Suspensions and debarments are “administrative remedies” used to prevent the Government from working with parties who are not “presently responsible”.
An individual or entity is not presently responsible if they engaged in criminal activity or other improper conduct, or have demonstrated serious poor performance to such a severe and compelling nature that it would lead to questioning their honesty, ethics, or competence.
Federal agencies use these remedies to exclude parties from obtaining new Federal contracts, certain subcontracts (procurement), discretionary assistance, certain funded lower-tiered transactions, leases, loans, loan guarantees, and other benefits (non-procurement).
Both suspended and debarred entities are listed in the General Services Administration (GSA) System for Award Management (SAM).
HealthProviders DB imports HHS and OIG exclusions from SAM.gov daily, keeping the database up to date.
The SAM suspensions and debarments are normalized, aggregated, and matched with the Healthcare Providers’ Profile as Exact or Possible matches, greatly simplifying your research.
What is a Suspension?
A suspension is a preliminary action taken by a Suspending and Debarring Official (SDO) to temporarily exclude a party from eligibility for new Federal Procurement and Non-procurement Awards.
Suspensions are applied pending completion of an investigation, audit, or review, or of a judicial or administrative proceeding that may ensue.
If legal or debarment proceedings have begun, the suspension may continue until those proceedings conclude.
However, if legal or debarment proceedings have not started, a suspension may not exceed twelve (12) months.
The SDO may grant a one-time extension of the 12-month limit for six (6) months.
What is Debarment?
Debarment is the final action taken by the Suspending and Debarring Official (SDO) to exclude a party from eligibility for new Federal Procurement and Non-procurement Awards.
Debarment is a suspension for a fixed, specified period, generally not to exceed three years.
The SDO has the discretion to either reduce or extend that time depending on the need to protect the Government’s interests.
What regulations apply to Suspension and Debarment?
There are procurement and non-procurement regulations that form the suspension and debarment regulations framework.
Procurement regulations
- 48 CFR Subpart 9.4 – Federal Acquisition Regulation (FAR)
- 48 CFR Part 1409 – Department of Interior Acquisition Regulation
Non-procurement regulations
- 2 CFR Part 180 – Office of Management and Budget (OMB) Guidelines to Agencies on Government-wide Debarment and Suspension
- 2 CFR Part 1400 – Nonprocurement Debarment and Suspension
What is the effect of a Suspension or Debarment?
Suspension and debarment render parties ineligible to receive new federal contract awards, specific subcontract awards, and new federal non-procurement awards.
Suspension or debarment triggers exclusion from new Federal procurement and non-procurement awards.
These remedies have a Government-wide, reciprocal effect. In other words, if the Department of the Interior (DOI) suspends or debars a party from procurement awards under the Federal Acquisition Regulation (FAR), that party is also suspended or debarred from DOI non-procurement awards (reciprocal effect) and from procurement and non-procurement awards across the other Executive Branch agencies or departments (Government-wide effect).
In addition, suspended and debarred parties cannot be agents, representatives, principals, or critical employees for performance purposes under Federal awards for otherwise eligible parties or participants.
Under minimal award-specific circumstances, agencies may determine, with the issuance of a written compelling reasons determination, that an award is necessary notwithstanding the fact that a party is suspended or debarred.
The Director, Office of Acquisition and Property Management, is the Department official authorized to issue such a determination.
Does Suspension or Debarment automatically cause the Termination of an existing award?
No.
Awarding officials decide the proper action and whether it is in the government’s best interests to continue the existing award separately.
Who can be Suspended or Debarred?
Any party that is not responsible and is reasonably expected to participate in Federal procurement or non-procurement programs may face suspension or debarment. Parties can include individuals, corporations, partnerships, and nonprofit organizations.
“Affiliates” – or those controlled by the primary lousy actor or primary poor performer – may also be subject to suspension and debarment.
Conduct may also be “imputed” from individuals to an entity, from an entity to individuals, and between entities. For example, the misconduct of a contractor may be attributed to an individual associated with the contractor who participated in, knew of, or had reason to learn of the contractor’s conduct.
What conduct can lead to Suspension or Debarment?
Either an indictment or information (a formal criminal charge made by a prosecutor without the necessity of obtaining a grand jury indictment), or fact-based causes, which are any information showing a lack of business honesty, integrity, or poor performance.
Information for a fact-based cause includes violation of the terms of an award, evidenced by willful failure to perform, a history of failure to perform on one or more awards, or specific tax delinquencies.
Offense-based causes
An offense-based cause is a conviction or a civil judgment for fraud, false statements, falsification of records, theft, bribery, or other misconduct that shows a lack of honesty or integrity.
Fact-based causes
A fact-based cause (e.g., performance) is any information showing a lack of business honesty, integrity, or poor performance.
Information for a fact-based cause includes violation of the terms of an award, evidenced by willful failure to perform, a history of failure to perform on one or more awards, or specific tax delinquencies.
Is there an evidentiary standard that must be met for a Suspension?
Yes.
