Contractors ordered to post DOD fraud hotline info

September 26, 2011 by

Make room on the bulletin board near contractor coffee makers and break rooms.

The Defense Department now requires its defense contractors to post the DOD inspector general’s fraud hotline posters in common work areas. The rule took affect Sept. 16, according to a notice in the Federal Register the same day.

The DOD IG didn’t think the old rules went far enough because the Federal Acquisition Regulation allowed a contractor to not post any other agency’s hotline numbers other than those of the Homeland Security Department if the company had its own business ethics program with a means of reporting fraud or waste.

However, the DOD IG believes the FAR might be limiting the use of its own hotline. Without a poster, an employee wouldn’t know the IG’s phone number.

“According to the DOD IG, some contractors’ posters may not be as effective as the DOD poster in advertising the hotline number, which is integral to the fraud program,” the notice explained. The DOD IG is also revising its poster to tell employees of federal whistleblower protections.

The rule amends the Defense Federal Acquisition Regulation Supplement, or DFARS.

In response to the proposal in May, some experts were concerned that the new hotline posters could replace the contractor as the first line of defense against waste and fraud. It would also get the IG involved in what often turns out to be human resource issues or concerns about day-to-day activities that may need immediate attention.

But the IG said its staff knows the difference between an urgent matter about a defense contract and a routine personnel issue.

The rule applies to contracts and subcontracts that exceed $5 million. It does not apply to purchases of commercial items or for work that will be performed entirely outside the United States if the contract exceeds $5 million.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement at Washington Technology.  This article appeared on Sept. 19, 2011 at http://washingtontechnology.com/articles/2011/09/19/dod-ig-required-fraud-hotline-posters.aspx?s=wtdaily_200911.