3.104-7 Violations or possible violations
Source: FAR 3.104-7 on acquisition.gov
FAR 3.104-7 mandates prompt assessment, documentation, and escalation of procurement integrity violations, with specific remedies and procedures to protect the integrity of the contracting process.
Overview
FAR 3.104-7 outlines the procedures and responsibilities when a contracting officer becomes aware of a violation or possible violation of procurement integrity statutes (41 U.S.C. 2102, 2103, or 2104). The regulation details the steps contracting officers and agency officials must take to assess the impact of the violation on the procurement process, including documentation, escalation, and potential remedies. It also specifies the roles of the Head of the Contracting Activity (HCA) in reviewing, investigating, and determining appropriate actions, which may include canceling procurements, disqualifying offerors, voiding or rescinding contracts, or referring matters for suspension or debarment. The section emphasizes the importance of proportional remedies and allows for urgent awards under certain circumstances, with proper notification and delegation protocols.
Key Rules
- Initial Assessment by Contracting Officer
- Upon learning of a violation or possible violation, the contracting officer must determine if it impacts the pending award or contractor selection and document the findings.
- Escalation and Review
- If there is no impact, documentation is forwarded for concurrence; if there is impact, or if concurrence is not given, the matter is escalated to the HCA.
- HCA Actions
- The HCA reviews all information and may continue the procurement, initiate an investigation, refer for criminal investigation, conclude a violation occurred, or recommend voiding/rescinding the contract.
- Remedies and Enforcement
- The HCA may direct cancellation, disqualification, contract remedies, voiding/rescinding contracts, or refer for suspension/debarment, depending on the severity and effect of the violation.
- Urgent and Compelling Circumstances
- The HCA may authorize contract award or modification in urgent situations after notifying the agency head.
- Delegation of Authority
- HCA authority may be delegated to a qualified senior official.
Responsibilities
- Contracting Officers: Assess and document violations, escalate as required, and withhold award if directed.
- Contractors: Avoid conduct that violates procurement integrity statutes; cooperate with investigations.
- Agencies/HCAs: Review violations, determine and implement appropriate remedies, and ensure proper documentation and escalation.
Practical Implications
- This section ensures integrity in the procurement process by establishing clear procedures for handling violations.
- It impacts daily contracting by requiring prompt reporting, thorough documentation, and strict adherence to escalation protocols.
- Common pitfalls include failure to document findings, improper escalation, or not applying remedies proportionate to the violation.
(a) A contracting officer who receives or obtains information of a violation or possible violation of http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section2102&num=0&edition=prelim" target="_blank">41 U.S.C. 2102, 2103, or 2104 (see 3.104-3) must determine if the reported violation or possible violation has any impact on the pending award or selection of the contractor.
(1) If the contracting officer concludes that there is no impact on the procurement, the contracting officer must forward the information concerning the violation or possible violation and documentation supporting a determination that there is no impact on the procurement to an individual designated in accordance with agency procedures.
(i) If that individual concurs, the contracting officer may proceed with the procurement.
(ii) If that individual does not concur, the individual must promptly forward the information and documentation to the HCA and advise the contracting officer to withhold award.
(2) If the contracting officer concludes that the violation or possible violation impacts the procurement, the contracting officer must promptly forward the information to the HCA.
(b) The HCA must review all information available and, in accordance with agency procedures, take appropriate action, such as—
(1) Advise the contracting officer to continue with the procurement;
(2) Begin an investigation;
(3) Refer the information disclosed to appropriate criminal investigative agencies;
(4) Conclude that a violation occurred; or
(5) Recommend that the agency head determine that the contractor, or someone acting for the contractor, has engaged in conduct constituting an offense punishable under http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section2105&num=0&edition=prelim" target="_blank">41 U.S.C. 2105, for the purpose of voiding or rescinding the contract.
(c) Before concluding that an offeror, contractor, or person has violated http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter21&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 21, the HCA may consider that the interests of the Government are best served by requesting information from appropriate parties regarding the violation or possible violation.
(d) If the HCA concludes that http://uscode.house.gov/view.xhtml?req=granuleid%3AUSC-prelim-title41-chapter21&saved=%7CZ3JhbnVsZWlkOlVTQy1wcmVsaW0tdGl0bGU0MC1jaGFwdGVyMzctZnJvbnQ%3D%7C%7C%7C0%7Cfalse%7Cprelim&edition=prelim" target="_blank">41 U.S.C. chapter 21 has been violated, the HCA may direct the contracting officer to-
(1) If a contract has not been awarded–
(i) Cancel the procurement;
(ii) Disqualify an offeror; or
(iii) Take any other appropriate actions in the interests of the Government.
(2) If a contract has been awarded-
(i) Effect appropriate contractual remedies, including profit recapture under the clause at 52.203-10, Price or Fee Adjustment for Illegal or Improper Activity, or, if the contract has been rescinded under paragraph (d)(2)(ii) of this subsection, recovery of the amount expended under the contract;
(ii) Void or rescind the contract with respect to which–
(A) The contractor or someone acting for the contractor has been convicted for an offense where the conduct constitutes a violation of http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section2102&num=0&edition=prelim" target="_blank">41 U.S.C. 2102 for the purpose of either-
(1) Exchanging the information covered by the subsections for anything of value; or
(2) Obtaining or giving anyone a competitive advantage in the award of a Federal agency procurement contract; or
(B) The agency head has determined, based upon a preponderance of the evidence, that the contractor or someone acting for the contractor has engaged in conduct constituting an offense punishable under http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section2105(a)&num=0&edition=prelim" target="_blank">41 U.S.C. 2105(a); or
(iii) Take any other appropriate actions in the best interests of the Government.
(3) Refer the matter to the agency suspending and debarring official.
(e) The HCA should recommend or direct an administrative or contractual remedy commensurate with the severity and effect of the violation.
(f) If the HCA determines that urgent and compelling circumstances justify an award, or award is otherwise in the interests of the Government, the HCA, in accordance with agency procedures, may authorize the contracting officer to award the contract or execute the contract modification after notifying the agency head.
(g) The HCA may delegate his or her authority under this subsection to an individual at least one organizational level above the contracting officer and of General Officer, Flag, Senior Executive Service, or equivalent rank.