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jsprandel

Reporting Suspected Violations to the IG

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Someone sent an anonymous tip into a tip-line about the actions of a contractor under one of my contracts. It seems the contractor is being accused of changing the production dates listed on some of the products produced at their plant. The production date for these products is time-sensitive. The products are similar to the ones under my contract, but I don't know if the products with [the alleged] false production dates were produced for my contract. I believe the issue was reported to local police (through the tip-line) and my agency has a safety inspection section that will probably investigate the issue also. I believe I should forward this issue to the IG for their consideration (since it involves fraud), but some of my co-workers believe that I should wait to see the results of any investigations the local law-enforcement or my agency's safety inspection section turns up. I would appreciate hearing any thoughts other contracting officers have concerning this issue. Specifically, what actions are required of COs when they suspect irregularities such as this and is there a reference that discusses the responsibilities of COs regarding this issue. In the contracting classes I've attended, they indicated we should report the issue to the IG and let them conduct the investigation.

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In the old days, it might be that one waited until he or she had some reasonable basis or evidence before turning in his or her neighbor to the law enforcement authorities. But these days, anyone who hesitates will be found guilty along with, and maybe even before, the neighbor.

How did you learn about this matter? Did your local police contact you? Was it their tip-line? If so, the basis for your referral to your agency IG can simply be the fact of the police referral, not your own knowledge or suspicions. But your own agency contracts attorney should be able to give you competent advice.

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It was posted on a civilian website called wetip.com and a report was generated by that website that indicates local law enforcement was notified. The issue went through several hands before I was cc'd on it.

Although the issue has come to my attention, it's not something that I can investigate. However, I'm not sure if I should ignore an anonymous tip.

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If someone went to that website and made a report that a malicious and untrue report that a man (a competitor of some sort, perhaps) was molesting his minor child, and the man was your neighbor and you saw it the report after it went through several hands, would you refer it to child protective services in your state?

You know that the very act of referral is going to result in immediate and severe actions against the man -- the referral alone, with no evidence whatsoever, is going to result in the immediate abduction of his child by the state and maybe his arrest, and the loss of his job, and thousands of dollars in legal fees, and so forth -- and maybe the entire report from the beginning was malicious and untrue -- but once the report is made to the proper authorities, malicious and untrue are irrelevant, as the accused man must prove his innocence (which he cannot easily do -- how does one prove that he didn't do something to a system that assumes guilt?).

Talk to your agency contracts attorney -- let him or her tell you what you should do.

To me, if the original poster on that website had any basis for the tip, he or she would have made the tip to the proper authorities.

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Guest Vern Edwards

You appear to have no direct knowledge of any violation of the law.

Ask your supervisor for direction. Document what he or she tells you and put it in the contract file. Go about your business.

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Specifically, what actions are required of COs when they suspect irregularities such as this and is there a reference that discusses the responsibilities of COs regarding this issue. In the contracting classes I've attended, they indicated we should report the issue to the IG and let them conduct the investigation.

I believe for a policy reference for CO & contractor responsibility regarding reporting possible violations you may want to review FAR 3.1003 (B ) as well as your Department/Agency supplement. Also, you may want to check to see if the contract contains FAR 52.203-13 Contractor Code of Business Ethics and Conduct. The clause provides information on reporting and other information that might be helpful in your situation.

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Why don't we just reveal what the FAR Policy is concerning this question (emphasis added for clarity):

3.1003 -- Requirements.

...( b ) Notification of possible contractor violation. If the contracting officer is notified of possible contractor violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title 18 U.S.C.; or a violation of the civil False Claims Act, the contracting officer shall—

(1) Coordinate the matter with the agency Office of the Inspector General; or

(2) Take action in accordance with agency procedures.

I will guess that agency procedures probably include the contracting officer notifying their supervisor but I imagine it doesnt intend to imply just "go[ing] on with your business."

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If you work for the DoD or a Military Branch, for instance - DoD and each Service supplement FAR 3.1003 ( b ) with further policy direction. Check your local policy and I would also recommend discussing with your supervisor - but the KO has some specific responsibilities. I recommend that the KO (you?) not take them lightly.

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Guest Vern Edwards

We work in organizations for a reason. If you have been told that a contractor is breaking the law, you're an idiot if you go to the IG before you talk to your boss. This is a matter of simple courtesy and organizational politics. I wish I had a nickel for every time some chucklehead told me that a contractor was breaking the law. If I took it seriously I wouldn't think of just picking up the phone and calling the IG. The one exception would have been if I thought or suspected that my boss were involved. That's especially true in a military organization.

