CPCM Certified Professional Contract Manager: Ethics and Compliance 4 — Questions and Answers
Question 1: A contractor's ethics training program must be conducted at least:
- Once every five years
- At the time of hire and periodically thereafter as required by the program (Correct answer)
- Only when a violation is detected
- During the final year of each contract
Correct answer: At the time of hire and periodically thereafter as required by the program
FAR 52.203-13 and best practices require initial ethics training at hire and periodic refresher training, with frequency determined by the contractor's program.
Question 2: When a contracting officer suspects a contractor is engaged in bid rigging, the APPROPRIATE action is to:
- Award the contract and monitor closely
- Report the suspicion to the Inspector General or Department of Justice (Correct answer)
- Negotiate directly with the lowest bidder
- Cancel the procurement and re-solicit without notifying authorities
Correct answer: Report the suspicion to the Inspector General or Department of Justice
Bid rigging is a criminal antitrust violation that must be reported to the Inspector General or DOJ, not simply managed through contract administration.
Question 3: Which of the following is an example of improper business practices that could constitute fraud in contracting?
- Submitting a timely invoice for work actually performed
- Charging costs to a government contract that are allocable to a commercial contract (Correct answer)
- Requesting a no-cost contract extension
- Providing voluntary progress reports ahead of schedule
Correct answer: Charging costs to a government contract that are allocable to a commercial contract
Misallocating costs from commercial work to a government contract is a form of cost mischarging, which constitutes fraud under the False Claims Act.
Question 4: The Procurement Integrity Act prohibits disclosing contractor bid or proposal information for a period of:
- 30 days after contract award
- The entire period the information is protected as a trade secret or for 3 years, whichever is longer (Correct answer)
- 1 year after contract completion
- Until the contractor consents to disclosure
Correct answer: The entire period the information is protected as a trade secret or for 3 years, whichever is longer
The Procurement Integrity Act protects contractor bid or proposal information for the duration its trade secret status applies or three years post-award, whichever is longer.
Question 5: A contract manager who has a personal financial interest in a contractor's stock should:
- Participate normally as long as the interest is less than $5,000
- Divest the financial interest or recuse themselves from matters involving that contractor (Correct answer)
- Disclose the interest to their team and continue working on the contract
- Report the interest only if asked during an audit
Correct answer: Divest the financial interest or recuse themselves from matters involving that contractor
Federal ethics rules require divestiture or recusal when a personal financial interest could be affected by official actions, regardless of the dollar amount in many cases.
Question 6: Which statement BEST describes the relationship between ethics and contract law?
- Ethics and contract law are completely separate and never interact
- Ethical obligations may extend beyond legal minimums, requiring higher standards of conduct (Correct answer)
- Legal compliance always satisfies ethical obligations
- Ethics rules override contract law in all disputes
Correct answer: Ethical obligations may extend beyond legal minimums, requiring higher standards of conduct
Ethical standards often demand conduct above what is strictly required by law, as professional integrity involves more than mere legal compliance.
Question 7: An internal ethics audit reveals minor compliance gaps that do not rise to the level of fraud. The contract manager should:
- Disregard them since no fraud occurred
- Document the findings and implement corrective actions to prevent escalation (Correct answer)
- Report them directly to the Department of Justice
- Terminate the responsible employees immediately
Correct answer: Document the findings and implement corrective actions to prevent escalation
Minor compliance gaps should be documented and corrected proactively to prevent them from growing into significant violations.
CPCM Certified Professional Contract Manager: Ethics and Compliance 4
A contractor's ethics training program must be conducted at least: