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equivalent, to the last known address Commonwealth of Puerto Rico, any of a party, its identified counsel, its territory or possession of the United agent for service of process, or any States, or any agency of a State, exclupartner, officer, director, owner, or sive of institutions of higher education, joint venturer of the party. Notice, if hospitals, and units of local governundeliverable, shall be considered to ment. A State instrumentality will be have been received by the addressee considered part of the State governfive days after being properly sent to ment if it has a written determination the last address known by the agency from a State government that such

Participant. Any person who submits State considers that instrumentality a proposal for, enters into, or reason

to be an agency of the State governably may be expected to enter into a

ment. covered transaction. This term also in

Suspending official. An official aucludes any person who acts on behalf of

thorized to impose suspension. The susor is authorized to commit a partici

pending official is either: pant in a covered transaction as an

(1) The agency head, or agent or representative of another par

(2) An official designated by the ticipant. Person. Any individual, corporation,

agency head. partnership, association, unit of gov

(3) The DOE suspending official is the ernment or legal entity, however orga

Deputy Assistant Secretary for Pronized, except: foreign governments or

curement and Assistance Management foreign governmental entities, public

or designee. international organizations, foreign Suspension. An action taken by a susgovernment owned (in whole or in part) pending official in accordance with or controlled entities, and entities con these regulations that immediately exsisting wholly or partially of foreign cludes a person from participating in governments or foreign governmental covered transactions for a temporary entities.

period, pending completion of an invesPreponderance of the evidence. Proof tigation and such legal, debarment, or by information that, compared with Program Fraud Civil Remedies Act that opposing it, leads to the conclu- proceedings as may ensue. A person so sion that the fact at issue is more prob- excluded is "suspended." ably true than not.

Voluntary exclusion or voluntarily erPrincipal. Officer, director, owner, cluded. A status of nonparticipation or partner, key employee, or other person limited participation in covered transwithin a participant with primary actions assumed by a person pursuant management or supervisory respon- to the terms of a settlement. sibilities; or a person who has a critical influence on or substantive control

(53 FR 19204, May 26, 1988, as amended at 53

FR 19172, May 26, 1988; 60 FR 33040, 33044, over a covered transaction, whether or

June 26, 1995; 61 FR 39856, July 31, 1996) not employed by the participant. Persons who have a critical influence on or

8 1036.110 Coverage. substantive control over a covered transaction are:

(a) These regulations apply to all per(1) Principal investigators.

sons who have participated, are cur(2) (Reserved]

rently participating or may reasonably Proposal. A solicited or unsolicited be expected to participate in transbid, application, request, invitation to actions under Federal nonprocurement consider or similar communication by programs. For purposes of these regulaor on behalf of a person seeking to par

tions such transactions will be referred ticipate or to receive a benefit, directly to as “covered transactions." or indirectly, in or under a covered (1) Covered transaction. For purposes transaction.

of these regulations, a covered transRespondent. A person against whom a action is a primary covered transaction debarment or suspension action has or a lower tier covered transaction. been initiated.

Covered transactions at any tier need State. Any of the States of the United not involve the transfer of Federal States, the District of Columbia, the funds.

(i) Primary covered transaction. Except as noted in paragraph (a)(2) of this section, a primary covered transaction is any nonprocurement transaction between an agency and a person, regard less of type, including: grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, donation agreements and any other nonprocurement transactions between a Federal agency and a person. Primary covered transactions also include those transactions specially designated by the U.S. Department of Housing and Urban Development in such agency's regulations governing debarment and suspension.

(ii) Lower tier covered transaction. A lower tier covered transaction is:

(A) Any transaction between a participant and a person other than a procurement contract for goods or services, regardless of type, under a primary covered transaction.

(B) Any procurement contract for goods or services between a participant and a person, regardless of type, expected to equal or exceed the Federal procurement small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $25,000) under a primary covered transaction.

(C) Any procurement contract for goods or services between a participant and a person under a covered transaction, regardless of amount, under which that person will have a critical influence on or substantive control over that covered transaction. Such persons are:

(1) Principal investigators.

(2) Providers of federally-required audit services.

(2) Erceptions. The following transactions are not covered:

(i) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government;

(ii) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental en tities, public international organizations, foreign government owned (in whole or in part) or controlled entities,

entities consisting wholly or partially of foreign governments or foreign goyernmental entities;

(iii) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted);

(iv) Federal employment;

(v) Transactions pursuant to national or agency-recognized emergencies or disasters;

(vi) Incidental benefits derived from ordinary governmental operations; and

(vii) Other transactions where the application of these regulations would be prohibited by law.

