FAR 3.104-7—Violations or possible violations.
Plain-English Summary
FAR 3.104-7 explains what happens when a contracting officer learns of an actual or possible violation of the procurement integrity rules in 41 U.S.C. 2102, 2103, or 2104. It covers the contracting officer’s initial duty to assess whether the reported conduct affects the pending award or contractor selection, the required escalation path to the agency’s designated official or the head of the contracting activity (HCA), and the HCA’s authority to review the matter and choose an appropriate response. The section also addresses possible actions before award and after award, including continuing the procurement, investigating, referring the matter for criminal investigation, finding that a violation occurred, canceling the procurement, disqualifying an offeror, applying contractual remedies such as profit recapture, voiding or rescinding a contract, and referring the matter to suspension and debarment officials. It further covers the HCA’s ability to request additional information before making a violation determination, the use of remedies proportionate to the seriousness of the misconduct, emergency or best-interest authority to proceed with an award despite the issue, and delegation of HCA authority to a senior official. In practice, this section is the decision-and-escalation roadmap for protecting the integrity of federal procurements while preserving the Government’s ability to act quickly when necessary.
Key Rules
Assess procurement impact first
When a contracting officer receives information about a possible procurement integrity violation, the first question is whether it affects the pending award or contractor selection. That threshold determination controls whether the matter can be handled locally or must be escalated to the HCA.
No-impact findings still require documentation
If the contracting officer concludes the reported violation has no impact on the procurement, the information and supporting documentation must still be forwarded to the agency-designated official under agency procedures. If that official agrees, the procurement may continue; if not, the matter goes to the HCA and award must be withheld.
Impact findings go to the HCA immediately
If the contracting officer believes the violation or possible violation does affect the procurement, the information must be promptly sent to the HCA. The contracting officer does not make the final enforcement decision in that situation.
HCA reviews and selects the response
The HCA must review all available information and, under agency procedures, may continue the procurement, start an investigation, refer the matter to criminal investigators, conclude a violation occurred, or recommend that the agency head determine the conduct warrants voiding or rescinding the contract.
Additional information may be requested
Before concluding that a violation occurred, the HCA may seek information from relevant parties if doing so would best serve the Government’s interests. This allows the agency to clarify facts before imposing serious remedies.
Pre-award and post-award remedies differ
If no contract has been awarded, the HCA may direct cancellation of the procurement, disqualification of an offeror, or other appropriate action. If a contract has been awarded, the HCA may direct contractual remedies, voiding or rescission in specified circumstances, recovery of amounts expended after rescission, or other actions in the Government’s best interests.
Serious cases may trigger suspension and debarment
The HCA may refer the matter to the agency suspending and debarring official. This is separate from procurement-specific remedies and addresses the contractor’s broader responsibility and future eligibility.
Remedies should match severity
The HCA should recommend or direct a remedy that is commensurate with the seriousness and effect of the violation. The rule is not one-size-fits-all; the response should fit the misconduct and its impact on the procurement.
Urgent awards can still be authorized
If urgent and compelling circumstances justify proceeding, or if award is otherwise in the Government’s interests, the HCA may authorize award or execution of a modification after notifying the agency head. This preserves mission needs while ensuring senior-level awareness.
Authority may be delegated upward
The HCA may delegate these authorities only to a senior official at least one organizational level above the contracting officer and at General Officer, Flag, Senior Executive Service, or equivalent rank. The delegation limit ensures high-level oversight of procurement integrity issues.
Responsibilities
Contracting Officer
Determine whether reported information about a possible violation of 41 U.S.C. 2102, 2103, or 2104 affects the pending award or contractor selection. If there is no impact, forward the information and supporting documentation to the designated agency official; if there is impact, promptly forward the matter to the HCA and withhold award as directed.
Agency-Designated Official
Review no-impact referrals from the contracting officer under agency procedures and concur or not concur. If the official does not concur, promptly forward the matter and documentation to the HCA and advise the contracting officer to withhold award.
Head of the Contracting Activity (HCA)
Review all available information and decide the appropriate course of action, including continuing the procurement, initiating an investigation, referring the matter for criminal investigation, concluding a violation occurred, recommending voiding or rescission, directing pre-award or post-award remedies, referring the matter to suspension and debarment, and authorizing urgent awards or modifications when justified.
Agency Head
Receive notification when the HCA authorizes award or execution of a modification under urgent and compelling circumstances or when award is otherwise in the Government’s interests. Also make the determination, when applicable, that conduct constitutes an offense punishable under 41 U.S.C. 2105(a) for purposes of voiding or rescinding a contract.
