One unique administrative tool available to the federal government is the ability to either suspend or debar persons or entities from federal contracts.  The suspension and debarment options are not punishments, but are available to the government to protect it from doing business with contractors deemed not sufficiently responsible.  A suspended or debarred contractor is ineligible for new contracts or for other federal assistance programs.  The suspension and debarment programs are administered by each agency’s Suspension Debarment Official (SDO).

Suspension or debarment actions can be asserted against contractors, persons or entities reasonably expected to become contractors, or agents of contractors.  Additionally, suspension and debarment actions can be initiated by an agency that has no contract with the target.

The government can suspend or debar affiliates, defined as persons or entities with the ability to control others.  The government may also suspend or debar a person or entity for third party actions imputed to the person or entity.  An example would be where an employee acts improperly resulting in his/her employer being suspended or debarred.

The suspension and debarment process is unique in that the target is notified in writing of the basis for the violation.  At the same time, the target’s identity is posted at www.sam.gov making the target immediately ineligible for new contracts.  The target has the right to make a written submission in opposition to the suspension/debarment and it may request and receive a copy of the administrative record containing the facts leading to the suspension/debarment.  There are no additional discovery rights.  

Contractors usually submit a writing either challenging the facts upon which the adverse action is based or demonstrating current responsibility to perform.  A conference between the SDO, other government representatives, and the contractor often occurs to discuss the action.

A suspension is based on adequate evidence of the contractor’s misconduct.  Suspension can last for 12-18 months or until the completion of any ongoing investigation or legal proceeding that generated the finding of misconduct.  Adequate evidence could be an indictment, a civil or criminal judgment for any business integrity issue, or failure to adequately perform a government contract.  The government through the SDO determines if the evidence is adequate.  A debarment is more serious, but usually does not exceed three (3) years.  

Federal government contractors and companies with a substantial amount of their business devoted to federal contracting should (1) insure that employees are familiar with the suspension and debarment tools available to the government, (2) have compliance programs in place, and (3) should have an aggressive program for responding to any proposed suspension and debarment by immediate correction of the alleged misconduct.