Final Ethics Rule Includes Exemption For Small Contractors Small businesses will not be required to set up formal ethics training or internal controls under a final rule issued by the Federal Acquisition Regulation councils. Large businesses must set up such programs if they hold a federal contract worth more than $5 million, but the FAR councils agreed to exempt small contractors. SBA’s chief counsel for advocacy estimated that set-up costs for training and internal controls would be at least $10,000, with additional costs for retraining and compliance. Small contractors will be required to have a business code of ethics and provide copies of it to their employees. The FAR councils said there are many available sources of sample codes. “The Councils note that if a small business subsequently finds itself in trouble ethically, the need for a training program and internal controls will likely be addressed by the Federal Government at that time, during a criminal or civil lawsuit or debarment or suspension,” the councils said in an explanation of the rule. In a separate rulemaking, the councils have proposed requiring all contractors to report any violation of criminal law in the course of performing a contract. Those who do not report violations could be suspended or debarred. (SAA, 11/23) Comments on that proposed rule, FAR case 2007-006, are due Jan. 14. The final rule, FAR Case 2006-007 in the Nov. 23 Federal Register, takes effect Dec. 24.