POGO's 2nd public comment for improved contractor misconduct disclosure

General Services Administration,

Regulatory Secretariat (VIR)

1800 F Street, NW

Room 4041

Washington, DC 20405

Sent by Facsimile: (202) 501-4067

Subject: FAR Case 2007-006

Dear FAR Secretariat:

The Project On Government Oversight (POGO) provides the following public comment to FAR Case 2007-006—“Contractor Compliance Program and Integrity Reporting (2nd Proposed Rule).” (73 Fed. Reg. 28407 (May 16, 2008).) POGO is an independent nonprofit organization that investigates and exposes corruption and other misconduct in order to achieve a more accountable federal government, and therefore POGO has a keen interest in government contracting matters. POGO supports the proposed rule, as well as its objectives. POGO believes, however, that the proposed rule’s mandatory reporting requirement must be clarified and expanded to require contractors to disclose a broader array of unethical conduct.

The proposed rule by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council would (1) require contractors to have a code of ethics and business conduct, (2) establish and maintain specific internal controls to detect and prevent improper conduct in connection with the award or performance of federal contracts or subcontracts, and (3) require the timely disclosure to contracting officers when there are overpayments on a federal contract, and when there are violations of the civil False Claims Act or federal criminal law in connection with the award or performance of any government contract or subcontract. The proposed rule also stipulates that the failure to comply with the notification requirement could result in suspension or debarment.

The expanded scope of this proposed rule is much improved. The inclusion of civil False Claims Act cases, commercial items, and contracts performed overseas was essential to promote an efficient, effective, and ethical procurement compliance program. While the proposed rule is certainly an improvement over the previously proposed rule and the current contractor compliance system, which went into effect in December 2007, POGO believes the mandatory reporting requirement is still confusing and far too narrow.

First, the phrase “to timely disclose” a violation is subject to many interpretations. Does a violation occur after an alleged violation is reported, after an internal review is performed, after a criminal cased is filed, after a verdict is handed down by a court or jury, or after an appeal is decided? Additional guidance is necessary to clarify what constitutes a “violation.” Additional guidance is also needed to clarify how many days are considered “timely.”

Second, the proposed rule’s narrow focus won’t cover a number of criminal, civil, and administrative contract cases. For example, many cases are settled without any admission of fault or liability and therefore those cases might not trigger the violation disclosure requirement. Additionally, there has been a rise in deferred and non-prosecution agreements in criminal cases brought by the government against contractors, which creates additional confusion regarding disclosure of those sets of criminal cases. Contracting officers and the public should have access to contractors’ complete responsibility track records and therefore all criminal, civil, and administrative cases should be reported.

Third, the information obtained by contracting officers needs to be shared government-wide. The consolidation of contractor information is vital to making pre-award responsibility determinations in order to prevent risky contractors from receiving federal contract awards. Unfortunately, the proposed rule emphasizes that civil False Claims Act and criminal violations should be considered in the context of suspension and debarment only. This information should be part of contractor responsibility determinations governed by FAR Subpart 9.1 and available to all government officials as well as the public.

The Councils should consider clarifying the types of cases and the timetable in which they must be reported. POGO urges the Councils to expand the scope of reporting to include all criminal, civil, and administrative violations and settlements so that contracting officers and the public can have access to contractors’ complete performance and responsibility track records. Thank you for your consideration of this comment. If you have any questions, you may contact me at (202) 347-1122.

Sincerely,

Scott H. Amey

General Counsel

[email protected]

POGO 1st public comment for improved contractor misconduct reporting. January 14, 2008.