Discussing debarment

The government has many arrows in its compliance enforcement quiver, but few are as lethal as debarment.

Often called the "death penalty" for a government contractor, a debarment essentially is an order to exclude a company from government contracting for a specific — and potentially quite lengthy — period of time.

The term was previously mentioned only in hushed tones among defense industry insiders. But recent events have brought it out of the closet and into the nation's living rooms. Anyone who has heard of Arthur Andersen, MCI — formerly WorldCom Inc. — or Sprint probably has at least a passing familiarity with the term.

For federal contractors, however, something more than a passing familiarity is necessary.

A federal agency invokes a debarment in order to preclude irresponsible contractors from continuing to contract with the government.

A debarment, in theory at least, is not designed to punish a contractor for past actions. Rather, it is designed to protect the government's interests by excluding contractors that demonstrate a lack of responsibility.

This distinction notwithstanding, the events that trigger a debarment, not surprisingly, are past actions. For example, a company can be debarred for the commission of fraud in connection with a public contract or subcontract, or for a serious violation of the terms of a government contract or subcontract.

Regardless of the rationale, its effect can be devastating. A debarment prohibits federal agencies from soliciting offers from, awarding contracts to or permitting subcontracting with debarred contractors. New orders under a pre- existing General Services Administration's multiple-award schedule contract may continue to be placed, however.

Additionally, in many cases, a debarment can have the collateral effect of preventing a company from contracting with state governments as well. Imagine having to explain that one to your vice president of state and local sales — or worse, your chief executive officer.

Savvy contractors will take steps to implement risk-mitigation plans well in advance of any problems. Such plans should include the following six elements:

* Maintain effective standards of conduct and an effective internal control system.

* Take disciplinary action against individuals responsible for wrongdoing.

* Implement remedial measures following the discovery of wrongdoing.

* Review internal control procedures regularly and revise as necessary.

* Implement an ethics training program.

* Develop an internal program that illustrates management's commitment to compliance.

Although these rules may not be able to shield a contractor from the government's debarment arrow in all circumstances, when implemented prudently and conscientiously, they may be able to deflect that arrow from the heart.

Aronie is a partner in the government contracts group of Sheppard Mullin Richter & Hampton LLP in Washington, D.C. He can be reached at jaronie@smrh.com.

The 2015 Federal 100

Meet 100 women and men who are doing great things in federal IT.

Featured

  • Shutterstock image (by venimo): e-learning concept image, digital content and online webinar icons.

    Can MOOCs make the grade for federal training?

    Massive open online courses can offer specialized IT instruction on a flexible schedule and on the cheap. That may not always mesh with government's preference for structure and certification, however.

  • Shutterstock image (by edel): graduation cap and diploma.

    Cybersecurity: 6 schools with the right stuff

    The federal government craves more cybersecurity professionals. These six schools are helping meet that demand.

  • Rick Holgate

    Holgate to depart ATF

    Former ACT president will take a job with Gartner, follow his spouse to Vienna, Austria.

  • Are VA techies slacking off on Yammer?

    A new IG report cites security and productivity concerns associated with employees' use of the popular online collaboration tool.

  • Shutterstock image: digital fingerprint, cyber crime.

    Exclusive: The OPM breach details you haven't seen

    An official timeline of the Office of Personnel Management breach obtained by FCW pinpoints the hackers’ calibrated extraction of data, and the government's step-by-step response.

  • Stephen Warren

    Deputy CIO Warren exits VA

    The onetime acting CIO at Veterans Affairs will be taking over CIO duties at the Office of the Comptroller of the Currency.

  • Shutterstock image: monitoring factors of healthcare.

    DOD awards massive health records contract

    Leidos, Accenture and Cerner pull off an unexpected win of the multi-billion-dollar Defense Healthcare Management System Modernization contract, beating out the presumptive health-records leader.

  • Sweating the OPM data breach -- Illustration by Dragutin Cvijanovic

    Sweating the stolen data

    Millions of background-check records were compromised, OPM now says. Here's the jaw-dropping range of personal data that was exposed.

  • FCW magazine

    Let's talk about Alliant 2

    The General Services Administration is going to great lengths to gather feedback on its IT services GWAC. Will it make for a better acquisition vehicle?

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above