CFCM Professional Ethics & Conduct 4 — Questions and Answers
Question 1: A federal contract manager at a prime contractor discovers a subcontractor is falsifying inspection records. Under FAR 52.203-13 and the Mandatory Disclosure Rule, the prime is required to:
- Terminate the subcontractor and self-cure without Government notification
- Disclose the violation to the agency Office of Inspector General or the Department of Justice (Correct answer)
- Report only to the prime's Board of Directors and take corrective action
- Document the violation internally and report only at contract completion
Correct answer: Disclose the violation to the agency Office of Inspector General or the Department of Justice
FAR 52.203-13's mandatory disclosure rule requires primes to report credible evidence of subcontractor fraud or criminal violations to the Government's OIG or DOJ.
Question 2: Which of the following best describes an 'organizational conflict of interest' (OCI) under FAR Subpart 9.5?
- A situation where a contractor has more than one active government contract
- A situation where a contractor's ability to render impartial assistance is impaired, or where a contractor has an unfair competitive advantage (Correct answer)
- A disagreement between a contractor's legal and contracts departments
- A conflict between a prime contractor and its subcontractor over contract terms
Correct answer: A situation where a contractor's ability to render impartial assistance is impaired, or where a contractor has an unfair competitive advantage
FAR 9.5 defines OCI as situations where a contractor's objectivity may be impaired or where they gain an unfair advantage over competitors in government contracting.
Question 3: Under the Whistleblower Protection Act and FAR 3.903, contractor employees who report fraud, waste, or abuse in federal contracting are protected from:
- Criminal prosecution for disclosing proprietary information
- Reprisal by the contractor for making protected disclosures (Correct answer)
- Civil liability for any inaccurate statements made in good faith
- All performance evaluations for the remainder of the contract
Correct answer: Reprisal by the contractor for making protected disclosures
The Whistleblower Protection Act and FAR 3.903 protect contractor employees from retaliation for disclosing reasonably believed violations of law or regulation.
Question 4: A contract manager realizes that during negotiations, the Government's negotiator inadvertently revealed the agency's price objective. The ethical obligation under NCMA's Code of Ethics is to:
- Use the information since it was voluntarily disclosed
- Inform the Government negotiator of the disclosure and decline to use the information unfairly (Correct answer)
- Document the disclosure and seek competitive advantage within legal limits
- Consult the company's attorney before deciding whether to use the information
Correct answer: Inform the Government negotiator of the disclosure and decline to use the information unfairly
NCMA's Code of Ethics requires members to report inadvertent disclosures and avoid gaining unfair advantage from information that should not have been shared.
Question 5: The False Claims Act's 'qui tam' provision allows:
- Government auditors to recover triple damages from contractors without a trial
- Private citizens to file suit on behalf of the Government and share in any resulting recovery (Correct answer)
- Contracting officers to unilaterally terminate contracts for fraud
- The SBA to debar contractors who submit false small business certifications
Correct answer: Private citizens to file suit on behalf of the Government and share in any resulting recovery
The False Claims Act's qui tam provision empowers whistleblowers (relators) to sue on the Government's behalf and receive 15-30% of recovered funds.
Question 6: When a contractor's contract manager learns of a potential Anti-Kickback Act violation within their organization, the most appropriate first step is to:
- Issue a stop-work order on all affected contracts
- Report the matter through the company's ethics hotline or legal department and cooperate with any resulting investigation (Correct answer)
- Negotiate directly with the affected subcontractor to resolve the matter privately
- Notify the contracting officer informally without creating a written record
Correct answer: Report the matter through the company's ethics hotline or legal department and cooperate with any resulting investigation
Internal reporting through ethics channels or legal counsel is the proper first step, enabling proper investigation and potentially triggering mandatory disclosure obligations.
Question 7: Under the executive branch gift rules (5 C.F.R. § 2635.204), which exception generally permits a Government employee to accept a gift from a contractor?
- Gifts valued under $100 from any source
- Gifts based on a bona fide personal relationship that predates the employment relationship and is clearly not connected to official duties (Correct answer)
- Any gift offered at an industry-wide conference or trade show
- Gifts to the Government employee's spouse rather than directly to the employee
Correct answer: Gifts based on a bona fide personal relationship that predates the employment relationship and is clearly not connected to official duties
The personal relationship exception permits gifts where the friendship is genuine, pre-existing, and the gift is given for personal—not official—reasons.
CFCM Professional Ethics & Conduct 4
A federal contract manager at a prime contractor discovers a subcontractor is falsifying inspection records.
Under FAR 52.203-13 and the Mandatory Disclosure Rule, the prime is required to: