In honor of the release of the 6th Edition of the Government Contracts Compliance Handbook, we present six essential tips for government contractors navigating the complexities of parallel proceedings and global settlements. These strategies offer contractors the guidance they need to protect their interests across simultaneous government investigations and manage the challenges of securing a comprehensive settlement. The insights below highlight key practices to manage legal risks effectively and demonstrate our expertise as a resource for contractors seeking legal assistance.
1. Recognize and Prepare for the Risks of Parallel Proceedings
When a company is under investigation, it may face multiple, concurrent proceedings across criminal, civil, and administrative fronts, known as parallel proceedings. These overlapping investigations can strain resources, and the company's response in one proceeding may inadvertently impact others. For example, disclosures made in a civil investigation can influence a criminal case or vice versa.
To mitigate this risk, government contractors should coordinate all responses and strategy across proceedings. Engaging legal counsel who can oversee and manage a comprehensive defense approach is crucial, ensuring that actions in one case do not compromise positions in others.
2. Carefully Handle Privileged Information
One of the greatest challenges in parallel proceedings is managing privileged information, as any disclosure in one proceeding can risk waiving privileges in other proceedings. For instance, voluntarily sharing internal investigation findings with one agency may expose that information to other agencies or even in private lawsuits.
To protect privileged information, contractors should seek legal guidance before making any disclosures and consider implementing protective measures, such as confidentiality agreements with agencies. Being proactive in protecting privileged materials helps avoid inadvertent waivers that could otherwise compromise the defense.
3. Manage Employee Communication and Morale
Parallel proceedings not only create legal and operational risks but can also affect employee morale and productivity. Employees may feel the pressure of potential interviews, increased documentation requirements, and the uncertainty of the company's future. Key personnel may even leave if they perceive the organization to be at heightened risk.
To address this, contractors should maintain clear, transparent communication with their employees while limiting specific discussions about the proceedings. Providing training on how to handle government inquiries and offering resources to support employees during the investigation can alleviate concerns and maintain morale.
4. Be Proactive About Negotiating a Global Settlement
When facing parallel proceedings, contractors should consider, to the extent possible, negotiating a global settlement—a comprehensive agreement that resolves all criminal, civil, and administrative issues simultaneously. While this approach requires coordinating with multiple agencies, a global settlement can save time, reduce costs, and prevent inconsistent outcomes across proceedings.
A well-negotiated global settlement minimizes the risk of additional sanctions, negative publicity, and the operational challenges of ongoing litigation. By working proactively with experienced counsel, contractors can push for an agreement that addresses all related matters in a single resolution.
5. Understand the Benefits of Coordination Across Proceedings
Contractors involved in parallel proceedings benefit from closely coordinating their defense efforts across criminal, civil, and administrative cases. Close coordination allows for consistent defense strategies, more efficient document production, and reduced discovery costs. Moreover, a unified approach helps manage public perception, especially in cases where multiple government entities may release information about the investigations.
Effective coordination often involves regular communication among legal teams, sharing information between proceedings to ensure consistency, and establishing internal processes for document management and disclosure tracking.
6. Leverage a Strong Compliance Record in Negotiations
When negotiating settlements, a contractor's history of compliance and proactive remedial actions can be influential. Demonstrating a robust ethics and compliance program and commitment to preventing future issues may sway government agencies to take a more lenient stance in settlements. Agencies often appreciate contractors who can show they acted promptly and proactively to investigate and rectify issues, which can lead to reduced penalties and favorable terms.
Maintaining a strong ethics and compliance program not only protects against potential infractions but also positions the company as a cooperative, responsible entity during negotiations. Regular audits, training, and policy updates can serve as evidence of a contractor's ongoing commitment to compliance and can be valuable assets in settlement discussions.
Parallel proceedings and global settlements present unique challenges for government contractors, but with the right approach, these challenges can be navigated effectively. These six essential tips, drawn from the 6th edition of the Government Contracts Compliance Handbook, provide a roadmap to managing risks, protecting privileged information, and achieving a favorable resolution in complex, high-stakes investigations. Our team is here to guide contractors through these multifaceted processes with seasoned expertise and practical strategies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
