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In dealing with government officials the small business owner must be aware of regulations regarding procurement integrity. This body of law has come into being through trial and error in dealing with conflict of interest and undue influence by industry on government officials and vice versa.
The section of the Federal Acquisition Regulation dealing with these matters is 3.104, "Procurement Integrity". It is recommended reading for every small business growing into government contracting:
Improper Business Practices and Personal Conflicts of Interest
FAR Section 3.104 defines the roles of government officials in the source selection process that are subject to procurement integrity regulation. FAR Section 3.1 sets out definitions of standards of conduct, conflict of interest and specifies restrictions on gratuities to government employees (permitting virtually none). It details restrictions on dialogue regarding employment with officials prior their leaving their government jobs and further restricts where an official may work in industry and in what capacities relative to prior government service.
Penalties for violating these rules are significant and are specified in Part 3.1. They range from criminal prosecution for government and industry personnel found guilty of violations to debarment of companies and individuals from government contracting.
The rules, which define procurement integrity regarding prime and subcontractor relationships, are defined in FAR Section 3.1, under the topic heading, "Subcontractor Kickbacks".