[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR3.402]



[Page 52]

 

            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.