Category: Suspension and Debarment

Three Major Features of the New Final Rule on Suspension and Debarment

Dominique L. Casimir ●


Introduction

On January 3, 2025, the Federal Acquisition Regulatory Council (“FAR Council”) published a long-awaited final rule to update suspension and debarment procedures. 90 Fed. Reg. 507. The final rule takes effect January 17, 2025.

As a refresher, suspension and debarment are non-punitive administrative actions by which the federal government excludes non-responsible contractors from eligibility to receive new government contracts and other federal awards. Suspension is a temporary measure, often imposed pending the outcome of an investigation or legal proceedings, when immediate exclusion is necessary to protect the government’s interests. Debarment is a longer-term exclusion, typically lasting up to three years, imposed when, after due process, the Suspending and Debarring Official (“SDO”) finds the contractor non-responsible. Both actions aim to ensure that the government only engages with responsible and reliable contractors.

Suspension and debarment procedures are codified in two distinct regulatory regimes: the Federal Acquisition Regulation (“FAR”), codified in 48 CFR, applies to procurement transactions, which involve the federal government’s acquisition of goods and services; and the Nonprocurement Common Rule (“NCR”), found in 2 CFR part 180, which applies to transactions such as grants, cooperative agreements, and other forms of federal assistance. While both regulatory frameworks aim to protect the government’s interests by excluding unreliable contractors, they differ in their specific procedures and immediate effects.

Continue reading “Three Major Features of the New Final Rule on Suspension and Debarment”

Deadline Looms for the Submission of Comments on FAR Council’s Proposed Rule Updating Federal Debarment Procedures


Dominique L. Casimir and Patrick F. Collins ●

Introduction

The United States spends hundreds of billions of dollars annually on government contracts, grants, and other forms of federal assistance. Although most entities that receive these awards are good business partners, the government must protect itself from those that lack integrity. One of the ways the government does this is by imposing suspension or debarment, which renders an entity broadly ineligible to receive federal awards for a specified period.

The suspension and debarment regulations at Federal Acquisition Regulation (“FAR”) Subpart 9.4 (which apply to procurement contracts) and at 2 C.F.R. Part 180, known as the Nonprocurement Common Rule (“NCR”) (which apply to nonprocurement transactions such as grants) have remained relatively unchanged for many years. But change may be on the horizon, as the FAR Council recently issued a proposed rule that aims to better harmonize the two regulatory regimes. The period for public comment closes on March 11, 2024—one week from today. Rulemaking is infrequent in this area, so the final rule will be highly anticipated.

Continue reading “Deadline Looms for the Submission of Comments on FAR Council’s Proposed Rule Updating Federal Debarment Procedures”

My Company Just Got a Notice of Proposed Debarment. Now What?

 

Dominique L. Casimir ●

Receiving a Notice of Proposed Debarment from a federal agency Suspending and Debarring Official (“SDO”) is an alarming moment for any government contractor. It means the government believes there is a basis to question whether the entity is “presently responsible.” Debarment is sometimes referred to colloquially as the “death penalty” for government contractors because of its many, potentially devastating effects. A debarred entity is ineligible to receive new government contracts from any executive agency, not just the agency that imposes the debarment. Additionally, any existing federal contracts cannot be augmented or extended and may even be terminated.

Debarment can also seriously disrupt numerous areas of an entity’s business, including prime-sub relationships, teaming arrangements, and the normal function of the supply chain, because companies involved in government contracts ordinarily avoid partnering with debarred entities, and even entities proposed for debarment. Moreover, there are significant reputational impacts associated with debarment and these can affect everything from workplace morale to customer goodwill and even commercial relationships. And finally, debarment casts a long shadow, because even after the debarment ends, an entity will almost certainly be required to disclose the prior debarment as it pursues future government work.

For these reasons, it is critical to respond effectively to a Notice of Proposed Debarment. This blog post offers suggestions to federal contractors who have been proposed for debarment and are wondering what to do next.

Continue reading “My Company Just Got a Notice of Proposed Debarment. Now What?”

