The executive branch awards contracts to contractors who present attractive bids and meet specific eligibility requirements. One such condition is to meet the definition of a responsible contractor.
If the government decides that a contractor no longer meets the definition of a responsible contractor, they may suspend or debar them from contracting with the government during a specified period. Suspensions tend to last for months, while debarments may last for years. These restrictions can have immense impacts on your life, including limitations on your ability to work and receive federal funding.
If you are subject to a debarment proceeding, you may have many questions about the reasons for the debarment and what happens next. The National Security Law Firm is here to help answer your questions and guide you through the process.
If you are facing debarment and want tailored advice for your specific situation, call us at 202-600-4996 to schedule a free consultation.
What Is Debarment?
Debarment is where a contractor is excluded from entering into government contracts with the executive branch for a certain period. The government places additional restrictions on the debarred individual’s ability to receive types of federal funding and work for federally-funded organizations.
The debarring officials at the appropriate agency determine whether a current or prospective contractor or subcontractor is no longer eligible to perform work under a government contract with the executive branch.
Responsible Contractor Eligibility Standards
Under the Federal Acquisition Regulations (FAR), all contractors must continuously meet specific eligibility requirements to work on federally awarded contracts and receive federal assistance. The FAR governs the criteria that contractors must meet, the process of awarding contracts, and the reasons for and effects of a debarment. Agencies may adopt their own regulations that supplement or modify the requirements in the FAR.
FAR § 9.104-1 requires contractors to be responsible and meet specific eligibility standards to qualify as a “responsible contractor.” General requirements to meet this standard include:
- The financial ability to handle and carry out the contract
- The ability to balance the delivery and performance workload under the circumstances
- Maintaining a stable record of integrity and business ethics
- Meeting the qualifications and eligibility requirements to work on federally awarded contracts and receive federal funds
- Additional responsibility standards required by the government to complete the contract
Agencies may impose additional or different requirements on what meets the definition of responsible contractor for the purpose of the contract.
What Happens If the Contractor Fails to Meet the Standards for Responsibility?
When officials believe an individual no longer meets the “responsible contractor,” they may initiate an investigation for debarment. Under FAR § 9.405, debarment excludes someone from receiving government contracts or certain federal assistance during a specific period of time. Different agencies or departments may have special procedures for deciding whether debarment is appropriate; however, the Federal Acquisition Regulations outline the general process.
Suspension vs. Debarment
Both suspensions and debarments can significantly impact the contractor’s life. That said, there are important differences between the two.
If you are facing suspension or debarment, do not go it alone. You have options, and having an experienced attorney can help increase your chances of minimizing the impact of the proceedings. Our suspension and debarment attorneys understand your struggles and are here to fight for your rights.
Per FAR § 9.407, a suspension is a temporary disqualification of a contractor to perform work on federally awarded contracts. Suspensions typically remain in effect while the government investigates the situation or while related legal or administrative proceedings are pending.
The suspension may end if the government fails to initiate suspension proceedings within 12 months of issuing the notice. In some cases, the government has up to 18 months to initiate suspension proceedings.
The scope of a suspension is typically identical to that of debarments. The contractor cannot work on or sign new government contracts or receive federal assistance. Suspensions can also negatively impact your ability to work at places that receive federal funding.
In contrast, debarment typically lasts three years or less, in proportion to the severity of the alleged misconduct. Specific offenses carry stiffer penalties. For example, according to FAR § 9.406.4, violation of the federal Drug-Free Workplace Act may result in a debarment period of up to five years.
If the contractor was suspended leading up to the current debarment, the government might reduce the debarment period accordingly.
While someone is debarred, they cannot participate in most government contracts with the executive branch or receive certain types of federal funding. Their ability to find new work is likewise limited because they may be ineligible to work for federally-funded employers.
What Are Common Reasons for Debarment?
Debarment may occur for many reasons, as outlined in FAR § 9.406-2. If the investigating officer believes your conduct falls in one of these categories, they may subject you to debarment proceedings.
