Audits, Investigations & Disclosures

Steptoe’s Government Contracts team has substantial experience in representing government contractors in internal and government investigations in a wide range of compliance-related matters, including defective pricing under the Truth in Negotiations Act, cost accounting, product substitution, labor mischarging, kickbacks, and violations of the False Claims Act and other laws and regulations. 

In an environment where government contractors are facing significant scrutiny by the government, Steptoe assists clients in evaluating and conducting proactive internal investigations of suspected fraud, waste, and abuse in connection with the performance of government contracts.  This experience includes counseling federal government contractors in evaluating and making disclosures under the FAR’s Contractor Code of Business Ethics and Conduct regulations at FAR Subpart 3.10 and FAR clause 52.203-13.  Steptoe has been helping clients with disclosures since the inception of the DoD Voluntary Disclosure Program in 1986, including compliance with contractual disclosure commitments long before such commitments were generally mandated by the FAR. 

Steptoe also regularly represents and counsels both corporate and individual clients in preparing for and responding to government audits, investigations and subpoenas involving the DCAA, Inspector Generals (IG), US Attorneys, and the Department of Justice.  This experience ranges from assisting clients in DCAA and IG audits of costs to advising clients in response to subpoenas and search warrants issued by investigatory agencies.  As appropriate, our Government Contracts team works closely with Steptoe’s White-Collar Criminal Defense team to assist corporate and individual clients in government investigations of procurement fraud and other matters with potential criminal penalties. 

We have had substantial success in resolving audits and investigation without litigation, either by assisting clients in satisfactorily responding to government inquiries or through the use of alternative dispute resolution. 

Any investigation of a government contractor must also consider the impact of potential suspension and debarment proceedings by federal and state procuring agencies.  As a result, Steptoe also counsels clients in taking steps early in the process to improve the client’s posture for demonstrating its present responsibility, and has successfully represented clients in suspension and debarment proceedings resulting from an investigation, audit, and/or disclosure.  Steptoe also advises clients in enhancing internal compliance and ethics policies and practices in light of such investigations and audits.  

Representative Matters

  • Steptoe conducted an internal investigation for a government contractor relating to alleged gratuities provided to government officials.  Steptoe assisted the client in making a disclosure to the agency's IGs and in responding to the IG’s investigation of the matter, which included employee interviews.  Steptoe also assisted the client in developing additional compliance policies, procedures and employee training programs relating to this issue.         
  • Steptoe conducted an internal investigation for a client relating to its cost accounting practices on a contract performed in Afghanistan.  Steptoe assisted the client in making a disclosure to the agency under the FAR 52.203-13.
  • Steptoe assisted a client in responding to an Inspector General audit of, and findings relating to, costs charged to Federal grants for the performance of work in Iraq and Afghanistan, including challenges to costs charged for private security contractors.
  • Steptoe has conducted internal reviews of clients’ compliance under GSA Multiple Award Schedule contracts, including compliance with the Price Reductions clause and disclosures of commercial sales and discounting practices.  This experience includes advising clients on strategies that resulted in the successful implementation of voluntary contract price adjustments, enhancements to compliance procedures for the Price Reductions clause, and revisions to disclosures of commercial sales practices.
  • Steptoe represented a contractor in responding to Government audits of the contractor’s compliance with the contract’s terms for pricing items purchased under a prime vendor contract awarded by the Defense Logistics Agency’s Defense Supply Center of Philadelphia.  The agency’s investigation of contractors was prompted by hearings before Congressional oversight committees.  This matter was resolved in mediation with the agency.  

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