ENHANCING SUPPLIER ETHICS AND COMPLIANCE
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CONTENT
SUPPLY CHAIN MANAGEMENT SUPPLIER CODE OF CONDUCT ETHICS PROGRAM EXPECTATIONS SUPPLIER TOOLS ON ETHICS ENGINEERING quality
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SUPPLY CHAIN MANAGEMENT
Suppliers must create accurate records, not conceal or misrepresent transactions, and comply with FAR 4.703 requirements and NARA requirements for U.S. Government contracts and prescribed work. ACCURATE RECORDS Suppliers must uphold human rights by treating people with respect, encouraging diversity, promoting equal opportunity, and fostering an inclusive culture, while avoiding any adverse impacts on others. HUMAN RIGHTS
HUMAN TRAFFICKING
Suppliers must comply with human trafficking regulations, educate employees, discipline violators, and inform contracting officers of violations in all contracts.
Suppliers are prohibited from the following in all contracts:
Utilizing forced labor, slavery, or trafficking. Destroying or destroying identity or immigration documents. Employing misleading recruitment tactics. Charging employee recruitment fees or providing inadequate housing. Failing to provide employment contracts in native language. Failing to provide return transportation for U.S. government contract employees. Failing to interview and protect suspected trafficking victims. Hiring prostitutes or engaging in trafficking-related activities.
NNS has added tools to its supplier website to help them enhance their internal ethics and compliance programs. These tools include templates, posters, codes of ethics, and company values. ETHICS AND COMPLIANCE NNS contracts require ethics and compliance, including DoD contracts, and expect suppliers to have management systems to support compliance with laws, regulations, and Supplier Code of Conduct expectations. NNS SUPPLIER AND ETHICS COMPLIANCE
SUPPLIER CODE OF CONDUCT
This training is not meant to alter existing contract terms, and suppliers must adhere to applicable laws, contract terms, and this Code of Conduct in case of conflict. GENERAL DISCLAIMER
COMPLIANCE WITH LAWS
HII upholds high ethical standards for business conduct, requiring adherence to Company Values, Code of Ethics, and strict adherence to U.S. and foreign laws. All stakeholders, including suppliers, are responsible for integrity and consequences.
ACCURATE RECORDS
Suppliers must maintain accurate records, not conceal transactions, and comply with FAR 4.703 and relevant agency or NARA requirements, even when no longer needed for business.
EMPLOYMENT PRACTICES HARASSMENT
Suppliers are obligated to provide their employees with an environment free from physical, psychological, and verbal harassment or other abusive conduct.
NON-DISCRIMINATION
Suppliers must ensure equal employment opportunities for all employees and applicants, regardless of race, ethnicity, religion, or disability, as long as essential job functions can be performed competently.
SUBSTANCE ABUSE
Suppliers must maintain a workplace free from illegal use, possession, sale, or distribution of controlled substances.
Suppliers are required to adhere to all anti-corruption laws, directives, and regulations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act. ANTI-CORRUPTION
IMPROPER PAYMENTS
Suppliers are prohibited from making improper payments to government officials or political parties for business or obtaining visas or customs clearances, unless there's an imminent health or safety threat.
DUE DILIGENCE
Our suppliers are expected to conduct thorough investigations to prevent and detect corruption in all business transactions, including partnerships, joint ventures, offset agreements, and consultant hiring.
GIFTS/BUSINESS COURTESIES
Suppliers must compete on product merits, avoid unfair advantage through business courtesies, ensure legality, compliance with recipient's rules, and market customs in business relationships.
INSIDER TRADING Suppliers and personnel are prohibited from using non-publicly disclosed information obtained during business relationships with us for trading or enabling others to trade in HII or other company securities. Suppliers must comply with antitrust and competition laws, refraining from fixing prices, rigged bids, exchanging pricing information, participating in cartels, or engaging in unlawful restraint of competition. ANTI-TRUST & FAIR COMPETITION CONFLICTS OF INTEREST Suppliers are required to avoid conflicts of interest in their dealings with HII and must inform affected parties of any actual or potential conflicts of interest. Suppliers are expected to handle sensitive information responsibly, comply with intellectual property laws, and ensure proper cybersecurity controls for electronic transmissions, unless authorized by the owner. INFORMATION PROTECTION ENVIRONMENT, HEALTH AND SAFETY Suppliers must actively manage risk, conserve resources, and protect the environment, adhering to environmental management system principles and complying with relevant laws and regulations.
