Overview
This section defines the reach of Subpart 3.4, which establishes regulatory limits and procedures regarding the use of contingent fee arrangements in the pursuit of government contracts. It ensures these arrangements align with specific statutory requirements aimed at preventing improper influence.
Key Rules
- Restricted Arrangements: The subpart strictly limits the use of fees that are contingent upon the successful solicitation or procurement of a government contract.
- Statutory Compliance: All permitted contingent fee arrangements must conform to the standards set forth in 10 U.S.C. 3321(b)(1) (applicable to military agencies) and 41 U.S.C. 3901 (applicable to civilian agencies).
- Regulatory Scope: This section serves as the foundational authority for subsequent rules regarding the "Covenant Against Contingent Fees."
Practical Implications
- Contractors must exercise caution when hiring third-party consultants or "finders," ensuring that compensation structures do not violate federal prohibitions against "influence peddling."
- Failure to comply with these restrictions can lead to severe consequences, including contract annulment, debarment, or the recovery of the contingent fee amount by the Government.