Breaking down the rule

The government amended the Federal Acquisition Regulation in November to require contractors to share credible criminal allegations related to contracts with the agency involved and its inspector general. Contractors must also report overpayments. The rule replaces voluntary disclosure measures that had been in place.

Here’s a breakdown of the rule requirements. Contractors must:


  • Establish and maintain specific internal controls to detect and prevent improper conduct connected to a government contract.

  • Inform the agency’s IG and the contracting officer whenever the contractor has credible evidence of a crime involving fraud, conflict of interest or bribery.

  • Create an internal control system within 90 days after a contract’s award, unless the contracting officer allows more time. The regulation lets contractors work out the details of the system to “the highest ethical standards they consider to be appropriate.”


The rule also allows the government to suspend or debar a company if an executive or manager doesn’t make the required disclosures. The suspension and debarment could come as long as three years after the final payment on a contract.

The rules become effective Dec. 12.

Source: The Federal Register

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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