As this 2016 election season swings into its final months,
federal government contractors should continue to be aware of the
laws and regulations regarding political contributions.
The Federal Election Campaign Act prohibits federal government
contractors from making contributions to influence federal
elections. 52 U.S.C. § 30119(a). The prohibition applies to
contributions to federal candidates, political parties, political
action committees (PACs), Super PACs and other political
committees. The sole proprietor of a business with a federal
contract may not contribute from personal or business funds.
However, employees who work for a company or partnership with a
federal government contract may still make contributions from
personal funds. It is important to remember that the ban on
contributions is in place before the contract award. Specifically,
the prohibition applies from “commencement of
negotiations” until the end of negotiations or performance of
the contract. 11 C.F.R. § 115.2. The contribution ban remains
in place until completion of contract performance.
The Federal Acquisition Regulation contains a more extensive
prohibition that applies to federal, state and local elections, as
well as referendums and ballot initiatives, and disallows the
costs of contributions in connection with cost-type contracts. FAR
31.205-22. Not only are in-kind and cash contributions prohibited,
but endorsements, publicity and payments for the expenses of
political parties or PACs also are banned.
It does not appear that the contribution ban will be lifted
anytime soon. In 2015, the U.S. Court of Appeals for the D.C.
Circuit unanimously upheld the individual contractor contribution
ban against free speech and equal protection challenges in the case
Wagner v. Federal Election Commission. The en banc opinion was
written by Judge Merrick Garland, the current U.S. Supreme Court
As the election season continues through the next months,
federal contractors should pay close attention to their obligations
and the restrictions imposed upon them under federal law.
Specifically, contractors should pay close attention to
Types of contributions banned;
The relevant time the ban applies; and
How the ban applies to business and personal funds.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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