National 8(a) Association
Conference June 2015
Different Viewpoints When a Government Contract
Goes Wrong: Department of Justice, Private Practice
Attorney, and a Suspension and Debarment Official
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Your Presenters: Kevin Feldis
 Kevin Feldis
 Kevin Feldis is the First Assistant United States Attorney and Chief of
the Criminal Division of the United States Attorney's Office for the
District of Alaska. He has been a federal prosecutor since 1999, and
has handled hundreds of federal cases involving fraud, federal
programs, corruption, violent crime, firearms and environmental
crime.
 Mr. Feldis graduated with honors from Yale University in 1990 and
received his law degree from the University of Chicago Law School in
1994. Before joining the U.S. Attorney’s Office, he was a law clerk for
a Federal District Court Judge in Illinois, and was in private practice at
national law firms in both Washington DC and in Alaska. Beginning
this fall, he will be an adjunct professor at the Seattle University
School of Law, Anchorage campus.
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John Klein
 John Klein, Associate General Counsel for procurement law
United States SBA
Principal Legal Advisor to senior Agency officials and their staffs
with respect to the 8(a) Business Development program; the
Agency’s Government Contracting programs, including the
small business set-aside, subcontracting and Certificate of
Competency programs; the HUBZone program; the Small
Business Innovation Research program; the Size Standards
program; the Service Disabled Veteran-Owned Small Business
program; SBA’s internal contracting procedures; and
Suspension and Debarment Official for SBA
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Christine Williams
Adjunct Professor of Law, Seattle University, Government Contracting,
Satellite Program
Adjunct Professor, Alaska Native Executive Leadership Program,
Master’s Program, Government Contracting and the 8(a) Program
Partner, Davis Wright Tremaine LLP
Christine concentrates on Government Contracting from counseling on
qualifications and administration to disputes and crisis. She is often
involved in sensitive internal investigations and frequently interacts with
Government agencies when a company faces a tough situation.
Christine is known for her deep experience with the SBA programs.
Despite having a national practice, as a born and raised Alaskan, she
understands the unique challenges that may be faced by Alaskan
companies that they often encounter when it comes to Government
Contracting on a national basis.
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Private Practioner Perspective: Who is Involved
Agency Resources
OIG
Main Justice
/
Suspension and
Debarment Official
AUSA
Contracting
Officer
SBA
Investigative
Agencies
Contractor
DCAA
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Private Practioner Perspective: General Rules
 Develop facts in a thorough and reliable way
 Promote credibility and avoid the appearance of conflicts
 Report findings clearly
 Use the findings to protect the business
 Do no harm
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Private Practioner Perspective: Initial Steps
 Do not allow any misconduct to continue
 Have a plan
 Have a team: internal and external: points of contact
 Who are the players: Government, agencies, media, GAO,
Inspector Generals, DOJ
 What has been done: Civil investigatory demand, internal
complaint, subpoena, search warrant….
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Private Practioner Perspective: Data Collection
 Quickly and quietly
 No obstruction (do no harm)
 Keep confidentiality
 Word may spread be prepared
 Assemble data and prepare for interviews
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Private Practioner Perspective: Interviews in General
 Where is the harm coming from and who is likely the main
cause, if any
 Has it spread
 Capacity to be surprised
 Capacity to understand context and out of context statements,
emails, etc.
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Private Practioner Perspective: Interviews
 Be prepared
 Two interviewer rule
 Give Upjohn at all interviews
 Document the interview, keep opinions out
 Whether or not to record the interview
 Be prepared for employee questions they always come
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Private Practioner Perspective:
 Reports and how to do them
 Corrective measures, if needed, in place/recommended
 Decisions regarding the Government (if not already involved)
– Mandatory Disclosure
– Voluntary Disclosure
– Compliance with the law certifications
– 8(a) Good Character
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Suspension and Debarment Perspective: Types
 Administrative
– Procurement (Federal Acquisition Regulation)
– Non-Procurement (Non-Procurement Common Rule)
– Government-wide effect (E.O. 12689)
 Statutory
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Suspension and Debarment Perspective: FAR 9.4 Policy
 Protect the U.S. Government
– Integrity of contracting process
– Quality goods and services
 In the public interest
 Not punishment
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Suspension and Debarment Perspective: Causes for
Suspension FAR 9.407-2 Adequate Evidence of:
 Fraud or crime in connection with a public contract
 Antitrust violation relating to submission of offers
 Embezzlement, bribery, false statements, tax offenses, etc.
 Drug-Free Workplace violation
 False “Made in America” inscription
 Unfair trade practice
 Delinquent taxes
 Failure to disclose credible evidence of criminal or False Claims Act
violation or overpayments
 Any other offense affecting present responsibility
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Suspension and Debarment Perspective: Causes for
Debarment FAR 9.406-2



