Under legislation recently enacted into law, Congress for the first time requires the establishment of a database identifying certain government contractors, defense or otherwise, who have violated the law. (Section 872 of Public Law 110-417). The “Duncan Hunter National Defense Authorization Act for Fiscal Year 2009” (“the Act”) requires the General Services Administration (“GSA”) to establish this database within one year of enactment into law, which occurred on Oct. 14, 2008. This article analyzes the database and the information that will be included within it, as well as how it will be used by government officials in connection with the award and performance of federal agency contracts and grants.  

Creation and Contents of Database

Under the Act, the GSA shall establish and maintain a database “regarding the integrity and performance of certain persons awarded federal agency contracts and grants for use by federal agency officials having authority over contracts and grants.” (Section 872(a)). The database shall include information on certain civil, criminal, and administrative matters, described in full below, for (1) “[a]ny person awarded a federal agency contract or grant in excess of $500,000”; and (2) “[a]ny person awarded such other category or categories of Federal agency contract as the Federal Acquisition Regulation may provide.” (Section 872(b)(1-2)).  

For those persons identified above, Section 872(c) of the Act requires the GSA to include information occurring over “the most recent five year period” related to (1) judicial matters, including: criminal, civil and administrative proceedings “in connection with the award or performance of a contract or grant with the Federal Government”; and (2) other administrative matters, including: default, debarment and suspension proceedings, as well as certain matters falling under either the Office of Federal Procurement Policy Act or Federal Acquisition Regulation.  

The Act describes the following criminal, civil, and administrative proceedings related to the award or performance of a contract or grant with the federal government that shall be included in the database:  

  • Criminal proceedings that result in conviction.
  • Civil proceedings with a “finding of fault and liability that results in the payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more.”
  • Administrative proceedings with a “finding of fault and liability that results in (i) the payment of a monetary fine or penalty of $5,000 or more; or (ii) the payment of a reimbursement, restitution, or damages in excess of $100,000.”
  • A disposition of any criminal, civil, or administrative proceeding where there was “an acknowledgment of fault” by the person that would have led to the results described above. (Section 872(c)(1)(a-d)).  

The Act describes the following additional administrative proceedings that shall also be included in the database:

  • Situations where a federal contract and grant award was terminated because of default.
  • Each federal suspension and debarment of a government contractor.
  • Each federal agreement to “resolve a suspension or debarment proceeding.”
  • “Each final finding by a Federal official that a person has been determined not to be a responsible source under subparagraph (C) or (D) of section 4(7) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(7)).”
  • Such other information as shall be provided for purposes of [section 4(7) of the Office of Federal Procurement Policy Act] in the Federal Acquisition Regulation.
  • “To the maximum extent practical, information similar to the information covered [above] in connection with the award or performance of a contract or grant with a State government.” (Section 872(c)(2-7)).  

In addition, the GSA is charged with developing policies regarding notification of any covered persons when information is entered into the database, and to provide covered persons with the chance to include comments in response. (Section 872(d)(2)).  

Use of Database

Once up and running, the Act provides that the database shall be available “to appropriate acquisition officials of Federal Agencies, to such other government officials as the [GSA] determines appropriate, and, upon request, to the Chairman and Ranking Members of Congressional committees with jurisdiction.” (Section 872(e)(1)). The Act requires its use for “a contract or grant in excess of the simplified acquisition threshold under section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11)).” (Section 872(e)(2)(A)). Finally, “any persons with Federal agency contracts and grants valued in total greater than $10,000,000” shall submit information required for inclusion in the database and update this semiannually. (Section 872(f)(1-2).  

Conclusion

By creating a database that details the criminal, civil, and administrative misconduct of contractors, Congress has provided a valuable tool to help federal agencies make acquisition decisions. It is expected that there will be more efforts to bring transparency to the government contracting process, especially when Congress reviews efforts by GSA to bring the database up and running over the course of next year. We will continue to monitor this situation and advise as to any additional measures affecting government contractor accountability.