(b) Relationship to other sections. This section describes the types of transactions to which a debarment or suspension under the regulations will apply. Subpart B, "Effect of Action," 81036.200, "Debarment or suspension,” sets forth the consequences of a debarment or suspension. Those consequences would obtain only with respect to participants and principals in the covered transactions and activities described in 91036.110(a). Sections 1036.325, “Scope of debarment," and 1036.420, “Scope of suspension," govern the extent to which a specific participant or organizational elements of a participant would be automatically included within a debarment or suspension action, and the conditions under which affiliates or persons associated with a participant may also be brought within the scope of the action.

(c) Relationship to Federal procurement activities. In accordance with E.O. 12689 and section 2455 of Public Law 103–355, any debarment, suspension, proposed debarment or other governmentwide exclusion initiated under the Federal Acquisition Regulation (FAR) on or after August 25, 1995 shall be recognized by and effective for Executive Branch agencies and participants as an exclusion under this regulation. Similarly, any debarment, suspension or other governmentwide exclusion initiated under this regulation on or after August 25, 1995 shall be recognized by and effective for those agencies as a debarment or suspension under the FAR.

(1) Debarment and suspension of DOE procurement contractors is covered by 48 CFR (DEAR) 909.4.

(2) (Reserved] [53 FR 19204, May 26, 1988 as amended at 60 FR 33041, 33044, June 26, 1995; 61 FR 39856, July 31, 1996)

8 1036.115 Policy.

(a) In order to protect the public interest, it is the policy of the Federal Government to conduct business only with responsible persons. Debarment and suspension are discretionary actions that, taken in accordance with Executive Order 12549 and these regulations, are appropriate means to implement this policy.

(b) Debarment and suspension are serious actions which shall be used only in the public interest and for the Federal Government's protection and not for purposes of punishment. Agencies may impose debarment or suspension for the causes and in accordance with the procedures set forth in these regulations.

(c) When more than one agency has an interest in the proposed debarment or suspension of a person, consideration shall be given to designating one agency as the lead agency for making the decision. Agencies are encouraged to establish methods and procedures for coordinating their debarment or suspension actions.

tier covered transactions (see 81036.110(a)(1)(ii)) for the period of their exclusion.

(c) Exceptions. Debarment or suspension does not affect a person's eligibility for

(1) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government;

(2) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities;

(3) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted);

(4) Federal employment;

(5) Transactions pursuant to national or agency-recognized emergencies or disasters

(6) Incidental benefits derived from ordinary governmental operations; and

(7) Other transactions where the application of these regulations would be prohibited by law. (60 FR 33041, 33044, June 26, 1995] $ 1036.205 Ineligible persons.

Persons who are ineligible, as defined in § 1036.105(i), are excluded in accordance with the applicable statutory, executive order, or regulatory authority.

Subpart B-Effect of Action 8 1036.200 Debarment or suspension.

(a) Primary covered transactions. Except to the extent prohibited by law, persons who are debarred or suspended shall be excluded from primary covered transactions as either participants or principals throughout the Executive Branch of the Federal Government for the period of their debarment, suspension, or the period they are proposed for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall enter into primary covered transactions with such excluded persons during such period, except as permitted pursuant to § 1036.215.

(b) Lower tier covered transactions. Except to the extent prohibited by law, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded from participating as either participants or principals in all lower

$ 1036.210 Voluntary exclusion.

Persons who accept voluntary exclusions under $1036.315 are excluded in accordance with the terms of their settlements. DOE shall, and participants may, contact the original action agency to ascertain the extent of the exclusion. $1036.215 Exception provision.

DOE may grant an exception permitting a debarred, suspended, or voluntarily excluded person, or a person proposed for debarment under 48 CFR part 9, subpart 9.4, to participate in a particular covered transaction upon a

written determination by the agency head or an authorized designee stating the reason(s) for deviating from the Presidential policy established by Executive Order 12549 and § 1036.200. However, in accordance with the President's stated intention in the Executive Order, exceptions shall be granted only infrequently. Exceptions shall be reported in accordance with § 1036.505(a).

(a) The DOE authorized designee is the Deputy Assistant Secretary for Procurement and Assistance Management or designee.

(b) (Reserved] [60 FR 33041, 33044, June 26, 1995, as amended at 61 FR 39856, July 31, 1996)

(3) Ineligible for or voluntarily excluded from the covered transaction.

