(2) Violation of the Federal antitrust statutes arising out of submission of bids or proposals; or

(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty which seriously and directly affects the question of present responsibility as a Government contractor.

If the conviction or judgment is reversed on appeal, the debarment shall be removed upon receipt of notification thereof. The foregoing does not necessarily require that a firm or individual be debarred. The decision to debar is discretionary; the seriousness of the offense and all mitigating factors should be considered in making the decision to debar.

(b) Clear and convincing evidence of violation of contract provisions, as set forth below, when the violation is of a character so serious as to justify debarment action

(1) Willful failure to perform in accordance with the specifications or delivery requirements in a contract (including violation of the Buy American Act with respect to other than construction contracts);

(2) A history of failure to perform, or of unsatisfactory performance, in accordance with the terms of one or more contracts; Provided, That such failure or unsatisfactory performance is within a reasonable period of time preceding the determination to debar. (Failure to per

form

or unsatisfactory performance caused by acts beyond the control of the contractor shall not be considered as a basis for debarment.);

(3) Violation of the contractual provision against contingent fees; or

(4) Violation of the Gratuities clause, as determined by the Secretary in accordance with the provisions of the clause.

(c) For other cause of such serious and compelling nature, affecting responsibility as a Government contractor, as may be determined by the Secretary of the Department concerned to justify debarment; or

(d) Debarment for any of the above causes by some other executive agency of the Government. (Such debarment may be based entirely upon the record of facts obtained by the original debarring agency, or upon a combination of addi

tional facts with the record of facts obtained by the original debarring agency.) [30 F.R. 5963, Apr. 29, 1965]

§ 1.604-2 Period and scope of debar

ment.

(a) Period of debarment. All debarments shall be for a reasonable specified period of time, commensurate with the seriousness of the cause therefor. As a general rule, a period of debarment shall not exceed three years. In the event debarment is preceded by suspension, consideration shall be given to such period of suspension in determining the period of debarment. Prior to the expiration of the debarment period, the Department or Agency which imposed the debarment should review all the facts and circumstances relating to the debarment. The debarment shall be removed at the expiration of the specified period unless it is determined that debarment for an additional period is required in order to protect the Government's interest. However, a debarment shall not be extended for an additional period solely on the basis of the facts and circumstances on which the initial debarment action was based. When debarment for an additional period is considered necessary, notice of the proposed debarment shall be furnished to the individual or firm concerned in accordance with 1.604-3. The debarment of an individual or firm may be modified by reducing the period thereof when the circumstances justify such action. With respect to debarment for violation of the Equal Opportunity clause (Type F), the debarment shall be removed prior to the expiration of the debarment period by the Secretary who imposed the debarment upon receipt of satisfactory evidence that corrective action has been taken.

(b) Scope of debarment. (1) Debarment may include all known affiliates of a concern or individual. Business concerns are considered affiliates of each other when either directly or indirectly one concern or individual controls or has the power to control another or a third controls or has the power to control both.

(2) A decision to include known affiliates in a proposed debarment is an individual determination which must be made on a case by case basis.

(3) The fraud or criminal conduct of an individual may be imputed to the business firm with which he is connected when the impropriety involved was per

formed in the course of official duty or with the knowledge or approval of the business firm.

[29 FR. 2812, Feb. 29, 1964, as amended at 30 F.R. 5964, Apr. 29, 1965]

§ 1.604-3 Notice of debarment.

(a) (1) The firm or individual and its known affiliates concerned shall be furnished with a written notice of the proposed debarment, stating as a minimum:

(i) The fact that debarment is being considered;

(ii) The reasons for the proposed debarment; and

(iii) The period of time to be afforded to present information for consideration.

(2) Information in opposition to a proposed debarment may be presented in person, in writing, or through representation. The period of time to be afforded to present information for consideration shall be limited to 30 days unless the subject of the proposed debarment requests additional time. When

no additional time is requested, the debarment determination, including notice to the firm or individual and known affiliates involved, shall be completed within 90 days. If the subject of the proposed debarment requests additional time to present information, the 90-day period shall be extended commensurately. When no suspension is in effect under § 1.605, the notice of proposed debarment shall state that no contracts will be awarded pending the debarment determination. If debarment is effected, the firm or individual shall be notified in writing within 10 days after determination of debarment has been made. This notice shall:

(i) Reference the earlier notice of proposed debarment;

(ii) Specify the reasons for debarment;

(iii) State the period of debarment, including effective dates; and

(iv) Advise that the debarment is effective throughout the Department of Defense.

(3) If, following the notice of proposed debarment, a determination is made that debarment will not be effected, the firm or individual shall be notified in writing accordingly.

(b) Copies of the notice of debarment and of any removals from debarment prior to termination of the specified period shall be furnished to the General Services Administration.

