Suspension and debarment of government contractors come into play when you do not comply with the terms and conditions of your contract. Not all companies understand what does debarred mean. The consequences are serious and can severely impact your business revenues. How you respond to a proposed suspension or debarment notice is critical.
This can include anything for contract clause compliance or involvement with contract procurement fraud, forgery, false statements and more.
Suspension and debarment of government contractors also give agencies protecting from doing business with individuals/companies/recipients who pose a business risk to the government. Suspension and debarment are not conclusive to what an agency alleges. Instead, the facts and circumstances drive the outcome.
Impact to Government Contractors
After you meet the “debarred meaning”, the impact your personal and business’ future can be a very serious matter. As a practical matter, developing internal audit reports and having your company evaluated for compliance can minimize the impact.
- Consider having a tailored compliance roadmap that minimizes terrible audit reports from DCAA, IG or DOJ.
Suspension or debarment of government contractors impact the ability of companies to participate in future government contracts, subcontracts, government loans and other federal programs. (See 2 CFR Part 180 and 2 CFR Part 1532). This can have a crippling effect of a company’s revenues.
When you are involved in criminal indictments, involved in theft, forgery, poor contract performance, of found making false statements to the federal government, suspension actions can last up to one year.
- The suspension action is effective immediately.
Appealing the government’s suspension or debarment action is possible but difficult. When looking at the suspension definition, concerns arise as to whether government contractors are already guilty without a trial or legal action. However, such a defense will not stand up in court. See information about appeals of suspension and debarment.
The meaning of debarment involves more serious consequences. If government contractors are convicted of judgments or involving environmental crimes, contract fraud, embezzlement, theft, forgery, bribery, poor performance, non-performance or making false statements to the federal government, you can be permanently debarred from doing business with the federal government.
Agency Discretion to Recommend Suspension and Debarment of Government Contractors
The law allows government agencies wide latitude to recommend suspension and debarment of government contractors for issues that are serious and that can seriously impact procurement integrity. This is a broad net. Some of the common actions that can trigger suspension and debarment of government contractors:
- fraud or criminal offenses in connection with obtaining, attempting to obtain, or performing a public contract
- violation of federal or state antitrust laws relating to the submission of offers
- embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, or receipt of stolen property
- violations of the Drug-Free Workplace Act of 1988
- intentional misuse of the “Made in America” designation
- violation of Trade Agreements Act (TAA)
- unfair trade practices, as defined in Section 201 of the Defense Production Act
- other offenses indicating a lack of business integrity or honesty that seriously affect the present contractor responsibility.
Besides the above list contracting agencies can also suspend you for any other action if there is evidence of “any other cause of so serious or compelling a nature that affects the present responsibility of a … contractor or subcontractor.”
A suspension lasts only as long as an agency’s investigation of the conduct for which the contractor was suspended, or any ensuing legal proceedings. It may not exceed 18 months unless legal proceedings have been initiated within that period.
Read more about Administrative Agreements During Suspension or Debarment
Find out more about Defending and Responding to Contractor Suspension and Debarment.
For more information about suspension and debarment of government contractors, or if you are facing indictment or involved in a suspension and debarment action, call a debarment lawyer or a white collar criminal defense attorney at 1-866-601-5518.