If you are a federal contractor, or your organization plans on being a contractor it is highly recommended that you institute a Contractor Code of Business Ethics and Conduct as soon as possible. There I said it and it sounds easier said that done – 
correctly.
In this series of articles, we will discuss why you should bother to have this code, questions as to how this code can be measured and the trends and outlook for such codes in the future.
Contractor Code of Business Ethics and Conduct – Why bother?
If any contractor organization has had doubts as to having a corporate code of ethics, those doubts were quickly dispelled this year. Every aspect of contractor ethics has come under scrutiny. Indeed, issues of sexual harassment and sexism, bribery, bullying, racial and religious discrimination and many other factors have bubbled to the surface. Contractors have had to do a lot of unexpected soul-searching. The soul-searching yielded serious questions about the cultures of the workplaces, the lack of clear-cut policies and non-existent compliance programs where objectionable (sometimes horrendous behaviors) went unchecked and unreported for decades.
The fact that unethical employee conduct was virtually out in the open was not only an organizational embarrassment, but its Achilles heel. Once news of an organization misconduct comes to light it is very hard, almost impossible, for them to recover. In most cases, federal contractors without a clearly defined Contractor Code of Business Ethics and Conduct were doomed to failure. A “code” invariably helps to promote an ethical culture and individual responsibility among employees, their dealings with vendors and suppliers and across all geographic regions.
The Climate is Changing
There was a time when organizations were not all that concerned with a Contractor Code of Business Ethics and Conduct. It has quickly changed. Federal contractors are now required to have a written code, establish a company business ethics awareness and compliance program and even display ethical hotline posters throughout the workplace per the terms of its government contract. One blatant (or not so blatant) violation of ethical behavior could result in severe consequences.
In this current environment, a federal contractor who violates a written ethical code could risk a disbarment.
However, we far too often view things in the negative rather than positive. For example, in terms of bidding having a solid compliance program and ethics program can make a federal contractor “more attractive” and ultimately more competitive. Federal contractors that can prove a strong record of integrity and ethical behavior can demonstrate their preparedness to perform the contract.
This preparedness is not a “theoretical,” but extends to nuts and bolts issues like transparency, accounting, budgeting and bookkeeping, legal compliance and human resources issues. Given a solid Contractor Code of Business Ethics and Conduct those awarding the contract understand the potential federal contractor has an ethical culture in place with employees who are ethically indoctrinated and trained before contract performance begins.
However, this is where the “Catch-22” of the entire situation comes into play. While no one would logically argue the value of a Contractor Code of Business Ethics and Conduct, and certainly no one could deny the importance of having employees motivated to be ethical, unless a solid training program is in place for federal contractors, it is all doomed to failure.
Writing up an impressive Contractor Code of Business Ethics and Conduct, and proclaiming the employees are “ethical,” is not the same thing as incorporating programs that are backed by a reinforcement of those rules of conduct. In learning about making wise choices and understanding the consequences of egregious ethical mistakes are extremely important lessons.
Many organizations proclaiming to have codes still failed in their adherence to ethics because no one instilled in them as to what the penalties and ramifications for federal contractors might be like for actions such as sexual harassment or bribery among many other areas of misconduct.
For any federal contractor, whether a five-person organization to 50,000 to fail to embody ethical lessons, is potentially to invite the loss of huge revenues. As a keynote speaker, lecturer and teacher on ethical behavior I know all too well that the rather modest expenses involved with ethical training dwarf in comparison to losses of opportunities resulting in ethical misconduct. There is, in short, every reason for a federal contractor to “bother.”
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