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Contractor Disclosure Program

Contractor Disclosure Program. Jeff Bennett Investigative Policy & Oversight June 4, 2010. Close the Contractor Fraud Loophole Act. Requires timely notification by Federal contractors Must report all violations of Federal criminal law or overpayments

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Contractor Disclosure Program

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  1. Contractor Disclosure Program Jeff Bennett Investigative Policy & Oversight June 4, 2010

  2. Close the Contractor Fraud Loophole Act • Requires timely notification by Federal contractors • Must report all violations of Federal criminal law or overpayments • Contracts in amount >$5M and more than 120 days in duration • Flow down to subcontracts

  3. FAR Rule • Requires all contractors to: “timely disclose to the Govt., in connection with the award, performance, or closeout of a govt. contract or a subcontract awarded there under, credible evidence of a violation of federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in 18 USC or a violation of the civil False Claims Act . . . [and] remit [any] significant overpayment amount.”

  4. FAR Rule Implemented • Voluntary Disclosure Program became Contractor Disclosure Program • Effective December 12, 2008 • AT&L December 29, 2008 Letter designating DoD Office of Inspector General as “agency IG for DoD contracts” • Disclosures must be in writing – to IG – Copy to Contracting Officer

  5. Contractor Disclosure Program • Process essentially the same as Voluntary Disclosure Program • Centralized management; decentralized execution • Affords contractors a means to report violations • Facilitates coordinated evaluation of criminal, civil, and administrative actions with stakeholders • Provides a framework for Government verification, when appropriate

  6. DoD OIG DCMA Services General Counsel Services Suspension & Debarment Authority Contracting Officer Affected Military Department DCAA Defense Agencies Defense Criminal Investigative Organizations AFOSI CID DCIS NCIS DOJ Criminal Division (Fraud Section) DOJ Civil Division (Commercial Litigation) US Attorney Office SIGAR Stakeholders

  7. Disclosure Stakeholders triage Decision Company internal investigation, if appropriate Government verification investigation, if appropriate Coordination of Remedies Close with notice to company Contractor Disclosure Process

  8. FY10 Disclosures April 26, 2010

  9. How will the effectiveness of the Rule be measured • The Rule is already a success in terms of the Government clearly stating its expectations for contractors on disclosure and cooperation • Effectiveness will not be how many disclosures contractors make • Effectiveness will be how the Government responds to disclosures made and not made

  10. CD Program Initiatives • Toll Free Number 866 429-8011 • Web-based Disclosures • DoD Guide to submitting a Disclosure • DoD Instruction • Federal Agency Roundtable • Coordination and Outreach • DCIO Meeting • DoD PFWG • DoJ Meeting • AFMC Training

  11. Contact UsDoD Office of the Inspector GeneralInvestigative Policy and Oversight400 Army Navy Drive, Suite 1037Arlington, VATelephone 703 604-8711 EMAIL: frances.mccormick@dodig.mil Toll Free Number 866 429-8011FAX: 703 604-8720 CDP Org Email: disclosures@dodig.milInternet: www.dodig.mil

  12. Overpayments Presented By: Russell J. Geoffrey Director, Contract Integrity Center Defense Contract Management Agency Revision #, Date (of revision)

  13. Overpayments • FERA • FAR Payment Clauses • Contractor Disclosure Rule • Suspension & Debarment • Presidential Executive Order

  14. FERA: Reverse False Claims Old FCA: knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government. §3729(a)(7). FERA: knowingly makes, uses, or causes to be made or used, a false record or statement material an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government. §3729(a)(1)(G).

  15. “Materiality” “the term ‘material’ means having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property.” FERA § 3729(a)(4).

  16. Contract Overpayments and Reverse False Claims • FERA defines “obligation” for the first time: “an established duty, whether or not fixed, arising from an express or implied contractual, grantor-grantee, or licensor- licensee relationship, from a fee-based or similar relationship, from statute or regulation, or from the retention of any overpayment.”

  17. FAR Payment Clauses If the contractor becomes aware of a duplicate contract financing or invoice payment or if the contractor becomes aware that the Government has otherwise overpaid on a contract financing or invoice payment, the contractor shall • Remit the overpayment amount to the payment office cited in the contract along with a description of the overpayment; and • Provide a copy of the remittance and supporting documentation to the contracting officer.

  18. FAR Contractor Disclosure RuleThe Look Back Provision • FAR Part 3 provides that a contractor may be suspended and/or debarred for failing to disclose to “the Government” credible evidence of a criminal violation and violations of the civil FCA. • FAR Subpart 3.1003(a)(2)

  19. Suspension & Debarment FAR 3.1003(a)(3) Relating to the payment clauses, “A contractor may be suspended and/or debarred for knowing failure by a principal to timely disclose credible evidence of a significant overpayment, other than payments resulting from contract financing payments

  20. Presidential Executive OrderNovember 23, 2009Reducing Improper Payments and Eliminating Waste in Federal Programs Sec. 4. Enhanced Focus on Contractors and Working with State and Local Stakeholders. (a) Within 180 days of the date of this order, the Federal Acquisition Regulatory Council, in coordination with the Director of OMB, and in consultation with the National Procurement Fraud Task Force . . . shall recommend to the President actions designed to enhance contractor accountability for improper payments. The recommendations may include, but are not limited to, subjecting contractors to debarment, suspension, financial penalties, and identification through a public Internet website, subject to Federal privacy policies and to the extent permitted by law and where the identification would not interfere with or compromise an ongoing criminal or civil investigation, for knowingly failing timely to disclose credible evidence of significant overpayments received on Government contracts.

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