C-Note: "Working for the Sovereign | Confessing - Not Just a Good Idea, It's the Law"

Working for the Sovereign

The American version of Sovereign rule is our Constitutional form of government. Working for the Sovereign is more likely today as Federal Government dollars continue helping shore up our faltering economy. This and C-Notes that follow will provide summaries of important rules that demarcate some key differences between public and private projects.

Confessing – Not Just a Good Idea, It’s the Law

A controversial new self-reporting rule took effect on December 12, 2008, for General Services Administration (GSA), NASA and the Department of Defense (DOD) projects. Amendments to 48 CFR Parts 2, 3, 9, 42 & 52 (the “Rule”) Generally, it requires practitioners contracting with these agencies to notify, in writing, the Office of the Inspector General, whenever the contractor has “credible evidence” that a principal, employee, agent, or subcontractor of the contractor has committed a violation of the civil False Claims Act or a violation of Federal criminal law involving fraud, conflict of interest, bribery, or gratuity violations in connection with a Federal contract or any related subcontract. There is even a handy form available on-line for a duly “authorized representative empowered to speak for the company” to confess with speed and ease. The Rule also mandates that a contractor must implement standards for internal controls and reporting.

The consequences for failing to abide by this Rule can be dire. A knowing failure by a contractor principal to report when there is credible evidence of a covered violation will likely lead to suspension or debarment from further government projects. The reporting obligation lasts three years after final payment.


The C-Note is a practical guide to and commentary on topical legal issues affecting design professionals.  It is written by John Hawkins, AIA, who is a 20-year lawyer in the Litigation Practice Group of Houston-based Porter Hedges LLP.

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