MEMORANDUM FOR CHIEF ACQUISITION OFFICERS

EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

WASHINGTON, D.C. 20503

OFFICE OF FEDERAL

PROCUREMENT POLICY

November 14, 2008

MEMORANDUM FOR CHIEF ACQUISITION OFFICERS

SENIOR PROCUREMENT EXECUTIVES

FROM: Lesley A. Field

Deputy Administrator

SUBJECT: Preventing Fraud in Federal Contracting

The government remains committed to detecting and deterring fraud in federal

contracting. As this is a shared responsibility, I ask that you advise your agencies of the

affirmative steps being taken to combat and prevent this unacceptable activity, and

reiterate the steps your agency is taking to deter fraudulent contracting actions in your

agencies.

The Federal Acquisition Regulation (FAR) was recently changed to require

contractors to disclose violations of criminal law and the False Claims Act in connection

with award and performance of government contracts and subcontracts. Contractors are

subject to debarment and suspension from government contracting for knowingly failing

to disclose such violations and overpayments on government contracts in a timely

manner. Contractors are also required to establish internal control systems to facilitate

timely disclosure of improper conduct and fully cooperate with government agencies

responsible for audit, investigation, and corrective actions. This FAR change, which is

effective on December 12, 2008, was published in the Federal Register on November 12,

2008 (73 FR 67064).

This FAR change is in addition to another recent FAR amendment that requires

government contractors to have a written code of business ethics and an ethics

compliance training program for contractor employees, and to post “fraud hotline”

posters at contractor worksites, which encourage contractor employees to report

fraudulent activity in connection with performance and award of government contracts.

In October 2006, the Office of the Deputy Attorney General announced the

formation of the National Procurement Fraud Task Force (the Task Force) to promote the

early detection, prevention, and prosecution of procurement fraud associated with

increased contracting activity for national security and other government programs.

More than 350 civil and criminal procurement fraud cases were filed since the Task Force

began its efforts. The Task Force, which is chaired by the Assistant Attorney General of

the Criminal Division, coordinates its efforts with the U.S. Attorneys’ Offices, the Justice

Department’s Civil, Antitrust, Environmental and Natural Resources, National Security,

and Tax Divisions, other law enforcement agencies, and the office of Management and

Budget. One of the key objectives of the Task Force is to increase coordination and

strengthen partnerships among all Inspectors General (IGs), law enforcement, and the

Department of Justice to fight and eliminate procurement fraud. The Task Force works

with contracting and audit offices and the private sector to more effectively detect and

report fraud.

Additionally, the Task Force has a Web site that provides significant resources

regarding fraud training, reporting, and other information that agencies will find helpful

as they guard against unethical behavior by their contractors and employees. Please

ensure that all of your acquisition professionals have access to this information on

http://www.usdoj.gov/criminal/npftf/.

All agencies must take immediate actions before the effective date of the FAR

change to inform their acquisition workforce of the FAR changes described above, the

resources provided by the National Procurement Fraud Task Force, and their workforce’s

responsibilities to deter procurement fraud. Actions might include issuing agency

guidance, memoranda, or other communications.

Agencies that are required to have Chief Acquisition Officers pursuant to the

Services Acquisition Reform Act (P.L. 108-136) shall report to the Office of Federal

Procurement Policy the steps taken to disseminate this information and to disseminate

agency specific policies or requirements related to deterring procurement fraud. Please

send this information to Mike Gerich, at mgerich@omb.eop.gov, no later than December

10, 2008.

Thank you for your attention to this serious matter.