FAR 52.203-13: the contractor code of ethics rule
Moving up to bigger federal jobs brings compliance clauses that small projects never trigger. One of the most important is the Contractor Code of Business Ethics and Conduct clause.
- The clause goes in contracts expected to exceed $7.5 million with a performance period of 120 days or more.
- Within 30 days of award you need a written code of business ethics and must make it available to each employee working on the contract.
- You must timely disclose in writing to the agency OIG credible evidence of certain fraud, bribery, conflict-of-interest or gratuity crimes, or civil False Claims Act violations.
- The formal training program and internal control system (within 90 days) don't apply to small businesses or commercial-product contracts.
When it applies
FAR 3.1004, contract clauses (ethics and hotline posters) says to insert FAR 52.203-13 when "the value of the contract is expected to exceed $7.5 million and the performance period is 120 days or more." A related hotline poster clause, 52.203-14, applies above $7.5 million in some cases.
What you must do
Under FAR 52.203-13, Contractor Code of Business Ethics and Conduct, within 30 days after award (unless the contracting officer allows longer), the contractor must "have a written code of business ethics and conduct" and "make a copy of the code available to each employee engaged in performance of the contract." You must also exercise due diligence to prevent and detect criminal conduct.
Mandatory disclosure
The clause requires the contractor to "timely disclose, in writing, to the agency Office of the Inspector General (OIG), with a copy to the Contracting Officer," whenever it has credible evidence that a principal, employee, agent or subcontractor committed certain federal crimes involving fraud, conflict of interest, bribery or gratuities, or a civil False Claims Act violation, in connection with the contract or any subcontract.
Training and internal controls
Within 90 days after award, contractors must set up an ongoing ethics awareness and compliance program with training, plus an internal control system for timely discovery of improper conduct. That paragraph "does not apply if the Contractor has represented itself as a small business concern" for the award, or for commercial products and services.
Subcontracts
The substance of the clause flows down to subcontracts above the FAR 3.1004(a) threshold with a performance period of more than 120 days.
Before you bid big
- Draft a short, plain-language code now, so you aren't scrambling after award.
- Decide who receives and escalates ethics reports.
- Budget for training if you're not a small business on the award.
Related: SBA Certificate of Competency and GAO bid protest deadlines.
General information, not legal advice. Sources: FAR 3.1004, contract clauses (ethics and hotline posters); FAR 52.203-13, Contractor Code of Business Ethics and Conduct.
Published October 31, 2026. We do not use affiliate links on this page; see our Affiliate Disclosure.