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
 Contracts in amount >$5M and more than
120 days in duration
 Flow
down to subcontracts
FAR Rule
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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.”
FAR Rule Implemented
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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
Contractor Disclosure Program
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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
Stakeholders
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DoD OIG
DCMA
Services General
Counsel
Services Suspension &
Debarment Authority
Contracting Officer
Affected Military
Department
DCAA
Defense Agencies
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Defense Criminal
Investigative
Organizations
 AFOSI
 CID
 DCIS
 NCIS
DOJ Criminal Division
(Fraud Section)
DOJ Civil Division
(Commercial Litigation)
US Attorney Office
SIGAR
Contractor Disclosure Process
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Disclosure
Stakeholders triage
Decision
Company internal investigation, if
appropriate
Government verification investigation, if
appropriate
Coordination of Remedies
Close with notice to company
FY10 Disclosures
April 26, 2010
Labor Mischarging
Other
False Claim
Non-conforming material or parts
50%
Procurement Integrity
10%
Anti-Kickback
14%
Theft of Government Property
Bribery
How will the effectiveness of the
Rule be measured
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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
CD Program Initiatives
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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
Contact Us
DoD Office of the Inspector General
Investigative Policy and Oversight
400 Army Navy Drive, Suite 1037
Arlington, VA
Telephone 703 604-8711
EMAIL: frances.mccormick@dodig.mil
Toll Free Number 866 429-8011
FAX: 703 604-8720
CDP Org Email: disclosures@dodig.mil
Internet: www.dodig.mil
Overpayments
Presented By:
Russell J. Geoffrey
Director, Contract Integrity Center
Defense Contract Management Agency
Revision #, Date (of revision)
Overpayments
• FERA
• FAR Payment Clauses
• Contractor Disclosure Rule
• Suspension & Debarment
• Presidential Executive Order
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).
“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).
Contract Overpayments
and Reverse False Claims
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FERA defines “obligation” for the first time:
“an established duty, whether or not fixed,
arising from an express or implied
contractual, grantor-grantee, or licensorlicensee relationship, from a fee-based or
similar relationship, from statute or
regulation, or from the retention of any
overpayment.”
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.
FAR Contractor Disclosure Rule
The Look Back Provision
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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.
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FAR Subpart 3.1003(a)(2)
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
Presidential Executive Order
November 23, 2009
Reducing 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.