Tag Archives: Business Ethics

Government Contractor Tax Day Tidbits – “Food for Thought”

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tax day

“THE PROJECT ON GOVERNMENT OVERSIGHT”

[On] the federal tax filing deadline, the Project On Government Oversight (POGO) offer[ed] some tax-related contractor oversight food for thought:

  • ” The Treasury Inspector General for Tax Administration (TIGTA) found that the Internal Revenue Service (IRS) awarded contracts to at least 20 companies that owed more than $5 million in delinquent federal taxes. TIGTA also found that 11 contractors owing $4.3 million in taxes were awarded more than $356 million in IRS contracts and an additional $3.7 billion in contracts from other federal agencies
  • POGO tracks tax violations in our Federal Contractor Misconduct Database, which shows that contractors have paid $3.64 billion to resolve cases with local, federal, and foreign revenue collection authorities. The bulk of this amount comes from GlaxoSmithKline’s record-breaking $3.4 billion payment in 2006 to settle IRS charges of under-reporting profits.
  • There are some noteworthy tax misconduct cases pending against the large federal contractors, including actions by New York City and State against FedEx and United Parcel Service for allegedly trafficking in contraband cigarettes, and a complaint filed with the IRS accusing ExxonMobil of violating tax laws to wage a campaign attacking climate science.
  • Earlier this month, the IRS launched a program employing private debt collection companies to recover delinquent income taxes. This is the third time since 1996 the IRS has tried to outsource tax debt collection—both previous attempts were dismal failures.
  • Congress has taken another stab at passing a law that would prevent individuals with seriously delinquent tax debts from obtaining federal employment, contracts, and grants. Similar bills introduced in 2011, 2013, and 2015 ultimately failed to advance. The Senate is also attempting to strengthen protections for those who blow the whistle on tax fraud.

So get those tax returns out the door! You can rest assured that POGO will do its best to make sure the government collects what it is owed and does not waste that money.”

http://www.pogo.org/blog/2017/04/tax-day-tidbits.html

 

 

 

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BUSINESS ETHICS FEED GOVERNMENT RECORDS OF PAST PERFORMANCE

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INTRODUCTION

Previous discussions have emphasized the importance of maintaining a solid past performance rating to meet award criteria used by every federal agency when granting small business contracts.

Your Past Performance Record

We have also highlighted the importance of maintaining solid ethical business practices in dealing with customers and industry partners.

Maintaining an Ethical Company Image

This article will discuss the practical aspects of achieving the above, the associated challenges and how not meeting them can jeopardize your industry reputation and business success.

IGNORANCE ON POLICY AND REGULATORY MATTERS IS NOT AN EXCUSE


The small business faces a front-end-loaded and ongoing learning challenge in understanding the Federal Acquisition Regulation (FAR), Cost Accounting Standards (CAS), Unallowable Costs, Organization Conflict of Interest (OCI) and many other similar policies the federal government invokes.

A continuous learning process must include evaluating the impact of these requirements, developing consistent processes and systems to meet and maintain them or risk poor ratings on proposals, audits and performance; even the denial of an invoice payment.

In short, the government has the right to audit, examine and approve your internal operations for conformance to the law before granting a contract or paying a bill.  These are not preferences by contracting officers.  They are federal contracting laws.

The astute small business learns the law and incorporates compliance in its business practices.

CONTRACTING PERSONNEL IN ACQUISITION ROLES HAVE VARYING LEVELS OF KNOWLEDGE AND PROFESSIONALISM


The US Government and its prime contractor cadre form a massive professional base.  Although they conduct training in policy and regulation to their acquisition professionals, these professionals are rotated frequently and/or encounter contracting authority as only one role among many in their principal professional endeavors.

Government Contracting Roles


Small business systems are unique to a company.  Documenting them and conveying their compliance to regulations in a clear, lucid way to auditors, agency buyers/contracting officers and other government customers is a vital part of avoiding misunderstandings regarding compliance issues.

An additional concern with prime contractors is protecting intellectual and proprietary data, such as rates and factors, while participating in the assist audit process used by the government to avoid risk of undesirable disclosure from one firm to another.

If, during the course of marketing, proposing and negotiating government contracts with government and prime contractor personnel, a small business encounters lack of professionalism, misunderstanding of the regulations or defiance of them, the occurrence must be escalated to higher authority with tact, judgment and the long term objective of not only obtaining new business, but staying in business.

Managing Government Teaming Relationships

DISCLOSURES ARE MANDATORY

Federal Acquisition Regulation (FAR)  52.203-13 in 2008 made mandatory that contractors must disclose past, present or pending violations of contract law to the government.   Not adhering to this requirement can be costly in terms of poor past performance records, legal expenses and financial judgments.

FAR 52.203-13 (3) – Mandatory Disclosure

The Truth in Negotiations Act

TRAINING IN GOVERNMENT REGULATIONS IS A GOOD INVESTMENT

As fast as things move these days if we don’t train and communicate effectively we are running very high risks.  The modern era in which we live demands that training be sophisticated, interactive and responsive to changing times. It should evolve out of core company processes and contain feedback mechanisms.
Some training will be global, such as policy, corporate ethics and human relations. Other training will be specialized, such as changes in law, company policy or technology by functional areas.

Principal among the topics at the head of the list for generic training in the art of something would be “Communicating Effectively” to employees to customers, to regulators; both orally and in writing.

Small Business Company Trainng

SUMMARY

Small business must evaluate regulations then communicate and enunciate a company ethics policy and processes that insure compliance with laws and regulations, training personnel on them in the process.

In doing so, disclosures will then be positive and the business will not become an entry in the Project on Government Oversight’s Contractor Misconduct Data Base or the subject of negative press releases by a government agency. (Examples below)

Federal Contractor Misconduct Data Base

Portrait of a Crooked Government Contractor

Star Power And The Military Industrial Complex