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New Rules Face Federal Contractors

Washington, D.C.— A significant amendment to the Federal Acquisition Regulation that will affect federal government contractors took effect on Dec. 12, 2008. According to the law firm Howrey LLP, contractors with federal government contracts of more than $5 million and with performance periods of more than 120 days face more extensive requirements as a result of the amendment.

January 26, 2009

Washington, D.C.— A significant amendment to the Federal Acquisition Regulation that will affect federal government contractors took effect on Dec. 12, 2008.

According to the law firm Howrey LLP, contractors with federal government contracts of more than $5 million and with performance periods of more than 120 days face more extensive requirements as a result of the amendment. And Under FAR (48 CFR) 3.1003 (a) (2–3), all government contractors, regardless of size and duration of the contract, now must report to the federal government "credible evidence" of any of the following:

  • A "violation of Federal criminal law involving fraud, conflict of interest, bribery or gratuity violations. ..."
  • A violation of the civil False Claims Act.
  • Significant overpayments by the federal government.

A contractor may be debarred or suspended for "knowing failure by a principal, until three years after final payment on any Government contract awarded to the contractor, to timely disclose to the government, in connection with the award, performance or closeout of the contract or a subcontract there under," evidence of any of these events. A "principal" includes "an officer, director, owner, partner, or a person having primary management or supervisory responsibility within a business entity. ..."

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