Ethics: Is your company squeaky clean?
You worked hard to build your company, and went into government contracting because you want to build a legacy for your family. You don’t want to end up in the news as being the contractor who sold a toilet seat to the government for $1,000. What can you do to protect yourself and your company?
The term “ethics” is defined as the compass or moral principles that govern an organization’s behavior. Why is this such a big deal? Currently the contracting regulations for the Federal Government are in a state of motion as they struggle to define new contracting methods for working with the explosion of technology impacting services and products. This transition from bid openings and proposals to white papers and other transaction agreements (OTA’s) is moving quickly leaving many government employees and contractors to implement new systems, methods, and processes. How do you navigate these transitions and stay ethical and true to your purpose, culture, and organization structure and beliefs?
Ethical violations include misrepresentation of certification status, conflicts of interest, mishandling of funds, fraudulent billings. These violations can happen quietly without management realizing what has taken place. Unfortunately, when they are unveiled, the cost to the business can range from lost revenue to poor reputation or worse. Additionally, the cost to the human capital of the business can impact morale, production, reputation, relationships, and future projects and income.
A business ethics and compliance program can help alleviate these situations and is required in some contracting situations. The Department of Justice has recently issued guidance for an organization’s ethics and compliance program. Small business organizations tend to be fast-moving, lean, and running the business takes a tremendous amount of time.
We have a few suggestions to help you:
- An ethics program is not separate from other business processes – it should be set up as part of all significant business systems within the company. Everyone in the company has a responsibility for assessing risks in their areas of the workplace, making sure controls are in place to address these risks.
- Most businesses already have some semblance of an ethics program in place – it’s just not called an ethics program. Reviewing your company controls and systems will reveal several requirements that are already in compliance with an ethics program. This review will make the process more manageable.
What steps do you take to get an ethics program in place in your business?
- Get your key players together and look at what you have in place, including existing controls. Discuss where improvements might be necessary.
- Research – look at available guidance online for ethics and compliance programs. Check into government guidance, many companies post their multiple programs online, including ethics programs. See what fits. Keep it simple.
- Designate someone to be the company’s Ethic’s Compliance Officer. Support this person.
- Identify areas that are at risk, and develop suggestions for controls to improve these risks.
- Hold a training session for all employees and train new employees as they come on-board.
Having an ethics program and process in place can help alleviate major risk factors for a business. Additionally, having everyone in the company working together to identify issues and steps to minimize those risks will serve as protection for everyone.
Reach out to your Norcal PTAC Procurement Specialist for support with this or anything else government-contracting related. Not a Client yet? Apply for services today!
Written by Mary Jo Juarez, Norcal PTAC Procurement Specialist.