United States Department of Agriculture

Marketing and Regulatory Programs

Agricultural Marketing Service

Animal and Plant Health Inspection Service

Grain Inspection, Packers and Stockyards Administration

Directive MRP 5003.1 08/15/2012

APPROPRIATIONS RESTRICTIONS FOR FINANCIAL TRANSACTIONS WITH 

FELONS AND TAX DELINQUENT CORPORATIONS

1. PURPOSE

This Directive establishes Marketing and Regulatory Programs’ (MRP) policy and 

implementing procedures for complying with Federal requirements prohibiting agencies 

from entering into financial transactions with any corporation that was convicted of a 

felony within the preceding 24 months or that has an unpaid Federal tax liability.

2. POLICY

No MRP agency will enter into financial transactions with any corporation that was 

convicted (or had an officer or agent of such corporation acting on behalf of the 

corporation convicted) of a felony criminal violation under any Federal or State law 

within 24 months, where the agency is aware of the conviction, unless the agency has 

considered suspension or debarment of the corporation, or such officer or agent, and has 

made a determination that this action is not necessary to protect the interest of the 

Government.

Further, no MRP agency will enter into financial transactions with any corporation that 

has any unpaid Federal tax liability that has been assessed, for which all judicial and 

administrative remedies have been exhausted or have lapsed, and that is not being paid in 

a timely manner pursuant to an agreement with the authority responsible for collecting 

the tax liability, where the agency is aware of the unpaid tax liability, unless the agency

has considered suspension or debarment of the corporation and made a determination that 

this action is not necessary to protect the interest of the Government.

MRP awareness is imputed at the contracting officer level for procurement transactions 

and at the awarding officer level for nonprocurement transactions.

3. AUTHORITIES

a. Agriculture, Rural Development, Food and Drug Administration, and Related 

Agencies Appropriations Act, 2012 (Public Law (P.L.) 112-55), Sections 738 and 

739.

b. Federal Acquisition Regulation (FAR) 48, Part 9, Contractor Qualification.

Distribution: AMS, APHIS, GIPSA Originating Office: MRPBS-ODA
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c. FAR 48, Part 12, Acquisition of Commercial Items.

d. Agriculture Acquisition Regulation (AGAR) 48 CFR Chapter 4, Section 409.471, 

provision at 452.209-70 and clause at 452.209-71.

e. 2 Code of Federal Regulations, Sections 180.600 – 180.635.

4. DEFINITIONS

a. Agency Suspension and Debarment Official (SDO) (Nonprocurement). The 

agency Administrator.

b. Awarding Officer. The MRP employee(s) who has the authority to, and enters 

into, financial transactions with a corporation(s).

c. Contracting Officer. The MRP employee(s) who has the authority to, and 

authorizes, procurement expenditures.

d. Corporation. Any for-profit or non-profit entity that has filed articles of 

incorporation in any of the 50 States, the District of Columbia, or the various 

territories of the United States of America including American Samoa, Federated 

States of Micronesia, Guam, Midway Islands, Northern Mariana Islands, Puerto 

Rico, Republic of Palau, Republic of the Marshall Islands, and the U.S. Virgin 

Islands.

e. Covered Violation. Any criminal felony conviction or any unpaid Federal tax 

liability as set forth in Section 2.

f. Financial Transaction. A contract, memorandum of understanding, memorandum 

of agreement, cooperative agreement, grant, loan, or loan guarantee made to a 

corporation. For purposes of this definition, cooperative agreements include those 

in which the MRP agency receives funds for work performed, and memoranda of 

agreement include those whereby appropriated funds are utilized for indirect costs 

(employee salaries, benefits, and related expenses).

g. Procurement Suspension and Debarment Official. The Director, Office of 

Procurement and Property Management (OPPM).

5. RESPONSIBILITIES

a. The agency Administrator will:

(1) Ensure that all responsible employees are aware of the requirements set 

forth in P.L. 112-55; 

(2) Serve as the agency SDO; and
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(3) When notified of a covered violation, consider whether suspension or 

debarment is necessary to protect the Government’s interests. The SDO

may take into consideration another agency’s determination that 

suspension or debarment is not necessary, and, if the analysis and 

conclusion are appropriate for the MRP agency, adopt that determination 

as its own determination without conducting a further review.

b. Deputy Administrators will ensure that all Awarding Officers are aware of the 

requirements set forth in P.L. 112-55.

c. The MRP Head of the Contracting Activity Designee (HCAD), will:

