Seven Elements of an Effective Compliance Program

The Office of Inspector General (OIG) for Heath and Human Services posted in the Federal Register (back in 1998) the Compliance Program Guidance for hospitals.  How does this relate to Government Contracts?  Compliance is becoming ever increasingly important for government contractors, and taking tips from the extremely regulated health care arena makes quite a bit of sense.  The areas of Contractor Business Ethics, Accounting, and Subcontracting, to name a few, require effective programs to comply with FAR (and all its supplements’) requirements.  The best example is the Contractor Code of Business Ethics and Conduct.  The FAR clause that dictates this topic is FAR 52.203-13.   If you are a large business, you must have an ethics awareness and compliance program and internal control system.  If you are a small business, the program and system are nice to have, but you still must have a policy and procedure at a minimum that meets criteria.

Even if you are a small business, a simple compliance program in all sensitive areas of your company provides a smart return on investment.  Distilling an effective compliance program into seven elements is a path to success and thank you to HHS and the OIG (did I just thank the OIG?) for laying it out for us government contractors:

1) Oversight

2) Standards and Procedures

3) Education and Training

4) Auditing and Monitoring

5) Reporting

6) Enforcement and Discipline

7) Response and Prevention

There is an 8th “implied” element, which is *Periodically reassess and review risk*.  If this implied element is forgotten, you could be left with a stale compliance program and then a program of little use. Especially when Business System rules are out there, DCAA is stepping up audits, prime contractors want to make sure their subs follow rules, etc. Keeping up to date on the latest requirements is key and ensuring your policies, procedures, and hopefully compliance program, are up to date too is icing on the cake.

If your company requires assistance in building effective and compliant policy and procedure or programs, please visit


About Stephanie Amend

Stephanie is the Principal and CEO of Arrowhead Solutions, LLC, a solutions firm specializing in assisting established small businesses be successful government contractors.

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