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Compliance Training

The Importance of Compliance When Doing Business with the U.S. Government


By Farzad Barkhordari May 19, 2016

compliance us government business

Some may argue that the cost of compliance — including effective training — is high and that there may be better ways to spend money. But the issue is: what happens if you don’t invest in and commit to compliance? The unfortunate answer is that a failure to commit to compliance can lead to the end of your business altogether.

What Can Happen When You Aren’t Committed to Compliance?

Doing business with the U.S. government requires a serious commitment to compliance – both as a contractual matter (in most cases) and also as a practical matter. Why? Because the U.S. government can suspend a company from doing business with it and cancel its contracts mid-stream if it becomes concerned about compliance issues. 

Just ask the Academy for Educational Development (AED), a non-profit in Washington, D.C. that was suspended by the U.S. Agency for International Development (USAID) for “compliance” concerns. And that suspension led to AED having to sell all of its assets – essentially going out of business.

This article in Slate explains more, but not a lot. What is clear is that one of the reasons for the suspension went far beyond any misconduct and instead focused on the lack of “internal controls,” at least as perceived by USAID.

Compliance Issues That Violate the Rules

So, what are some of the compliance issues that can get your company in hot water with the U.S. government? It isn’t always a violation of the rules – it can include the absence of a compliance plan, the absence of a compliance officer or department, and the failure to provide regular, mandatory training of your employees.

In fact, most contracts with the U.S. government require both a compliance plan and compliance awareness training. Training helps in two key ways:

  1. It reinforces the rules to your employees to help keep them (and your company) out of trouble, and
  2. It demonstrates to authorities, including those in the U.S. government, that you take your compliance obligations seriously.

Thus, it is both a sword (use it to arm your employees with knowledge to reduce your risk) and a shield (use it after a bad act by an employee to demonstrate that you take compliance seriously).

Conclusion

By having a comprehensive compliance plan, establishing a culture of compliance, and by providing training to your employees, you can help to reduce your company’s risk.

To learn more about Workplace Answers’ training courses for doing business with the U.S. government, fill out the form on the right.

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