5.29.2008 - 12:23pm ET

(CSRwire) PHOENIX,AZ, - May 28, 2008 - The Open Compliance and Ethics Group (OCEG) today launched its Government Contracts Domain, an integrated database for U.S. federal government contractors and subcontractors to assist them in remaining compliant as well as meeting the ethics and mandatory control requirements.

"Under new Federal Acquisition Regulations (FAR) Part 3.10 that took effect last December, all government contractors are now required to establish ethics programs suitable to the size of the company and the nature of their federal contracting to help prevent fraud and drive ethical conduct," said OCEG President, Carole Stern Switzer. "But like similar regulations imposed on other industries and activities, these regulations don't tell contractors how best to comply. To address this, OCEG is providing a searchable framework of clearly defined practices. This is the only independent, publicly vetted guidance available to contractors who need to develop or improve a compliance program."

OCEG worked with legal editor McKenna Long & Aldridge and business editor Ernst & Young LLP as the principle authors of the guidance. They were supported by an Advisory Board from leading government contracting firms that offered comments in the initial scoping of the Domain structure and reviewed drafts of the guidance.

"While the FAR change is based on good intentions, it offers few details about what an effective code of conduct should contain or what are appropriate controls." said Ray Pushkar of McKenna Long & Aldridge. "The OCEG guidance offers a roadmap to establish or improve an ethics program as well as navigate the maze of contracting requirements to stay in compliance."

In a recent OCEG survey of more than 100 government contractors, one-third of the respondents said that doing business with the government adds 10 to 25 percent to their costs, while another 15 percent see an increase of almost 25 to 50 percent.

"There are thousands of companies with either government prime contracts or subcontracts," said Alan Chvotkin, Executive Vice President and Counsel of the Professional Services Council, the leading national trade association representing government services contractors. "For many, the federal marketplace is only a small part of their business. Until now, each contractor has had to search through a myriad of sources to determine what regulations apply to them and what steps must be taken to comply. With the new FAR requirements, the OCEG Government Contracts Domain is an invaluable tool for any company, regardless of experience level, to navigate the federal contracting rules and establish a strong program for ethical conduct."

The OCEG survey also showed that over 45 percent of respondents ranked financial risk - fines, penalties, and settlements -- as their greatest concern. Another 25 percent ranked suspension and debarment as the greatest concern while 20 percent identified negative public relations. Only 8 percent cited legal risk. The survey also revealed that the most problematic areas of government contracting are Accounting (e.g., Cost Accounting Standards/Unallowable Cost) and Systems (Purchasing, Estimating, Budgeting, etc.).

"Federal procurement rules and regulations are complex and the risks can be substantial if contracts are not entered into without sufficient due diligence on the part of the contractor," said Brian Simmons, National Director of Ernst & Young's Government Contract Services practice."OCEG's Government Contracts domain gives companies the tools and resources they need to help manage the risk."


BACKGROUND

OCEG is a nonprofit organization that provides:

• Common Governance, Risk Management and Compliance (GRC) language and structure - a Framework that can be followed to assess risks then design and evaluate controls for them;

• Compliance Metrics - Measurements to ensure performance aligns with company objectives;

• Online Access - a searchable database that provides ready access to key legal requirements (and to the laws and regulations themselves), clearly stated practices to aid with compliance, and tools and resources to make the process easier;

• A community of practice to share ideas, ask questions, and benchmark against peers.

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