Anti-Kickback Act of 1986
PL 99-634 (S.2250), enacted 11/07/1986

PUBLIC LAW 99-634—NOV. 7, 1986 
100 STAT. 3523 
Public Law 99-634 
99th Congress 
An Act 
To strengthen the prohibition of kickbacks relating to subcontracts under Federal 
Government contracts. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled. That this Act may 
be cited as the "Anti-Kickback Enforcement Act of 1986". 
SEC. 2. (a) The Act entitled "An Act to eliminate the practice by 
subcontractors, under cost-plus-a-fixed-fee or cost reimbursable con-
tracts of the United States, of paying fees or kickbacks, or of 
granting gifts or gratuities to employees of a cost-plus-fixed-fee or 
cost reimbursable prime contractors or of higher tier subcontractors 
for the purpose of securing the award of subcontracts or orders", 
approved March 8, 1946 (41 U.S.C. 51-54), is amended to read as 
follows: 
"SHORT TITLE 
"SECTION 1. This Act may be cited as the 'Anti-Kickback Act of 
1986'. 
"DEFINITIONS 
"SEC. 2. As used in this Act: 
"(1) The term 'contracting agency', when used with respect to 
a prime contractor, means any department, agency, or 
establishment of the United States which enters into a prime 
contract with a prime contractor. 
"(2) The term 'kickback' means any money, fee, commission, 
credit, gift, gratuity, thing of value, or compensation of any kind 
which is provided, directly or indirectly, to any prime contrac-
tor, prime contractor employee, subcontractor, or subcontractor 
employee for the purpose of improperly obtaining or rewarding 
favorable treatment in connection with a prime contract or in 
connection with a subcontract relating to a prime contract. 
"(3) The term 'person' means a corporation, partnership, 
business association of any kind, trust, joint-stock company, or 
individual. 
"(4) The term 'prime contract* means a contract or contrac-
tual action entercMi into by the United States for the purpose of 
obtaining supplies, materials, equipment, or services of any 
kind. 
"(5) The term 'prime contractor' means a person who has 
entered into a prime contract with the United States. 
"(6) The term 'prime contractor employee' means any officer, 
partner, employee, or agent of a prime contractor. 
"(7) TTie term 'subcontract' means a contract or contractual 
action entered into by a prime contractor or subcontractor for 
the purpose of obtaining supplies, materials, equipment, or 
services of any kind under a prime contract. 
"(8) The term 'subcontractor'— 
Nov. 7, 1986 
[S. 2250] 
Anti-Kickback 
Enforcement Act 
of 1986. 
41 u s e 51 note. 
Anti-Kickback 
Act of 1986. 
41 u s e 51. 
41 u s e 52. 
100 STAT. 3524 
PUBLIC LAW 99-634—NOV. 7, 1986 
"(A) means any person, other than the prime contractor, 
who offers to furnish or furnishes any supplies, materi^s, 
equipment, or services of any kind under a prime contract 
or a subcontract entered into in connection with such prime 
: 
contract; and 
"(B) includes any person who offers to furnish or fur-
nishes general supplies to the prime contractor or a higher 
tier subcontractor. 
"(9) The term 'subcontractor employee' means any officer, 
partner, employee, or agent of a subcontractor. 
"PROHIBITED CONDUCT 
41 use 53. 
"SEC. 3. It is prohibited for any person— 
"(1) to provide, attempt to provide, or offer to provide any 
kickback; 
"(2) to solicit, accept, or attempt to accept any kickback; or 
"(3) to include, directly or indirectly, the amount of any 
kickback prohibited by clause (1) or (2) in the contract price 
charged by a subcontractor to a prime contractor or a higher 
tier subcontractor or in the contract price charged by a prime 
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contractor to the United States. 
"CRIMINAL PENALTIES 
41 use 54. 
"SEC. 4. Any person who knowingly and willfully engages in 
conduct prohibited by section 3 shall be imprisoned for not more 
than 10 years or shall be subject to a fine in accordance with title 18, 
United States Code, or both. 
"CIVIL ACTIONS 
41 use 55. 
"SEC. 5. (aXD The United States may, in a civil action, recover a 
civil penalty from any person who knowingly engages in conduct 
prohibited by section 3. The amount of such civil penalty shall be— 
"(A) twice the amount of each kickback involved in the 
violation; and 
"(B) not more than $10,000 for each occurrence of prohibited 
conduct. 
"(2) The United States may, in a civil action, recover a civil penalty 
from any person whose employee, subcontractor or subcontractor 
employee violates section 3 by providing, accepting, or charging a 
kickback. The amount of such civil penalty shall be the amount of 
that kickback. 
