DOD orders contractors to publicize fraud hotline

You're a contractor employee and you see something strange in your [work] neighborhood. Who're you going to call?

Not Ghostbusters, but maybe the Defense Department Inspector General. The DOD IG is now requiring defense contractors to post the DOD inspector general’s fraud hotline posters in common work areas. The rule took effect Sept. 16, according to a notice in the Federal Register the same day.

The Federal Acquisition Regulation allowed a contractor to post only the Homeland Security Department's phone number if the company had its own business ethics program with a means of reporting fraud or waste. The DOD IG didn't think that rule went far enough.

"According to the DOD IG, some contractors’ posters may not be as effective as the DOD poster in advertising the hotline number, which is integral to the fraud program,” the Federal Register notice explained. The DOD IG is also revising its poster to tell employees of federal whistleblower protections.

The rule amends the Defense Federal Acquisition Regulation Supplement, or DFARS.

In response to the proposal in May, some experts were concerned that the new hotline posters could replace the contractor as the first line of defense against waste and fraud. It would also get the IG involved in low-level cases that are easily resolved by the contractor, wasting resources.

But the IG said its staff knows the difference between an urgent matter about a defense contract and a routine personnel issue.

The rule applies to contracts and subcontracts that exceed $5 million. It does not apply to purchases of commercial items or for work that will be performed entirely outside the United States if the contract exceeds $5 million.

About the Author

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

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