Common reasons for debarment include:
- Certain criminal convictions or civil judgments against you
- Failure to abide by the terms of a government contract
- Violation of the Drug-Free Workplace Act
- Owing delinquent federal taxes
- Failure to make required disclosures
- Other causes of a “serious or compelling nature”
- Failure to abide by the employment provisions of the Immigration and Nationality Act
Our team focuses on providing top-tier representation of clients in national security cases, such as those involving debarment proceedings. Before engaging in private practice, the team worked for the federal government, giving them an edge over other firms in this area of law.
Civil Judgment or Criminal Conviction
A debarment may occur if a contractor receives a criminal conviction or civil judgment in the following circumstances:
- Conviction of a crime or civil judgment for committing fraud or a criminal offense involving a government contract
- Violation of federal or state antitrust law in submitting an offer
- Committing embezzlement, forgery, theft, bribery, tax evasion, making false statements, or other related offenses
- Intentionally putting a “Made in America” sticker or marking on a product sold in or shipped to the U.S. that was not made in the United States or by one of its outlying territories
- Committing an offense that shows a lack of business integrity or honesty and impacts a current responsibility to the government
If you are in the midst of legal proceedings for any of these, the government may initiate debarment proceedings.
Please note that, in many cases of the above, the government may decide against debarring you if legal proceedings against you do not result in a conviction or civil judgment. The exception is if the government believes you intentionally misused a “Made in America” as described above. In that case, the government may debar you if it believes you, more likely than not, committed the violation.
A conviction or civil judgment against you that falls into one of the above categories does not automatically mean debarment is guaranteed. The government still needs to prove that the factual circumstances merit debarment under the criteria outlined in the regulations.
The National Security Law Firm understands the unique circumstances of debarment proceedings and the rights of contractors like you. We diligently review the administrative record and develop a strategy to maximize the potential for a positive outcome for our clients. We appreciate what is on the line. Our team does everything in our power to minimize the impact of the debarment proceedings on our clients’ lives.
Failure to Follow the Terms of a Contract
In some situations, the government can debar a contractor for failing to abide by the terms of an existing federally-awarded contract. According to the regulations, the failure must be willful or be part of a history of noncompliance with a government agreement.
For these grounds to apply, the government must meet a preponderance of the evidence standard. This standard requires the government to show that it is more likely than not that you willfully failed to perform the terms of the contract.
Drug-Free Workplace Violation
Under the Drug-Free Workplace Act, contractors must not use, possess, manufacture, distribute, or dispense a controlled substance while performing a government contract. If the contractor fails to follow this rule, this may be grounds for suspension, debarment, or other adverse action.
An important note is that the contractor may still be subject to proceedings even if they do not directly violate the Drug-Free Workplace Act. This typically occurs if a high number of their employees are convicted of drug offenses or violate the Drug-Free Workplace Act.
Owing Delinquent Federal Taxes
If the contractor owes more than $10,000 in delinquent federal taxes, they may be debarred. Taxes are delinquent if any of the following applies:
- There is a final determination of the taxpayer’s liability to pay the taxes. Taxes are not yet delinquent if you or your attorney filed a pending good faith challenge to the decision of how much you owe in taxes.
- The tax liability is delinquent, meaning that the time for payment has come and gone, and the taxpayer has not made sufficient payments.
- A tax liability is not delinquent if the taxpayer is in a bankruptcy proceeding or is making installment payments based on an agreed plan with the IRS. Further, tax debt is not delinquent if it is the subject of pending legal challenges.
Failure to Make Required Disclosures
Contractors may be subject to debarment proceedings if the contractor or a principal on a contract fails to disclose to the government credible evidence of the following:
- Violation of specific Federal criminal laws, including fraud
- Violation of the civil False Claims Act
- Significant overpayments on the contract
The contractor (as the principal under the contract) must make these disclosures for up to three years after the final contract payment.
