Suspension & Debarment:What You Need to Know

1. Suspension & Debarment:What You Need to Know • Maria Swaby • Director, Suspension & Debarment Division • GSA

2. 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

3. 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

4. Tools in the Government’s Tool Box Proposed Debarment Suspension Debarment Show Cause Letter Request for Information Administrative Compliance Agreement

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. Collateral Consequences • Potential termination of ongoing contracts • Reputational damage and loss of goodwill • Loss of revenue • Contraction of credit and/or denial of loans

16. 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

17. 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?

18. 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?

19. Present Responsibility? • Focus is on the contractor’s: • Honesty • Integrity • Ethics • Competence • Other Case-Specific Factors

20. 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 Overview of Factors Considered for Present Responsibility

21. 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

22. 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

23. 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

24. 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

25. GSA S&D Actions by Fiscal Year

26. Causes for GSA Debarments in FY 2011

27. 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

28. 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