amount that the agency has established.

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52.203-14 Display of Hotline Poster(s) (Oct 2015)

• (a) Definition.
• “United States,” as used in this clause, means the 50 States, the District of Columbia, and outlying areas.
• (b) Display of fraud hotline poster(s). Except as provided in paragraph (c)—
• (1) During contract performance in the United States, the Contractor shall prominently display in common

work areas within business segments performing work under this contract and at contract work sites—

• (i) Any agency fraud hotline poster or Department of Homeland Security (DHS) fraud hotline poster identified

in paragraph (b)(3) of this clause; and

• (ii) Any DHS fraud hotline poster subsequently identified by the Contracting Officer.
• (2) Additionally, if the Contractor maintains a company website as a method of providing information to

employees, the Contractor shall display an electronic version of the poster(s) at the website.

• (3) Any required posters may be obtained as follows:
• Poster(s)
• Obtain from
• ______________
• ______________

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52.203-14 Display of Hotline Poster(s) (Oct 2015)

• (Contracting Officer shall insert—
• (i) Appropriate agency name(s) and/or title of applicable Department of Homeland Security fraud hotline

poster); and

• (ii) The website(s) or other contact information for obtaining the poster(s).)
• (c) If the Contractor has implemented a business ethics and conduct awareness program, including a

reporting mechanism, such as a hotline poster, then the Contractor need not display any agency fraud hotline posters as required in paragraph (b) of this clause, other than any required DHS posters.

• (d) Subcontracts. The Contractor shall include the substance of this clause, including this paragraph (d),

in all subcontracts that exceed $5.5 million, except when the subcontract—

• (1) Is for the acquisition of a commercial item; or
• (2) Is performed entirely outside the United States.

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