"(b) A civil action under this section shall be barred unless the 
action is commenced within 6 years after the later of (1) the date on 
which the prohibited conduct establishing the cause of action oc-
curred, and (2) the date on which the United States first knew or 
should reasonably have Imown that the prohibited conduct had 
occurred. 
"ADMINISTRATIVE OFFSETS 
41 use 56. 
"SEC. 6. (a) A contracting officer of a contracting agency may 
offset the amount of a kickback provided, accepted, or charged in 
violation of section 3 against any moneys owed by the United States 
to the prime contractor under the prime contract to which such 
kickback relates. 
PUBLIC LAW 99-634—NOV. 7, 1986 
100 STAT. 3525 
"(bKl) Upon direction of a contracting officer of a contracting 
agency with respect to a prime contract, the prime contractor shall 
withhold from any sums owed to a subcontractor under a sub-
contract of the prime contract the amount of any kickback which 
was or may be offset against that prime contractor under subsec-
tion (a). 
"(2) Such contracting officer may order that sums withheld under 
paragraph (1)— 
"(A) be paid over to the contracting agency; or 
"(B) if the United States has already offset the amount of 
such sums against that prime contractor, be retained by the 
prime contractor. 
"(3) The prime contractor shall notify the contracting officer when 
an amount is withheld and retained under paragraph (2XB). 
'(c) An offset under subsection (a) or a direction or order of a Claims. 
contracting officer under subsection (b) is a claim by the Govern-
ment for the purposes of the Contract Disputes Act of 1978. 
41 use 60i note. 
"(d) As used in this section, the term 'contracting officer' has the 
meaning given that term for the purposes of the Contract Disputes 
Act of 1978. 
"CONTRACTOR RESPONSIBIUTIES 
"SEC. 7. (a) Each contracting agency shall include in each prime 41 use 57. 
contract awarded by such agency a requirement that the prime 
contractor shall have in place and follow reasonable procedures 
designed to prevent and detect violations of section 3 in its own 
operations and direct business relationships. 
"(b) Each contracting agency shall include in each prime contract 
awarded by such agency a requirement that the prime contractor 
shall cooperate fully with any Federal Government agency inves-
tigating a violation of section 3. 
"(cXl)(A) Whenever a prime contractor or subcontractor has 
Reports. 
reasonable grounds to believe that a violation of section 3 may have 
occurred, the prime contractor or subcontractor shall promptly 
report the possible violation in writing. 
(B) A contractor shall make the reports required by subpara- 
Reports. 
graph (A) to the inspector general of the contracting Eigency, the 
head of the contracting agency if the agency does not have an 
inspector general, or the Department of Justice. 
'(2) In the case of an administrative or contractual action to 
suspend or debar any person who is eligible to enter into contracts 
with the Federal Government, evidence that such person has sup-
plied information to the United States pursuant to paragraph (1) 
shall be favorable evidence of such person's responsibility for the 
purposes of Federal procurement laws and regulations. 
INSPECTION AUTHORITY 
"SEC. 8. For the purpose of ascertaining whether there has been a 
violation of section 3 with respect to any prime contract, the Gen-
eral Accounting Office and the inspector general of the contracting 
agency, or a representative of such contracting agency designated by 
the head of such 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 any electronic data or records, of 
any prime contractor or subcontractor under a prime contract 
awarded by such agency.". 
41 use 58. 
100 STAT. 3526 
PUBLIC LAW 99-634—NOV. 7, 1986 
(b) The title of such Act is amended to read as follows: "An Act to 
prohibit kickbacks relating to subcontracts under Federal Govern-
ment contracts.". 
Effective date. 
SEC. 3. (a) Except as provided in subsection Ob), the Anti-Kickback 
41 use 51 note. Act of 1986 (as set out in section 2(a)) shall take effect with respect to 
conduct described in section 3 of such Act which occurs on or after 
the date of the enactment of this Act. 
(b) Subsections (a) and (b) of section 7 of the Anti-Kickback Act of 
1986 (as set out in section 2(a)) shall take effect with respect to 
contract solicitations issued by an agency, department, or other 
establishment of the Federal Government on or after the date which 
is 90 days after the date of the enactment of this Act. 
Approved November 7, 1986. 
''>i 
LEGISLATIVE HISTORY—S. 2250 (H.R. 4783): 
HOUSE REPORTS: No. 99-964, Pt. 1 accompanying H.R. 4783 (Comm. on Government 
Operations). 
SENATE REPORTS: No. 99-435 (Comm. on Governmental Affairs). 
: 
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CONGRESSIONAL RECORD, Vol. 132 (1986): 
Sept. 12, considered and passed Senate. 
Oct. 7, H.R. 4783 considered and passed House; proceedings vacated and S. 2250, 
amended, passed in lieu. 
Oct. 15, Senate concurred in House amendments. 
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