Thoughts of suspension and debarment bring to my mind Bobby Darin’s song, Call Me Irresponsible:

Call me irresponsible
Yes I’m unreliable

Why?  Because acquisition regulations require federal government contractors to be “responsible” businesses and the Uniform Guidance regulations require the same of non-profits and other entities that are awarded federal government cooperative agreements and federal grants.  And, if you are irresponsible, the government may debar you.

Definition of Responsible

The Federal Acquisition Regulations define “responsible” federal government contractors as having:

  • The technical capability to perform awarded contracts;
  • Financial and accounting capabilities to comply with the FAR
  • Operational systems to manage contract requirements and to comply with the law and regulations
  • A history of and commitment to ethical conduct.

If a contractor is not responsible, then, depending on the reason, the contractor may be suspended and/or debarred from government contracting. FAR 9-104.1. For some contractors – this may mean the end of their company.  For entities with cooperative agreements or grants, the Uniform Guidance regulations take almost the same approach.

They best way to manage this risk is to not be irresponsible.  But, if you find your company accused of being irresponsible, there is a defined process to determine that; and, as part of the process, a contractor is allowed to defend themselves.

Suspension

The government can suspend a contractor from government contracting when the government has “adequate evidence” that there is a need for “immediate action” to protect the government from the irresponsible contractor.  A suspension is temporary while the government gathers more facts. For contractors or recipients of cooperative agreements or grants who under criminal investigation or who are indicted or convicted; or who have an executive or key employee under investigation, indicted or convicted, the government may rely on the fact there is an indictment or conviction to suspend.

Debarment

A debarment prohibits a contractor from government contracting for a specified period of time – usually three years.  A business or person when debarred is also debarred from getting government grants or loans, to include SBA loans. Generally, the government debars a contractor after giving the contractor notice and an opportunity to contest the proposed debarment.

To debar a contractor the government must find that there is a preponderance of the evidence proving that a contractor was irresponsible.

However, regulations make clear that just because there is a reason to debar, it does not mean that a contractor must be debarred.  Rather, given how serious suspension and debarment are, these sanctions should only be imposed when it is in necessary to protect the Government’s interests.

Also, note that suspension and debarment are not for purposes of punishment.  Instead they are designed to protect the Government from irresponsible contractors.

Defending Against Suspension and Debarment

To avoid suspension/debarment a contractor must prove it is responsible, that is it must prove to the government that it:

  • Can be trusted to perform the agreement
  • Has required financial and operating controls
  • Complies with applicable laws, and
  • Conducts business with integrity.

To prove this to the government the contractor generally needs to:

  • Conduct a risk assessment of its current operations to identify gaps in its compliance with laws and regulations and in its operational controls
  • Develop plans to address the gaps in compliance
  • Execute on the plans to address the gaps with internal controls like policies, procedures and trainings so its responsible going forward.

A Government agency may settle a debarment or suspension action at any time, to include having the contractor voluntarily agree to be excluded from government work.

Administrative Agreements

At times debarment may be avoided by entering an administrative agreement with the Government.  Administrative agreements are negotiated between the Government and the contractor.  An administrative agreement defines in detail what a contractor must do to be considered responsible.  And, the contractor must do the actions in the agreement to avoid debarment.  The agreement generally does not make findings about responsibility or determinations about the facts of a case.

Administrative Agreements are posted on the Government’s Federal Awardee Performance and Integrity Information System (FAPIIS) website.  So, as a contractor with such an agreement pursues additional government contracts, it must remember that its agreement will be available for review.

Abraham Lincoln:  You can’t escape the responsibility of tomorrow by evading it today.

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