Limitation on Payments to Influence Certain Federal Transactions
Contractors must not use appropriated funds to influence federal officials regarding contract actions and must disclose any lobbying activities, ensuring compliance throughout their subcontracting chain.
Overview
FAR 52.203-12 prohibits contractors and their subcontractors from using appropriated funds to pay any person to influence or attempt to influence federal officials in connection with the award, extension, renewal, amendment, or modification of federal contracts, grants, loans, or cooperative agreements. The clause defines key terms, outlines specific exceptions (such as certain agency and legislative liaison activities and professional/technical services), and establishes disclosure, penalty, and subcontract flow-down requirements. Contractors must disclose lobbying activities using OMB Standard Form LLL and ensure compliance throughout their subcontracting chain for contracts exceeding the threshold in FAR 3.808. Violations can result in civil penalties and other remedies.
Key Rules
- Prohibition on Use of Appropriated Funds
- Contractors cannot use appropriated funds to influence federal officials regarding covered federal actions.
- Exceptions
- Certain agency and legislative liaison activities and professional/technical services are permitted if they meet specific criteria.
- Disclosure Requirements
- Contractors must submit OMB Standard Form LLL if lobbying occurs and update disclosures within 30 days of any changes.
- Penalties
- Violations may result in civil penalties and other remedies.
- Subcontractor Flow-Down
- The clause must be included in subcontracts exceeding the FAR 3.808 threshold, and disclosures must be collected and forwarded up the chain.
Responsibilities
- Contracting Officers: Ensure inclusion of the clause, monitor compliance, and collect required disclosures.
- Contractors: Prohibit use of appropriated funds for lobbying, submit required disclosures, flow down the clause, and retain documentation.
- Agencies: Enforce compliance and assess penalties for violations.
Practical Implications
- This clause exists to prevent improper influence in federal contracting and ensure transparency in lobbying activities.
- Contractors must have robust internal controls to track lobbying expenditures and ensure timely disclosures.
- Common pitfalls include failing to flow down the clause, missing disclosure deadlines, or misunderstanding what constitutes a covered federal action or permissible activity.