New risk for contractors
The government issued new regulations, effective Dec. 12, 2008, adding more requirements and greater risk for government contractors, according to Grant Thornton.
The regulations stipulate new minimum requirements for government contractors’ internal control systems. Among the requirements are monitoring and auditing, as well as an internal reporting mechanism to detect criminal conduct.
“The government’s imposition of these new comprehensive formalized ethics and compliance programs adds significant new risk and expense for government contractors,” Hall asserted. “Because these requirements are mandatory in most situations, the risk and cost cannot be avoided for companies who consider the government to be a key customer. Ultimately, government contractors will bear the cost of these new or expanded requirements.”