[30 F.R. 5964, Apr. 29, 1965]

§ 1.605 Suspension of firm or individual.

Suspension of a contractor, bidder or offeror is a drastic action which must be based upon adequate evidence rather than mere accusation. In assessing adequate evidence, consideration should be given to how much credible information is available, its reasonableness in view of surrounding circumstances, corroboration or lack thereof as to important allegations, and inferences which may be drawn from the existence or absence of affirmative facts. This assessment should include an examination of basic documents, such as contracts, inspection reports, and correspondence. Placing the name of an individual or firm on the consolidated list will be for the purpose of protecting the interest of the Government and not for punishment. Suspension is an administrative determination which may be modified when determined to be in the interest of the Government. [30 F.R. 5964, Apr. 29, 1965]

§ 1.605-1 Causes for suspension.

The Secretary or his authorized representative (see § 1.600 (b)) may, in the interest of the Government, suspend a firm or individual:

(a) Suspected, upon adequate evidence, of

(1) Commission of fraud or a criminal offense as an incident to obtaining, attempting to obtain, or in the performance of a public contract;

(2) Violation of the Federal antitrust statutes arising out of the submission of bids and proposals; or

embezzlement,

(3) Commission of theft, forgery, bribery, falsification or destruction of records, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty, which seriously and directly affects the question of present responsibility as a Government contractor; or

(b) For other cause of such serious and compelling nature, affecting responsibility as a Government contractor, as may be determined by the Secretary of the Department concerned to justify suspension.

Suspension of a firm or individual by the Secretary or his authorized representative shall operate to suspend such firm or individual throughout the Department of Defense.

[30 F.R. 5964, Apr. 29, 1965]

§ 1.605-2 Period and scope of suspen

sue.

sion.

(a) Period of Suspension. All suspensions shall be for a temporary period pending the completion of investigation and such legal proceedings as may enIn the event prosecutive action is not initiated by the Department of Justice within 12 months from the date of the notice of suspension, the suspension shall be terminated unless an Assistant Attorney General requests continuance of the suspension. If such a request is received, the suspension may be continued for an additional six months. Notice of the proposed removal of the suspension shall be given to the Department of Justice 30 days prior to the expiration of the 12 month period. In no event will a suspension continue beyond 18 months unless prosecutive action has been initiated within that period. When prosecutive action is initiated, the suspension may continue until the legal proceedings are completed. Upon removal of a suspension, consideration may be given to debarment in accordance with § 1.604.

(b) Scope of suspension. (1) Suspension may include all know affiliates of a concern or individual. Business concerns are considered affiliates of each other when either directly or indirectly one concern or individual controls or has the power to control another or a third party controls or has the power to control both.

(2) A decision to include known affiliates in a proposed suspension is an individual determination which must be made on a case by case basis.

(3) The fraud or criminal conduct of an individual may be imputed to the business firm with which he is connected when the impropriety involved was performed in the course of official duty, or with the knowledge or approval of the business firm.

[29 F.R. 2813, Feb. 29, 1964]

§ 1.605-3 Notice of suspension.

The firm or individual concerned shall be furnished a written notice of the suspension by the Secretary concerned or his authorized representative, within 10 days after the effective date of the suspension. The notice of suspension shall state that:

(a) The suspension is based on information that the firm or individual has

committed irregularities of a serious nature in business dealings with the Government, or that the suspension is based on irregularities which seriously reflect on the propriety of further dealings of the firm or individual with the Government, together with a description of the nature of those irregularities, in general terms, without disclosing the Government's evidence;

(b) The suspension is for a temporary period pending the completion of an investigation and such legal proceedings as may ensue;

(c) Bids and proposals will not be solicited from the firm or individual and if received will not be considered, and awards of contracts may not be made unless it is determined to be in the best interest of the Government by the Secretary or his authorized representative to do so; and

is

effective

(d) The suspension throughout the Department of Defense. In case of inquiry (see § 1.601-6), the Department shall not give further information to the contractor or his representatives concerning the reasons for suspension beyond that stated in the notice of suspension set forth above until the Department of Justice has been advised of the inquiry. If the Department of Justice objects to the release of the information requested, it shall be withheld until clearance from the Department of Justice has been obtained. [30 F.R. 5964, Apr. 29, 1965]

§ 1.606 Limited debarment or suspen

sion.

Where it is determined to debar or suspend a concern pursuant to § 1.604-1 or § 1.605-1, the Secretary or his authorized representative shall decide whether the debarment or suspension should extend to procurement contracts or to sales contracts, or both. If the debarment or suspension is limited to procurement contracts or to sales contracts, the listing should so indicate. [30 F.R. 5964, Apr. 29, 1965]

§ 1.607 Interchange of debarment in

formation.

