49.106
Fraud or other criminal conduct
If fraud or criminal conduct is suspected during contract settlement, the TCO must stop negotiations and report the issue per agency procedures.
Overview
FAR 49.106 addresses the procedures to follow if fraud or other criminal conduct is suspected during the settlement of a terminated contract. The section requires the Termination Contracting Officer (TCO) to immediately halt settlement negotiations and report the suspected misconduct according to the agency's established procedures. This ensures that potential criminal activity is properly investigated and not inadvertently overlooked or compromised during the settlement process.
Key Rules
- Suspicion of Fraud or Criminal Conduct
- If the TCO suspects any fraudulent or criminal activity related to the contract settlement, they must take immediate action.
- Discontinuation of Negotiations
- The TCO is required to stop all ongoing settlement negotiations upon suspicion.
- Reporting Requirements
- The TCO must report the facts of the suspected misconduct following the agency's internal procedures.
Responsibilities
- Contracting Officers: Must be vigilant for signs of fraud or criminal conduct and act promptly by discontinuing negotiations and reporting as required.
- Contractors: Should ensure all settlement activities are transparent and compliant to avoid suspicion or investigation.
- Agencies: Must have clear procedures for reporting and investigating suspected fraud or criminal conduct.
Practical Implications
- This section exists to protect the integrity of the contract settlement process and ensure that any potential criminal activity is addressed appropriately.
- It impacts daily contracting by requiring immediate action and reporting, which can delay settlements but is necessary for compliance and legal protection.
- Common pitfalls include failing to recognize or report suspicious activity, which can result in legal consequences for both individuals and organizations.