Agencies could lose some suspension and debarment discretion

Defense bill would mandate action against contractors in some situations, rather than allowing agencies to decide case by case.

Legislators continue to slowly alter the approach that agencies are to take in suspending or debarring a company from working with the government.

The fiscal 2013 National Defense Authorization Act (H.R. 4310) would require agency officials to suspend or debar a contractor for misrepresenting itself as a small business. The bill would remove officials’ ability to consider whether the misrepresentation rises to the level of a serious lack of business integrity justifying suspension or debarment, and make the measures mandatory.

The provision clarifies that misrepresentation as a small business is an independent basis for suspension or debarment of a contractor, wrote the House Armed Services Committee in a report on the bill. Ultimately, the provision lays down a bright line, which takes discretion away from an agency’s suspension and debarment official, said Trey Hodgkins, senior vice president of national security and procurement policy at TechAmerica, an industry group.

“It’s an ‘it is or it isn’t’ kind of question," when circumstances can allow for other options, such as administrative agreements, he said.

Furthermore, industry experts and government procurement officials have said the suspension or debarment options are supposed to be for the protection of taxpayers and not punishment for contractors. According to the Federal Acquisition Regulation, “The serious nature of debarment and suspension requires that these sanctions be imposed only in the public interest for the government’s protection and not for purposes of punishment.”

Sen. Claire McCaskill (D-Mo.) has pushed for more automatic suspensions and debarments. Her Comprehensive Contingency Contracting Reform Act (S. 2139) includes a provision requiring suspension of a contractor from government work if criminal charges or accusations of fraud are leveled at the company. Her bill would also invoke the measure if a federal official determines that the contractor failed to pay the government what’s due in connection specifically with an operation overseas.

The automatic suspension requirement is a bad idea in the eyes of many experts. The Wartime Contracting Commission, for example, backed off its early support for the automatic action in its final report. Commission members had concerns that the government doesn’t use its suspension authority enough. Early on, commissioners had said that the government needed to mandate suspensions.

On top of that, procurement officials in the Office of Federal Procurement Policy and in the Defense Department told McCaskill in 2011 that automatic suspensions override the authority and expertise of the suspension and debarment official, who is reviewing each situation.

“We’re deciding no matter what you’ve done to correct the problem, no matter what remedial measures you’ve taken, you’re going to automatically suspend or debar,” said Dan Gordon, former OFPP administrator and now the associate dean for government procurement law studies at George Washington University Law School.

Hodgkins said the defense bill's provision shows Congress requiring uniformity on a process that should be considered on a case-by-case basis.

Under the legislation, Small Business Administration officials would also have to publish standard operating procedures for suspension and debarment on its Web site.

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