supplier mentoring program checklist

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Supplier Ethics:Program Checklist

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Guidelines for Program Requirements

• Federal Sentencing Guidelines (FSG)– Last amended 2010– Effective Compliance and Ethics Program (Chapter 8, Part B, Section 2)

• Due diligence to prevent and detect criminal conduct• Promote organizational culture encouraging ethical

conduct and compliance with law

• Defense Industry Initiative on BUSINESS ETHICS AND CONDUCT (DII)– Creating and Maintaining an Effective Ethics and Business

Conduct Program• Suggestions for each element of an effective program• Good resource for possible additions / enhancements

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• FAR Clause 52.203-13 “Contractor Code of Business Ethics and Conduct”

– Requires government contractors to:• Exercise due diligence to prevent and detect criminal

conduct• Promote an organizational culture that encourages ethics

and compliance• Submit mandatory disclosures to the government

– Mandates:• Code of Business Ethics and Conduct• Business Ethics Awareness and Compliance Program • Internal Control System

– Subcontract Flowdown

Guidelines for Program Requirements (cont’d)

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Checklist

• Checklist maps requirements of FSG and FAR, as well as DII recommendations, against program elements

• Reviewers should refer to the source documents for more detail

• Links to Source Documents– Federal Sentencing Guidelines §8B2– FAR Clause 52.203-13 “Contractor Code of Business

Ethics and Conduct” • DII

Creating and Maintaining an Effective Ethics and Business Conduct Program

• Note both potential gaps and highlights/best practices

http://www.ussc.gov/Guidelines/2010_guidelines/Manual_HTML/Chapter_8.htm

https://www.acquisition.gov/far/farqueryframe.html

https://www.acquisition.gov/far/farqueryframe.html

http://www.dii.org/files/dii-toolkit.pdf



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Ethics & Business Conduct ProgramSentencing Guideline Requirement Ethics & Business Conduct Program

Standards and procedures Code of ConductDistribution/Access

Internal Control Procedures

Corporate Policy Statements: _____________________________________________________________________________________________

FAR Requirement*

Code of Conduct made available to each employee working on the contract

Internal Control System

Defense Industry Initiative

Written policy signed by top official providing for key elements of program

Code of Conduct, including potential content

Note: Bold text indicates minimum program requirement

*for contracts of more than $5M and period of performance > 120 days

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Ethics & Business Conduct Program

Sentencing Guideline Requirement Ethics & Business Conduct Program

Board knowledge and oversight Certifications of training

Frequency of reports to Board:QuarterlyBi-yearlyYearlyOther: _____________

Oral report to Board

Written report to Board

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High-level person responsible for program• Report to executives and Board• Resources, authority and access

Access to company resourcesBudgetStaff

Level of person responsible for ethics__________________________

Report to CEOHard lineDotted line

Report to Board of DirectorsHard lineDotted line

Steering Committee

FAR Requirement

Assignment of responsibility at sufficiently high level with adequate resources to ensure effectiveness of program (ICS)


• Defined organizational structure

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Due diligence for substantial authority positions

Sources of information:Background ChecksEthics database checkHR hiring processes

Frequency of checks once in position:Upon offer onlyOnce a yearOther _____________________

FAR Requirement

Reasonable efforts not to include individual as a principal, whom due diligence would have exposed conduct in conflict with Code (ICS)

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Communication and training Board of Directors training

Employee trainingCode of Conduct (or general

ethics) TrainingCompliance Training

Training for agents and subcontractors

Ethics staff training

Employee communicationsEthics messages integratedStandalone ethics

communications

FAR Requirement

Ongoing ethics awareness and compliance program

• Reasonable steps to communicate periodically and in practical manner Contractor’s standards and procedures by

– conducting effective training programs– otherwise disseminating information

appropriate to individual’s respective roles and responsibilities

• Training for contractor’s principals and employees and, as appropriate, contractor’s agents and subcontractors


• Rules-based compliance training based on risk assessment• Ethics awareness training and discussion• Comprehensive communication plan

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Monitoring, auditing, and periodic evaluation

Annual internal controls audit Employee survey Ethics program assessment

Frequency: Once a year Every other year Other __________________

External benchmarking Ethics metrics review

Frequency: Monthly Quarterly Bi-Yearly Yearly Other __________________

General internal and external audits

FAR Requirement

Periodic reviews of business practices, procedures and internal controls (ICS)


Regular program assessments, employee survey, metrics reporting, internal and external audits

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System for reporting misconduct or seeking guidance, without fear of retaliation

Anonymous reporting

Ethics Officers

Help/hotline

Other _________________________

Protection against retaliation

System to report

System to seek guidance

System for tracking contacts

FAR Requirement

Standards and procedures to facilitate timely discovery of improper conduct (internal controls)

Internal reporting mechanism, such as hotlines, to report suspected misconduct and instructions that encourage employees to make reports (ICS)


Place for employees, suppliers, customers and business relations to raise concerns / ask questions

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Consistent enforcement Disciplinary process for violations

Discipline review committees

Internal investigationsFAR Requirement

Disciplinary actions for improper conduct or failing to take reasonable steps to prevent or detect improper conduct (ICS)

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Response to criminal activity Audits

Corrective action analysis

Discipline

Internal investigations

Mandatory Disclosure policy

Voluntary Disclosure policy

FAR Requirement

Corrective measures are promptly instituted and carried out (internal controls)

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NEW (as of 2010): Obligation to communicate directly with the Board or a sub-group of the Board

Periodic reports (oral and written) to Board committee: _______________________________

Frequency of reports to Board:QuarterlyBi-yearlyYearlyOther: _____________

Communication with board documented in company policy/procedure: _______________________________

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FAR Requirement Ethics & Business Conduct Program

Disclosures of violations of the civil False Claims Act or Federal criminal law shall be directed to the agency Inspector General, with a copy to the Contracting Officer

Timely disclosure to the agency Inspector General of certain violations of law by principal, employee, agent or subcontractor

Full cooperation with government agencies for audits, investigations and actions

Process for making disclosuresPolicy stating expectations for full

cooperation

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Defense Industry initiative Ethics & Business Conduct Program

Leadership Commitment Tone at the topEngaged middle managementReinforcing messages

supplier mentoring program checklist

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