1.3 Gifts, Gratuities, and the Anti- Kickback Act of 1986

Last Revised Date
Tuesday, March 1, 2016 - 12:00 am

Policy Information

Policy Number: 1.3 Effective Date: February 1996
Responsible Unit: Financial Services - Purchasing Last Revised Date: March 2016
Phone: 520-621-1747 Email: contactpacs@fso.arizona.edu

Purpose and Summary

This policy establishes prohibited activity to ensure the University of Arizona is compliant with all federal requirements and as a member of the National Association of Educational Procurement (NAEP), commits to their Code of Ethics.

Source

Anti-Kickback Act of 1986 (41 U.S.C. 87)
Federal Acquisition Regulations (FAR) 52.203-7 Anti-Kickback Procedures

Scope

This policy applies to all University locations and units, including all University extensions, satellite locations, and off-site campus units, both domestic and international.

Definitions

  1. Kickback: As defined by the FAR, 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 Contractor, prime Contractor employee, subcontractor, or subcontractor employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with a subcontract relating to a prime contract.

Policy

  1. Under FAR 3.502-2, the Anti-Kickback Act of 1986 (41 U.S.C. 87), the University is prohibited from: 
    1. Providing, attempting to provide, or offering to provide any kickback;
    2. Soliciting, accepting, or attempting to accept any kickback; or
    3. Including, directly or indirectly, the amount of any kickback 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 contractor to the United States.
  2. The University is required to have in place and follow reasonable procedures designed to prevent and detect violations of the Anti-Kickback Act of 1986 in its operations and direct business relationships.
  3. It is the policy of the University to decline personal gifts or gratuities in connection with the purchasing function. University employees in any of its locations may not accept personal gifts or gratuities from any current or potential suppliers of goods or services to the University.

Procedures

  1. The University Purchasing Department will establish levels of authority for approving transactions to detect any discrepancies or failure to follow required policies and procedures.
  2. If an employee becomes aware of any activity prohibited by the policies above, they should immediately report suspected violations to a supervisor in their chain of authority or make a report directly to the Business Affairs Office or the University’s Ethics and Compliance Hotline. If the President or the person appointed by the President to receive such reports, is the person alleged to have received the kickback, then the activity should be reported to the Senior Vice President for Business Affairs and Chief Financial Officer. These reports shall be examined and, if warranted, investigated.
  3. When the University has reasonable grounds to believe that a prohibited activity has occurred, it will be reported as described in FAR 52.203-7.

Frequently Asked Questions

  1. What are the penalties for noncompliance pursuant to FAR 3.502-2, the Anti-Kickback Act of 1986 (41 U.S.C. 87)?
    The kickbacks statute imposes criminal penalties on any person who knowingly and willingly engages in the prohibited conduct stated in policy statement #1 above, and provides for the recovery of civil penalties by the United States from any person who knowingly engages in such prohibited conduct and from any person whose employee, subcontractor, or subcontractor employee provides, accepts, or charges a kickback.

Anti-Kickback Act of 1986 (41 U.S.C. 87)
Ethics and Compliance Hotline
Federal Acquisition Regulations
Purchasing Code of Ethics
Policy on Conflict of Interest (Section 1.4)
National Association of Educational Procurement

* Please note that sections titled Frequently Asked Questions and Related Information are provided solely for the convenience of users and are not part of the official University policy.