Suspension and Debarment – Basic Information
What is the Purpose of Suspension and Debarment Actions?
The suspension and debarment process is set in place to protect the government from fraud, waste, and abuse in Federal procurement and other non-government contract programs. Suspension and debarment of government contractors or individuals exclude the person or company from doing business with the Federal Government. The exclusions make sure that the government only does business with “responsible” contractors or individuals. The Federal Acquisition Regulation (FAR), at 48 CFR Subpart 9.4, Debarment, Suspension, and Ineligibility, provides rules for government contracting actions. Contractors must keep in mind that debarment or suspension acts, whether or not considered procurement actions can reach each other and cause the same result for companies and individuals. See Executive Order 12549
The General Services Administration (GSA) maintains the list of debarred contractors and individuals. Conduct that can lead to being suspended or proposed for debarment from doing business with the United States includes procurement fraud under the SBA programs, falsification of documents relating to contract payments, applying or bidding on contracts, falsification of documents, qualifications, or any other failure to follow the regulations and contract or financial assistance requirements. Suspension and debarment can cause the company’s cash flow to be crippled and sometimes even put the company out of business. This is why getting the proper legal help is essential.
Meaning of suspension: Administrative proceedings for suspension of a government contractor excludes a company or individual from being involved in federal contracting and financial assistance awards government-wide on any new contracts or financial assistance awards dated on or after the date of the suspension. The effect of a suspension is immediate. A suspension is a temporary exclusion action that lasts until the conclusion of the criminal indictment, investigation of trial, or administrative proceedings upon which the action is based, or for 12 months or 18 months if the prosecuting official justifies an extension in writing.
A suspension may be based on an indictment, information, or the agency’s independent, adequate evidence that a company or individual committed fraudulent conduct (e.g. public contracts and financial assistance, such as contract & financial assistance fraud, embezzlement, theft, forgery, bribery, poor performance, non-performance, or false statements).
Government Contracts Debarment
Meaning of debarment: A government debarment results in an exclusion from contracting with the federal government, using any financial assistance government-wide for a specified period. A company can be debarred for up to three years from the date the debarment decision is finalized. The debarring official can extend that time if supported by the facts. Both contractors and government employees can be debarred. As a general rule, prime contractors cannot do business with debarred subcontractors.
Debarment may be based on criminal convictions, civil judgments or the contracting agency’s independent investigation or evidence proving by a preponderance of the evidence that a contractor or individual was involved in fraudulent conduct on public contracts, such as contract and financial assistance fraud, embezzlement, theft, forgery, bribery, poor performance, non-performance or false statements as well as other causes. All federal contractors and employees excluded from receiving government grants and government contracts are listed on the GSA’s System for Award Management available online at www.SAM.gov.
What is the Suspension & Debarment process?
- Matters are referred to the suspension and debarment official (SDO) from the contracting office, Office of Inspector General (IG) and more
- SDO makes a decision based on the referral
- Contractors are immediately listed on www.SAM.gov if they are suspended or proposed for debarment
- When suspended proposed for debarment, contractors may submit matters in opposition demonstrating present responsibility (this is where an experience debarment lawyer comes in)
- If requested, SDO may meet with the contractor
- If additional facts are presented, SDO makes a final decision which is provided to the contractor
Affiliation is a unique term that can also be carried over to Suspension and debarment exclusions. The exclusion can also extend to include subsidiaries, parent companies & other individuals, who may be suspended or debarred through findings of affiliation with excluded contractors.
Impact of Criminal Investigations and Charges
One of the commonly-missed impacts of suspension and debarment is that while a company is being investigated or charged with a crime of procurement fraud, the evidence in the investigation or legal proceedings can also impact the basic debarment or suspension case. Having a suspension and debarment lawyer on both sides may avoid a problem of inconsistent statements and testimony that can impact the criminal case or both.
For Immediate Help With Proposals for Debarment– If you are being suspended or debarred from government contracts or an employee being debarred, please call our suspension and debarment lawyers at 1.866.601.5518.