GLOBAL TRADE COMPLIANCE
The US Department of Homeland Security's Customs-Trade Partnership Against Terrorism initiative encourages suppliers to implement security practices and procedures in their supply chains. SECURITY Suppliers are required to adhere to all relevant laws, directives, and regulations regarding the import of various components, systems, equipment, software, and technical data. IMPORT Suppliers must adhere to all laws, directives, and regulations governing the export of parts, components, systems, equipment, software, technical data, and services to foreign individuals. EXPORT The 1977 Export Administration Act and the 1976 Tax Reform Act mandate that suppliers are prohibited from participating in, cooperating with, or supporting any unapproved foreign economic boycott. ANTI-BOYCOTT
QUALITY HII expects suppliers to adhere to quality standards by implementing quality assurance processes to identify defects and corrective actions. They must also develop and maintain methods to minimize the risk of introducing counterfeit parts and materials into deliverable products. RESOURCES HII resources including time, property, information, and services should be used only for authorized business purposes. Correct time charging is crucial for employee compensation, customer billing, cost estimation, contract allocation, and performance reporting. Accurate time records and timely submission of expenses are mandatory. Disruptive or offensive use of electronic media is prohibited. Information is considered an asset, and misuse is prohibited, especially sensitive procurement information. HII information must be handled and safeguarded in strict compliance with security procedures. Those acting on HII's behalf are prohibited from circumventing internal controls or providing misleading information.
ETHICS PROGRAM EXPECTATIONS
Suppliers must offer employees safe channels to voice legal or ethical concerns without fear of retaliation, and take steps to prevent, detect, and rectify retaliatory actions. WHISTLE BLOWER PROTECTION We expect our suppliers to have management systems for compliance with laws and regulations, and encourage them to implement their own written code of conduct and pass it on to their suppliers. ETHICS POLICIES
In the event of a violation of any of the above expectations, we may pursue corrective actions to remedy the situation. In the case of a violation of law or regulation, we may be required to report those violations to proper authorities. We reserve the right to terminate our relationship with any supplier under the terms of the existing procurement/purchasing contract VIOLATIONS
SUPPLIER TOOLS ON ETHICS
The tool provides suppliers with reference materials for a robust ethics and compliance plan, which can be used and updated to support their program.
The DoD Instruction 7050.01 mandates the publicizing of the DoD Hotline Program, encouraging the community to report suspected fraud, waste, and mismanagement in DoD programs. DOD HOTLINE POSTER Defense contractors and subcontractors have whistleblower rights, and a reprisal compliant can be filed with the DoD Hotline or HII Openline. DOD WHISTLEBLOWER POSTER This policy outlines a company's compliance with Mandatory Disclosure requirements set by the Federal Acquisition Regulation (FAR), for reference only and at consumer's own risk. EXAMPLE OF A MANDATORY DISCLOSURE PROCEDURE This template provides a guide for case management, detailing the life cycle from addressing concerns to implementing corrective actions at the consumer's own risk. EXAMPLE OF A CASE MANAGEMENT PROCEDURE This policy confirms a company's commitment to non-retaliation and supports individuals seeking advice, raising concerns, or reporting misconduct in good faith. EXAMPLE OF A NON-RETALIATION PROCEDURE
EXAMPLE OF A CODE OF ETHICS OR CONDUCT POLICY
This template serves as a reference for developing a code of conduct or ethics, serving as both an internal guideline and an external statement of corporate values.
EXAMPLE OF A CODE OF CONDUCT OR ETHICS
This template serves as a reference for developing a code of conduct or ethics, serving as both an internal guideline and an external statement of corporate values.
DETERMINING COMPANY VALUES Identify your company's values, which will form the basis of your ethics program. Engage with leadership and employees through focus groups, questionnaires, or employee suggestions. Defining ethical ideals is crucial for code development or ethics programs. Draft a definition for each value, ensuring employees understand your views and priorities.
QUESTIONS TO CONSIDER: Who are the stakeholders of our company? What do we stand for? What is most important to us? What do we believe in? How do we want to be perceived?
