Jeannine LeCompte, Publishing and Research Coordinator
Occasionally, a long-term care facility (LTC) will engage in a contractual arrangement with the federal government as a prime contractor or subcontractor on federal projects or federally funded projects—whether on the state or federal level. In such an event, the rules pertaining to government contracts have requirements over and above “ordinary” contracts.
These “extra” rules can be divided into four broad categories: recordkeeping, cost and pricing data, quality control, and certification.
1. Recordkeeping: In contrast to “ordinary” contracts, the LTC is obliged to maintain and provide the government with ongoing audit access to accounting and other records. These records must also be kept for as long as the applicable laws require.
2. All costs and labor must be charged accurately and to the appropriate account, regardless of the status of the budget for that account. For example, it is illegal to charge costs to the wrong contract, either by accident or on purpose, or to engage in any adjusting of costs in any manner. Full disclosure of all pricing data must be made as part of all contracts, and no later unilateral changes are allowed. This includes any “unallowable costs” such as advertising, public relations, donations, entertainment, fines and penalties, lobbying, defense of fraud proceedings, and goodwill. Any unallowable costs must not be included in indirect cost proposals as part of the contract.
3. There is also a direct obligation upon all contractors with the state to provide full quality control, testing, and compliance with all specifications as clearly stated in the contract. Any failure to deliver goods and services that do not meet these requirements is a serious breach, and can have fraud, waste, and abuse consequences far beyond “ordinary” civil proceedings.
4. Finally, it is the obligation of the LTC to ensure that its employees, contractors, and subcontractors are not on the list of excluded individuals or entities or debarred contractors, and that personnel will adhere to all rules and regulations as they pertain to federal socioeconomic programs, contract specifications, environmental laws, and procurement regulations.