(1) Ensure that all Contracting Officers are aware of the requirements set forth 

in P.L. 112-55; and

(2) Notify the Chief of the Procurement Policy Division, OPPM, in writing, if 

he/she becomes aware of a covered violation. 

d. The Contracting Officer will:

(1) Ensure that the proper representations are included in all solicitations 

above the micro-purchase threshold;

(2) Not enter into contracts with corporations with a covered violation(s);

(3) Ensure that the proper assurance clause is included in all award 

documents; and

(4) Notify the MRP HCAD if he/she becomes aware of a covered violation.

e. The Awarding Officer will:

(1) Ensure that the proper representations are included in all solicitations,

requests for proposals, and applications;

(2) Not make awards to corporations with a covered violation(s);

(3) Ensure that the proper assurance clause is included in all award 

documents; and

(4) Notify the Agency SDO, through his/her Deputy Administrator, if he/she 

becomes aware of a covered violation.

6. PROCUREMENT TRANSACTIONS

a. Contracting Officers will include the following representation in all solicitations

above the micro-purchase threshold, including those for the acquisition of 

commercial items under Federal Acquisition Regulation Part 12:
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“Awards made under this announcement are subject to the provisions contained in the 

Agriculture, Rural Development, Food and Drug Administration, and Related Agencies 

Appropriations Act, 2012, P.L. No. 112-55, Division A, Sections 738 and 739 regarding 

corporate felony convictions and corporate federal tax delinquencies. To comply with 

these provisions, all applicants must complete the paragraph (1) of this representation, 

and all corporate applicants also must complete paragraphs (2) and (3) of this 

representation. 

(1) Applicant _______________________________________________ (insert applicant 

name) is ____ is not ____ (check one) an entity that has filed articles of 

incorporation in one of the 50 States, the District of Columbia, or the various 

territories of the United States including American Samoa, Federated States of

Micronesia, Guam, Midway Islands, Northern Mariana Islands, Puerto Rico, Republic 

of Palau, Republic of the Marshall Island, U.S. Virgin Islands. (Note that this 

includes both for-profit and non-profit organizations.)

If Applicant checked “is” above. Applicant must complete paragraphs (2) and (3) of 

the representation. If applicant checked “is not” above, Applicant may leave the 

remainder of the representation blank.

(2) Applicant _______________________________________________ (insert applicant 

name) has ____ has not ____ (check one) been convicted of a felony criminal 

violation under Federal or State law in the 24 months preceding the date of 

application. Applicant has ____ has not ____ (check one) had any officer or agent of 

Applicant convicted of a felony criminal violation for actions taken on behalf of 

Applicant under Federal or State law in the 24 months preceding the date of 

signature.

(3) Applicant _______________________________________________ (insert applicant 

name) has ____ does not have ____ (check one) any unpaid Federal tax liability that 

has been assessed, for which all judicial and administrative remedies have been 

exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an 

agreement with the authority responsible for collecting the tax liability.”

b. For all solicitations released during Fiscal Year 2012 without a representation, 

where proposals/offers have already been received, but where the award has not 

yet been made, the Contracting Officer will issue an amendment to the solicitation 

in writing, notifying every offeror who submitted a proposal/offer of the new 

appropriations restrictions and requesting them to submit signed representations 

to be added to their proposals/offers. The notification will read:

“This is to notify you of recent award prohibitions contained in the (insert MRP agency 

name) Fiscal Year 2012 Appropriations Act regarding corporate felony convictions and 

corporate tax delinquencies. Under the Appropriations Act, no awards can be made to 

any corporation (for profit or non-profit) that has a tax delinquency or felony conviction 

as defined in the Appropriations Act and described in the attached representation. To 

comply with these provisions, all offerors are required to return the attached 
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representation to (insert name and submission address) no later than (insert date and 

time). Please note that if you have a tax delinquency or felony conviction, as defined in 

the Appropriations Act and described in the attached representation, you are not eligible 

for award. If you are ineligible for award because of these prohibitions, it is possible that 

you can regain eligibility for award, but only if the USDA procurement suspension and 

debarring official considers your tax delinquency and/or felony conviction and 

determines that suspension or debarment is not necessary to protect the interest of the 

Government.”

