What counts as a kickback under the Anti-Kickback Act?

Any money, fee, commission, credit, gift, gratuity, thing of value, or compensation paid by a subcontractor to a prime contractor's employee for the purpose of improperly obtaining or rewarding favorable treatment in connection with a subcontract.

What anti-kickback procedures must we maintain?

Procedures typically include: written anti-kickback policy, annual employee training, a reporting mechanism for suspected violations, periodic audits of subcontract awards, and documented reviews of gifts and entertainment received from subcontractors.

What are the penalties for kickback violations?

Criminal penalties include fines and imprisonment up to 10 years. Civil penalties include recovery of the kickback amount plus double damages. Debarment from government contracting is also a likely consequence.

Do we need to report kickback suspicions immediately?

Report to the contracting officer when you have reasonable grounds to believe a kickback occurred. There is no specific statutory deadline, but prompt reporting demonstrates good faith and may factor into penalty assessments.

Medium RiskFAREthics

52.203-7 — Anti-Kickback Procedures

Last updated: 2026-04-09

Researched by the BidStride Research Team

What This Clause Requires

Requires prime contractors to have procedures to detect and prevent the payment or receipt of kickbacks in connection with subcontracts.

Official Regulation Text

See 48 CFR 52.203-7 for the full regulatory text. This clause implements the Anti-Kickback Act of 1986. It requires prime contractors to have in place procedures to detect and report kickbacks paid or received in connection with subcontracts under the prime contract.
Source: eCFR, 48 CFR 52.203-7

Compliance Checklist

Maintain anti-kickback procedures
Report suspected kickbacks to contracting officer
Cooperate with any Government investigations

Flow-Down to Subcontractors

Flow-down required

This clause must be included in subcontracts with all subcontractors at all tiers where the subcontractor will perform work covered by this clause. Typically appears in contract Sections H, I.

52.203-13Contractor Code of Business Ethics and Conduct

Frequently Asked Questions

BidStride automatically scans your RFPs for 52.203-7

Stop hunting through solicitations manually. BidStride identifies every FAR and DFARS clause in your RFP, flags risk level, and surfaces compliance requirements before you submit your bid.

This summary is for informational purposes only and reflects the BidStride Research Team's plain-English interpretation of the regulation. It is not legal advice and does not constitute an attorney-client relationship. Always consult the official Federal Acquisition Regulation (FAR) or Defense Federal Acquisition Regulation Supplement (DFARS) text and qualified legal counsel for compliance decisions.