2023 Tennessee Code › Title 12 - PUBLIC PROPERTY, PRINTING AND CONTRACTS (§§ 12-1-101 — 12-12-113) › Chapter 4 - PUBLIC CONTRACTS (§§ 12-4-101 — 12-4-1007) › Part 1 - GENERAL PROVISIONS (§§ 12-4-101 — 12-4-120) › Section 12-4-104 - Penalty for unlawful transactions

(a)
It is an offense for a public employee involved in negotiating a procurement agreement to accept employment with any person or entity with whom the employee dealt in an official capacity on behalf of the state concerning the procurement agreement for a period of twenty-four (24) months from the ending of the procurement agreement or one (1) year immediately following departure from employment as the public officer or employee, whichever occurs first. For purposes of this section, "procurement agreement" means any agreement to procure goods or services, including, but not limited to, a contract or grant, but does not include a contract or grant by a public institution of higher education to procure research or public service-related goods or services.
(b)
It is an offense for any person who, for compensation, prepares a solicitation for or on behalf of a public body to:
(1)
Submit a response to a solicitation for that procurement or any portion thereof; or
(2)
Disclose to any respondent to a solicitation information concerning the procurement that is not available to the public. A public body may permit such person to submit response to a solicitation for that procurement or any portion thereof if the public body determines that the exclusion of the person would limit the number of potential qualified respondents to a solicitation in a manner contrary to the best interest of the public body.
(c)
(1)
It is an offense for a contractor or subcontractor to demand or receive from any of the contractor's or subcontractor's suppliers or for a contractor to demand or receive from the contractor's subcontractors, as an inducement for the award of a subcontract or order, any payment, loan, subscription, advance, deposit of money, services or anything, present or promised, unless consideration of substantially equal or greater value is exchanged.
(2)
It is an offense for a subcontractor or supplier to make or offer to make any payment, loan, subscription, advance, deposit of money, services or anything, present or promised, unless consideration of substantially equal or greater value is exchanged.
(3)
It is an offense for any person to demand or receive any payment, loan, subscription, advance, deposit of money, services or anything of value in return for an agreement not to compete on a public contract.
(4)
If a contractor, subcontractor, supplier or any person violates any provision of this subsection (c), the amount thereof shall be conclusively presumed to have been included in the price of the contract, subcontract or order and ultimately borne by the public body and shall be recoverable from both the maker and recipient. Recovery from one (1) offending party shall not preclude recovery from other offending parties.
(d)
(1)
A contract entered into in violation of this section on or after October 1, 2011, is void. A contract that is otherwise void under this section may continue in effect until an alternative can be arranged when:
(A)
Immediate termination would result in harm to the public health or welfare; and
(B)
The continuation is approved by the commission.
(2)
Approval of continuation of contracts under this subsection (d) shall be given for the minimum period necessary to protect the public health or welfare. The chief procurement officer and the comptroller of the treasury shall be notified immediately upon a determination that a contract violates this subsection (d).
(e)
(1)
As used in this section, the term "public officer" means an individual who is elected or appointed to serve or represent a public agency, other than an employee or independent contractor of a public agency.
(2)
A public officer or employee is involved in administering a contract if the officer or employee oversees the performance of the contract or has authority to make decisions regarding the contract or to interpret the contract.
(3)
A public officer or employee is involved in making a contract if such officer or employee participates in the development of specifications or terms or in the preparation or award of the contract. A public officer is also involved in making a contract if the board, commission, or other body of which such officer is a member takes action on the contract, whether or not the public officer actually participates in that action, unless the contract is approved under an exception to this section under which the public officer is allowed to benefit and is prohibited from voting.
(4)
A public officer or employee derives a direct benefit from a contract if the person or the person's spouse:
(A)
Has more than a ten-percent ownership or other interest in an entity that is a party to the contract;
(B)
Derives any income or commission directly from the contract; or
(C)
Acquires property under the contract.
(f)
A public officer or employee is not involved in making or administering a contract solely because of the performance of ministerial duties related to the contract.
(g)
A violation of this section is a Class A misdemeanor.
Amended by 2021 Tenn. Acts, ch. 562, s 6, eff. 5/26/2021.
Amended by 2013 Tenn. Acts, ch. 403, s 74, eff. 7/1/2013.
Acts 1953, ch. 160, §§ 2, 3 (Williams, §§ 1876.2, 1876.3); impl. am. Acts 1979, ch. 203, § 20; T.C.A. (orig. ed.), § 12-404; Acts 1989, ch. 591, § 24.