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FAR and DFARS › FAR Part 3: Improper Business Practices and Personal Conflicts of Interest › Subpart 3.2

FAR 3.204 Treatment of violations.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section explains how an agency handles suspected violations of the Gratuities clause. Before penalizing a contractor, the agency must give notice and a hearing to determine if the contractor offered or gave a gratuity to a government employee with the intent to get a contract or favorable treatment. If a violation is found, the Government may terminate the contractor's right to proceed, start debarment or suspension, and assess exemplary damages for DoD contracts.

Applies to: Contractors, their agents, or representatives under a contract containing the Gratuities clause

Key terms: Gratuities clause · gratuity · notice and hearing · debarment · suspension

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) Before taking any action against a contractor, the agency head or a designee shall determine, after notice and hearing under agency procedures, whether the contractor, its agent, or another representative, under a contract containing the Gratuities clause—

(1) Offered or gave a gratuity (e.g., an entertainment or gift) to an officer, official, or employee of the Government; and

(2) Intended by the gratuity to obtain a contract or favorable treatment under a contract (intent generally must be inferred).

(b) Agency procedures shall afford the contractor an opportunity to appear with counsel, submit documentary evidence, present witnesses, and confront any person the agency presents. The procedures should be as informal as practicable, consistent with principles of fundamental fairness.

(c) When the agency head or designee determines that a violation has occurred, the Government may—

(1) Terminate the contractor's right to proceed;

(2) Initiate debarment or suspension measures as set forth in subpart 9.4; and

(3) Assess exemplary damages, if the contract uses money appropriated to the Department of Defense.

← 3.203 Reporting suspected violations of the Gratuities clause. · 3.301 General. →

Rule changes for FAR Part 3

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 3.204 Treatment of violations · SpendQuery