Election Season Highlights Contractor Contribution Prohibitions

 
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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...

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