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FAR ClauseLabor & Compliance

FAR 52.203-13Contractor Code of Business Ethics and Conduct

Requires federal contractors with contracts over $6M and 120-day performance to maintain a written code of ethics, training program, internal reporting mechanism, and disclosure to the agency Inspector General of credible evidence of fraud, bribery, or False Claims Act violations.

When This Clause Applies

Required in contracts and subcontracts exceeding $6M with performance over 120 days. Small business exemption applies for some elements but not the disclosure requirement.

What This Means for Contractors

Contractors must: (1) maintain a written ethics code distributed to all employees; (2) provide ethics training; (3) maintain a hotline or other reporting mechanism; (4) discipline violators; (5) self-disclose credible evidence of fraud/bribery/FCA violations or significant overpayments to the agency IG. Failure to disclose can independently trigger debarment.

Common Pitfalls

  • 1Treating the ethics program as a one-time write-up rather than an ongoing program
  • 2Not training new employees within reasonable time
  • 3Failing to self-disclose credible fraud findings (treating it as discretionary)
  • 4Inadequate hotline/reporting confidentiality

Related Topics

FAR 52.203-13contractor code of ethicsethics compliance programmandatory disclosure rule

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