Do as you please. It's your career.

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The OP asked:

Specifically, what actions are required of COs when they suspect irregularities such as this and is there a reference that discusses the responsibilities of COs regarding this issue. In the contracting classes I've attended, they indicated we should report the issue to the IG and let them conduct the investigation.

Asked and answered.

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Guest Vern Edwards

Yes. Asked and answered. Talk to your supervisor before you call the IG.

I'm telling you -- if the chief of the contracting office and the head of the contracting activity find out that you called the IG without giving them a heads up first, you'll be in the dog house and your career may not recover.

This advice does not conflict with the FAR. We who answer questions owe people not just the words of the reg, but also a little good advice.

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Yes. Asked and answered. Talk to your supervisor before you call the IG.

I'm telling you -- if the chief of the contracting office and the head of the contracting activity find out that you called the IG without giving them a heads up first, you'll be in the dog house and your career may not recover.

This advice does not conflict with the FAR. We who answer questions owe people not just the words of the reg, but also a little good advice.

No disagreement there.

But I do disagree with advising one to simply document what the supervisor tells him or her, then "Go about your business". One also needs to be aware of their responsibilities as a warranted KO - which is what the OP specifically asked.

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Guest Vern Edwards

I'm not sure that "go about your business" is bad advice.

Look... if anyone thinks something bad is going on, and if their boss is telling them to do nothing, and if they smell a rat, they should call the IG and be prepared to deal with the reaction. But to encourage an inexperienced contract specialist or CO to bypass her boss or ignore her boss's instructions and call the IG is, in my opinion, irresponsible. In our business people commonly think something is "illegal" when it's not.

Hierarchical organization is a feature of our culture for a reason. We owe it to our superiors and to our colleagues to consult with them and listen to what they have to say before we pursue what they may consider to be a hasty and potentially damaging course of action. It may sound righteous to say "Call the iG," but righteousness is not always wise or right.

I'm sure that most of my peers would say the same as I have been saying.

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I agree with Vern but for different reasons.

Look at the original post. An anonymous tip was left on a website. The tip involved possible product fraud (changing the dates of manufacture to avoid product expiration times) "on some of the products produced" but there was no specific allegation that government products were involved in the manipulation, if it occurred at all. Government safety inspectors will investigate to see if the anonymous allegations are true, and if the government was harmed.

Until then, I would argue that the CO has not been "notified" as that term is used in the FAR section quoted above. Being cc'd on a series of emails (Re: Re: Re: Re:) is not "notification" in my book. Notification will take place when the government safety inspectors issue their report to the CO.

To paraphrase Vern's comment, I wish I had a nickel for every time some chucklehead posted an anonymous allegation on the internet about somebody or something, and it went viral, and many people got upset, and then it turned out to be nothing because the original allegation was specious in the first place.

Vern's advice, to notify the supervisor and document the conversation for the file, is spot on and commensurate with what the CO knows. At this point, there is no evidence, credible or otherwise, that points to any contractor criminal violations.

Hope this helps.

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Looking at 3.1003, to me, it appears that the contracting officer's duty identified in (B ) is triggered by a contractor's report of a potential violation that is based on credible evidence. I don't take the guidance in (B ) to apply to any notice from any source, no matter how irresponsible, of a possible (no matter how remote) violation by a contractor.

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Looking at 3.1003, to me, it appears that the contracting officer's duty identified in (B ) is triggered by a contractor's report of a potential violation that is based on credible evidence. I don't take the guidance in (B ) to apply to any notice from any source, no matter how irresponsible, of a possible (no matter how remote) violation by a contractor.

It doesn't appear that way to me. The scope of Subpart 3.10 also addresses "policies and procedures for the establishment of contractor codes of business ethics and conduct, and display of agency Office of Inspector General (OIG) fraud hotline posters" at 3.1000 ( b ).

I don't think that 3.1003 is organized very well under 3.10 but ( b ) doesnt anywhere limit KO responsibilities to Contractor reported violations and 3.10 covers some aspects of whistleblower accommodations. In addition, it would be silly to assume that the KO only has any responsibility to do something if the Contractor self reports itself! Unfortunately, I have known quite a few paper pushers who acted like ostriches.

As far as when or if the KO takes action here, that will probably depend upon the results of the on-going investigation.

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Concerning the above discussion on the CO talking to the supervisor I would agree that absent some form of notification from the contractor I believe it would be prudent for the CO to talk this over with the supervisor.

