Government Contracts Monitor
Obama Administration Encourages Increased Use of Suspensions and Debarments to Hold Contractors Accountable
November 29, 2011
As part of the President’s Campaign to cut Fraud, Waste, and Abuse, the Office of Federal Procurement Policy (OFPP) has directed agencies to “ensure they are fully equipped to suspend and debar contractors and other recipients whenever necessary to protect the government’s interest.” The Administration believes that effective suspension and debarment programs play an important role in protecting taxpayer money. By using suspension and debarment procedures effectively, agencies can ensure that contractors who lack business integrity and honesty do not receive any portion of the public fisc. However, the Administration does not believe agencies are currently taking full advantage of these essential tools.
Office of Management and Budget (OMB) Director Jack Lew has directed agencies to take necessary steps to improve their suspension and debarment programs. Specifically, each agency must designate a Senior Accountable Official who will assess the agency’s suspension and debarment program. That Official will ensure that the agency has adequate training and resources and will review the agency’s internal policies and procedures. That Official will also ensure that the agency checks databases such as the Excluded Parties List System (which lists suspended and debarred parties) before awarding grants or contracts. A list of the designated Senior Accountable Officials can be found here.
OMB has also encouraged agencies to participate in the Interagency Suspension and Debarment Committee. The Administration believes this Committee “plays an important role as support structure for helping agencies build and maintain their suspension and debarment programs.” OMB intends to work with the Committee to develop detailed guidance for agencies to improve their suspension and debarment programs.
This increased emphasis from the Obama Administration on suspension and debarment means that contractors should be extra vigilant. Contractors should make sure to adhere to all contract requirements and work to prevent even the appearance of impropriety. OMB applauded the recent decision by the Defense Logistics Agency to debar a contractor for 10 years because the contractor willfully delivered non-conforming “locknuts” that the agency found were critical to the safety of the aircraft. No contractor wants to find itself in that position. The effects of suspension or debarment can be devastating, especially to a company that relies heavily on government work. As the Administration encourages agencies to improve their suspension and debarment programs, contractors should take necessary steps to ensure they are not caught in the crosshairs. These steps may include reviewing and refining existing business ethics and compliance programs, modifying compliance training for employees, and adopting and improving safeguards to ensure performance meets government requirements.
To read the full OFPP memorandum, click here.
Katie Calogero is the attorney responsible for content of this article.