(b) Violation of the restriction under paragraph (a) of this section may result in disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other remedies as appropriate.

(c) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the covered transaction (See appendix B of these regulations), unless it knows that the certification is erroneous. An agency has the burden of proof that a participant did knowingly do business with a person that filed an erroneous certification. [60 FR 33041, 33044, June 26, 1995]

$ 1036.220 Continuation of covered

transactions. (a) Notwithstanding the debarment, suspension, proposed debarment under 48 CFR part 9, subpart 9.4, determination of ineligibility, or voluntary exclusion of any person by an agency, agencies and participants may continue covered transactions in existence at the time the person was debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A decision as to the type of termination action, if any, to be taken should be made only after thorough review to ensure the propriety of the proposed action.

(b) Agencies and participants shall not renew or extend covered transactions (other than no-cost time extensions) with any person who is debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible or voluntary excluded, except as provided in 8 1036.215. (60 FR 33041, 33044, June 26, 1995)

Subpart C-Debarment $ 1036.300 General.

The debarring official may debar a person for any of the causes in $ 1036.305, using procedures established in 88 1036.310 through 1036.314. The existence of a cause for debarment, however, does not necessarily require that the person be debarred; the seriousness of the person's acts or omissions and any mitigating factors shall be considered in making any debarment decision.

$ 1036.225 Failure to adhere to restric

tions. (a) Except as permitted under $ 1036.215 or $1036.220, a participant shall not knowingly do business under a covered transaction with a person who is

(1) Debarred or suspended;

(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or

$ 1036.305 Causes for debarment.

Debarment may be imposed in accordance with the provisions of $8 1036.300 through 1036.314 for:

(a) Conviction of or civil judgment for:

(1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction;

(2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging;

(3) Commission of embezzlement, theft, forgery, bribery, falsification or (d) Any other cause of so serious or compelling a nature that it affects the present responsibility of a person. (53 FR 19204, May 26, 1988, as amended at 54 FR 4950 and 4952, Jan. 31, 1989)

$1036.310 Procedures.

DOE shall process debarment actions as informally as practicable, consistent with the principles of fundamental fairness, using the procedures in 881036.311 through 1036.314.

8 1036.311 Investigation and referral.

Information concerning the existence of a cause for debarment from any source shall be promptly reported, investigated, and referred, when appropriate, to the debarring official for consideration. After consideration, the debarring official may issue a notice of proposed debarment.

destruction of records, making false statements, receiving stolen property, making false claims, or obstruction of justice; or

(4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a person.

(b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as:

(1) A willful failure to perform in accordance with the terms of one or more public agreements or transactions;

(2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or

(3) A willful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction.

(c) Any of the following causes:

(1) A nonprocurement debarment by any Federal agency taken before October 1, 1988, the effective date of these regulations, or a procurement debarment by any Federal agency taken pursuant to 48 CFR subpart 9.4;

(2) Knowingly doing business with a debarred, suspended, ineligible, or voluntarily excluded person, in connection with a covered transaction, except as permitted in 1036.215 or 8 1036.220;

(3) Failure to pay a single substantial debt, or a number of outstanding debts (including disallowed costs and overpayments, but not including sums owed the Federal Government under the Internal Revenue Code) owed to any Federal agency or instrumentality, provided the debt is uncontested by the debtor or, if contested, provided that the debtor's legal and administrative remedies have been exhausted;

(4) Violation of a material provision of a voluntary exclusion agreement entered into under $1036.315 or of any settlement of a debarment or suspension action; or

(5) Violation of any requirement of subpart F of this part, relating to providing a drug-free workplace, as set forth in $1036.615 of this part.

§ 1036.312 Notice of proposed debar

ment. A debarment proceeding shall be initiated by notice to the respondent advising:

(a) That debarment is being considered;

(b) of the reasons for the proposed debarment in terms sufficient to put the respondent on notice of the conduct or transaction(s) upon which it is based;

(c) Of the cause(s) relied upon under $ 1036.305 for proposing debarment;

(d) of the provisions of $1036.311 through $1036.314, and any other DOE procedures, if applicable, governing debarment decisionmaking; and

(e) of the potential effect of a debarment.

(f) That within 30 days after receipt of the notice, the respondent may submit, or make a written request for an opportunity to submit, to the debarring official or designee, information and argument in opposition to the proposed debarment, including any additional specific information that may raise a genuine dispute over the material facts. The submission in opposition may be made in person, in writing or through a representative; and

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