The Importance of Effective Subcontractor Due Diligence

By Joy Charles, ARG Senior Project Manager

Every Chief Executive should periodically assess the veracity of information shared with clients about the effectiveness of subcontractor due diligence reviews by asking: "How is my organization ensuring that appropriate due diligence reviews are conducted?"  When that client is a government agency, the question becomes more about ensuring that subcontractors meet the standards of responsibility as defined in procurement rules such as the Federal Acquisition Regulations Subpart 9.1.  Of course, irrespective of whether the client is in the public or private sector, the bigger question should be: What is the organization doing to create and sustain a culture of compliance with all laws and regulations?  A positive answer to this question is important to ensuring that organizations have the means to detect, prevent and otherwise deter the possibility of fraud, waste, and abuse from infiltrating the organization.  Effective due diligence aligned with corporate values should be the standard for how companies conduct business in the marketplace.  But what exactly, you may ask, is due diligence, and why is it important?

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