# § 4651. Expenditure of appropriations: limitation
**(a)** Money appropriated to the Department of Defense may not be spent under a contract other than a contract for personal services unless that contract provides that—
The existence of facts upon which the Secretary makes findings under clause (1) may be reviewed by any competent court.
**(1)** the United States may, by written notice to the contractor, terminate the right of the contractor to proceed under the contract if the Secretary concerned or his designee finds, after notice and hearing, that the contractor, or his agent or other representative, offered or gave any gratuity, such as entertainment or a gift, to an officer, official, or employee of the United States to obtain a contract or favorable treatment in the awarding, amending, or making of determinations concerning the performance, of a contract; and
**(2)** if a contract is terminated under clause (1), the United States has the same remedies against the contractor that it would have had if the contractor had breached the contract and, in addition to other damages, is entitled to exemplary damages in an amount at least three, but not more than 10, as determined by the Secretary or his designee, times the cost incurred by the contractor in giving gratuities to the officer, official, or employee concerned.
**(b)** This section does not apply to a contract that is for an amount not greater than the simplified acquisition threshold (as defined in section 134 of title 41).
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**Source Credit**: (Added Pub. L. 87–651, title II, § 207(a), Sept. 7, 1962, 76 Stat. 520, § 2207; amended Pub. L. 104–106, div. A, title VIII, § 801, Feb. 10, 1996, 110 Stat. 389; Pub. L. 111–350, § 5(b)(5), Jan. 4, 2011, 124 Stat. 3842; renumbered § 4651, Pub. L. 116–283, div. A, title XVIII, § 1862(b), Jan. 1, 2021, 134 Stat. 4277.)
| Revised section | Source (U.S. Code) | Source (Statutes at Large) |
| --- | --- | --- |
| 2207 | 5:174d. | June 30, 1954, ch. 432, § 719, 68 Stat. 353. |
The following substitutions are made: “spent” for “expended”; “United States” for “Government”; “if a contract is terminated under clause (1)” for “that in the event any such contract is so terminated”; and “has . . . that it would have had if” for “shall be entitled . . . to pursue . . . as it could pursue in the event of”. The word “official” is inserted for clarity. The words “entered into after ” are omitted as executed.
## Editorial Notes
### Prior Provisions
A prior section 4651, , ; (b(3)(C), , , related to issuance of arms, tentage, and equipment necessary for proper military training to institutions not maintaining units of the Reserve Officers’ Training Corps, prior to repeal by , , .
### Amendments
2021— renumbered as this section.
2011—Subsec. (b). substituted “” for “section 4(11) of the Office of Federal Procurement Policy Act ()”.
1996— designated existing provisions as subsec. (a) and added subsec. (b).
## Statutory Notes and Related Subsidiaries
### Effective Date of 2021 Amendment
Amendment by effective , with additional provisions for delayed implementation and applicability of existing law, see , set out as a note preceding .