A Suspending and Debarring Official (SDO) may suspend a party only when the SDO determines that there is adequate evidence and an immediate need for action to protect the Government’s interest.
The “adequate evidence” standard resembles the “probable cause” standard.
The government has the burden of proving cause for suspension.
The existence of an indictment, information, or the equivalent meets the standard and establishes cause for suspension under the regulations.
Without an indictment, information, or the equivalent, the Government must prove through documentary and other evidence that a cause for suspension exists.
Is there an evidentiary standard that must be met for Debarment?
Yes.
The standard of proof for debarment is “preponderance of the evidence.”
The preponderance standard means proof by information that, compared with information opposing it, leads to the conclusion that the fact at issue is more probably actual than not.
The government has the burden of proving cause for debarment.
A conviction, whether by trial, a guilty plea, or a civil judgment, meets the standard under the regulations.
An indictment alone is seldom sufficient, but an indictment, along with other corroborating evidence, such as an admission by the party, may meet the preponderance of the evidence standard.
For fact-based actions, the Government must prove, using documentary and other evidence, that a cause for debarment exists.
Is Debarment Permanent?
Not necessarily.
In most cases, debarment by a Suspending and Debarring Official (SDO) is not permanent.
Here’s why:
- Fixed Period: Debarment is generally for a fixed, specified period, usually not exceeding three years.
- SDO Discretion: The SDO has the authority to either reduce or extend the debarment period based on the specific circumstances and the need to protect the government’s interests.
- Exceptions and Extensions: While the general rule is a maximum of three years, there are exceptions. For example, debarment for violations of the Drug-Free Workplace Act may last up to 5 years. Additionally, debarment can be extended if the SDO deems it necessary to safeguard the government’s interests, according to Acquisition.GOV.
- Opportunities for Mitigation: Contractors can present information and arguments to the SDO to demonstrate their current responsibility and potentially influence the duration of the debarment, or even avoid it altogether.
In essence, while debarment is a serious consequence, it is usually temporary. The length of the debarment depends on the severity of the offense and the SDO assessment of the contractor’s present responsibility.
The SDO will consider mitigating or aggravating factors and remedial measures, and will use these factors to determine whether debarment is necessary to protect the Government’s interests.
While the government bears the burden of establishing a cause for action, the party bears the burden of demonstrating to the SDO that suspension or debarment is unnecessary.
What factors does the SDO consider when making the decision?
Several factors may influence the SDO’s decision, which are set out in 48 CFR Part §9.406-1 for actions under the Federal Acquisition Regulation (FAR), and in 2 CFR Part §180.860 for actions under the non-procurement regulations.
For actions taken under FAR, factors include, but are not limited to, whether practical standards of conduct and internal control systems were in place at the time of the activity:
- whether the party has taken appropriate disciplinary actions;
- whether the party voluntarily disclosed the activity; whether the party conducted a complete internal investigation;
- whether the party fully cooperated with Government agencies in the inquiry;
- whether the party fulfilled all civil, criminal, and administrative liabilities for the improper activity;
- whether the party implemented remedial measures;
- whether the party implemented new or revised review and internal control procedures and ethics training programs;
- and whether the party recognizes and understands the seriousness of the misconduct.
For actions taken under 2 CFR Part §180.860, factors include, but are not limited to:
- The actual or potential harm or impact of the wrongdoing; the frequency or the duration of the wrongdoing;
- any pattern or history of wrongdoing; any past exclusion or disqualifications by a Federal agency based on conduct similar to a cause for debarment;
- whether the party accepts responsibility and recognizes the seriousness of the wrongdoing;
- whether the party fully cooperated with the Government agencies during the investigation;
- whether the party fulfilled all criminal, civil, and administrative liabilities for the improper activity;
- the pervasiveness of wrongdoing; whether the party implemented appropriate corrective action or remedial measures;
- whether the principals tolerated the offense;
- whether the party conducted a full internal investigation;
- whether the party has practical standards of conduct and internal control systems;
- whether the party took appropriate disciplinary action against wrongdoers;
- and other factors that are appropriate to the circumstances of the particular case.
What is the decision-making process?
The suspension and debarment regulations require basic due process.
First, the agency must issue the party a written notice identifying the cause of action and how to contest it. (Affiliates must receive separate notice.)
Second, the party may submit a written opposition to the notice.
The party may also have an informal meeting with the Suspending and Debarring Official (SDO) upon request in offense-based cases and cases where material facts are not genuinely disputed. Such meetings may be held virtually.
Third, the SDO may order a fact-finding hearing if a genuine dispute of material facts exists.
However, the SDO will deny a fact-finding hearing in a pre-indictment suspension action if the U.S. Department of Justice states that the Government has a substantial interest in pending or contemplated legal proceedings based upon the same facts as the suspension and that the proceedings would be prejudiced by a fact-finding hearing.
Fourth, the SDO issues a written decision to the party based on the administrative record.
In addition, the SDO may resolve a matter by an administrative agreement if it determines it is in the government’s best interests.
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