New Tax and Felony Disclosure Rule for Fed Contractors

February 12, 2016

Contractors seeking federal projects should be aware of a new rule that prohibits the Federal government from entering into contracts with any corporation that:

  • Has any unpaid federal tax liability that is not being paid in a timely manner;
  • Was convicted of a federal criminal violation under any federal law within the preceding twenty-four months.

Last December, the Department of Defense, and the General Services Administration issued an interim rule amending the Federal Acquisition Regulations to implement sections of the Consolidated and Further Continuing Appropriations Act, 2015.

The rule also adds a “Certification Regarding Tax Matters” for contracts that exceed $5,000,000 (including options).

The certification requires an offeror to certify that it has:

  • Filed all federal tax returns during the preceding three years;
  • Not been convicted of a criminal offense under the Internal Revenue Code;
  • Not, more than 90 days prior to certification, been notified of any unpaid federal tax assessment that remains unsatisfied.

If you are considering bidding on a Federal project, now is a good time to audit your compliance with Federal requirements. Remember, if duck the requirements, get the contract, then make a payment application you may be making a false claim which is a possible civil and criminal violation.

Source: Bradley Arant Boult Cummings LLP