Additional Reasons for Debarment
Additional reasons for debarment include:
- False certification under the Violation of Arms Control Treaties or Agreement-Certification
- The Secretary of Homeland Security or United States Attorney General determined that the contractor violated the employment provisions of the Immigration and Nationality Act
- The contractor engaged in conduct or activities of a “serious and compelling nature” that disqualifies them from being a responsible contractor
Please note that, in most cases, violations of the Immigration and Nationality Act employment provisions are not reviewable in debarment proceedings.
Regardless of the reason for the proposed debarment, you may benefit from speaking with an experienced suspension and debarment attorney to understand your rights. They can help you explore all available avenues to refute and defend against the allegations.
What Is the Process of Debarment?
FAR § 9.406-3 outlines the general process of debarment, which includes the following:
- Someone reports possible misconduct or a violation to an official.
- The debarment office investigates the possible grounds for debarment.
- Debarment proceedings begin. If the debarring officials conclude there might be grounds for debarment, they initiate the proceedings.
- The contractor receives a Notice of Proposal to Debar, which they may respond to by filing an appropriate response within 30 days.
- If the contractor’s response shows a genuine dispute of material fact, the parties submit further arguments and may appear before the debarring officials.
- Final decision. After hearing arguments and reviewing the administrative record, the debarring officials issue a final decision.
If you receive a Notice of Proposal to Debar or any comparable notice, it is crucial to act quickly. You must file a response on time and sufficiently argue against the debarment to avoid being unnecessarily subjected to debarment. In some cases, the debarring officials allow parties to file an extension of the deadline to submit their response. Still, acting sooner rather than later is in your best interest.
Our attorneys have decades of experience helping contractors prepare and file the appropriate paperwork to protect their rights. We understand this is a confusing and frustrating time for you. Our goal is to safeguard and advocate for your best interests, helping ensure minimal disruption to your life.
Someone Refers the Matter to the Debarring Official
Debarment proceedings begin with someone bringing a potential issue to the attention of the debarring official. Typically, there is an internal discussion or referral before someone notifies the debarring official.
For example, if there is a potential performance issue, the appropriate division or department may talk with the contractor about their performance. They may provide retraining opportunities or work with the contractor to develop a plan of action to remediate the issue. If this is unsuccessful, or the division believes it would be unsuccessful, they may refer the matter to the appropriate debarring office within that agency. For example, the Acquisition Integrity Office handles debarment matters within the Department of the Navy.
Debarring Officials Conduct an Investigation
Once the appropriate office receives a referral, they will assign a debarring official (a government attorney) to investigate the claim.
During the investigation, they may interview you, your coworkers, your boss, or any other parties that they feel would have beneficial information to understand the allegations. Initially, the debarring officials will investigate to determine if there is enough to proceed with the official debarment proceedings.
Debarring Officials Engage in the Debarment Decisionmaking Process
If the debarring officials decide there are credible grounds for debarment, they conduct debarment proceedings. The FAR does not provide specific guidelines or procedures each agency must follow. Instead, the FAR allows each governmental agency to develop debarment decision-making procedures.
The FAR does require that the agency put in place procedures that align with the fundamental principles of fairness. Additionally, the process must be “as informal as practicable” and provide the contractor with a fair opportunity to respond to the allegations.
Our team is familiar with the decision-making process for debarment employed by multiple government agencies. We can review your case, help you understand the process, and recommend appropriate action.
Contractor Receives a Notice of Proposal to Debar
Once the debarring official decides debarment is appropriate, they must send you a Notice of Proposal to Debar. The notice includes:
- Background information on the complaint
- The legal and factual basis for the decision
- Your rights
- Information about the agency’s process for making debarment decisions
You have 30 days after receiving this notice to oppose the proposed debarment. If you do not respond to this notice, you will likely be debarred.
We can help you oppose the notice and protect your rights by filing an appropriate objection, such as Matters in Opposition (MIO), or any other agreement to help avoid debarment.
Contractor Files a Response
You or your legal representative may file additional information and arguments in response to the proposed debarment. This is a chance for you or your attorney to fully address and explain what occurred. Your attorney can also provide legal arguments for why debarment is inappropriate or unwarranted in your situation.
