The necessity of compliance isn’t going anywhere:

That may seem like an obvious statement, but despite declining budgets, many federal agencies will increase audits and fraud investigations in 2015. The Department of Health and Human Services Fiscal Year 2015 Budget in Brief states, “The Budget includes $400 million in discretionary and mandatory funding for the Office of Inspector General (OIG), an increase of $105 million above FY 2014. This increase will enable OIG to expand CMS program integrity efforts for the Health Care Fraud Prevention and Enforcement Action Team…and will enhance investigative efforts focused on civil fraud, oversight of grants, and the operation of Affordable Care Act programs.”

Fraud enforcement can mean increased government revenue. The need for robust compliance programs is not going away in 2015 or the foreseeable future. Contractors must conduct timely internal investigations of any suspected activities which are out of compliance. There is also an increased risk of suspension and debarment, which can be mitigated by a contractor’s strong internal programs. It is imperative that your company has up-to-date compliance programs and dedicated parties to monitor not only trends in compliance, but new compliance regulations.

Large government contractors are devoting more resources to meet government compliance requirements:

The Department of Justice (DOJ) asks contractors to:


1.   Conduct periodic reviews of risk and adjust internal compliance programs accordingly. Be prepared to give a      presentation about your compliance program with very little notice.

2.   Ensure your compliance and ethics program has some degree of independence.

3.   Focus on the actions of individual employees. Show a thorough effort to find parties responsible for any              violations.

It’s becoming easier for contractors to sell commodity items without compliance pushback, but…

That’s one piece of goods news. Commodity items like consumer products will be easier to manage; however, it will be more challenging to sell other items like commercial products and services that are similar, but not identical. This can impact companies with high-end consulting services and services in general.

Watch your pricing. There will be more fraud claims in 2015; pay special attention to your commercial items determinations.


Overall, the government’s efforts to simplify federal contracting remain in flux:

There has been much ado about increasing efficiency, yet some agencies give conflicting guidelines, so stay tuned to see how such efforts evolve. A good source of what’s to come is the Office of Federal Contract Compliance Programs (OFCCP) website. You can join the OFCCP email update list to monitor their latest news here: .

To learn more about government contracting trends and how it affects your business, contact Arrowhead Solutions, LLC.