Subpart 503.7 - Voiding and Rescinding Contracts
503.703 Authority.
Pursuant to FAR 3.703 and 3.705(b), the authority to void or rescind contracts resides with the Senior Procurement Executive.
503.705 Procedures.
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(a) Contracting officer’s actions:
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(1) If a contract is tainted by misconduct, the contracting officer shall consult with assigned counsel to determine if the Government has a common law remedy such as avoidance, rescission, or cancellation.
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(2) If the contractor has a final conviction for a violation under 18 U.S.C. 201-224, the contracting officer shall refer the matter to the Senior Procurement Executive under FAR 3.705 and shall—
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(i) Identify in the referral the final conviction;
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(ii) Include the information required by FAR 3.705(d)(2) through (5); and
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(iii) Coordinate the referral with the Office of Inspector General to determine whether to recommend debarment.
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(b) Senior Procurement Executive’s actions:
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(1) Reviews the referral and coordinates with assigned counsel and the contracting activity.
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(2) Takes both the following actions, if the official decides to declare void and rescind a contract and to recover the amounts expended and the property transferred:
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(i) Issues the notice required by FAR 3.705; and
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(ii) Conducts the hearing contemplated by FAR 3.705(c)(3).
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(3) Refers the matter to the agency fact-finding official, in case of a dispute of material fact about the agency decision. The Senior Procurement Executive makes this referral if the dispute of fact relates to any of the following:
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(i) Contracts affected by the final conviction.
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(ii) Amounts expended and property transferred by the Government under the affected contracts.
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(iii) Identity and value of any tangible benefits received by the Government under the affected contracts.
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(4) Issues GSA’s final decision under FAR 3.705(e) after receiving the fact-finding official’s report, if a referral was made. The Senior Procurement Executive may reject the fact-finding official’s findings only if they are clearly erroneous or arbitrary and capricious. The Senior Procurement Executive may explain any such rejection in writing.
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(5) Coordinates the final decision with the contracting activity and provides the activity a copy of the decision.
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(c) Fact-finding official’s actions: The fact-finding official takes all the following actions:
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(1) Gives the contractor an opportunity to dispute material facts.
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(2) Conducts the proceedings under rules consistent with FAR 3.705(c)(3).
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(3) Schedules a hearing within 20 calendar days after receiving the referral. The official may grant extensions for good cause at the request of the contractor or GSA.
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(4) Delivers written findings of fact to the voiding and rescinding official (together with a transcription of the proceeding, if made) within 20 calendar days after the hearing record closes. The findings must resolve any material disputes of fact by a preponderance of the evidence.
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(5) Coordinates the final decision with the contracting activity and provides the activity a copy of the decision.
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