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B-222102 1 (1986-02-26)

handle is hein.gao/gaobaduwt0001 and id is 1 raw text is: 


                                                             i 726
                COMPTROLLER GENERAL OF THE UNITED STATES
                         WASHINGTON D.C.  4



B-222102                                        R  LEAEDi,
                                  February 26, 1986


The Honorable William S. Cohen
Chairman, Subcommittee on Oversight of
   Government Management
Committee on Governmental Affairs

Dear Mr. Chairman:

     Your February 13, 1986 letter, submitted jointly with
Senator Carl Levin, asks five questions concerning the extent
of General Accounting Office involvement pursuant to the Anti-
Kickback Act, 41 U.S.C. 51-54,4in reviews of kickbacks paid by
defense subcontractors to employees of prime contractors.

     Your first two questions request specific information on
GAO kickback investigations, including investigations of
defense subcontractor kickbacks within the last 10 years.
This information has been supplied to members of the subcom-
mittee staff.

     Your other questions request the definition of kickback
used by GAO, including how non-cash items should be treated,
as well as a discussion of problems encountered in conducting
subcontractor kickback reviews and a comment as to the ade-
quacy of the Act, particularly as to those provisions that
identify specific GAO responsibilities.


     As you know, the Act defines kickback as including the
payment of any fee, commission, or compensation of any kind
(emphasis supplied) to an employee of a higher tier subcon-
tractor or to an employee of a prime contractor holding a
negotiated contract with the Government. The Act also pro-
hibits such payments directly to higher tier subcontractors or
to prime contractors. It must be demonstrated, however, that
payments were made either as an inducement for the award of a
subcontract or order from the prime contractor or any subcon-
tractors, or as an acknowledgement of a subcontract or order
previously awarded. Proof that such an intent existed can
frequently be difficult to demonstrate conclusively. Never-
theless, the definition clearly encompasses the provision of
non-cash items such as trips, cars, and tickets to sporting
events.

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