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Federal Contractors Can Now Lose Out On Projects, Be Debarred For Tax Delinquencies

Monday, August 04, 2008 03:24 pm

Federal Contractors Can Now Lose Out On Projects, Be Debarred For Tax Delinquencies

The Federal Acquisition Regulation (FAR) has been amended to make tax delinquencies grounds for declaring bidders non-responsible and for debarment and suspension from federal contracting.

The amendments, effective May 22, 2008, are the result of a study entitled "Thousands of Federal Contractors Abuse the Federal Tax System"by Congress' Government Accountability Office. The study of federal contractors with unpaid federal taxes was presented to the House Subcommittee on Government Management, Organization and Procurement, which is part of the Committee on Oversight and Government Reform. (Resource: View the full text of the report at d07742t.pdf).

The GAO report led to introduction of a bill entitled "Federal Contractor Accountability Act of 2007"(HR 1986), which in turn prompted the amendments to FAR. FAR 52.209-5 now requires all contractors to make the following additional certifications when bidding on federal contracts:

The Offeror certifies... that... [t]he Offeror and/or any of its Principlals...

Have , have not , within a three-year period preceding this offer, been notified of any delinquent Federal taxes in an amount that exceeds $3,000 for which the liability [...]

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