Conviction or Civil Judgment
–
Fraud or crime in connection with a public contract
–
Antitrust violation relating to submission of offers
–
Embezzlement, bribery, false statements, tax offenses, etc.
–
False “Made in America” inscription
–
Any other offense affecting present responsibility
Preponderance of Evidence
–
Serious violation of Gov’t contract terms
–
Drug Free workplace violation
–
False “Made in America” inscription
–
Unfair trade practice
–
Delinquent taxes
–
Failure to disclose credible evidence of criminal or FCA violation or overpayment
Any other offense affecting present responsibility
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Suspension and Debarment
Official (SDO)
 Understand the SDO's responsibility
– Not to punish, but to protect the federal agency
– Assess the present responsibility of the named party
– Once the SDO has suspended a party or proposed a party for
debarment, the practical burden to demonstrate responsibility shifts to
the named party
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Suspension and Debarment
Official (SDO) (cont)
 Recognize the SDO's discretion
– Responsibility is a subjective assessment
– SDO final action is subject to review, but historically difficult to reverse
– SDO has authority to debar for extended periods – one Army
debarment was for 14 years
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Agency Options
 Show Cause Letters / Requests for Information
 Administrative Agreements
 Narrow scope of the debarment
 Expand scope of debarment
– Affiliates
– Imputation
– Joint Venture
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Government Coordination
of Remedies
 Suspension and debarment activity is monitored by
Government fraud counsel
 Early suspension and debarment can “enhance” parallel
criminal and civil proceedings for Government or vice versa
 Government does not have a policy of global settlements
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FAR Mitigation Factors
 Debarment – FAR 9.406
 Suspension – Uses the same factors as debarment
 A contractor has to consider which mitigation factors it has
satisfied or can satisfy prior to presentation of its position and
then implement the mitigation factors, as appropriate in the
individual case
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FAR Mitigation Factors (cont)

The existence/nonexistence of any single mitigating factor is
not necessarily dispositive

Contractor must demonstrate to SDO's satisfaction that it is
presently responsible and that suspension or debarment is
unnecessary
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Special Considerations
for the 8(a) Contractor
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Special Considerations
for the 8(a) Contractor
 SBA 8(a) program has certain admission requirements
 SBA regulations state that “good character” is
required for admission into the program. Good
character means: (1) no past / present criminal
conduct; (2) no debarment or suspension; and (3) no
violations of SBA rules
 If statements on admission application are not true
there are consequences
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SBA 8(a) Suspension:
13 CFR 124.305
 Following a notice of intent to terminate participation
in the 8(a) program, the SBA may suspend a
participant when the SBA determines that suspension
is needed to protect the interests of the Federal
Government
– Clear lack of program eligibility
– Conduct indicating a lack of business integrity
• Biggie: false statements to the Federal
Government
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SBA 8(a) Suspension:
13 CFR 124.305 - Notice
A notice of suspension will provide the following information the
basis of the suspension and that
 Suspension is immediate and will continue pending:
– completion of further investigation
– a final program termination determination,
– or some other specified period of time;
 8(a) contracts, will not be made during the pendency of the
suspension unless
– it is determined by the head of the relevant procuring
agency or an authorized representative to be in the best
interest of the Government to do so,
– and SBA adopts that determination;
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SBA 8(a) Suspension:
13 CFR 124.305 - Notice
 Company must complete previously awarded section
8(a) contracts
 Suspension is effective throughout SBA
 A request for a hearing on the suspension will be
considered by an Administrative Law Judge at OHA,
and granted or denied as a matter of discretion
 The program term will resume only if the suspension
is lifted or the firm is not terminated
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SBA 8(a) Suspension:
13 CFR 124.305 - Appeal
 A company can appeal a suspension decision
– the suspension remains in effect during appeal
 On appeal, the SBA has the burden of showing that
"adequate evidence" exists for the suspension
 "Adequate evidence"
– Information in the record before SBA
– Sufficient to support the belief that suspension is
necessary
 SBA need not demonstrate that an act or omission
actually occurred
22527367
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SBA 8(a) Termination:
13 CFR 124.303
 The SBA can terminate a company’s participation in the 8(a)
program if the contractor or its principles is debarred or
suspended under the FAR
 The SBA may also terminate a company’s participation in the
8(a) program for other reasons, including conduct by the
company, or a principal of the company, indicating a lack of
business integrity
 Such conduct may be demonstrated by information related to a
criminal indictment or guilty plea, a criminal conviction, or a
judgment or settlement in a civil case
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SBA 8(a) Termination:
13 CFR 124.303 - Examples
 False information on 8(a) application
 Failure by the company to maintain its eligibility for program
participation
 Failure by the company for any reason, to maintain ownership,
full-time day-to-day management, and control by
disadvantaged individuals-including death; [ownership/control]
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SBA 8(a) Termination:
13 CFR 124.303 - Examples
 Debarment, suspension, voluntary exclusion, or ineligibility of
the company or its principals
 Conduct by the company, or any of its principals, indicating a
lack of business integrity
 Willful failure by the Participant to comply with applicable
labor standards and obligations
 Material breach of any terms and conditions of the 8(a)
Program Participation Agreement
 Willful violation by a company, or any of its principals, of any
SBA regulation pertaining to material issues
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SBA Mitigating Factors
 Likely a lot like the FAR provisions
 Intent or mistake
 What type
 How far reaching
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Questions???
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