What are your personal values? What are your professional values? What was the philosophy of the founders/owners of our company? What do we write about our company in our ads or other marketing materials?
EXAMPLE OF COMPANY VALUES:
DFARS clause 252.246-7007 addresses unauthorized reproduction, substitution, or alteration of counterfeit electronic parts. This includes mismarking, misidentification, and false identification of parts. It applies to all electronic parts, including commercial items and suppliers. HII conducts due diligence to prevent counterfeit acquisition. COUNTERFEIT ELECTRONIC PARTS
Human trafficking is an illegal act involving force, fraud, or coercion to compel victims into sexual exploitation, labor without compensation, or other unlawful activities. The US Government has adopted a zero-tolerance policy, prohibiting contractors and employees from engaging in trafficking, commercial sex acts, or forced labor. HUMAN TRAFFICKING Severe forms of trafficking in persons, including: Involves commercial sex acts induced by force, fraud, or coercion. Involves individuals under 18 years of age. Recruitment, transportation, provision, or obtaining for labor or services. Purpose: Subjection to involuntary servitude, debt bondage, or slavery. Commercial sex act procurement. Use of forced labor in company business performance. Individuals involved in such activities may face disciplinary action, including termination of their customer contract or employment. Cybersecurity is crucial for adapting to external threats and vulnerabilities. HII promotes collaboration among personnel and organizations. The new DFARS clause 252.204-7012 must be included in all new Department of Defense prime contracts and subcontractors. Individuals involved in such activities may face disciplinary action, including termination of their customer contract or employment.
Key definitions defined by DFARS 252.204-7012: "Covered Contractor Information System" and "Controlled Technical Information" Covered contractor information system: Owned or operated by a contractor for processing, storing, or transmitting covered defense information. Controlled technical information: Military or space-application technical information subject to controls on access, use, reproduction, modification, performance, display, release, disclosure, or dissemination. Cyber incident: Actions resulting in adverse effects on an information system or its residing information. The new clause contains two principal requirements that apply to all contractors at every tier: Implement adequate security measures to safeguard unclassified controlled technical information within contractor information systems from unauthorized access and disclosure Report cyber incidents within 72 hours of the event We recommend starting the assessment process for your information system security to ensure compliance with the clause in future procurement solicitations or annual certifications.
HUMAN TRAFFICKING
DOCUMENT GUIDE
CYBERSECURITY
Cybersecurity promotes effective strategies and collaboration, requiring DFARS clause 252.204- 7012 in all new Department of Defense prime contracts and subcontractors, ensuring cybersecurity and cyber incident reporting.
Key definitions defined by DFARS 252.204-7012:
• A covered contractor information system is an entity owned or operated by a contractor that manages, stores, or transmits covered defense information. • Controlled technical information, military or space-related, is subject to restrictions on access, use, reproduction, modification, performance, display, release, disclosure, or dissemination, meeting DoD Instruction 5230.24 distribution statement criteria. • A cyber incident refers to actions taken using computer networks that can have a significant or potentially harmful impact on an information system or its contents. Implement adequate security measures to safeguard unclassified controlled technical information within contractor information systems from unauthorized access and disclosure Report cyber incidents within 72 hours of the event The new clause contains two principal requirements that apply to all contractors at every tier: We encourage you to begin the process necessary to assess your information system security so that you will be prepared to certify your compliance with the clause when you respond to a future procurement solicitation or submit the annual certifications and representations.
CONFLICT MINERALS
The U.S. Securities and Exchange Commission (SEC) adopted rules in 2012 implementing Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, requiring disclosure and due diligence for companies manufacturing products containing conflict minerals from countries like the Democratic Republic of the Congo, Angola, Burundi, Rwanda, South Sudan, Tanzania, Uganda, and Zambia.
REFERENCE MATERIALS
Conflict Minerals Frequently Asked Questions (FAQs) (Nov 4, 2014) Supplier Notification Letter (Jan 2, 2013)
FORMS
Conflict Minerals Reporting Template
SPARS TRAINING
The SPARS training module is embedded in SPARS, allowing users to create, query, or search for submittals. After navigating to "NNS Forms," an NNPI Warning appears, requiring OK to open the Active Forms Screen.
