Overview
This section establishes the government's authority to void and rescind contracts and seek recovery of funds when a contractor is convicted of bribery, graft, or conflicts of interest, or is found to have violated procurement integrity laws. It emphasizes the use of administrative remedies, such as debarment and suspension, to protect the government's interests when a contractor's integrity is compromised.
Key Rules
- Voiding and Rescission for Bribery/Graft: Upon a final conviction for violations of 18 U.S.C. 201-224, the agency head may declare contracts void, rescind them, and recover any expended funds or transferred property.
- Responsibility and Debarment: A conviction under these statutes serves as a trigger for agencies to evaluate the contractor's "present responsibility" and consider initiating debarment proceedings under FAR Subpart 9.4.
- Procurement Integrity Violations: Under 41 U.S.C. 2105, an agency can take action based on either a final conviction or a determination by the agency head—based on a preponderance of the evidence—that a violation occurred.
- Administrative Remedies: In cases of procurement integrity violations, the Head of the Contracting Activity (HCA) must consider both the rescission of contracts and the recommendation of suspension or debarment.
Practical Implications
- Contractors face severe administrative "death penalties" that extend far beyond criminal fines, including the potential loss of all current revenue from affected contracts and a multi-year ban from the federal marketplace.
- The government has a lower burden of proof (preponderance of the evidence) to initiate rescission or debarment for procurement integrity violations than is required for a criminal conviction.