Fred’s FAR Fact or Fiction: The Gift Rule

Fiction:  “I don’t have to worry about gift rules.  The ‘Standards of Conduct’ (5 C.F.R. 2635), and FAR 3.101 don’t address contractors – they only apply to government employees.  So I’ll let them worry about it.  Anyway, who will know?  And when there’s a violation, the prosecutors only go after the government employee.”

Fact:  This is a dangerous misconception.  Acting on it may lead directly to the unemployment lines, or worse.

First, contractors are subject to criminal penalties, including jail time, if they violate the federal bribery/gratuities statute.  Under 18 U.S.C. 201, anyone who “gives, offers, or promises anything of value to any public official” with intent to “influence any official act” or to “induce” an action or omission [bribe] or “for or because of any official act performed or to be performed by such public official” [gratuity] is subject to fines and imprisonment.

Maybe you think your motive is not corrupt, as defined by the statute.  Maybe you just want to improve the lot of a hard-working public servant.  Maybe you simply want to “improve your relationship.”  Maybe you want to “share the wealth.”  But will the investigator and prosecutor see it your way?  Will the jury?

And the FAR brings these concerns directly into the procurement system.  FAR 52.203-3, the Gratuities clause, states that a contract may be terminated (presumably for default) and the contractor may be fined if after notice and hearing the agency head or designee determines that the contractor (or its agent) offered or gave a gratuity in order to obtain a contract or favorable treatment.  This administrative action doesn’t require a prosecutor, and doesn’t require proof “beyond a reasonable doubt.”

Second, even if a prosecutor might agree that your violation was “technical” rather than corrupt, is it really good business to put your customer in a compromising position?  How much will your relationship be “improved” if your customer is disciplined or, even worse, loses his or her job?  Your customer undoubtedly has colleagues and friends.  A good reputation takes a long time to build, but it can be demolished in an instant.

But “who will know?”  Information comes out in many unexpected ways.  Government employees have calendars and expense reports.  More important, they may have enemies – an unhappy subordinate who wanted the same job, a disgruntled former employee, etc.  Mr. Anonymous makes many accusations to the Inspector General – and the IG must investigate each one.

Finally, even if the prosecutor does consider you a “small fish” and is out for bigger game, do you really want to spend your time in the witness preparation room?  How do you want to spend your summer vacation?

Want to learn more about FAR Facts and Fiction?  Sign up for the FAR Workshop or FUN with the FAR

This is part three of a multi-part series. If you are new to the series, we welcome you to check out part one and two.

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