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Code of Business Conduct
Standard 7
Always Remember That the Government Is a Unique Customer. We will conduct our
government business with the highest degree of integrity and honesty.
An important part of our business is the work that we do on behalf of the
federal government, such as our work for the Medicare program and the Federal
Employee Program, along with our contracts with state and local governmental
entities. When we act as a government contractor, we have a special obligation
to the government (along with the public at large) to ensure that we perform
that work with the highest degree of integrity. Accordingly, we must all be
committed to compliance with not only the letter but also the spirit of the
laws and regulations that apply to our government contracting business.
Although all of the standards discussed in this Code of Conduct are, of course,
applicable whether the customer is the government or a private entity, the
unique nature of doing business with the government implicates particular
statutes and regulations that do not normally apply to commercial transactions.
For example, under Title 18 of the United States Code, it is a crime to
knowingly make a false claim for payment to the government or to knowingly make
a false statement to the government. If you falsify data that is submitted to
the government, even if you are not doing so in an attempt to obtain payment
for the company, you have committed a crime. Both you and the company could be
subject to criminal prosecution for your violation and could be subject to
large penalties and fines. In addition, both you as an individual and the
company as an organization could be prohibited, through suspension and
debarment or exclusion, from working on government projects in the future.
If you engage in any conduct that results in a violation of this standard, you
will be subject to the full range of disciplinary sanctions, up to and
including termination for cause where appropriate. In addition, the company may
have an obligation to refer your actions to the appropriate prosecutorial
authorities, which could lead to criminal prosecution of both you and the
company.
Set forth below are some examples of the types of situations where we must be
especially vigilant in ensuring that we do not engage in conduct that could
violate this standard or the special rules applicable to government contracts.
A. Cost Records, Price Estimates and Time Charging.
We are required to maintain and provide the government with access to accounting
and other records to enable the government to substantiate its payments to us
for work performed on existing contracts and to help it verify our cost and
pricing estimates on future contracts. We must therefore ensure that accurate
and truthful records are maintained and that records are preserved for the
period of time required by applicable laws and contract provisions. We must
charge all costs and labor accurately, to the appropriate account, regardless
of the status of the budget for that account. If you engage in improprieties
such as the charging of labor or material costs to the wrong contract, charging
contract effort to an overhead or indirect account, falsification of time cards
and improper destruction or alteration of records, you will violate this and
other standards set forth in the Code of Conduct and will be subject to the
full range of disciplinary sanctions, up to and including dismissal where
appropriate.
B. Cost or Pricing Data.
We may be required to submit cost or pricing data to the government or to prime
contractors and to certify that the data are current, accurate and complete.
This is an affirmative disclosure obligation. Moreover, the definition of the
"data" that must be disclosed is very broad and includes not only hard facts
but also management decisions and estimates (based on verifiable data) which a
reasonable person would expect to have a significant effect on price
negotiations.
We must follow a policy of full disclosure in negotiations for government
contracts or subcontracts. If your actions result in the submission of cost or
pricing data that is not current, accurate and complete as of the date of
agreement on price, you will violate this and other standards set forth in the
Code of Conduct and will be subject to the full range of disciplinary
sanctions, up to and including termination for cause where appropriate.
C. Unallowable Costs.
We may submit proposals for reimbursement of indirect costs to the government,
either under cost reimbursement contracts or as part of overhead rates. You (or
one of your co-workers) may be required to certify your belief that a proposal
or cost submission does not contain any "unallowable" costs, and in particular,
does not contain unallowable costs for advertising, public relations,
donations, entertainment, fines and penalties, lobbying, defense of fraud
proceedings and goodwill. We must take special care to ensure that these
proposals seek reimbursement for only those indirect costs that are clearly
allowable or as to which we have a good faith argument that the costs are
allowable. If your actions result in the inclusion of clearly unallowable costs
in cost proposals, you will violate this and other standards set forth in the
Code of Conduct, and you will be subject to the full range of disciplinary
sanctions, up to and including termination for cause where appropriate.
D. Quality Control, Testing and Compliance With Specifications.
We are often required to certify compliance with applicable quality control
specifications and testing requirements for our products and services. We must
make every effort to ensure that we deliver goods and services that not only
meet all applicable contract requirements but also give the customer the
highest degree of confidence in our products. If you engage in improprieties
such as the delivery of nonconforming goods, components or services, the
failure to conduct required inspection or testing, or the manipulation of test
procedures, test data or contract performance data, you will violate this and
other standards set forth in the Code of Conduct and will be subject to the
full range of disciplinary sanctions, up to and including termination for cause
where appropriate.
E. Certification and Representations.
As the three examples above illustrate, contracts and subcontracts on government
projects often require the company to submit various certifications. These
contracts also usually contain clauses wherein the company is required to make
affirmative representations about a variety of matters in addition to those
described above, such as compliance with socioeconomic programs, contract
specifications, environmental laws and various procurement regulations.
These certifications and representations are serious matters. The company relies
upon the truthfulness and accuracy of the information it receives from its
employees when it submits these certifications. If your actions result in the
knowing submission of a false certification or representation in connection
with a government contract, both you and the company could be criminally
prosecuted for making false statements to the government. For this reason, we
must all exercise extreme diligence to ensure that these certifications and
representations are truthful and accurate before they are submitted to the
government.
Finally, although some of the subjects set forth below are discussed more fully
in other standards, we must all take special care to ensure that the company is
in full compliance with the following standards of conduct in contracting with
the government:
F. Gratuities.
We should ensure that government employees are not offered or given, either
directly or indirectly, entertainment, gratuities or other items, including
transportation or meals at business meetings, that such employees are
prohibited from receiving by applicable agency regulations. Accordingly,
company employees should obtain clearance from the company's legal department
before offering or giving any such item or service to a government employee.
G. Kickbacks.
We must never request or accept fees, commissions, compensation, gifts or
gratuities from our subcontractors or suppliers, directly or indirectly, as a
reward or inducement for business with the company. We must also never pay or
offer to pay kickbacks to any person. Moreover, we must never offer or give
anything of value to customer personnel under circumstances that could create
even an appearance that we are seeking to induce preferential treatment or pay
a reward for placing business with the company.
H. Classified Information and Confidential Data.
National security classified, procurement sensitive (e.g., budgets and
evaluation criteria), and proprietary information shall not be accepted from
any source, either directly or indirectly, in circumstances where there is
reason to suspect that the release is unauthorized. In addition, we must ensure
that all information we obtain about our competitors is done in compliance with
the law and the standards set forth in the Code of Conduct. We must not solicit
or obtain confidential information about a competitor in a manner that would be
illegal or would require a person to violate a contractual agreement, such as a
confidentiality agreement with a prior employer.
I. Former Government Employees.
Special restrictions apply to recruiting former government personnel and the
activities of former government employees retained by the company as employees
or consultants. Clearance must be obtained from the company's legal department
before even mentioning possible employment to a current government employee,
and before retaining any former government employee.
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