However, if the contractor provides notice IAW FAR 52.203-13 Contractor Code of Business Ethics and Conduct, I believe the notice to the CO would be a copy - the clause requires the contractor to report directly to the contract Agency OIG with a copy to the CO. The CO may want to give a heads up to the supervisor that this action has occurred but if the clause is followed the Agency OIG will not need something from CO regarding notification from the contractor - since its assumed they will already have received it.

This is relatively new policy - the clause is dated April 2010 - so it seems it would also be prudent to review not only this FAR part but supplemental agency guidance.

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Joel, retreadfed, policyguy --

I agree with retread and disagree with Joel. Here's my thinking.

I believe that the "notification" discussed at FAR 3.1003( B) refers to a contractor disclosure as required by the clause 52.213-13. That clause dictates the when, where and how of a contractor disclosure.

If "notification" means something else -- such as "brought to the Contracting Officer's notice" then there would be no need to specify the format of the disclosure, or to specify the recipients, or to discuss the content. All that language would be superfluous. And we know that we have to interpret the regulations as a whole, so as to give meaning to all words.

So I think it's fairly clear that "notification" as contemplated by that clause and by the FAR subsection does not refer to anonymous postings on commercial websites.

That is not to say that the Contracting Officer doesn't have responsibilities outside those prescribed by 3.1003 ... just that 3.1003 prescribes required actions given a certain, specified, set of circumstances -- i.e., receipt of a required contractor disclosure to the agency OIG.

H2H

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Let me explain my thinking on 3.1003 (trying to avoid the smiley face). The current language was printed in the Federal Register on Nov. 12, 2008 in regard to FAR Case 2007-006. That case dealt with contractor reporting of suspected violations. It dealt with no other subject. Reading (a) and in the context in which they were promulgated and their sturcture, it is clear that (a) imposes requirements on the contractor in regard to reporting and imposes requirements on the contracting officer in regard to reports made by the contractor. Significantly, does not require reporting by the contracting officer to the IG of notices received by the contracting officer. Instead, the contracting officer is to "coordinate" with the IG. This makes sense because the report of the potential violation by the contractor was made to the IG with a copy to the contracting officer.

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Guest Vern Edwards

Let’s recap.

In response to a request for advice about whether to report to an IG when “ a contractor is being accused” of improperly changing production dates. The OP said:

I believe the issue was reported to local police (through the tip-line) and my agency has a safety inspection section that will probably investigate the issue also.

The OP’s colleagues wanted to wait for the results of an investigation.

In Post #6, policyguy refers to FART 3.1003. In Post #7 Joel cites FAR 3.1003, emphasizing the contracting officer’s duty to (1) “coordinate” with the OIG and (2) comply with agency regulations when notified of “possible contractor violation of Federal criminal law” involving various offenses.

In Post #15, Retread says that 3.1003 refers to reports to the CO from a contractor based on credible evidence. In Post #16, Joel disagrees. In Post #17, here_2_help agrees with Retread.

Who is right? Or is there another answer?

According to FAR 3.1000, Subpart 3.1 implements 41 U.S.C. 3509 and prescribes policies and procedures for the establishment of contractor codes of business ethics.

Here is 41 U.S.C. 3509 in its entirety:


§ 3509. Notification of violations of Federal criminal law or overpayments

(a) Definition.--In this section, the term “covered contract” means any contract in an amount greater than $5,000,000 and more than 120 days in duration.

Federal Acquisition Regulation.--The Federal Acquisition Regulation shall include, pursuant to FAR Case 2007-006 (as published at 72 Fed. Reg. 64019, November 14, 2007) or any follow-on FAR case, provisions that require timely notification by Federal contractors of violations of Federal criminal law or overpayments in connection with the award or performance of covered contracts or subcontracts, including those performed outside the United States and those for commercial items.

Here is the summary of the proposed rule cited in the statute:

SUMMARY: The Civilian Agency Acquisition Council and the Defense AcquisitionRegulations Council (Councils) are proposing to amend the Federal Acquisition Regulation (FAR), at the request of the Department of Justice (DoJ), in order to require contractors to have a code of ethics and business conduct, establish and maintain specific internal controls to detect and prevent improper conduct in connection with the award or performance of Government contracts or subcontracts, and to notify contracting officers without delay whenever they become aware of violations of Federal criminal law with regard to such contracts or subcontracts

Now, that is not complete research, but based on what I've quoted above I'm with Retread and here_2_help. The statute and the implementing contract clause, FAR 52.203-13, call for the contractor to disclose suspected violations to the IG and to cooperate. FAR requires t\The CO is to "coordinate" with the IG. It does not require the CO to report anything to the IG. I think the CO is to report contractor violations through agency channels, unless he or she is whistleblowing.

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