Contractors have always feared lawsuits or audits by the government, but they have accepted that possibility as a cost of doing business. Now we’ve seen that contractors must also be alert to potential audits or suits brought by whistle-blowers in their own companies.
How can companies ensure that they don’t end up with a whistle-blower under their roofs?
They should institute measures to prevent or mitigate the effects of an audit or lawsuit from any source. The following are sound procedures for protecting and managing your General Services Administration schedule contracts.
1. Ensure that everyone understands his or her contract responsibilities. Senior managers must be aware of the responsibilities and consequences that go along with a GSA schedule contract. More than 5,500 companies now hold GSA information technology schedule contracts, and managers at established firms are typically well-versed in their contract responsibilities. However, many managers at other companies are not.
2. Establish data security procedures. The corporate data that your company must submit to GSA and other agencies includes sensitive information that you must protect against unauthorized disclosures inside and outside your company. You should establish need-to-know procedures for authorizing access to that data.
3. Implement a process to track your business practices. GSA awards its schedule contracts on the basis of your company’s business practices and discounts. Therefore, it is imperative that you monitor your practices to determine whether any changes will affect your GSA schedule contract. Violations can trigger the contract’s price reductions clause and result in fines and penalties pursuant to the False Claims Act. Many companies have been lax in this important area. Often, it’s because they have an incomplete understanding of their business practices and inadequate procedures for tracking them.
4. Make current, accurate and complete disclosures to GSA. You must ensure that the employees responsible for GSA schedule contracts are aware of what information they should and should not disclose. In some large companies, public- and private-sector sales teams often do not communicate as well as they should.
5. Establish an oversight system for your GSA schedule contract. Implementing a sound checks-and-balances system can effectively protect your company’s interests and mitigate the effects of audits and suits.
The government has reduced its oversight of the government contracting community in recent years, and many companies have become lax about managing government contracts. However, we are entering an era in which we can expect more oversight and, most likely, more audits by the government. If you add the threat of internal whistle-blowers, all government contractors must raise their guard. Corini is president of Computer Marketing Associates, a government marketing, business development and contract services firm. He can be reached at jcorini@cmai.com. This column is an excerpt from Corini’s email newsletter.
