Administrative agreements during suspension or debarment, in essence, focus on the trust from the agency that the contractor will comply with the terms and conditions. The government agency has decided to give the company a second chance to prove that is worthy of getting more revenues from the federal government.
Administrative agreements must be taken seriously. Attempts to divert away from the terms and conditions can have severe consequences for both the company and any corporate executive charged with criminal activity.
Individual Company Executives
In practice, a corporate executive is usually indicted and ultimately pleads guilty or is convicted of some criminal activity. This can include procurement fraud, conspiracy, wire fraud or other crimes.
If the suspension and debarment officials believe there is a reason to enter into an Administrative Agreement, the company executive is removed from the corporation and cannot exercise any control or decision-making in the business operations whatsoever.
- Any actions after agreeing to those terms that contradict the agreement can end up with the company back into the debarment or suspension action.
- An administrative Agreement is typically entered for the benefit of the company and not the corporate executive.
What Happens When Government Agencies Issue Administrative Agreements During Suspension or Debarment?
When agency suspension and debarment officials enter into an Administrative Agreement, there may be trustees assigned to step in and make decisions on behalf of the company.
These individuals or corporations must uphold their fiduciary duties to the company, and not the corporate executive. Suspension or debarment trustees are typically required to submit reports to the agency officials certifying that the terms and conditions of the Administrative Agreement are being met.
When entering into Administrative Agreements during suspension or debarment, trustees typical hire attorneys to provide legal advice on behalf of the company. This obligation can be pretty broad. For example, an assigned lawyer may advise trustees whether their actions violate the terms and conditions of the Administrative Agreement, or whether certain decisions are in the best interest of the company.
Repercussions on Non-Compliance With Administrative Agreements
When any party involved in Administrative Agreements during suspension or debarment is non-compliant, the results ultimately can impact the company’s future. Sometimes the suspension or debarment officials may appoint an Ombudsman (a third party) to investigate the matter and report back to the board.
Depending on the Ombudsman’s findings, the suspension or debarment board could determine that there is a breach of the Administrative Agreement. In this case, the board may elect to resume suspension or debarment actions. As a result, the company suffers, and employees will lose their jobs.
For help with issues related to Administrative Agreements during suspension or debarment, call our Suspension and Debarment Attorneys at 1-866-601-5518.