Office of
Sponsored Programs

Covenant Against Contingent Fees

GENERAL

Purpose

The following information is provided to the research community to clarify the university’s position and on a research-related issue. This information concerns business decisions that safeguard the financial environment associated with sponsored research and reflect best business practices.

Administration

The Office of Sponsored Programs is responsible for maintenance and review of this SHARPI Guideline.

Background

The Covenant was enacted in the United States Code (USC) and subsequently in a Federal Acquisition Regulation (FAR) to reflect long-standing public policy that improper influence should not be used to secure government contracts.

GENERAL DISCUSSION AND INFORMATION

This SHARPI applies to federal contracts in excess of the simplified acquisition threshold1 . It does NOT apply to regular employees or firms that are maintained by the university to secure business. Specific FAR language is as follows:

“The Contractor warrants that no person, or agency has been employed or retained to solicit or obtain this contract upon an agreement or understanding for a contingent fee2 , except a bona fide employee3 or agency4 …”

PROCESS

OSP Preaward

Certify by means of ‘reps and certs’ (if required) that no person or company has been employed or retained to solicit or obtain:

  • the contract itself, or
  • the contract under a commission, percentage, brokerage, or other fee contingent upon receiving the contract

OSP Postaward

  • include an item on the OSP form entitled “NEW AWARD – PI/Administrator/OSP Meeting” that requires PI to certify that he/she has not retained anyone to obtain the contract, other than an employee or our duly authorized and reported lobbying firm(s)

PI

  • refrain from using anyone to obtain the contract other than an employee or our duly authorized and reported lobbying firm(s)
  • advise OSP immediately if previously unknown efforts have been exerted to obtain the contract by other than an employee or our duly authorized and reported lobbying firm(s)

SANCTIONS FOR NONCOMPLIANCE

Noncompliance could result in the contract being annulled without government liability; a deduction being made from the contract price to recover the full amount of the contingent fee; suspension or debarment action; or, being referred to the Department of Justice for suspected fraudulent or criminal matters.

 

 

footnotes

1-Simplified Acquisition Threshold = $150,000 (June 5, 2012)

2-Contingent Fee = any commission, percentage, brokerage, or other fee that is contingent upon the success that a person or concern has in securing a Government contract.

3-Bona fide employee = a person, employed by a contractor and subject to the contractor’s supervision and control as to time, place, and manner of performance, who neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds out as being able to obtain any Government contract…through improper influence (see footnote 5).

4-Bona fide agency = an established commercial or selling agency, maintained by a contractor for the purpose of securing business, that neither exerts nor proposes to exert improper influence to solicit or obtain Government contracts nor holds itself out as being able to obtain any Government contract…through improper influence.

5-Improper influence = any influence that induces or tends to induce a Government employee or officer to give consideration or to act regarding a Government contract on any basis other than the merits of the matter.