Gifts, Hospitality & the Government Contractor
Briefing Papers No. 14-7, June 2014
33 Pages Posted: 18 Jul 2014 Last revised: 24 Jul 2014
Date Written: June 1, 2014
The government procurement process demands the highest commitment to ethical and unbiased conduct. To ensure that the individuals involved in the procurement process adhere to these standards, government entities in nearly all jurisdictions around the world have enacted codes of conduct, ethical restrictions, and anti-corruption laws designed to protect the integrity of government and ensure that government officials act impartially and do not give preferential treatment to any private organization or individual. To further these goals, most jurisdictions have enacted restrictions on the gifts and hospitality that government officials may accept from individuals and organizations that sell goods and services to the government.
While gifts and hospitality play an important role in facilitating and strengthening business relationships in the private sector, in the public sector, common business courtesies may appear as an attempt to influence a government official and the procurement process. This concern is not unfounded. Most public corruption cases involving government contractors include references to the offering of lavish gifts, meals, travel, or entertainment to government officials.
Moreover, nearly all governmental bodies have enacted ethical restrictions that limit the gifts and hospitality that may be accepted by government officials — even in the absence of intent to influence a government official. Indeed, these restrictions are often even more stringent for government procurement officials.
Ethics and anti-corruption laws vary dramatically depending on the jurisdiction. Consequently, determining the applicable rules for a particular government entity can be incredibly challenging. To assist contractors with this process, Part I of this Briefing Paper provides an overview of the laws and policies that restrict the offering or giving of gifts and hospitality to government officials. Part II addresses the severe consequences that may result when contractors offer or give gifts and hospitality to influence an official action. Part III offers practical suggestions regarding the policies and procedures that a government contractor may implement to reduce the risk of violating these laws.
Keywords: Ethics, Government, Public Officials, Government Officials, Government Contracts, State, Bribery, Gratuities, FCPA, Foreign Corrupt Practices Act, Government Contracts, Procurement, Corruption, Anticorruption, Bribery, Antibribery, Debarment, Gifts, Fraud
JEL Classification: F23, G15, G18, G38, H10, H40, H50, H41, H54, H56, H57, H59, H77, K14, K19, K22, K23, K33, K42, L14
Suggested Citation: Suggested Citation