52.203-8
Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity
Violations of procurement integrity laws can result in contract cancellation, rescission, and recovery of all funds expended, in addition to other penalties.
Overview
FAR 52.203-8 establishes the Government’s authority to cancel solicitations, rescind contracts, and recover funds if a contractor or related party is found to have engaged in illegal or improper activities related to the procurement process, specifically violations of 41 U.S.C. 2102-2104. This clause is intended to deter and address the exchange or misuse of procurement-sensitive information for personal gain or to obtain an unfair competitive advantage. It outlines the consequences for such violations, including contract cancellation or rescission and the recovery of funds expended under the contract, in addition to any legal penalties.
Key Rules
- Cancellation or Rescission Authority
- The Government may cancel a solicitation or rescind a contract if there is evidence of illegal or improper activity involving procurement information.
- Grounds for Action
- Action may be taken if a contractor or their representative is convicted or found, by a preponderance of the evidence, to have violated procurement integrity statutes for personal gain or competitive advantage.
- Recovery of Funds
- If a contract is rescinded, the Government can recover all funds expended under the contract, in addition to any statutory penalties.
- Non-Exclusive Remedies
- The Government’s rights under this clause are in addition to any other legal or contractual remedies.
Responsibilities
- Contracting Officers: Must enforce this clause, investigate allegations, and take appropriate action if violations are found.
- Contractors: Must avoid any illegal or improper conduct related to procurement information and ensure compliance by their representatives.
- Agencies: Must monitor compliance, investigate potential violations, and pursue recovery of funds and other remedies as necessary.
Practical Implications
- This clause exists to protect the integrity of the federal procurement process and deter misconduct.
- Contractors risk severe consequences, including loss of contract and financial penalties, for violations.
- Common pitfalls include improper handling of procurement-sensitive information or failing to monitor the actions of employees and agents.