Suspension & Debarment:What You Need to Know
Maria Swaby
Director, Suspension & Debarment Division
GSA
1
Legal Authority
• FAR Subpart 9.4
– FAR 9.400-9.402 Scope, Applicability, and Policy
– FAR 9.403 Definitions
– FAR 9.404 Excluded Parties List System (EPLS)
– FAR 9.405 Effect of Listing
– FAR 9.406 Debarment
– FAR 9.407 Suspension
2
Protection Not Punishment
• Suspension and debarment (S&D) are key tools used
to protect the Government from the risks associated
with doing business with non-responsible contractors
• S&D is not used to punish contractors for past
misconduct
3
Tools in the Government’s Tool Box
Request for
Information
Proposed
Debarment
Show Cause Letter
Debarment
Suspension
Administrative
Compliance
Agreement
4
Requests for Information
• Do not result in ineligibility
– Not listed on EPLS
• Information gathering tool
– Ex. RFIs may be sent to a contractor that has made
a mandatory disclosure in order to gain more
information about the circumstances or the
individual alleged to have engaged in misconduct
5
Show Cause Letters
• Do not result in ineligibility
– Not listed on EPLS
• A tool used to ascertain the contractor’s position
• Used where responsibility concerns exist, but
exclusion is not deemed appropriate at that moment
in time
6
Causes for Suspension & Debarment
• Suspension and Debarment may be based on
improper conduct reflecting negatively on a
contractor’s responsibility
– Criminal conduct
– Unethical conduct indicating a lack of business
integrity or business honesty
– Willful violations of contract terms
– History of a failure to perform
– Anything of so serious or compelling a nature
Judgments / Convictions are not necessary
7
Suspension and Debarment
• Suspensions are initiated through notices of
suspension
• Debarment actions are initiated through notices of
proposed debarment
• Both result in immediate exclusion
– Listing on EPLS
8
Suspension
• Facts still being developed through an investigation
or legal proceedings
• No conviction or civil judgment exists
• Adequate evidence is information sufficient to
support the reasonable belief that a particular act or
omission has occurred
• Used where immediate action is necessary to protect
Government’s interests
9
Length of Suspensions
• Generally, suspensions may last 12 months before
legal proceedings are initiated
• Once legal proceedings are initiated, the suspension
may stay in place until the proceedings conclude
10
Debarment
• Investigation or legal proceeding has concluded
resulting in conviction or civil judgment, or
• In the absence of a conviction or civil judgment,
preponderance of evidence exists of improper
conduct
– Evidence that leads to the conclusion that the fact
is more probably true than not
• Generally a debarment lasts 3 years—fact dependent,
may be longer or shorter
11
Burdens
• Government must find that sufficient evidence exists
to support the action
• Adequate evidence for suspension
• Preponderance of the evidence for proposed
debarment, debarment
• Once sufficient evidence is established, the burden
shifts to the contractor to show present responsibility
and that suspension or debarment is unnecessary
12
Opportunity to Respond
• Contractors are given 30 days to respond
• Contractors may request a meeting to make an oral
presentation in support of a written submission
• Decisions are based on the Administrative Record,
which is provided to the contractor upon request
• Contractor is not entitled to discovery
13
Effects
• Listed on the Excluded Parties List System (EPLS)
• Ineligibility for new contracts, including task orders—
May continue performing current contracts
• Agencies may not exercise options under existing
contracts, or issue modifications that add work or
extend duration
• May not perform subcontracts equal to or greater
than $30K
• May not act as a representative or agent of other
contractors
14
Collateral Consequences
Potential termination of ongoing contracts
Reputational damage and loss of goodwill
Loss of revenue
Contraction of credit and/or denial of loans
15
Collateral Consequences, cont’d
Reduction in size of the business and/or
delay/cancellation of future expansion plans
Reduction in employees and/or compensation
Loss of employees to competitors
Denial of commercial contracts, state/local contracts
Bankruptcy
16
Present Responsibility (PR) Explored
• The PR assessment only comes after there is a
common understanding of the underlying misconduct
• We must first know what transpired in the past and
why it occurred in order to assess whether it will
reoccur
• Despite prior misconduct, is the contractor presently
responsible?
17
What Is Present Responsibility?
• PR focuses on the perceived ability of a contractor to
contract with the Government in a responsible
manner on a going forward basis
• In essence, can the contractor be trusted to perform
in accordance with contract requirements, governing
law, and, overall, to conduct themselves ethically?
18
Present Responsibility?
• Focus is on the contractor’s:
– Honesty
– Integrity
– Ethics
– Competence
– Other Case-Specific Factors
19
Overview of Factors Considered for
Present Responsibility
•
•
•
•
•
•
Standards of Conduct
Voluntary Disclosure
Internal Investigation
Full Cooperation
Paid Costs/Restitution
Disciplined Employee
• Agreed to Implement
Remedial Actions
• Ethics Training
• Adequate amount of
time passed
• Management
Recognition of Problem
20
Decision-making
Does a cause for suspension/debarment exist?
If yes
↓
Has contractor demonstrated present responsibility?
↓
↓
↓
Yes
Maybe, but…
No
↓
↓
↓
Terminate the
Administrative
Debarment
Action
Agreement
21
Administrative Agreements
• Documents remedial measures taken to prevent
reoccurrence
• Often includes outside and independent
reviews/audits by consultants/experts
• Requires ethics and compliance program
improvements
• Overall, gives Government assurances and
protection
• Generally lasts 3 years
22
Administrative Agreements
• Scheduled Reports to Suspension and Debarment
Official (SDO)
– Disclosure of:
• Litigation and investigations
• Ethics hotline calls
• Internal investigations
• Usually provides that violation of Administrative
Agreement is a separate and independent basis for
debarment
23
Benefits of Suspension & Debarment
• Protects Government
• Enables the Government to motivate positive
behavior within organizations
– To demonstrate present responsibility, contractors
often must enhance their ethics and compliance
programs
– The process, alone, is an eye opener for
contractors and often leads to positive-long lasting
change
24
GSA S&D Actions by Fiscal Year
25
Causes for GSA Debarments in FY
2011
26
Lessons Learned
• S&D practice at GSA teaches us that S&D is very
effective in preventing non-responsible contractors
from receiving Federal contracts
• Of equal importance, S&D often results in positive,
long lasting ethical behavior of contractors
27
Contact Information
• Joseph Neurauter, Suspension & Debarment Official
– Joseph.Neurauter@gsa.gov
– (202) 219-3454
• Maria Swaby, Director, GSA Suspension & Debarment
Division
– Maria.Swaby@gsa.gov
– (202) 208-0291
28