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Debarment

Lawyers - Federal Government Contracts - Debarment

The Government can suspend or debar a company, individual employee, or corporate officer from doing business with the federal government.  We understand the drastic consequences of a suspension or debarment.  The contractor may challenge the Government’s decision to debar or suspend it from future federal procurements.  We successfully defended a contractor facing debarment by the Air Force relating to a multimillion dollar contract.

The debarring official decides whether a contractor should be debarred.  The debarring official must base his decision on the "administrative record."  Typically, the administrative record starts with documentation and findings gathered by agency investigators.  The contractor has the right to supplement the administrative record with documentation helpful to its case, as well as filing a written response to the proposed debarment.

The contractor is also entitled to meet with the debarring official.  This is an excellent opportunity to put a face to the company and emphasize the company's dedication to procurement integrity.  We recommend presenting the debarment official a written presentation during this face-to-face meeting.

Debarment is not suppose to be a penalty for past acts.  Debarment is appropriate if the contractor cannot be currently trusted.  For example, if the contractor has done nothing to avoid future misconduct and is not cooperating with the federal investigators.  Thus, when faced with a potential debarment, the contractor must take steps to demonstrate its commitment to honesty and procurement integrity.  The debarment regulations mention the following remedial measure and mitigating factors that the debarment official must consider:

  1. Whether the contractor had effective standards of conduct and internal control systems in place at the time of the activity which constitutes cause for debarment or had adopted such procedures prior to any Government investigation of the activity cited as a cause for debarment.
  2. Whether the contractor brought the activity cited as a cause for debarment to the attention of the appropriate Government agency in a timely manner.
  3. Whether the contractor has fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the debarring official.
  4. Whether the contractor cooperated fully with Government agencies during the investigation and any court or administrative action.
  5. Whether the contractor has paid or has agreed to pay all criminal, civil, and administrative liability for the improper activity, including any investigative or administrative costs incurred by the Government, and has made or agreed to make full restitution.
  6. Whether the contractor has taken appropriate disciplinary action against the individuals responsible for the activity which constitutes cause for debarment.
  7. Whether the contractor has implemented or agreed to implement remedial measures, including any identified by the Government.
  8. Whether the contractor has instituted or agreed to institute new or revised review and control procedures and ethics training programs.
  9. Whether the contractor has had adequate time to eliminate the circumstances within the contractor’s organization that led to the cause for debarment.
  10. Whether the contractor’s management recognizes and understands the seriousness of the misconduct giving rise to the cause for debarment and has implemented programs to prevent recurrence.

The existence or nonexistence of any mitigating factors or remedial measures listed above is not necessarily determinative of a contractor’s present responsibility.  The contractor has the burden of demonstrating, to the satisfaction of the debarring official, its present responsibility and that debarment is not necessary.

 

48 CFR 9.406-4 -- Period of Debarment

(a)(1) Debarment shall be for a period commensurate with the seriousness of the cause(s). Generally, debarment should not exceed 3 years, except that --

(i) Debarment for violation of the provisions of the Drug-Free Workplace Act of 1988 (see 23.506) may be for a period not to exceed 5 years; and

(ii) Debarments under 9.406-2(b)(2) shall be for one year unless extended pursuant to paragraph (b) of this subsection.

(2) If suspension precedes a debarment, the suspension period shall be considered in determining the debarment period.

(b) The debarring official may extend the debarment for an additional period, if that official determines that an extension is necessary to protect the Government’s interest. However, a debarment may not be extended solely on the basis of the facts and circumstances upon which the initial debarment action was based. Debarments under 9.406-2(b)(2) may be extended for additional periods of one year if the Secretary of Homeland Security or the Attorney General determines that the contractor continues to be in violation of the employment provisions of the Immigration and Nationality Act. If debarment for an additional period is determined to be necessary, the procedures of 9.406-3 shall be followed to extend the debarment.

(c) The debarring official may reduce the period or extent of debarment, upon the contractor’s request, supported by documentation, for reasons such as --

(1) Newly discovered material evidence;

(2) Reversal of the conviction or civil judgment upon which the debarment was based;

(3) Bona fide change in ownership or management;

(4) Elimination of other causes for which the debarment was imposed; or

(5) Other reasons the debarring official deems appropriate.

 

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