FAR Part 3: Improper Business Practices and Personal Conflicts of Interest

In plain English

FAR Part 3 prescribes policies and procedures for avoiding improper business practices and personal conflicts of interest in Government contracting. It covers gratuities, procurement integrity, antitrust violations, contingent fees, kickbacks, buying-in, and whistleblower protections. For contractors, it means strict ethical standards and specific compliance requirements when bidding and performing.

Key rules

• Government employees may not solicit or accept gratuities, gifts, favors, entertainment, loans, or anything of monetary value from contractors or those seeking contracts. (3.101-2)
• The contracting officer must insert the Certificate of Independent Price Determination in certain fixed-price solicitations. (3.103-1)
• Contractor bid or proposal information and source selection information must not be disclosed except as authorized. (3.104-4)
• The Gratuities clause must be inserted in solicitations and contracts exceeding the simplified acquisition threshold, except for personal services. (3.202)
• Agencies must report suspected antitrust violations to the Attorney General. (3.303)
• The Covenant Against Contingent Fees clause must be inserted in solicitations and contracts exceeding the simplified acquisition threshold, other than those for commercial products or commercial services. (3.404)
• The Anti-Kickback Procedures clause must be inserted in solicitations and contracts exceeding $200,000, other than those for commercial products or commercial services. (3.502-3)
• Contractors are prohibited from discharging, demoting, or otherwise discriminating against an employee as a reprisal for disclosing certain information. (3.903)

Who does what

In practice

• When bidding, ensure you do not engage in any improper business practices such as offering gratuities or violating procurement integrity.
• When performing, comply with contract clauses like the Gratuities clause, Covenant Against Contingent Fees, and Anti-Kickback Procedures.
• Implement a written code of business ethics and conduct if required by contract value and performance period.
• Protect whistleblower rights and avoid internal confidentiality agreements that prohibit reporting waste, fraud, or abuse.

Common pitfalls

• Offering or accepting gratuities to or from Government personnel can lead to contract termination and penalties.
• Failing to execute the Certificate of Independent Price Determination when required may result in rejection of your offer.
• Disclosing contractor bid or proposal information or source selection information improperly can lead to disqualification and penalties.
• Requiring employees to sign internal confidentiality agreements that prohibit whistleblowing can make you ineligible for contract award.

Written by AI from this part's codified text (2026-10-04); cited sections are checked against the part. A guide, not legal advice: the regulation text, the solicitation and your contract rule.