Government contractors are bound by stringent rules surrounding gift giving to Government employees. For example, last year a contractor was sentenced to 18 months of incarceration and over $60,000 in fines and restitution for providing gifts to General Services Administration employees in return for contracts. The rules can be confusing because some laws focus on the contractor’s actions,while others focus on the Government official’s ability to accept gifts. Although a gift may fit within the parameters of what a Government employee may accept, the contractor may still be in violation of the laws that govern its behavior.

The bribery and illegal gratuities statutes, which apply to contractors, attempt to delineate between ethical and unethical contractor conduct. The statutes focus on the intent in giving the gift and whether it is considered an attempt to influence an official action or to reward a prior action by a Government employee. In contrast to the rules for contractors, the rules for Government employees focus not on the intent of the giver of a gift, but on the strict definition of what a gift is, and the source of the gift.

Laws Governing a Contractor’s Actions—Under the federal bribery statute, 18 USCA § 201(b) (Bribery Statute), it is a crime to directly or indirectly give, offer or promise anything of value to any public official, or person selected to be a public official, with the intent to influence any official act. “Public official” is defined as any officer or employee or person acting for, or on behalf of, the U.S., or any department, agency or branch of Government. To find the required intent, there must be an expectation of a favorable official act in return for the gift or favor. However, even if the true intent is simply to generate goodwill, in the procurement arena there is a strong presumption of ill intent.

The federal gratuity statute, 18 USCA § 201(c) (Gratuity Statute), is similar to the Bribery Statute, but requires a lesser degree of intent. Under the Gratuity Statute, it is a crime to directly or indirectly give, offer or promise anything of value to any public official, former public official or person selected to be a public official, for or because of any official act performed by that official. It is illegal to reward Government officials and former Government officials for any public acts performed. For example, a violation of the Gratuity Statute can be as simple as sending a public official a gift for that individual’s favorable handling of a procurement action. The act is violated when there is a link between the thing of value conferred upon a public official and a specific “official act” for which it was given. While a gift given in an effort to build goodwill might not satisfy the necessary linkage to create a violation of this particular statute, if a procurement relationship with that official exists, such intent may be inferred.

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