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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle D--Accountability in Contracting

NDAA Section

House Conference Report 110-477

SEC. 848. REPORT ON CONTRACTOR ETHICS PROGRAMS OF MAJOR DEFENSE CONTRACTORS.

(a) Report Required- Not later than one year after the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the internal ethics programs of major defense contractors.

(b) Elements- The report required by subsection (a) shall address, at a minimum--

(1) the extent to which major defense contractors have internal ethics programs in place;

(2) the extent to which the ethics programs described in paragraph (1) include--

(A) the availability of internal mechanisms, such as hotlines, for contractor employees to report conduct that may violate applicable requirements of law or regulation;

(B) notification to contractor employees of the availability of external mechanisms, such as the hotline of the Inspector General of the Department of Defense, for the reporting of conduct that may violate applicable requirements of law or regulation;

(C) notification to contractor employees of their right to be free from reprisal for disclosing a substantial violation of law related to a contract, in accordance with section 2409 of title 10, United States Code;

(D) ethics training programs for contractor officers and employees;

(E) internal audit or review programs to identify and address conduct that may violate applicable requirements of law or regulation;

(F) self-reporting requirements, under which contractors report conduct that may violate applicable requirements of law or regulation to appropriate government officials;

(G) disciplinary action for contractor employees whose conduct is determined to have violated applicable requirements of law or regulation; and

(H) appropriate management oversight to ensure the successful implementation of such ethics programs;

(3) the extent to which the Department of Defense monitors or approves the ethics programs of major defense contractors; and

(4) the advantages and disadvantages of legislation requiring that defense contractors develop internal ethics programs and requiring that specific elements be included in such ethics programs.

(c) Access to Information- In accordance with the contract clause required pursuant to section 2313(c) of title 10, United States Code, each major defense contractor shall provide the Comptroller General access to information requested by the Comptroller General that is within the scope of the report required by this section.

(d) Major Defense Contractor Defined- In this section, the term `major defense contractor' means any company that was awarded contracts by the Department of Defense during fiscal year 2006 in amounts totaling more than $500,000,000.

The Senate amendment contained a provision (sec. 863) that would require the Comptroller General to report to the Committees on Armed Services of the Senate and the House of Representatives on the internal ethics programs of major defense contractors.

The House bill contained no similar provision.

The House recedes with a technical amendment.

In conducting the required review, the conferees direct the Comptroller General to report on the extent to which the internal ethics programs of major defense contractors include: (1) disclosure of personal financial interests and outside employment by key personnel performing work for the government; (2) conflict mitigation measures for addressing any personal conflicts of interest of employees in connection with their work on Department of Defense contracts; and (3) procedures for reporting these personal conflicts of interest and any mitigation measures to the Department of Defense.

Senate Armed Services Committee Report 110-77

The committee recommends a provision that would require the Comptroller General to report to the Armed Services Committees of the Senate and the House of Representatives on the internal ethics programs of major defense contractors. The report would address the extent to which major defense contractors have internal ethics programs in place, the content of such ethics programs, the extent to which the Department of Defense monitors or approves the programs, and the advantages and disadvantages of legislation requiring the implementation of such programs.