FAR 3.705—Procedures.
Plain-English Summary
FAR 3.705 explains the procedure an agency must follow when a contractor has a final conviction for certain bribery, graft, or conflict-of-interest offenses under 18 U.S.C. 201–224 that involve or relate to agency contracts. It covers prompt reporting of the conviction, notification to the Department of Justice Civil Division, the agency head’s authority to declare the affected contracts void and rescind them, and the agency’s ability to recover amounts expended and property transferred under those contracts. The section also lays out the minimum due-process steps for the contractor: written notice by certified mail, a 30-day period to submit information, an opportunity for a hearing if timely requested, and limits on what can be challenged at that hearing. It further requires the final written decision to address the contracts affected, the amounts and property to be returned, and the fair value of any tangible benefits the agency retained. Practically, this section gives agencies a structured but informal process for handling serious criminal misconduct tied to federal contracts, while ensuring contractors receive basic notice and an opportunity to respond before rescission and recovery actions are finalized. It also makes clear that these rescission actions are not Contract Disputes Act claims, so the normal contracting officer final decision procedures in FAR part 33 do not apply.
Key Rules
Prompt reporting required
Any final conviction for covered offenses involving or relating to agency contracts must be reported promptly to the agency head or designee. The agency head or designee must also promptly notify the DOJ Civil Division that the matter is being considered under this subpart.
Agency may void contracts
After assessing the facts, the agency head or designee may declare the affected contracts void and rescind them. The agency may also recover amounts expended and property transferred under those contracts.
Informal but fair process
Agency procedures must be as informal as practicable, but still consistent with fundamental fairness. At a minimum, the contractor must receive written notice, time to respond, and, if timely requested, a hearing with witness presentation and confrontation rights.
Thirty-day response period
The contractor must be given 30 calendar days after receipt of the notice to submit pertinent information before a final decision is made. If the contractor wants a hearing, the request must be made within that same 30-day period.
Notice content is specific
The proposed-action notice must identify the contracts, the offense or conviction, the amounts expended and property transferred, the money and property demanded back, and any tangible benefits retained by the agency and their value. It must also explain the response rights and that no action will be taken until a final written decision is issued.
Final decision must be written
If the agency decides to void and rescind, the final written decision must state that determination, specify the amounts due and property to be returned, and reflect consideration of the fair value of tangible benefits the agency received and retained. Notice of the decision must be sent promptly by certified mail, return receipt requested.
No CDA or part 33 claim
A rescission and recovery action under this authority is not a claim under the Contract Disputes Act or FAR part 33. Therefore, the normal procedures for a contracting officer final decision do not apply to these final agency decisions.
Responsibilities
Agency head or designee
Review the reported conviction, notify the DOJ Civil Division, decide whether to void and rescind the affected contracts, consider the fair value of tangible benefits retained by the agency, issue the final written decision, and ensure prompt certified-mail notice of both the proposed action and the final decision.
Agency officials receiving the conviction report
Promptly report the facts concerning the final conviction to the agency head or designee so the matter can be considered under this subpart.
Contractor
Review the proposed-action notice, submit pertinent information within 30 calendar days if it wants to influence the decision, and request a hearing within that same period if it wants to present witnesses and confront agency witnesses.
Agency
Provide a procedurally fair process, including certified-mail notice, the 30-day response period, and a hearing when timely requested; identify the affected contracts and amounts; and document the value of tangible benefits retained by the agency.
Department of Justice Civil Division
Receive prompt notice from the agency head or designee that the matter is being considered under this subpart.
Practical Implications
This section is triggered only by a final conviction for specified criminal offenses tied to agency contracts, so agencies must confirm the conviction and its connection to the contract before acting.
The notice requirements are detailed and mandatory; missing contract identification, offense identification, amounts, or benefit-value information can create process defects and delay rescission.
Contractors do not get a CDA-style dispute process here, so they should focus on submitting relevant facts quickly within the 30-day window and requesting a hearing on time if needed.
Agencies must account for any tangible benefits they kept, which can reduce the amount recoverable and should be documented carefully before the final decision.
Because the process is meant to be informal but fundamentally fair, agencies should avoid overcomplicating the proceeding while still preserving a clear record of notice, response, hearing, and final decision.
Official Regulatory Text
(a) Reporting . The facts concerning any final conviction for any violation of 18 U.S.C. 201 - 224 involving or relating to agency contracts shall be reported promptly to the agency head or designee for that official’s consideration. The agency head or designee shall promptly notify the Civil Division, Department of Justice, that the action is being considered under this subpart. (b) Decision . Following an assessment of the facts, the agency head or designee may declare void and rescind contracts with respect to which a final conviction has been entered, and recover the amounts expended and the property transferred by the agency under the terms of the contracts involved. (c) Decision-making process . Agency procedures governing the voiding and rescinding decision-making process shall be as informal as practicable, consistent with the principles of fundamental fairness. As a minimum, however, agencies shall provide the following: (1) A notice of proposed action to declare void and rescind the contract shall be made in writing and sent by certified mail, return receipt requested. (2) A thirty calendar day period after receipt of the notice, for the contractor to submit pertinent information before any final decision is made. (3) Upon request made within the period for submission of pertinent information, an opportunity shall be afforded for a hearing at which witnesses may be presented, and any witness the agency presents may be confronted. However, no inquiry shall be made regarding the validity of a conviction. (4) If the agency head or designee decides to declare void and rescind the contracts involved, that official shall issue a written decision which- (i) States that determination; (ii) Reflects consideration of the fair value of any tangible benefits received and retained by the agency; and (iii) States the amount due and the property to be returned to the agency. (d) Notice of proposed action . The notice of proposed action, as a minimum shall- (1) Advise that consideration is being given to declaring void and rescinding contracts awarded by the agency, and recovering the amounts expended and property transferred therefor, under the provisions of 18 U.S.C. 218 ; (2) Specifically identify the contracts affected by the action; (3) Specifically identify the offense or final conviction on which the action is based; (4) State the amounts expended and property transferred under each of the contracts involved, and the money and the property demanded to be returned; (5) Identify any tangible benefits received and retained by the agency under the contract, and the value of those benefits, as calculated by the agency; (6) Advise that pertinent information may be submitted within 30 calendar days after receipt of the notice, and that, if requested within that time, a hearing shall be held at which witnesses may be presented and any witness the agency presents may be confronted; and (7) Advise that action shall be taken only after the agency head or designee issues a final written decision on the proposed action. (e) Final agency decision . The final agency decision shall be based on the information available to the agency head or designee, including any pertinent information submitted or, if a hearing was held, presented at the hearing. If the agency decision declares void and rescinds the contract, the final decision shall specify the amounts due and property to be returned to the agency, and reflect consideration of the fair value of any tangible benefits received and retained by the agency. Notice of the decision shall be sent promptly by certified mail, return receipt requested. Rescission of contracts under the authority of the Act and demand for recovery of the amounts expended and property transferred therefor, is not a claim within the meaning of 41 U.S.C. chapter 71 , Contract Disputes, or part 33 . Therefore, the procedures required by the statute and the FAR for the issuance of a final contracting officer decision are not applicable to final agency decisions under this subpart, and shall not be followed.