ENGINEERING
COMPLEX/CRITICAL (C/C) PARTS
Complex/Critical (C/C) parts are high-level manufacturing components used in critical applications with high failure consequences. NNS Engineering evaluates their complexity and determines if the risk warrants classification. C/C parts receive additional procurement oversight, including technical assessments and quality audits. They are identified on Purchase Orders.
NNS conducts numerous material investigations annually due to non-conformances in shipboard installation, causing delays and impacting ship costs. Technical assessments are necessary to ensure suppliers understand and execute key technical requirements throughout the design, manufacture, assembly, and test process. SUPPLIER TECHNICAL ASSESSMENTS
When Newport News Shipbuilding (NNS) performs a Supplier Technical Assessment and Validation (STAV), expect the following: On-site evaluation to observe operations, review procedures, and discuss with craftsmen and management. Conducted by NNS Subject Matter Experts (SMEs) paired with Supplier representatives for one-on-one discussions. Duration of one or two days, depending on Supplier size, part complexity, and SME needs. Includes a Supplier presentation on core competencies/capabilities, a facility tour, and breakout sessions. Concludes with an Assessment Report detailing strengths, weaknesses, risks, and recommended mitigation actions. Post-visit, NNS briefs the STAV report and establishes a risk mitigation or development plan if needed.
SUPPLIER TECHNICAL ASSESSMENTS
POOR SPECIFICATION
SUPPLIER PERFORMANCE ADVOCATES
SUPPLIER ENGINEERING ADVOCATES
STAV
QUALITY AUDITS
MATERIAL FAULTS
SCM PROJECT MANAGEMENT
SDCI
INADEQUATE CAPABILITY
FAULTY EXECUTION
SCM RISK MANAGEMENT
QUALITY
navsea technical publication
MIL-STD- 2035 A(SH) DEPARTMENT OF DEFENCE TEST METHOD NONDESTRUCTIVE TESTING ACCEPTANCE CRITERIA
T9074-AS-GIB-010/ 271 REQUIREMENTS FOR NONDESTRUCTIVE TESTINGTEST METHOD
S09074-AR-GIB-010/ 278 REQUIREMENTS FOR FABRICATION WELDING AND INSPECTION, AND CASTING INSPECTION AND REPAIR FOR MACHINERY, PIPING, AND PRESSURE VESSELS
S9074-AQ-GIB-010/ 248 D REQUIREMENTS FOR WELDING AND BRAZING PROCEDURE AND PERFORMANCE QUALIFICATION
Welding, governed by physics and involving the four states of matter, is regulated by standards like AWS D1.1 and ASME Boiler and Pressure Vessel Code Section IX. These standards share similarities with Navy fabrication specifications (e.g., Tech Pub 1688, PPD 802-7094539, Tech Pub 278) but have nuanced differences. Full compliance with Navy standards necessitates a comprehensive welding quality control system, beyond just approved procedures and qualified welders. NAVY WELDING QUALITY CONTROL SYSTEM Compliant Navy welding systems take months to a year, requiring skilled personnel and careful planning, posing risks to cost and schedule constraints.
PARTS OF A WELDING QUALITY CONTROL SYSTEM
Navy fabrication specifications (e.g., Tech Pub 1688, PPD 802-7094539, Tech Pub 278) Quality manual delineation of responsibilities, procedures, and material control. Filler metal procurement to MIL-Spec requirements Verification of filler metal composition and mechanical properties at receipt inspection Storage and control of filler metal in production Surveillance of welders to ensure compliance with approved welding procedures Preheat and interpass temperature controls (where, when, and how) Welding equipment calibration and maintenance Welder quarterly qualification maintenance system and annual vision test Welder workmanship training and certification Post-weld heat treatment procedures and controls Control and documentation of base metal weld repairs Flow down of welding and NDT requirements to suppliers with appropriate oversight of their activities
NNS requires on-site welding and NDT audits for verification of items. Suppliers must comply with Navy requirements, pay attention to Purchase Orders, and obtain necessary documents. NNS supplier training modules, NNS Buyer or Supplier Engineering Advocates assistance, and NavWeld and NavNDT software are recommended for documenting procedures and qualifications, streamlining document development and approval.
NavWeld
NavNDT
These are free services for US Navy suppliers and sub-tier suppliers. For access send an email to Troy Paskell at paskell@weldqc.com
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