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Suspension and Debarment Concepts, Rules, and Process

Learn about the concepts, rules, and process of suspension and debarment in government contracting and discretionary assistance. Understand the authority, purpose, and effect of these actions, as well as the causes and standards of review for debarment.

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Suspension and Debarment Concepts, Rules, and Process

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  1. RECOVERY OVERSIGHT OFFICE Suspension and Debarment Concepts, Rules, and Process OFFICE OF INSPECTOR GENERAL U.S. DEPARTMENT OF THE INTERIOR

  2. introduction Government contracts and discretionary assistance are awarded only to “presently responsible” parties. RECOVERY OVERSIGHT OFFICE

  3. Definitions • Suspension – agency official temporarily excludes a contractor from government contracting and government-approved subcontracting, or temporarily excludes a person from participating in covered transactions • Debarment – agency official excludes a contractor from government contracting and government-approved subcontracting for a specific time, or excludes a person from participating in covered transactions for a specific time RECOVERY OVERSIGHT OFFICE

  4. Authority to suspend and debar • Administrative remedy – decision about significant business risk of a person or organization as a potential contractor or participant • By inherent authority– necessarily incidental to effective administration of a statutory scheme Gonzalez v. Freeman, 334 F.2d 570 (D.C. Cir. 1964) • By express authority – derived from a statute or an executive order RECOVERY OVERSIGHT OFFICE

  5. Purpose • The remedy is consistent with and supports a basic objective of the Recovery Act which is prevention, as well as detection, of poor performance, fraud, waste, and abuse RECOVERY OVERSIGHT OFFICE

  6. Never use the remedy… • as punishment; • to coerce acceptance of civil or criminal settlements; or • to embarrass, harass or get even RECOVERY OVERSIGHT OFFICE

  7. Two rules • Two separate governmentwide debarment rules • For procurement: 48 CFR 9.4 • For nonprocurement (Discretionary Assistance Loans and Benefit Programs): OMB Guidelines at 2 CFR Part 180 adopted by DOI at 2 CFR Part 1400 RECOVERY OVERSIGHT OFFICE

  8. differences • Three key rule differences: • FAR Notice of Proposed Debarment (NPD) has immediate effect but nonprocurement NPD does not • Award ineligibility under FAR limited to prime contract and approved subcontracts • Lower tiers reached under nonprocurement rule RECOVERY OVERSIGHT OFFICE

  9. Effect of action • Reciprocal effect of action under rules P.L. 103-355, Section 2455 and E.O. 12689 • Prospective effect – new awards only • Awarding officials must separately decide proper action on existing awards RECOVERY OVERSIGHT OFFICE

  10. Effect of action (Cont.) • For contractors (individuals or companies) proposed for debarment, suspended, or debarred - excluded from receiving new contracts and federally approved subcontracts • For participants (individuals or organizations) – no new awards RECOVERY OVERSIGHT OFFICE

  11. Effect of action (cont.) • Ineligible persons cannot be agents, representatives, or principals, including key employees for award performance purposes • Names entered into the web-based Excluded Parties List System: http://www.epls.gov • Awarding officials must check before making new awards RECOVERY OVERSIGHT OFFICE

  12. Excluded parties list system RECOVERY OVERSIGHT OFFICE

  13. Causes for debarment • Offense-based causes from a conviction or civil judgment for: • Commission of fraud or criminal offense in connection with obtaining, attempting to obtain, or performing a public contract, subcontract, or nonprocurement award • Violation of Federal or State antitrust statues relating to offer submissions RECOVERY OVERSIGHT OFFICE

  14. Causes for Debarment (cont.) • Embezzlement, theft, forgery, bribery, records falsification and destruction, false statements, Federal criminal tax violation and tax evasion • Stolen property • Intentional violation of “Made in America” laws RECOVERY OVERSIGHT OFFICE

  15. Causes for debarment (cont.) • Any other offense “indicating a lack of business integrity or honesty that seriously and directly affects…present responsibility…” • Conviction or civil judgment is cause for debarment (including deferred prosecution) RECOVERY OVERSIGHT OFFICE

  16. Causes for Debarment (cont.) • Fact-based causes: • Serious violation of terms of government award such as willful failure to perform, or history of failure to perform on one or more award, Drug Free workplace laws, Buy America, and certain tax delinquencies RECOVERY OVERSIGHT OFFICE

  17. Causes for debarment (cont.) • DHS Secretary or AG finding of Immigration and Nationality Act (INA) employment provisions noncompliance (not reviewable in debarment proceedings) • Any other cause of so compelling and serious nature that it affects present responsibility RECOVERY OVERSIGHT OFFICE

  18. Standard of review and Burden • Fact-based cause (other than INA): by “preponderance of evidence” • Government has burden of proof • SDO must conduct fact-finding on facts material to action and “genuinely in dispute” RECOVERY OVERSIGHT OFFICE

  19. Minimum due process • Notice; • Opportunity to be heard; • Cross-examine witnesses present in fact-finding; and • Written decision based on an administrative record RECOVERY OVERSIGHT OFFICE

  20. Mitigating and aggravating factors • Disciplined employee • Agreed to implement remedial actions • Ethics training • Adequate time to eliminate causes • Management recognition of problem • Standards of conduct • Voluntary disclosure • Internal investigation • Full cooperation • Paid costs/ restitution RECOVERY OVERSIGHT OFFICE

  21. suspension • Action to protect integrity of contracts and assistance award process at earliest stage prior to completion of record on whether misconduct exists RECOVERY OVERSIGHT OFFICE

  22. Suspension (cont.) • Two Components: • Adequate evidence (probable cause) that upon investigation/legal proceedings cause for debarment will exist • Met by either criminal charging document or facts • Necessity for immediate action to protect program award integrity interests pending completion of legal proceedings RECOVERY OVERSIGHT OFFICE

  23. process • AIU gathers information on possible S&D candidates • DOI assistance programs can also be a source of information • Reliable record-keeping of key documents critical RECOVERY OVERSIGHT OFFICE

  24. Process (cont.) • AIU coordinates lead agency through the Interagency Suspension and Debarment Committee • AIU prepares Action Referral Memo (ARM) and attachments and refers to SDO for notice issuance action • AIU tracks action - may provide further support, as appropriate RECOVERY OVERSIGHT OFFICE

  25. Basic Documents for arm • Offense-based actions: • Final indictment, information, or other charging document • Plea agreement, and, if separate, supporting factual resume • Conviction order • Fact-based actions: • If contract or grant involved, copies of basic documents and evidence RECOVERY OVERSIGHT OFFICE

  26. QUESTIONS? Special thanks to the Environmental Protection Agency (EPA) RECOVERY OVERSIGHT OFFICE

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