Suspension, debarment could turn more punitive under proposal

A proposed acquisition rule could potentially change the way suspension and debarment is used and compromise the intended use of the process, according to an industry group.

Under the proposed Federal Acquisition Regulation rule, Labor Department officials would be able to suspend or debar a company for failing to comply with rules to keep service workers in their jobs when a contract changes hands between companies. It's based on President Barack Obama’s executive order on non-displacement of qualified workers under service contracts. The Labor Department passed rules in 2011 regarding the same order. Incoming contractors have rules to follow for offering jobs to remaining employees who might otherwise lose their jobs as a result of the transition. Regulators are looking to amend the FAR now.

However, there's a problem. Under the FAR, suspension or debarment are intended only to protect the government, not to punish companies. The new rule implies that that the measures could be taken to penalize a company for not following rules that pertain only to private-sector labor.

Current Labor Department rules allow officials to suspend and debar a company for failing to comply with their regulations. On the other hand, the FAR describes suspensions and debarments as remedies, not punishments, the Professional Services Council told regulators July 2. "These remedies are not intended to be available for punishing every failure to comply with laws, regulations, and contract provisions," wrote Alan Chvotkin, PSC's executive vice president and counsel.

According to the FAR, “Agencies shall impose debarment or suspension to protect the government’s interests.”

The council recommended that, in the proposed rule, officials allow for suspensions and debarments when it’s the only option to guard the government’s interests. Officials need boundaries as to when they can suspend and debar. To do so, regulators should incorporate parts of Labor's current rules that deal with suspensions and debarments. Specifically, the council said the new FAR rule should include the limits on the suspending and debarring authorities given to officials. Officials should be able to suspend and debar only when a contractor fails to comply with the any order of the secretary or willfully commits violations of the non-displacement rule.

“These limits will ensure that the government’s interests in contracting with responsible companies are protected, while ensuring that these severe remedies are employed consistently with” the FAR’s standards for suspension and debarment, Chvotkin wrote.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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Reader comments

Thu, Jul 12, 2012 OccupyIT

It isn't a question of obeying the law - it is a question of the remedy to ensure they do or that a fair and transparent mechanism exist to enforce rule breaking. Does the penalty match the crime is at the heart of this. Should YOU be barred from earning a living because your library books are late - or even because you BROKE THE LAW by using HOV? Perspective and protection of the innocent from arbitrary (or simply mistaken)action by an all-powerful government is what we should be seekin - AND contractors that obey the law.

Wed, Jul 11, 2012

When dealing with a corporation who get debarred? The corporation, employees or upper managerment? I think if the goverment is looking to debar a colmpany they should at least find out who are the majority shareholder and minorite shareholder and debar them all. Instead they pick one minority shareholder and an employee who did contract biding and dis as told. Is this american or a third world county? USG needs to do its homework to see who really is responsible for contracts not being met. I alo believe the reason contract fail, its beauce of government workers who fail parts with no real reasoning and continue to ask for more paper work. First articles, more paper work, paint is the wrong shade of green. Please!!!

Wed, Jul 11, 2012 OccupyIT

This is so dangerous. Just because the government CAN grab the power, and especially BECAUSE they believe they don't mistakes, doesn't mean they SHOULD be given this power. There are firms that absolutely need to be debarred for wrong doing, and last I checked the list of daily debarments indicate it is a clearly viable and functional option, but as Alan pointed out debarring can't become a tool for the USG to manage source selection through technicality witch-hunts. It is very difficult for a company, especially a small company, to defend itself against the arbitrary and better-funded whim of the USG. Even if the allegation or one-sided alegation is refuted and reversed the damage can largely be done to their reputation and participation with partners in the market place. Keep in mind a balance of responses and don't escalate to nuclear war without an equally rigorous due process to prevcnt mistakes.

Wed, Jul 11, 2012

So it's not in the government's interest for contractors to obey the law? If the Professional Services Council believes that, we have a problem!

Wed, Jul 11, 2012 Alva Maynor Hill AFB

How is debarring a company that just won a contract based on their personnel posture, and don't see the need to hire people from another company who lost the contract in the best interest of the Government? This would cause the government to have to start over and would drive whatever the contract was to be delayed significantly. It could also cost the government a lot more money if the company is going to have to include the cost of all of those new employees on their payroll.

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