Contractor or Offeror
Respond to requests for information if the HCA seeks additional facts before making a violation determination. If misconduct is found, the contractor may be subject to disqualification, contractual remedies, rescission, voiding, recovery actions, or referral for suspension and debarment.
Suspending and Debarring Official
Review referrals from the HCA and determine whether suspension or debarment action is warranted based on the alleged or established misconduct.
Criminal Investigative Agencies
Receive referrals from the HCA when the information suggests possible criminal conduct and investigate as appropriate.
Practical Implications
Contracting officers should not treat procurement integrity allegations as informal complaints; they must make a documented impact assessment and follow the required escalation path.
A no-impact conclusion does not end the matter. The file still needs supporting documentation, and a higher-level reviewer can override the contracting officer’s view.
If there is any real possibility that the conduct affected source selection or award, the safest course is prompt escalation and withholding award until the HCA acts.
Post-award remedies can be severe, including profit recapture, rescission, voiding, and recovery of amounts expended, so agencies should coordinate closely with legal counsel and program officials.
Because the HCA may request more information before deciding, contractors should be prepared for fact-finding and should preserve records and communications relevant to the alleged violation.
Urgent mission needs do not eliminate procurement integrity concerns, but they can justify proceeding with senior approval and agency-head notification.
The section is closely tied to suspension and debarment, so a procurement integrity issue can have both immediate contract consequences and longer-term eligibility consequences.
Official Regulatory Text
(a) A contracting officer who receives or obtains information of a violation or possible violation of 41 U.S.C. 2102 , 2103, or 2104 (see 3.104-3 ) must determine if the reported violation or possible violation has any impact on the pending award or selection of the contractor. (1) If the contracting officer concludes that there is no impact on the procurement, the contracting officer must forward the information concerning the violation or possible violation and documentation supporting a determination that there is no impact on the procurement to an individual designated in accordance with agency procedures. (i) If that individual concurs, the contracting officer may proceed with the procurement. (ii) If that individual does not concur, the individual must promptly forward the information and documentation to the HCA and advise the contracting officer to withhold award. (2) If the contracting officer concludes that the violation or possible violation impacts the procurement, the contracting officer must promptly forward the information to the HCA. (b) The HCA must review all information available and, in accordance with agency procedures, take appropriate action, such as— (1) Advise the contracting officer to continue with the procurement; (2) Begin an investigation; (3) Refer the information disclosed to appropriate criminal investigative agencies; (4) Conclude that a violation occurred; or (5) Recommend that the agency head determine that the contractor, or someone acting for the contractor, has engaged in conduct constituting an offense punishable under 41 U.S.C. 2105 , for the purpose of voiding or rescinding the contract. (c) Before concluding that an offeror, contractor, or person has violated 41 U.S.C. chapter 21 , the HCA may consider that the interests of the Government are best served by requesting information from appropriate parties regarding the violation or possible violation. (d) If the HCA concludes that 41 U.S.C. chapter 21 has been violated, the HCA may direct the contracting officer to- (1) If a contract has not been awarded– (i) Cancel the procurement; (ii) Disqualify an offeror; or (iii) Take any other appropriate actions in the interests of the Government. (2) If a contract has been awarded- (i) Effect appropriate contractual remedies, including profit recapture under the clause at 52.203-10 , Price or Fee Adjustment for Illegal or Improper Activity, or, if the contract has been rescinded under paragraph (d)(2)(ii) of this subsection, recovery of the amount expended under the contract; (ii) Void or rescind the contract with respect to which– (A) The contractor or someone acting for the contractor has been convicted for an offense where the conduct constitutes a violation of 41 U.S.C. 2102 for the purpose of either- (1) Exchanging the information covered by the subsections for anything of value; or (2) Obtaining or giving anyone a competitive advantage in the award of a Federal agency procurement contract; or (B) The agency head has determined, based upon a preponderance of the evidence, that the contractor or someone acting for the contractor has engaged in conduct constituting an offense punishable under 41 U.S.C. 2105(a) ; or (iii) Take any other appropriate actions in the best interests of the Government. (3) Refer the matter to the agency suspending and debarring official. (e) The HCA should recommend or direct an administrative or contractual remedy commensurate with the severity and effect of the violation. (f) If the HCA determines that urgent and compelling circumstances justify an award, or award is otherwise in the interests of the Government, the HCA, in accordance with agency procedures, may authorize the contracting officer to award the contract or execute the contract modification after notifying the agency head. (g) The HCA may delegate his or her authority under this subsection to an individual at least one organizational level above the contracting officer and of General Officer, Flag, Senior Executive Service, or equivalent rank.