Are contractor kickbacks illegal?

Kickbacks that are exchanged between a government official and a contractor will be prosecuted under the federal bribery statute. Many states have commercial bribery statutes in place that prohibit kickbacks. Although kickbacks are punishable under federal and state law, they are not technically illegal.

What is a kickback construction?

Kickback in construction law means any money, fee commission, credit, gift, gratuity, thing of value or compensation of any kind that is provided directly or indirectly to any prime contractor, prime contractor employee, subcontractor or subcontractor employee for the purpose of improperly obtaining or rewarding …

Is there an Anti-Kickback Law for contractors?

There are reporting requirements under the Copeland “Anti-Kickback” Act for contractors and subcontractors performing on contracts in excess of $2,000 for the construction or repair of public buildings, public works, or buildings or works supported by the federal government.

Can a prime contractor withhold kickbacks from a subcontractor?

(2) The contracting officer may direct a prime contractor to withhold from any sums owed to a subcontractor under a subcontract of the prime contract the amount of any kickback which was or may be offset against the prime contractor under paragraph (d) (1) of this section; and

Is it illegal to kick back a repair bill?

It was X Corp.’s practice to kick back approximately 10 percent of the repair bill to the captain and chief engineer of all foreign-owned vessels, which kickbacks are illegal under a law of State Y (which is generally enforced) and potentially subject X Corp. to fines. During 1970, X Corp. paid $50,000 in such kickbacks.

What’s the penalty for giving an employee a kickback?

Any contractor or subcontractor who induces an employee working on a covered contract to give up any part of the compensation to which he or she is entitled is subject to a $5,000 fine, imprisonment for up to five years, or both.

What kind of contracts are protected from kickbacks?

The “Anti-Kickback” provisions apply to contractors and subcontractors that perform work on contracts for construction or repair to which a federal agency is a party or that are financed in whole or in part by loans or grants from the federal government, except for those contracts where the only federal assistance is a loan guarantee.

Who is the contractor facing federal kickback charges?

Earlier this year, the U.S. Department of Justice filed a lawsuit against a contractor and subcontractor for allegedly conspiring to submit $65 million of false subcontractor invoices to the National Nuclear Security Administration under their contracts for a MOX fuel fabrication facility in Aiken, South Carolina.

What was the Anti Kickback Act of 1986?

The Anti-Kickback Act of 1986 (now codified at 41 U.S.C. chapter 87, Kickbacks,) was passed to deter subcontractors from making payments and contractors from accepting payments for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract…