Overview
FAR Subpart 3.700 outlines the discretionary authority and procedures for the Government to void and rescind contracts tainted by misconduct, such as bribery, conflicts of interest, or the illegal exchange of procurement information.
Key Rules
- Discretionary Authority: The Government has the power to declare contracts void or to rescind them when specific illegal activities occur.
- Triggering Events for Rescission:
- Final Conviction: A formal conviction for bribery, conflict of interest, or the illicit receipt/disclosure of contractor bid or proposal information.
- Agency Head Determination: An official finding by an agency head that procurement information was exchanged for value or competitive advantage, even in the absence of a criminal conviction.
- Non-Exclusivity: These procedures do not limit the Government's ability to pursue other legal remedies, such as common law rights of avoidance, rescission, or cancellation.
Practical Implications
- Contractors risk the total loss of existing contracts if ethical violations or procurement integrity breaches are discovered, regardless of performance quality.
- Because this subpart exists alongside common law remedies, the Government maintains a broad toolkit to terminate relationships with unethical vendors, emphasizing the high stakes of maintaining strict internal ethics and compliance programs.