The representation must also include the language set forth in Section 6.a.

c. Contracting Officers are prohibited from making an award to any corporation 

that:

(1) Fails to comply with the requirement to complete the representation;

(2) Submits an affirmative response to the representation at 452.209-70 for 

having been convicted (or had an officer or agent of such corporation 

acting on behalf of the corporation convicted) of a felony criminal 

violation under any Federal or State law within the preceding 24 months, 

where the awarding agency is aware of the conviction;

(3) Submits an affirmative response to the representation at 452.209-70 for 

having any unpaid Federal tax liability that has been assessed, for which 

all judicial and administrative remedies have been exhausted or have 

lapsed, and that is not being paid in a timely manner pursuant to an 

agreement with the authority responsible for collecting the tax liability, 

where the awarding agency is aware of the unpaid tax liability; or

(4) Has had a felony conviction or tax delinquency, as set forth in c. (2) or (3)

above, even if the corporation has not submitted an affirmative 

representation.

d. If any of the incidents set forth in Section 6.c. occur, the Contracting Officer will 

refer the incident to the MRP HCAD who will, in turn, refer the incident, in 

writing, to the Chief of the Procurement Policy Division, OPPM, for suspension 

or debarment consideration by the procurement SDO. The notification will

include the name and address of the corporation, names of officers or agents, and 

a summary of the incident including any additional information needed to assess 

the incident.

e. Contracting Officers will include the following assurance clause in all awards 

documents above the micro-purchase threshold, including those for the 

acquisition of commercial items under Federal Acquisition Regulation Part 12 and 

lease contracts. 
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“This award is subject to the provisions contained in the Agriculture, Rural Development, 

Food and Drug Administration, and Related Agencies Appropriations Act, 2012, 

P.L. No. 112-55, Division A. Section 738 and 739 regarding corporate felony convictions 

and corporate federal tax delinquencies. Accordingly, by accepting this award, the 

recipient acknowledges that it: (1) does not have a tax delinquency, meaning that it is not 

subject to any unpaid Federal tax liability has been assessed, for which all judicial and 

administrative remedies have been exhausted or have lapsed, and that is not being paid in 

a timely manner pursuant to an agreement with the authority responsible for collecting 

the tax liability, and (2) has not been convicted (or had an officer or agent acting on its 

behalf convicted) of a felony criminal violation under any Federal or State law within 24 

months preceding the award, unless a suspending and debarring official of the United 

States Department of Agriculture has considered suspension or debarment of the recipient 

corporation, or such officer or agent, based on these convictions and/or tax delinquencies 

and determined that suspension or debarment is not necessary to protect the interest of the 

Government. If the recipient fails to comply with these provisions, the (insert MRP 

agency name) will annul this agreement and may recover any funds the recipient has 

expended in violation of Sections 738 and 739.”

f. If, at any time, a Contracting Officer becomes aware that a corporate contractor 

has a felony or tax delinquency, the Contracting Officer will notify the MRP 

HCAD. The MRP HCAD will contact the Chief, Procurement Policy Division, 

OPPM.

7. NONPROCUREMENT TRANSACTIONS

a. Awarding Officers will, for all financial transactions with corporations, whether 

awarded using the SF 424, Application for Federal Assistance, or not, include the 

representation set forth in Section 6.a. in all solicitations, requests for proposals, 

and applications for assistance.

b. Awarding Officers are prohibited from making an award to any corporation that:

(1) Fails to comply with the requirement to complete the representation;

(2) Submits an affirmative response to the representation for having been 

convicted (or having had an officer or agent of such corporation acting on 

behalf of the corporation convicted) of a felony criminal violation under 

any Federal or State law within the preceding 24 months, where the 

awarding agency is aware of the conviction;

(3) Submits an affirmative response to the representation for having any 

unpaid Federal tax liability that has been assessed, for which all judicial 

and administrative remedies have been exhausted or have lapsed, and that 

is not being paid in a timely manner pursuant to an agreement with the 

authority responsible for collecting the tax liability, where the awarding 

agency is aware of the unpaid tax liability; or
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(4) Has had a felony conviction or tax delinquency, as set forth in 

Section 6.c. (2) or (3), even if the corporation has not submitted an 

affirmative representation.

c. If any of the incidents set forth in Section 7.b. occur, the Awarding Officer will 

refer the incident, in writing, through his/her Deputy Administrator, to the agency

SDO, for suspension or debarment consideration. The notification will include 

the name and address of the corporation, names of officers or agents, and a 

summary of the incident including any additional information needed to assess the 

incident.

d. Awarding Officers will, for all financial transactions with corporations, whether 

awarded using the SF 424, or not, include the assurance clause set forth in 

Section 6.e. in all award documents.

8. INQUIRIES

a. Questions concerning the information and processes described in this Directive 

should be directed to 202-799-7064.

b. This Directive can be accessed on the Internet at 

http://www.aphis.usda.gov/library, and on the AMS Intranet at

http://www.ams.usda.gov/amsissuances

/s/

Joanne Munno

Deputy Administrator

MRP Business Services