Overview
This section implements statutory restrictions that prohibit the U.S. Government from contracting with entities involved in Iran’s energy sector, weapons of mass destruction (WMD) development, or the export of "sensitive technology" used to restrict speech in Iran. It establishes mandatory offeror certifications and severe administrative penalties for false statements, including contract termination and a minimum two-year debarment.
Key Rules
- Mandatory Certifications: Offerors must certify that neither they nor any person they own or control engages in activities sanctionable under the Iran Sanctions Act (specifically regarding the energy sector and WMDs).
- IRGC Transaction Threshold: Offerors must certify they have not knowingly engaged in any significant transaction (exceeding $15,000) with Iran’s Revolutionary Guard Corps (IRGC) or its blocked officials and affiliates.
- Sensitive Technology Ban: Contractors are prohibited from exporting hardware, software, or telecommunications equipment to Iran that is specifically used to disrupt, monitor, or restrict the free flow of information or speech.
- Broad Applicability: The definition of "Person" includes individuals, corporations, business associations, and any successors, as well as governmental entities operating as business enterprises.
- Severe Penalties for False Certification: If a certification is found to be false, the agency must terminate the contract and the contractor faces a mandatory debarment period of at least two years.
- Trade Agreement Exceptions: Certification requirements are generally waived if the acquisition is subject to trade agreements and the products offered are from designated countries.
- Strict Waiver Process: Waivers require Agency Head clearance and approval from the Office of Federal Procurement Policy, based on a determination that the procurement is essential to national security or the national interest.
Practical Implications
- Due Diligence Requirements: Prime contractors must implement robust internal controls and supply chain vetting to monitor the activities of all entities they "own or control" to avoid $15,000+ IRGC transaction triggers.
- Risk of "Corporate Death Penalty": Because the FAR mandates a minimum two-year debarment for false certifications, an administrative error in this area can effectively end a company's ability to do business with the federal government.