205 
(B) a prime contractor charges the Federal Government. 
§ 8703. Contractor responsibilities 
(a) REQUIREMENTS INCLUDED IN CONTRACTS.—Each contracting agency 
shall include in each prime contract awarded by the agency a requirement 
that the prime contractor shall— 
(1) have in place and follow reasonable procedures designed to pre-
vent and detect violations of section 8702 of this title in its own oper-
ations and direct business relationships; and 
(2) cooperate fully with a Federal Government agency investigating 
a violation of section 8702 of this title. 
(b) FULL COOPERATION REQUIRED.—Notwithstanding subsection (d), a 
prime contractor shall cooperate fully with a Federal Government agency in-
vestigating a violation of section 8702 of this title. 
(c) REPORTING REQUIREMENT.— 
(1) IN GENERAL.—A prime contractor or subcontractor that has rea-
sonable grounds to believe that a violation of section 8702 of this title 
may have occurred shall promptly report the possible violation in writ-
ing to the inspector general of the contracting agency, the head of the 
contracting agency if the agency does not have an inspector general, 
or the Attorney General. 
(2) SUPPLYING INFORMATION AS FAVORABLE EVIDENCE.—In an ad-
ministrative or contractual action to suspend or debar a person who is 
eligible to enter into contracts with the Federal Government, evidence 
that the person has supplied information to the Federal Government 
pursuant to paragraph (1) is favorable evidence of the person’s respon-
sibility for the purposes of Federal procurement laws and regulations. 
(d) INAPPLICABILITY TO CERTAIN PRIME CONTRACTS.—Subsection (a) 
does not apply to a prime contract— 
(1) that is not greater than $100,000; or 
(2) for the acquisition of commercial items (as defined in section 103 
of this title). 
§ 8704. Inspection authority 
(a) IN GENERAL.—To ascertain whether there has been a violation of sec-
tion 8702 of this title with respect to a prime contract, the Comptroller 
General and the inspector general of the contracting agency, or a represent-
ative of the contracting agency designated by the head of the agency if the 
agency does not have an inspector general, shall have access to and may 
inspect the facilities and audit the books and records, including electronic 
data or records, of a prime contractor or subcontractor under a prime con-
tract awarded by the agency. 
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(b) EXCEPTION.—This section does not apply to a prime contract for the 
acquisition of commercial items (as defined in section 103 of this title). 
§ 8705. Administrative offsets 
(a) DEFINITION.—In this section, the term ‘‘contracting officer’’ has the 
meaning given that term in chapter 71 of this title. 
(b) OFFSET AUTHORITY.—A contracting officer of a contracting agency 
may offset the amount of a kickback provided, accepted, or charged in viola-
tion of section 8702 of this title against amounts the Federal Government 
owes the prime contractor under the prime contract to which the kickback 
relates. 
(c) DUTIES OF PRIME CONTRACTOR.— 
(1) WITHHOLDING AND PAYING OVER OR RETAINING AMOUNTS.—On 
direction of a contracting officer of a contracting agency with respect 
to a prime contract, the prime contractor shall withhold from amounts 
owed to a subcontractor under a subcontract of the prime contract the 
amount of a kickback which was or may be offset against the prime 
contractor under subsection (b). The contracting officer may order that 
amounts withheld— 
(A) be paid over to the contracting agency; or 
(B) be retained by the prime contractor if the Federal Govern-
ment has already offset the amount against the prime contractor. 
(2) NOTICE.—The prime contractor shall notify the contracting offi-
cer when an amount is withheld and retained under paragraph (1)(B). 
(d) OFFSET, DIRECTION, OR ORDER IS CLAIM OF FEDERAL GOVERN-
MENT.—An offset under subsection (b) or a direction or order of a con-
tracting officer under subsection (c) is a claim by the Federal Government 
for the purposes of chapter 71 of this title. 
§ 8706. Civil actions 
(a) AMOUNT.—The Federal Government in a civil action may recover 
from a person— 
(1) that knowingly engages in conduct prohibited by section 8702 of 
this title a civil penalty equal to— 
(A) twice the amount of each kickback involved in the violation; 
and 
(B) not more than $10,000 for each occurrence of prohibited 
conduct; and 
(2) whose employee, subcontractor, or subcontractor employee vio-
lates section 8702 of this title by providing, accepting, or charging a 
kickback a civil penalty equal to the amount of that kickback. 
(b) STATUTE OF LIMITATIONS.—A civil action under this section must be 
brought within 6 years after the later of the date on which— 
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(1) the prohibited conduct establishing the cause of action occurred; 
or 
(2) the Federal Government first knew or should reasonably have 
known that the prohibited conduct had occurred. 
§ 8707. Criminal penalties 
A person that knowingly and willfully engages in conduct prohibited by 
section 8702 of this title shall be fined under title 18, imprisoned for not 
more than 10 years, or both. 
SEC. 4. CONFORMING AMENDMENT. 
Section 2410i(b)(1) of title 10, United States Code, is amended by strik-
ing ‘‘small purchase threshold’’ and substituting ‘‘simplified acquisition 
threshold’’. 
SEC. 5. CONFORMING CROSS-REFERENCES. 
(a) TITLE 5.—Title 5, United States Code, is amended as follows: 
(1) In section 504(b)(1)(C)(ii)— 
(A) strike ‘‘section 6 of the Contract Disputes Act of 1978 (41 
U.S.C. 605)’’ and substitute ‘‘section 7103 of title 41’’; and 
(B) strike ‘‘section 8 of that Act (41 U.S.C. 607)’’ and sub-
stitute ‘‘section 7105 of title 41’’. 
(2) In section 551(1)(H), strike ‘‘chapter 2 of title 41;’’. 
(3) In section 701(b)(1)(H), strike ‘‘chapter 2 of title 41;’’. 
(4) In section 3109(b)(3), strike ‘‘section 5’’ and substitute ‘‘section 
6101(b) to (d)’’. 
(5) In section 3374(c)(2), strike ‘‘section 27 of the Office of Federal 
Procurement Policy Act’’ and substitute ‘‘chapter 21 of title 41’’. 
(6) In section 3704(b)(2)(G), strike ‘‘section 27 of the Office of Fed-
eral Procurement Policy Act’’ and substitute ‘‘chapter 21 of title 41’’. 
(7) In section 4105, strike ‘‘section 5’’ and substitute ‘‘section 
6101(b) to (d)’’. 
(8) In section 5102(c)(30), strike ‘‘section 8 of the Contract Dis-
putes Act of 1978’’ and substitute ‘‘section 7105(a)(2), (c)(2), or 
(d)(2) of title 41’’. 
(9) In section 5372a— 
(A) in subsection (a)(1)— 
(i) strike ‘‘section 8 of the Contract Disputes Act of 1978’’ 
and substitute ‘‘section 7105(a)(2), (c)(2), or (d)(2) of title 
41’’; and 
(ii) strike ‘‘section 42 of the Office of Federal Procurement 
Policy Act’’ and substitute ‘‘section 7105(b)(2) of title 41’’; 
and 
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