What Now? Assessing Your New Compliance Program for Combating Trafficking in Federal Contracts

4 min

As National Slavery and Human Trafficking Prevention Month, January 2016 offers the opportunity for federal contractors to reflect on the significant regulatory changes to the Federal Acquisition Regulation (FAR) that occurred in 2015 as part of the fight to end human trafficking in federal contracts. For instance, contractors should take this opportunity to evaluate the effectiveness of the internal mechanisms established to comply with the new regulations. Contractors should pay particular importance to the effectiveness of their policies because noncompliance can lead to criminal, civil, and/or administrative consequences, as well as the declination to exercise options, contract termination, suspension of contract payments, and/or loss of award fee. 48 C.F.R. § 22.1704(d); 48 C.F.R. § 52.222-50(e).

As contractors begin to make their first certifications to comply with the new regulations, they should consider the following:

  • Identify vulnerable areas and work to mitigate risk. Contractors should engage in and document a deliberate strategy to assess where the contractor believes it is most at-risk. For example, contractors that subcontract overseas must consider how to vet these subcontractors. This can vary greatly depending on many factors, including, but not limited to, the country where work is performed, the industry, the nature of the work, the size of the organization, the known practices of the organization, etc.
  • Survey employees to determine how well the reporting mechanisms have been communicated. The regulations explicitly emphasize the need to "immediately" inform the contracting officer and the agency Inspector General of "credible information" that any prohibited activity has occurred. See 48 C.F.R. § 52.222-50. The commentary to the final rule describes this standard as a need to communicate "believable information" of a violation. 80 Fed. Reg. 4967, 4980 (Jan. 29, 2015). Therefore, contractors should, first, establish and broadly communicate clear lines of reporting within the organization and with all tiers of subcontractors. The person to receive such reports should be available at all times and should have immediate access to the company's decision-makers or be deputized to make the decision to contact the Inspector General, if appropriate.

    Assuming contractors have established these reporting lines, contractors should consider ways to measure effectiveness, such as surveying employees on what, when, and how to report believable information of a violation.

  • Continued training for employees and subcontractors. Contractors must give particular attention to scheduled training that educates their employees, subcontractor employees, and agents on warning signs and what to do if a warning sign arises. All contractors can look to the resources provided by the federal government to help educate their employees, including:

    For contractors with a workforce where English is not a primary language, the contractor must communicate its training in accessible languages, and contractors with workforces that do not routinely access a computer must consider additional methods of making these workers aware of their obligations under the law (some of whom may be at the front lines of identifying issues). Contractors must also make the consequences for violations (including not reporting incidents) by employees, agents, and subcontractors clear and well-known.

    Contractors that have established these training programs now must consider a continued schedule for refresher training for current employees and how to on-ramp new employees and new subcontractors and/or their new employees. Contractors should consider methods to measure the effectiveness of training through training quizzes and audits.

  • Consider Plan B if termination is necessary. In many industries and places in the world, only a handful of subcontractors are available to perform. Consider how your organization would respond to the need to terminate a key employee, agent, or subcontractor, and consider diversifying supply lines.

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The federal government has taken significant steps to curtail the flow of U.S. funds to human trafficking, including the imposition of substantial requirements and consequences for federal contractors. Accordingly, contractors must take steps to avoid entanglement in prohibited activities. Contractors must not only implement programs that comply with the new regulations, but seek to measure the effectiveness of the implemented measures and where the contractor remains exposed to greater risk of noncompliance; indeed, the failure to do so could result in civil and/or criminal sanctions, and even suspension or debarment.