Suspension & Debarment:What You Need to Know

Maria SwabyDirector, Suspension & Debarment Division

GSA

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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

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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

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Tools in the Government’s Tool Box

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Suspension

Debarment

Show Cause LetterRequest for Information

Administrative Compliance Agreement

Proposed Debarment

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

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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

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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 natureJudgments / Convictions are not necessary

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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

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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

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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

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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

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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

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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

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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

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Collateral ConsequencesPotential termination of ongoing contractsReputational damage and loss of goodwillLoss of revenueContraction of credit and/or denial of loans

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Collateral Consequences, cont’dReduction in size of the business and/or

delay/cancellation of future expansion plansReduction in employees and/or compensationLoss of employees to competitorsDenial of commercial contracts, state/local contractsBankruptcy

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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?

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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?

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Present Responsibility?

• Focus is on the contractor’s:– Honesty– Integrity– Ethics– Competence– Other Case-Specific Factors

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• 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

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Overview of Factors Considered for Present Responsibility

Decision-makingDoes a cause for suspension/debarment exist?

If yes↓

Has contractor demonstrated present responsibility? ↓ ↓ ↓

Yes Maybe, but… No ↓ ↓ ↓

Terminate the Administrative Debarment Action Agreement

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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

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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

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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

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GSA S&D Actions by Fiscal Year

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Causes for GSA Debarments in FY 2011

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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

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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

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