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Procurement

New Suspension And Debarment Report Shows Innovation – Government Contracts, Procurement & PPP


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The long-awaited and much-delayed fiscal year 2020 Interagency
Suspension and Debarment Committee Section 873 report to Congress
was published over the weekend with a new look and some new
information.1

Despite data being one-and-a-half fiscal years behind, the
document provides helpful context to federal agencies’
suspension and debarment activities. As is to be expected, the
changes in the report also raise new questions.

Report Summary

The fiscal year 2020 report is broken down into the following
key components, among others:

  • An overview of suspension, debarment and related administrative
    activities;

  • A review of fiscal year 2020 governmentwide activities;

  • Summary highlights of fiscal year 2020 metrics; and

  • Frequently asked questions on common misconceptions about
    suspension and debarment.

The overview provides a high-level description of suspension and
debarment activities generally and their purpose. The overview also
describes the factors suspension and debarment officials take into
consideration when determining whether to act against a contractor
or individual.

The year-in-review section identifies the following primary
strategic objectives for the ISDC: (1) promoting the fundamental
fairness of the suspension and debarment process; (2) increasing
transparency and consistency through training, engagement and
outreach; (3) enhancing federal suspension and debarment practices,
and alternatives by identifying and developing resources; and (4)
encouraging the development of more effective compliance and ethics
programs by contractors and nonprocurement participants.

The report highlights the ISDC’s newly created subcommittee
that will assist Federal Acquisition Regulation Council drafters
with aligning coverage in the FAR with the Nonprocurement Common
Rule as one initiative intended to further these objectives.

None of these strategic objectives are new, nor is the effort to
align the FAR with the NCR. They are all long-time efforts of the
ISDC2 covered in prior reports.

The fiscal year 2020 metrics section summarizes agency
suspension and debarment activities by the numbers. According to
this section, agencies reported issuing 415 suspensions, 1,317
proposed debarments, and 1,256 debarment in fiscal year 2020.

In fiscal year 2020, 58 administrative agreements were entered
into, 103 prenotice letters were issued and 21 voluntary exclusions
were reported. The metrics section also breaks down activities by
agency, showing that the U.S. Department of Homeland Security
reported the most debarment activity — 231 proposed
debarments and 215 total debarments. The U.S. Department of
Transportation reported the highest number of administrative
agreements — eight agreements.

The traditionally active government contracting agencies, such
as the U.S. Department of Defense components, the U.S.
Environmental Protection Agency and the General Services
Administration, were active yet again.

The U.S. Small Business Administration, the U.S. Department of
State and the U.S. Agency for International Development also were
highly active. DHS, the U.S. Department of Housing and Urban
Development, the U.S. Department of Agriculture and National
Nuclear Security Administration had notable suspension and
debarment activity, despite a comparatively low procurement
spend.

Also of interest, the report indicates that “the number of
declined referrals [for suspension/debarment action] almost
tripled” during fiscal year 2020. This is an important
statistic, and it should not necessarily be understood that there
are comparatively more poor-quality referrals. Rather, fiscal year
2020 was pandemic-stricken, with remote work and administrative
challenges. It is only natural that suspension and debarment
officials and their staffs would be more discerning in which cases
to take.

These declinations are signs of suspension and debarment
officials exercising their discretion to craft what, in their
minds, are appropriate remedies. This discretion is what separates
the process from a mere collateral consequence of a U.S. Department
of Justice or inspector general inquiry and is a vitally important
measure of the health of the system.

FAQ Section of the Section 873 Report

The report also contains a novel, and helpful, list of
frequently asked questions about suspension and debarment in an
effort to address what the report terms “common
misconceptions” about the ISDC and suspension/debarment
activities. This is a helpful innovation by the ISDC for which it
and the Office of Management and Budget staff who approved the
report deserve credit, even if the FAQs do raise some additional
questions.

For example, the FAQs clarify that suspension and debarment
officials do not independently initiate suspension and debarment
actions. Instead, they “generally rely on referrals from award
officials, law enforcement officials, and others to establish
administrative records and determine whether administrative actions
should be recommended.”

We note, however, that enterprising suspension and debarment
officials’ offices can initiate suspension and debarment
actions — or at the very least prenotice letters such as
show-cause letters — from, for example, media inquiries,
disclosures from contractors, and other sources that come directly
to the suspension and debarment officials and bypass
investigators.

Further, the FAQ section indicates that suspension and debarment
officials do not “have access into ongoing law enforcement
investigations.” This point merits some clarification,
especially for DOD component offices.

Department of Defense Instruction 7050.05, “Coordination of
Remedies for Fraud and Corruption Related to Procurement
Activities,”3 instructs that each DOD component
will “monitor, from its inception, all significant
investigations of fraud or corruption related to procurement
activities affecting its organization.”

The individuals who “monitor … all significant
investigations” sit in the DOD components’ suspension and
debarment officials’ offices. So suspension and debarment
officials do “have access into ongoing law enforcement
investigations.” That information should be firewalled from
the suspension and debarment official, however, until the
suspension and debarment official staff determines that an action
is ripe.

And finally, the FAQ makes clear that the ISDC cannot
“promulgate regulations and rules” for suspension and
debarment. Instead, the ISDC provides “recommendations and
technical guidance” to the rulemakers.

The statutory language empowering the ISDC is a bit more
precise, saying the committee shall … (4) recommend to the Office
of Management and Budget changes to Government suspension and
debarment system and its rules, if such recommendations are
approved by a majority of the Interagency Committee; [and] (5)
authorize the Office of Management and budget to issue guidelines
that implement those recommendations.4

Conclusion

The fiscal year 2020 report, delayed though it may be, showed
helpful innovation in terms of the information presented and the
way the ISDC explained its processes for the first time in more
than a decade.

The ISDC has more power, granted by statute, than the committee
appears to exercise. If the report is any indication, the ISDC is
interested in doing things differently. Perhaps ISDC leaders can
embrace their authority to bring more robust changes to suspension
and debarment practice in the future.

Footnotes

1
https://www.acquisition.gov/sites/default/files/page_file_uploads/ISDC_FY_2020_Section_873_Report_(use_for_web_upload).pdf
.

2 https://www.acquisition.gov/isdc-reporting.

3
https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/705005p.pdf?ver=2020-07-07-065758-907
.

4 Duncan Hunter National Defense Authorization Act for
Fiscal Year 2009, PL 110–417 § 873, October 14,
2008

Originally Published by Law360

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