Overview
FAR 3.801 defines the terminology used to regulate the use of appropriated funds for lobbying and the "limitation on payments to influence" federal transactions. It establishes the scope of "covered federal actions"—including contracts, grants, and loans—and identifies the specific government officials and private entities subject to these anti-lobbying regulations.
Key Rules
- Covered Federal Action: Broadly encompasses the awarding, making, or modifying of any Federal contract, grant, loan, or cooperative agreement.
- Influencing or Attempting to Influence: Defined as any communication to or appearance before agency officials, Members of Congress, or their staff with the intent to impact a covered federal action.
- Recipient Scope: The term "Recipient" explicitly includes both prime contractors and all levels of subcontractors.
- Regularly Employed Threshold: An employee is only considered "regularly employed" if they have worked for the contractor for at least 130 working days within the year immediately preceding the submission of a proposal.
- Market-Based Compensation: "Reasonable compensation" and "Reasonable payment" are defined by consistency with normal private-sector rates for non-federal work to prevent the use of inflated fees for lobbying purposes.
- Indian Tribe Exclusion: Specific exclusions apply to Indian tribes and tribal organizations regarding certain expenditures and their classification as a "Person" or "Recipient."
Practical Implications
- Tracking Employee Tenure: Contractors must monitor the 130-day employment threshold for staff interacting with the government, as the disclosure requirements for "regularly employed" staff differ from those for outside consultants or new hires.
- Subcontractor Compliance: Because the definition of "Recipient" includes subcontractors, prime contractors must flow down lobbying restrictions and ensure that their entire supply chain adheres to the definitions provided in this subpart.
- Audit Risk: Failure to distinguish between "reasonable compensation" for technical services and payments made for "influencing" can lead to violations of the Byrd Amendment (31 U.S.C. 1352).