Six Essential Tips for Avoiding the Unlawful Influence of Government Actions

In honor of the release of the 6th Edition of the Government Contracts Compliance Handbook, we are sharing six essential tips to help government contractors recognize and prevent the unlawful influence of government actions. Contractors working in the federal marketplace face unique challenges, from avoiding improper gifts to ensuring compliance with lobbying restrictions. Missteps can lead to severe legal and reputational consequences. These tips, drawn from our book, provide actionable guidance to navigate these complex issues and maintain compliance with federal regulations.

1. Understand the Distinction Between Bribes and Gratuities

Both bribes and illegal gratuities involve offering something of value to a government official, but the intent behind the act distinguishes the two. A bribe involves a "quid pro quo" — a corrupt intent to influence an official act in exchange for something of value. Gratuities, on the other hand, are gifts given for or because of an official act, even without the intent to influence. 

Contractors must educate employees on these distinctions and implement policies to prohibit offering anything of value to government officials without prior approval from the company’s legal or compliance team. Examples include gifts, meals, or entertainment that may seem innocuous but could violate the law. Even simple gestures of goodwill commonly exchanged in commercial business practices, such as paying for parking or picking up the bill at a coffee shop, could create the perception of illegality when extended to federal officials.

2. Establish Robust Policies on Interactions with Government Officials

Developing clear, written policies governing interactions with government officials is essential to prevent unlawful influence. These policies should explicitly prohibit bribes and include guidelines on acceptable gifts under federal rules, such as minor items valued under $20 per occasion, but not to exceed $50 per year, and establish a system for monitoring such expenses. 

The policy should also address gray areas, such as offering transportation for mandatory inspections or other site visits to government personnel or door prizes at trade shows. It should require all company employees to certify that they have read and understand the policy and designate a compliance officer to oversee training and enforcement.

3. Train Employees on Recognizing Unlawful Influence Risks

Regular training programs are critical for helping employees recognize situations that may lead to unlawful influence allegations. Training should cover scenarios such as: 

• Improper Gifts: Explaining the consequences of offering seemingly harmless gifts, such as sports tickets or meals, to government officials. 

• Employment Discussions: Highlighting how discussing potential employment opportunities with government officials during procurement activities can violate regulations. 

• Subtle Influence Attempts: Educating employees on how even gestures like sending thank-you gifts could be misconstrued as an attempt to influence government actions. 

Interactive training sessions, case studies, and real-world examples make the content more relatable and ensure employees understand their responsibilities.

4. Monitor and Audit Employee Activities

Effective compliance requires monitoring and auditing employee activities to detect potential violations early. Regularly review expense reports and communications to ensure compliance with policies on gifts, entertainment, and lobbying. Implement spot checks to verify that no improper payments or offers are being made. 

Monitoring systems also demonstrate a contractor’s good-faith efforts to comply with regulations, which can be a mitigating factor in enforcement actions.

5. Encourage Transparency Through Reporting Mechanisms

Creating a culture of transparency is key to preventing and addressing potential violations. Establish confidential reporting mechanisms, such as anonymous hotlines or secure online portals, where employees can report suspected issues without fear of retaliation. 

Encourage employees to report concerns promptly and provide clear procedures for investigating and addressing allegations of unlawful influence. Prompt and transparent responses to reported issues not only help resolve problems but also reinforce the company’s commitment to ethical conduct.

6. Align Compliance Programs with Lobbying and Anti-Kickback Laws

Beyond bribery and gratuities, contractors must also comply with laws governing lobbying and kickbacks. For instance: 

• Lobbying Restrictions: Ensure no appropriated funds are used to influence government decisions, as required by the Byrd Amendment. 

• Anti-Kickback Act Compliance: Prohibit offering or accepting kickbacks and implement controls to ensure subcontractors and partners adhere to the same standards. 

Conduct regular audits to verify compliance with these laws and provide targeted training for employees involved in lobbying or subcontractor negotiations. An effective compliance program integrates all these requirements to protect the company from liability. 

Government contractors operate in a high-stakes environment where even inadvertent missteps can result in serious consequences. By following these six essential tips, contractors can recognize and prevent the unlawful influence of government actions, ensuring compliance with federal laws and maintaining their reputation as ethical business partners. 

These insights are drawn from the 6th Edition of the Government Contracts Compliance Handbook, a resource designed to guide contractors through the complexities of compliance. As an elite government contracts practice group, we are here to provide expert advice and support tailored to your unique challenges in the federal marketplace.