Overview
This section outlines the mandatory reporting requirements for government personnel regarding suspected contingent fee violations and details the specific administrative and legal actions the government can take to penalize such conduct.
Key Rules
- Mandatory Reporting: Government personnel who suspect improper influence or violations of the Covenant Against Contingent Fees must promptly report the matter to the contracting officer or higher authority.
- Authority to Act: The chief of the contracting office is responsible for reviewing the facts and directing enforcement actions when a reasonable basis for suspicion exists.
- Pre-Award Sanctions: The government may reject a bid or proposal if a violation is identified before the contract is awarded.
- Post-Award Remedies: For violations discovered after award, the government maintains the right to annul the contract in its entirety or deduct/recover the amount of the contingent fee.
- Administrative & Criminal Referrals: Violations can lead to formal suspension or debarment proceedings under FAR Subpart 9.4, and suspected criminal or fraudulent matters must be referred to the Department of Justice.
Practical Implications
- Contractors risk not only the immediate loss of a specific contract but also long-term exclusion from the federal marketplace through debarment if they utilize improper "pay-to-play" arrangements.
- The government has a multifaceted "safety net" that allows it to claw back funds or void agreements even after work has commenced, ensuring that unethical procurement practices have severe financial and legal consequences.