Further, you can take this opportunity to address factors in mitigation and remediation found at FAR § 9.406-1, including:
- Whether you notified your superiors of the incident in a timely fashion
- Whether you received proper training before the incident or have since received appropriate training to reduce the risk of future occurrences
- Whether you have fully paid any civil or criminal fines or offered to reimburse the government for expenses incurred because of the misconduct
- Whether you have fully cooperated (or attempted to fully cooperate) with the government and your department regarding this matter
Additional mitigating factors may apply to your case that you can put forth to argue against debarment.
We will thoroughly investigate the claims against you, review the administrative record, and perform extensive legal research. Our team has years of practice defending the rights of others facing debarment proceedings.
Parties Submit Further Arguments and Appear Before the Debarring Officials
After you respond to the allegations, the debarring officials will review the case and your arguments. Then, they will determine whether your statements in response create a genuine dispute of material fact that calls into question the debarment proposal’s merit.
The debarring official may ask you, your attorney, and other parties to appear before them to present further arguments and information. They may also request additional written statements to elaborate on the material in your objection. Sometimes, the debarring official may instruct another agency or department to investigate further and issue findings. The debarring official does not have to follow the recommendations of the other agency in making its final decision.
We have represented parties in debarment proceedings, including presenting oral and written arguments in defense of our clients. Because of the importance of the proceedings and the impact they may have on your livelihood, hiring an attorney you trust is essential. Our team operates with the highest standard of ethics and integrity, advocating for our clients’ best interests at all times.
Debarring Officials Issue a Final Decision
After the proceedings, the debarring officials issue a final decision, either debarring you or declining to debar you. If applicable, the debarring official sends you the Notice of the Final Decision to Debar. It includes or refers to the original Notice of Proposal to Debar, states the reasons for the debarment, and indicates the length of the debarment.
If the officials debar you, you are excluded from working on contracts with the entire executive branch of the government while the debarment is in effect. Additionally, you cannot receive certain types of federal funding, and there are limitations on your ability to work for federally-funded organizations.
An agency within the executive branch may continue or engage in new contract work with you in limited circumstances. Once the debarment period ends, you may be eligible to resume work with an agency within the executive branch and the other restrictions may be lifted.
How Much Time Do You Have to Respond to a Notice of Proposal to Debar?
You must respond to the Notice of Proposal to Debar by filing an objection within 30 days. In some cases, you may be able to request an extension of this deadline. Either way, it is in your best interest to address the notice as soon as you receive it.
Facing debarment can be incredibly stressful. Our attorneys seek to ease your burden by taking care of your legal paperwork and communicating with third parties on your behalf.
How Can I Tell If I Have Been Debarred?
If you are debarred, you should have received prompt notice. To check if you are subject to debarment, you can also check online on the System for Award Management’s (SAM) website.
Your name will be on the exclusion list on SAM while the debarment or suspension proceedings are pending. Additionally, your name will remain on the list once the suspension or debarment goes into effect. Your name may be removed from the list at the end of the suspension or debarment period.
Nationwide Debarment Lawyers
If you are facing debarment, retaining the help of an experienced and dependable legal team is critical. Going up against the government is no small endeavor, and the stakes are high.
Because debarment proceedings involve federal law, you do not need to hire a lawyer in a particular state. What is important is that you hire lawyers who practice nationwide in debarment proceedings.
Our nationwide debarment lawyers are leaders in their field, having worked for the government before leaving to engage in private practice. To schedule a free consultation, contact us today at 202-600-4996.
Why Choose the National Security Law Firm
The National Security Law Firm consists of professional and compassionate attorneys with extensive training in specialized fields. For example, Brett O’Brien worked in the intelligence community and served as the legal adviser for the United States Army’s counterintelligence organization. Clients praise Brett and the team for their diligence, knowledge, and professionalism.
If you are facing debarment, do not go it alone. Call us today at 202-600-4996 to schedule a free, no-obligation consultation.