FAR 3.104-9—Contract clauses.
Plain-English Summary
FAR 3.104-9 tells contracting officers which anti-corruption contract clauses must be included when the procurement is above the simplified acquisition threshold and is not for commercial products or commercial services. Specifically, it requires insertion of FAR 52.203-8, Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity, and FAR 52.203-10, Price or Fee Adjustment for Illegal or Improper Activity. This section is part of the Procurement Integrity framework and is designed to protect the Government’s ability to cancel, rescind, or recover funds if illegal or improper conduct affects the procurement process. In practice, it means the solicitation and resulting contract must put contractors on notice that improper conduct can lead to serious remedies, including contract price or fee adjustments and recovery actions. The rule applies only to noncommercial acquisitions above the simplified acquisition threshold, so contracting personnel must check both the dollar threshold and the commercial-item/commercial-service status before deciding whether to include these clauses. For contractors, the clauses create real financial and legal exposure if procurement integrity violations occur; for agencies, they are mandatory safeguards that support enforcement and deterrence.
Key Rules
Applies Above Threshold
The clause requirement applies only to solicitations and contracts that exceed the simplified acquisition threshold. If the acquisition is at or below that threshold, this section does not require these clauses.
Noncommercial Only
The clauses are required only for acquisitions other than those for commercial products or commercial services. Commercial-item and commercial-service buys are excluded from this clause mandate.
Insert FAR 52.203-8
Contracting officers must include FAR 52.203-8, Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity, in covered solicitations and contracts. This clause preserves the Government’s remedies when illegal or improper conduct affects the procurement.
Insert FAR 52.203-10
Contracting officers must also include FAR 52.203-10, Price or Fee Adjustment for Illegal or Improper Activity, in covered solicitations and contracts. This clause allows the Government to adjust price or fee as a consequence of improper conduct.
Mandatory Clause Inclusion
The rule is not discretionary for covered acquisitions; if the solicitation or contract meets the stated conditions, the clauses must be inserted. Failure to include them can create compliance risk and weaken the Government’s enforcement position.
Responsibilities
Contracting Officer
Determine whether the acquisition exceeds the simplified acquisition threshold and whether it is for commercial products or commercial services. If the acquisition is covered, insert FAR 52.203-8 and FAR 52.203-10 into the solicitation and contract.
Agency
Ensure acquisition personnel use the correct clause set for covered noncommercial procurements and maintain internal controls so mandatory anti-corruption clauses are not omitted.
Contractor
Review the solicitation and contract for these clauses, understand the remedies they authorize, and maintain compliance with procurement integrity requirements to avoid cancellation, rescission, recovery of funds, or price/fee adjustments.
Practical Implications
Contracting officers should verify both the dollar threshold and the commercial-item/commercial-service status early, because those two checks determine whether the clauses are required.
These clauses are enforcement tools, not mere boilerplate; if improper activity occurs, the Government may have contractual remedies that affect payment, fee, or even the validity of the award.
A common pitfall is omitting the clauses in a covered procurement because the team assumes they are only needed in certain types of contracts; this section makes them mandatory for the stated category.
Contractors should treat these clauses as a signal to strengthen internal ethics, procurement integrity, and reporting controls, especially on larger noncommercial awards.
If the clauses are missing from a covered solicitation or contract, the omission should be corrected promptly through contract administration or amendment, because the Government’s rights and the contractor’s obligations may otherwise be unclear.
Official Regulatory Text
In solicitations and contracts that exceed the simplified acquisition threshold, other than those for commercial products or commercial services, insert the clauses at— (a) 52.203-8 , Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity; and (b) 52.203-10 , Price or Fee Adjustment for Illegal or Improper Activity.