ISDC Report Highlights New Flexibilities as Alternative Remedies Increase

Dominique L. Casimir and Tjasse L. Fritz


The Interagency Suspension and Debarment Committee (“ISDC”) has released its annual Section 873 Report to Congress for FY2020. The data in this report provides a big picture view of trends in suspension and debarment. Here’s what you need to know:

1. Debarments Increased in FY2020.

Debarments were up slightly, with 1,256 debarments in 2020 compared with 1,199 in 2019, bucking the downward trend of the previous six years. It is reasonable to expect that the increase in debarments will continue, particularly as the Government progresses in investigating CARES Act fraud.

2. Suspensions and Proposed Debarments Decreased.

Suspensions decreased, after a brief uptick in 2019, from 722 in 2019 to 415 in 2020, consistent with the general downward trend of years prior. Similarly, proposed debarments fell from 1,437 in 2019 to 1,317 in 2020. Interestingly, the ISDC attributes these decreases, “in part, to delays in mail service, travel restrictions, and postponements in court proceedings,” which means the FY2020 decrease is likely due to the COVID-19 pandemic rather than an actual Governmentwide downward trend in activity. And the decrease was not uniform: 13 of the 29 agencies reporting their FY2020 metrics actually increased the number of suspensions.

Continue reading “ISDC Report Highlights New Flexibilities as Alternative Remedies Increase”

A Contractor’s Guide to Trump’s Diversity Training Order

Dominique L. Casimir, Brooke T. Iley, and Tjasse L. Fritz






An expanded version of our September 24, 2020, post, Trump Administration Bans Contractors from Providing Certain Types of Diversity Training, was published in Law360 on October 2, 2020. Read on for more information about the order and how contractors should respond.

Federal contractors have long provided various types of anti-harassment, nondiscrimination and diversity and inclusion, or D&I, training to their employees. After the death of George Floyd and the nationwide protests that followed, D&I training has proliferated in workplaces across the country, including within federal agencies and in the contractor community.

In response to the widespread public protests for racial equality, many companies and executives issued public statements denouncing racism. Many also pledged millions of dollars to social justice organizations. In numerous workplaces, employees have taken the initiative to organize book clubs and discussion circles focused specifically on promoting open workplace discussions about race. Some employers have provided lists of resources for employees seeking to learn more about issues of race.

On Sept. 22, the Trump administration issued a bombshell executive order purporting to ban certain types of D&I training,[1] leaving federal contractors scrambling to determine how best to comply, and how to identify and mitigate the new risks they now face.

Why now?

President Donald Trump has been vocal about his views on the discourse of racial issues following the nationwide protests for racial equality that started at the beginning of the summer.

In June, the president rejected calls to rename military bases honoring Confederate generals.[2] The Trump administration issued a memorandum on Sept. 4,[3] directing agencies to identify:

all contracts or other agency spending related to any training on critical race theory,[4] white privilege, or any other training or propaganda effort that teaches or suggests either (1) that the United States is an inherently racist or evil country or (2) that any race or ethnicity is inherently racist or evil [and to] identify all available avenues within the law to cancel any such contracts and/or to divert Federal dollars away from these un-American propaganda training sessions.

The executive order that followed three weeks later takes aim at contractor-provided workplace D&I training that the Trump administration considers divisive and objectionable.

Please click here for the full article.

Trump Administration Bans Contractors from Providing Certain Types of Diversity Training

Brooke T. Iley, Dominique L. Casimir, and Tjasse L. Fritz







On Tuesday evening, the Trump administration surprised the federal contracting community by issuing an Executive Order (“EO”) titled “Combating Race and Sex Stereotyping” that will ban federal contractors from conducting certain types of anti-discrimination training. In particular, the EO prohibits workplace racial sensitivity and diversity and inclusion (“D&I”) training programs that contain so-called “divisive content,” defined in the EO as instilling a belief in the existence of systemic racism and inherent bias. The EO expands an earlier ban issued in a September 4, 2020, memorandum that prohibits certain anti-discrimination training from being conducted within federal agencies.

