[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR3.402]

[Page 51]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 3_IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF INTEREST--Table of Contents
 
                       Subpart 3.4_Contingent Fees
 
Sec.  3.402  Statutory requirements.

    Contractors' arrangements to pay contingent fees for soliciting or 
obtaining Government contracts have long been considered contrary to 
public policy because such arrangements may lead to attempted or actual 
exercise of improper influence. In 10 U.S.C. 2306(b) and 41 U.S.C. 
254(a), Congress affirmed this public policy but permitted certain 
exceptions. These statutes--
    (a) Require in every negotiated contract a warranty by the 
contractor against contingent fees;
    (b) Permit, as an exception to the warranty, contingent fee 
arrangements between contractors and bona fide employees or bona fide 
agencies; and
    (c) Provide that, for breach or violation of the warranty by the 
contractor, the Government may annul the contract without liability or 
deduct from the contract price or consideration, or otherwise recover, 
the full amount of the contingent fee.