Public construction projects are the backbone of any community, paid for and overseen by the state or local government. They provide infrastructure and jobs, boosting local economies. These kinds of projects are also subject to a slew of regulations that dictate everything from contracts, payroll, hiring, and materials. If these regulations are not followed, the project can turn quickly into a white collar crime scene.
“We find that oftentimes companies aren’t very familiar with these regulations, because they’re busy building some of the most sophisticated and complex projects in the Commonwealth and throughout the Northeast. They’re working with owners and designers and subcontractors and vendors, solving problems and getting projects built, efficiently, quickly, and on schedule,” says James J. Barriere, Co-Chair of Hinckley Allen’s Construction & Public Contracts Group.
To stave off any potential civil or criminal liability, a robust compliance program is your best bet. Here’s what good programs have in common.
Compliance is an on-going process, not a one-time thing
Compliance programs should be designed to keep both internal and external liabilities at bay, whether by deterring implicit or accidental fraud or by cutting out corruption. Compliance is not just a noun, it’s a verb- an action that you and everyone you work with must take in order to insulate your company from future prosecution. What contractors might not be mindful of is that, while they’re working hard to successfully complete those amazing projects, there are government regulators and oftentimes prosecutors who are looking very closely at how these projects are being overseen and what steps contractors are taking to make sure that they are compliant with the rules and regulations that govern public contracting. Identify one person within your organization whose responsibility it is to keep tabs on the project and how it stacks up to the rules and regulations.
Compliance language should not be complicated
A compliance program that is rife with jargon, legalese, and presumptions is useless. As you build your protocols, William F. Sinnott, a Partner in Hinckley Allen’s Litigation group, recommends that you take a cue from Napoleon’s military leadership. “Napoleon’s generals, sub-generals, and colonels would plan the battle and he would have them brief it to their senior staff, battlefield operators, and leaders, but he would always put a corporal in that room. Then, at the end of the briefing, he’d turn to the corporal and say, ‘All right, in your own words, tell me what you and everyone else has to do.’ And if the corporal couldn’t do it, Napoleon made them do it all over again.” Everyone that may come into contact with your organization or may put your enterprise and your leadership and your employees in jeopardy, must understand the program and what their role is in that program. If they can’t, it’s deficient.
Education is the cornerstone of all good compliance programs
Once your organization has created clear compliance protocols, you must take the time to educate everyone on them. “Compliance programs can protect you, your employees, and the company, but they must be clear and effective documents that all employees – not just leadership or supervisors – can understand and on which all are trained and monitored with documentation of all the training and monitoring,” said Sinnott. Training and education can easily be handled with webinars and regular communication. While it is paramount that everyone within your company be routinely exposed to and oriented to the compliance protocols, you must also make sure that companies and partners you work with outside of your organization are also following the proper procedures.
If this sounds like a lot of work, that’s because it is. No one will tell you that compliance is a simple item on a checklist. You can be sure, however, that having a robust compliance program will pay off in the long-run and could even keep you from civil and criminal penalties. “Rather than looking at compliance programs as a burden, you should consider the benefits, which can be tremendous for your employees and for the company. These programs educate employees on the standards, protocols, and expectations of your company. They reinforce a company mindset of uncompromising integrity. And in providing real protection against enforcement actions and prosecutions, it can save your company,” says Sinnott.
For additional information, please contact one of the authors listed above, or any member of our Government Enforcement & White Collar Defense or Construction & Public Contracts Practice Groups.
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