3.401 Definitions
Source: FAR 3.401 on acquisition.gov
FAR 3.401 defines key terms to prevent improper influence and ensure ethical practices in the use of contingent fees for government contracts.
Overview
FAR 3.401 provides definitions for key terms used in Subpart 3.4, which addresses contingent fees in government contracting. This section clarifies what constitutes a bona fide agency, bona fide employee, contingent fee, and improper influence. Understanding these definitions is essential for contractors and contracting officers to ensure compliance with rules prohibiting improper influence and the use of contingent fees to secure government contracts. The definitions set the foundation for identifying acceptable and unacceptable practices related to securing government business.
Key Rules
- Bona Fide Agency
- Must be a legitimate commercial or selling agency that does not use or claim to use improper influence to obtain government contracts.
- Bona Fide Employee
- Must be a genuine employee under the contractor’s control who does not use or claim to use improper influence to secure contracts.
- Contingent Fee
- Any fee dependent on the success of obtaining a government contract, such as commissions or brokerage fees.
- Improper Influence
- Any influence that encourages a government official to act on a contract for reasons other than merit.
Responsibilities
- Contracting Officers: Must ensure that contractors and their representatives meet the definitions and do not engage in improper influence or prohibited contingent fee arrangements.
- Contractors: Must only use bona fide agencies or employees and avoid contingent fee arrangements involving improper influence.
- Agencies: Oversee compliance and investigate potential violations.
Practical Implications
- These definitions help prevent unethical practices in government contracting.
- Contractors must carefully vet their agents and employees to ensure compliance.
- Misunderstanding or misapplying these definitions can lead to contract ineligibility or legal penalties.
As used in this subpart-
Bona fide agency means an established commercial or selling agency, maintained by a contractor for the purpose of securing business, that neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds itself out as being able to obtain any Government contract or contracts through improper influence.
Bona fide employee means a person, employed by a contractor and subject to the contractor’s supervision and control as to time, place, and manner of performance, who neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds out as being able to obtain any Government contract or contracts through improper influence.
Contingent fee means any commission, percentage, brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract.
Improper influence means any influence that induces or tends to induce a Government employee or officer to give consideration or to act regarding a Government contract on any basis other than the merits of the matter.