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Preventing and Detecting Fraud in HHS Contracting



To:           Heads of Contracting Activity

From:       Martin J. Brown /s/
                Senior Procurement Executive

Subject:    Preventing and Detecting Fraud in HHS Contracting

Attached is a memorandum from the Office of Federal Procurement Policy (OFPP) dated November 14, 2008, informing Federal agencies of the aggressive steps being taken government-wide to prevent, detect and prosecute procurement fraud.

In line with this government-wide initiative and building on HHS’ successful, long-term efforts to combat procurement fraud, ASAM/OAMP remains committed to working with you to prevent and detect procurement fraud at HHS – whether committed by contractors or Federal employees.  We have taken or plan to take the following five steps to support this critical endeavor:

  1. On November 12, 2008, we forwarded you the new FAR rule entitled “Contractor Business Ethics Compliance Program and Disclosure Requirements” (effective December 12, 2008), which may be accessed at: We will consult with you, benchmark with other Federal agencies and seek industry’s perspective on the extent to which the Department should issue supplemental coverage in the HHS Acquisition Regulation – especially in light of the controversial aspects to this FAR rule.
  2. I recommend you explore the website of the National Procurement Fraud Task Force, at, to learn more about how to report procurement fraud and where to find training courses on the subject.  We will ask HHS University to share with its customers any relevant training information on the topic.
  3. ASAM/OAMP will contact appropriate officials within HHS’ Office of Inspector General, Office of General Counsel and Office of Finance, to request their input regarding any additional risk-based measures HHS should take to strengthen procurement-related internal controls, audits, investigations and adjudication.
  4. I ask for your advice on how the Department may continuously hone its methods to address, assess and counteract the risk of procurement fraud through: our day-to-day contract administration efforts; intensive oversight of Purchase Card transactions; regular Procurement Management Reviews; periodic vulnerability evaluations under HHS’ Acquisition Balanced Scorecard; and occasional termination for default and suspension/debarment activities.
  5. ASAM/OAMP will also include this as an agenda topic at our next Executive Committee for Acquisition meeting, which is scheduled for January 15, 2009.  To facilitate our discussions, Dennise March, Alan Schoenberg and I would welcome any thoughts you may have on the matter (including suggested speakers) by December 15, 2008.

Please disseminate this memorandum widely throughout your contracting organizations and program offices.  As a reminder, any suspected fraud or abuse may be reported to the HHS OIG Hotline:  (800)-HHS-TIPS.

cc:      Mike Gerich, OFPP
          Joseph Vengrin, OIG
          Timothy Menke, OIG
          Dan Barry, OGC
          Sheila Conley, DAS/Finance
          Vicki Baldwin, HHS University

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Acquisition Policy Implementation Guidance