The Government Contractor Gifting Guide: 4 Tips to Avoid Severe Penalties

PilieroMazza PLLC

PilieroMazza PLLC

The holiday season will be here before we know it.  Although this year’s celebrations may look different for many of us, one thing will still be on everyone’s mind: gifts.  For companies, holiday gifting to clients and colleagues can be a cheerful and effective marketing tool.  If your clients or colleagues are government employees, it is important to remember the many rules that govern making gifts to government employees.  Keep these rules in mind to prevent a small gift from becoming a big problem.

First, don’t forget: there is a general prohibition against making gifts to government employees.  As a rule, government employees cannot solicit or accept gifts from any entity that does business with or seeks business from the government.  “Gifts” are not limited to things you can wrap in a bow; they also include discounts, entertainment, and hospitality. 

Second, remember there are many, precise exceptions to this rule: 

  1. There are multiple exceptions to what the government considers to be a “gift.”  For instance, greeting cards and other “modest” gifts usually fall outside the scope of the government’s definition of “gift,” so they may be given to government employees. 
  2. There are plenty of express exceptions to the general prohibition against gifts.  Some of these exceptions are based on the value of the gift.  Others are based on the government employee’s relationship with the giftor.  For example, if you have a personal or family relationship with a government employee, which predates any business-related contacts, then any gifts to the government employee may be excepted from the gifting prohibition.  These are only a few of the many allowances under the gifting rules.  If you are planning to give a gift to a government contractor, you should be sure that the gift precisely falls within an exception, and that you can prove the exception applies.

Third, you should not be offended if a government employee declines your gift.  Even if a gift is permissible under the rules, a government employee may decide not to accept it.  Specifically, government employees are encouraged to decline otherwise permissible gifts if they believe that the gift might cause a person to question the employee’s integrity or impartiality as a result of accepting the gift. 

Finally, keep in mind other related prohibitions under federal law.  Even if a gift is permissible under these rules, giving a gift that is conditional upon official action by the employee will subject both the giftor and the government employee to severe penalties.

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PilieroMazza PLLC

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