FAR and DFARS › FAR Part 3: Improper Business Practices and Personal Conflicts of Interest › Subpart 3.7
FAR 3.704 Policy.
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 outlines the government's policy for responding to final convictions for bribery, graft, or conflicts of interest related to federal contracts, or for offenses under the Procurement Integrity Act. It allows agency heads to void or rescind contracts, recover expended amounts and property, and consider debarment or suspension of the contractor. Contractors should be aware that such convictions can lead to contract termination, financial recovery, and exclusion from future contracting.
Applies to: Contractors and agencies involved in federal contracts where there is a final conviction for certain offenses.
What it requires
- Agency head or designee shall consider the facts available and, if appropriate, may declare void and rescind contracts and recover amounts expended and property transferred.
- Agency should consider initiating debarment proceedings if debarment has not been initiated or is not in effect at the time the final conviction is entered.
- Head of the contracting activity shall consider declaring void and rescinding contracts and recovering amounts expended, and recommending initiation of suspension or debarment proceedings.
Key terms: final conviction · declare void and rescind contracts · recover the amounts expended · debarment · suspension
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) In cases in which there is a final conviction for any violation of 18 U.S.C. 201-224 involving or relating to contracts awarded by an agency, the agency head or designee shall consider the facts available and, if appropriate, may declare void and rescind contracts, and recover the amounts expended and property transferred by the agency in accordance with the policies and procedures of this subpart.
(b) Since a final conviction under 18 U.S.C. 201-224 relating to a contract also may justify the conclusion that the party involved is not presently responsible, the agency should consider initiating debarment proceedings in accordance with subpart 9.4, Debarment, Suspension, and Ineligibility, if debarment has not been initiated or is not in effect at the time the final conviction is entered.
(c) If there is a final conviction for an offense punishable under 41 U.S.C. 2105, or if the head of the agency, or designee, has determined, based upon a preponderance of the evidence, that the contractor or someone acting for the contractor has engaged in conduct constituting such an offense, then the head of the contracting activity shall consider, in addition to any other penalty prescribed by law or regulation—
(1) Declaring void and rescinding contracts, as appropriate, and recovering the amounts expended under the contracts by using the procedures at 3.705 (see 3.104-7); and
(2) Recommending the initiation of suspension or debarment proceedings in accordance with subpart 9.4.
← 3.703 Authority. · 3.705 Procedures. →
Rule changes for FAR Part 3
- Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 3 and 49 ↗ · proposed 2026-06-23 · comments due 2026-07-23
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · final rule 2025-08-27 · effective 2025-10-01
- Federal Acquisition Regulation: Preventing Organizational Conflicts of Interest in Federal Acquisition ↗ · proposed 2025-01-15 · comments due 2025-03-17
- Federal Acquisition Regulation: Controlled Unclassified Information ↗ · proposed 2025-01-15 · comments due 2025-03-17
- Federal Acquisition Regulation: Improving Consistency Between Procurement and Nonprocurement Procedures on Suspension and Debarment ↗ · final rule 2025-01-03 · effective 2025-01-17
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · proposed 2024-11-29 · comments due 2025-01-28
- Federal Acquisition Regulation: Reverse Auction Guidance ↗ · final rule 2024-07-30 · effective 2024-08-29
- Federal Acquisition Regulation: Improving Consistency Between Procurement and Nonprocurement Procedures on Suspension and Debarment ↗ · proposed 2024-01-09 · comments due 2024-03-11
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.