Suspension and debarment

Consistent with the Federal Acquisition Regulation, the debarment and suspension procedures are intended to prevent fraud, waste and abuse, and support the integrity and public trust in procurement and non-procurement actions. In summary, debarment excludes an organization, or individual from doing business with the Federal Government. Procurement exclusions are governed under the Federal Acquisition Regulation 9.4. Debarment, Suspension and Ineligibility. Non-procurement actions are governed under 2 Code of Federal Regulations Part 180. Generally, individuals who are proposed for debarment will be listed in www.sam.gov

Pursuant to FAR 9.406-2, debarment may be initiated based on the following grounds:  

The debarring official may debar- 

(a) A contractor for a conviction of or civil judgment for-

(1) Commission of fraud or a criminal offense in connection with- (i) Obtaining;

(ii) Attempting to obtain; or (iii) Performing a public contract or subcontract.

(2) Violation of Federal or State antitrust statutes relating to the submission of offers;

(3) Commission of embezzlement, theft, forgery, bribery, falsification or  destruction of records, making false statements, tax evasion, violating  Federal criminal tax laws, or receiving stolen property;

(4) Intentionally affixing a label bearing a “Made in America” inscription  (or any inscription having the same meaning) to a product sold in or  shipped to the United States or its outlying areas, when the product was  not made in the United States or its outlying areas (see Section 202 of  the Defense Production Act (Public Law102-558)); or

(5) Commission of any other offense indicating a lack of business integrity  or business honesty that seriously and directly affects the present  responsibility of a Government contractor or subcontractor.

(b) (1) A contractor, based upon a preponderance of the evidence, for any of the following-

(i) Violation of the terms of a Government contract or subcontract so serious as to justify debarment, such as- (A) Willful failure to perform in accordance with the terms of one or more contracts; or

(B) A history of failure to perform, or of unsatisfactory performance of, one or more contracts.

(ii) Violations of 41 U.S.C. chapter 81, Drug-Free Workplace, as indicated by-

(A) Failure to comply with the requirements of the clause at 52.223-6, Drug-Free Workplace; or

(B) Such a number of contractor employees convicted of violations of  criminal drug statutes occurring in the workplace as to indicate that  the contractor has failed to make a good faith effort to provide a  drug-free workplace (see 23.504).

(iii) Intentionally affixing a label bearing a “Made in America” inscription  (or any inscription having the same meaning) to a product sold in or  shipped to the United States or its outlying areas, when the product was  not made in the United States or its outlying areas (see Section 202 of  the Defense Production Act (Public Law102-558)).

(iv) Commission of an unfair trade practice as defined in 9.403(see Section 201 of the Defense Production Act (Pub.L.102-558)).

(v) Delinquent Federal taxes in an amount that exceeds $10;000. 

(A) Federal taxes are considered delinquent for purposes of this provision if both of the following criteria apply:

(1) The tax liability is finally determined. The liability is finally determined if it has been assessed. A  liability is not finally determined if there is a pending administrative  or judicial challenge. In the case of a judicial challenge to the  liability, the liability is not finally determined until all judicial  appeal rights have been exhausted.

(2) The taxpayer is delinquent in making payment. A taxpayer is delinquent if the taxpayer has failed to pay the tax  liability when full payment was due and required. A taxpayer is not  delinquent in cases where enforced collection action is precluded.

(B) Examples.

(1) The taxpayer has received a statutory notice of deficiency, under  I.R.C. §6212, which entitles the taxpayer to seek Tax Court review of a  proposed tax deficiency. This is not a delinquent tax because it is not a  final tax liability. Should the taxpayer seek Tax Court review, this  will not be a final tax liability until the taxpayer has exercised all  judicial appeal rights.

(2) The IRS has filed a notice of Federal tax lien with respect to an  assessed tax liability, and the taxpayer has been issued a notice under  I.R.C. §6320 entitling the taxpayer to request a hearing with the IRS  Office of Appeals contesting the lien filing, and to further appeal to  the Tax Court if the IRS determines to sustain the lien filing. In the  course of the hearing, the taxpayer is entitled to contest the  underlying tax liability because the taxpayer has had no prior  opportunity to contest the liability. This is not a delinquent tax  because it is not a final tax liability. Should the taxpayer seek tax  court review, this will not be a final tax liability until the taxpayer  has exercised all judicial appeal rights.

(3) The taxpayer has entered into an installment agreement pursuant to I.R.C. §6159. The taxpayer is making timely payments and is in full compliance with  the agreement terms. The taxpayer is not delinquent because the taxpayer  is not currently required to make full payment.

(4) The taxpayer has filed for bankruptcy protection. The taxpayer is not delinquent because enforced collection action is stayed under 11 U.S.C. 362 (the Bankruptcy Code).

(vi) Knowing failure by a principal, until 3 years after final payment on  any Government contract awarded to the contractor, to timely disclose to  the Government, in connection with the award, performance, or closeout  of the contract or a subcontract thereunder, credible evidence of-

(A) Violation of Federal criminal law involving fraud, conflict of  interest, bribery, or gratuity violations found in Title 18 of the  United States Code;

(B) Violation of the civil False Claims Act (31 U.S.C. 3729-3733); or

(C) Significant overpayment(s) on the contract, other than overpayments resulting from contract financing payments as defined in 32.001.

(2)  A contractor, based on a determination by the Secretary of Homeland  Security or the Attorney General of the United States, that the  contractor is not in compliance with Immigration and Nationality Act  employment provisions (see Executive Order12989, as amended by Executive  Order13286). Such determination is not reviewable in the debarment  proceedings.

(c) A contractor or subcontractor based on any other cause of so serious or  compelling a nature that it affects the present responsibility of the  contractor or subcontractor.

 CASE RESULTS DEPEND UPON A VARIETY OF FACTORS UNIQUE TO EACH CASE;  CASE RESULTS DO NOT GUARANTEE OR PREDICT A SIMILAR RESULT IN ANY FUTURE CASE UNDERTAKEN BY THE LAWYER