The EO comes on the heels of a widespread social and racial justice movement that dominated much of the summer of 2020, in response to which corporate America has taken a stand, with companies pledging millions to social justice reform movements. An overwhelming number of employers either have offered or plan to offer some form of diversity training to their employees. This latest EO leaves many federal contractors and subcontractors wondering whether and how to proceed, and what penalties they may face if they offer such training. Continue reading “Trump Administration Bans Contractors from Providing Certain Types of Diversity Training”

Examining and Dispelling Common Misconceptions about Suspension and Debarment

Dominique L. Casimir

Contractors are well aware that being suspended or debarred renders them ineligible for federal contracts and subcontracts. Many contractors may believe that suspension and debarment are not realistic risks for them if they already have a robust ethics and compliance program or strong internal controls. Nevertheless, the risk of suspension and debarment can crop up suddenly and unexpectedly, such as when misconduct has been concealed or errors have gone undetected. For this reason, contractors should have a baseline understanding about what to do if they must engage with a Suspending and Debarring Official (“SDO”). This post explores ten common misconceptions about suspension and debarment, with the aim of helping contractors understand the landscape and respond effectively.

Common Misconception #1: We have already settled with another agency and paid a fine, so we will not be suspended or debarred. Continue reading “Examining and Dispelling Common Misconceptions about Suspension and Debarment”

What Contractors Should Know about DOJ’s Revised Guidance on Evaluations of Corporate Compliance

Brian S. Gocial and Stephanie M. Harden

Stephanie Harden's Headshot Photo

As government contractors know well, a robust compliance program can be critical—both in preventing, detecting, and resolving compliance problems and in working with agencies and/or the Department of Justice (“DOJ”) to resolve compliance issues when they arise. Though DOJ has previously issued guidance on how it evaluates corporate compliance programs, on April 30, 2019, it greatly expanded upon its earlier guidance with a lengthy new guidance document. The document is notable for its emphasis not just on the design of compliance programs, but also on their effectiveness in practice. The document is a useful benchmark for contractors to evaluate their compliance programs, as well as to demonstrate their affirmative responsibility to agencies when facing agency-level investigations.

The guidance document focuses on three central questions:

    1. Is the corporation’s compliance program well designed?
    2. Is the corporation’s compliance program implemented effectively?
    3. Does the compliance program actually work in practice?

The following outline provides a summary of the various factors DOJ discusses in connection with each of these questions—and more information on each topic can be found here.

Contractors should assess how their own compliance programs measure up against these factors: Continue reading “What Contractors Should Know about DOJ’s Revised Guidance on Evaluations of Corporate Compliance”

Spring Cleaning for Government Contractors? Think Compliance.

Merle M. DeLancey Jr.

If you’re like me, it’s the time of year when you clean out your garage and closets and do all those outside projects you delayed until the weather warmed up. If you are a government contractor, you should consider this to be the season to do some spring cleaning in terms of your government contract compliance programs and procedures. Not to be an alarmist, but there are numerous areas you can review now and, if you should find some compliance deficiencies, you still have ample time to get your house in order before an agency audit or the deadline for submission of certain government reports.

Set forth below is a list of areas you may want to clean up: Continue reading “Spring Cleaning for Government Contractors? Think Compliance.”

Deficient Administrative Record Leads Federal Court to Vacate 15-Year Debarment

Justin A. Chiarodo and Stephanie M. Harden

A recent federal court decision vacating a staggering 15-year debarment based on shortcomings in the administrative record offers a glimmer of hope to contractors facing exclusion from federal programs, and reinforces the importance that any final debarment decision be based on a fulsome record—particularly in “fact-based” debarments where there are disputed material facts. The big takeaway for contractors facing an exclusion is to ensure that the administrative record on which a debarment decision is based reflects all information showing why an exclusion is unwarranted (or unnecessary) to protect the Government.

Continue reading “Deficient Administrative Record Leads Federal Court to Vacate 15-Year Debarment”