Overview
This subpart implements statutory requirements for contractors to report federal criminal law violations or overpayments and establishes the regulatory framework for contractor ethics programs and fraud hotline disclosures.
Key Rules
- Statutory Implementation: Formally implements 41 U.S.C. 3509, which concerns the notification of criminal violations and the recovery of overpayments.
- Ethics Programs: Establishes the policies for contractors to create and maintain formal codes of business ethics and conduct.
- Internal Controls: Provides the basis for requirements regarding contractor internal control systems to detect and prevent improper conduct.
- Transparency: Mandates the display of agency Office of Inspector General (OIG) fraud hotline posters to encourage the reporting of wrongdoing.
Practical Implications
- Contractors are legally obligated to proactively disclose "credible evidence" of specific crimes or significant overpayments to the government to avoid potential suspension or debarment.
- Firms must invest in administrative compliance infrastructure, including written ethics codes and internal reporting mechanisms, to meet mandatory contract clause requirements.