(a) The General Services Administration (see GSA Regulation 1-II-207.07) compiles a combined list of debarments, including the basis therefor, from the notifications of debarments furnished by

the Military Departments and executive agencies. A copy of the list is distributed to all executive agencies, including the Military Departments. This list is for information only, and does not replace or supplement the lists maintained by the various agencies.

(b) Each Department shall notify the General Services Administration of the name and address of its central office where debarment information should be sent.

(c) Each Department shall check the list of debarred bidders furnished by the General Services Administration and consider firms or individuals listed thereon for inclusion upon their own lists, in accordance with the provisions of this subpart.

(d) The General Services Administration has agreed to furnish to the Military Departments upon specific request, a copy of the notice reflecting the basis for debarment action taken by another agency for causes contained in § 1.604-1 (subsection 207.05a of GSA Regulation 1-II) or under the Buy American Act. If desired, direct inquiry concerning any debarment case may be made to the agency which originated the action. [30 FR. 5965, Apr. 29, 1965]

[30 FR. 5965, Apr. 29, 1965]

§ 1.608-1 Situations where reports are required.

A report incorporating the information required by § 1.608-2 shall be prepared when:

(a) A contractor has committed, or is suspected of having committed, any of the acts described in §§ 1.604-1 and 1.605-1;

(b) A report is required by § 1.111-1 (this does not concern reports required to be submitted to the Department of Justice on identical bids under Executive Order 10936, dated 24 April 1961 (see § 1.114));

(c) A report is required by § 1.508-4 (contingent fees);

(d) A report is required by § 8.206 of this chapter (termination settlements);

(e) Buy American Act violations are suspected (see § 6.205 of this chapter);

or

(f) An individual or firm is suspected of attempting to evade the prohibitions

or debarments or suspensions imposed under this subchapter by changes of address, multiple addresses, formation of new companies, or by other devices. [30 F.R. 5965, Apr. 29, 1965]

§ 1.608-2 Contents of reports.

Each report prepared pursuant to § 1.608 shall include substantially the following information, where available: (a) Name and address of the bidder or offeror, contractor, or subcontractor; (b) Names of the principal officers, partners, owners, or managers;

(c) All known affiliates, subsidiaries, or parent firms, and the nature of the affiliation;

(d) Description of the contract or contracts concerned, including the contract number, and all office identifying numbers or symbols, the amount of each contract, the degree of completion, the amount paid the contractor and the amount still due, and the percentage of work to be completed;

(e) The status of vouchers;

(f) Whether the contract has been assigned pursuant to the Assignment of Claims Act, and if so assigned, the name and address of the assignee and a copy of the assignment;

(g) Whether any other contracts are outstanding with the contractor or any of his affiliates, and if so, the amount of such contracts, whether they are assigned pursuant to the Assignment of Claims Act, and the amounts paid or due on such contracts;

(h) A complete summary of all pertinent evidence;

(i) A recommendation as to the administration of all current contracts with a full explanation of the reason for such recommendation, or if no recommendation is made, the reason therefor;

(j) An estimate of damages, if any, sustained by the Government as a result of the action of the contractor, including an explanation of the method used in making the estimate;

(k) The comments and recommendations of the contracting officer and of each successive echelon as to (1) whether the contractor should be suspended or debarred, (2) whether any limitations should be applied to such action, and (3) the period of any debarment; and

(1) As an inclosure, a copy of the contract (or contracts) or pertinent excerpts

59

The Commander in Chief, United States European Command (CINCEUR), the Commander in Chief, Pacific (CINCPAC) and the Commander in Chief, Southern Command (USCINCSO), or the Commanders of a component command which each of these unified commanders may designate, shall establish and maintain a consolidated list of offshore suppliers to whom contracts will not be awarded and from whom bids or proposals will not be solicited. The CINCEUR consolidated list will include names in the North Atlantic and Mediterranean areas, including all of Europe, North Africa, and the Middle East. The CINCPAC consolidated list will include names in the Far East and Pacific Ocean areas, excluding the United States and its possessions. The USCINCSO consolidated list will include names in Central and South America, excluding possessions. All other overseas commanders shall utilize and contribute to such list as appropriate to their geographical location or areas in which they award con

The list shall show as a minimum the following information:

(a) Names and addresses of those firms or individuals to whom contracts shall not be awarded and from whom bids or proposals shall not be solicited. (Names will be set forth alphabetically with appropriate cross reference where more than one name is involved in a single action or where a parent firm or individual in one country is known to control subsidiaries, branches, or agencies in the same or other countries.);

(b) Basis or authority for each action; (c) Extent of restrictions imposed; (d) Termination date for each debarred listing; and

(e) Originating activity, component, or agency.

[30 F.R. 5965, Apr. 29, 1965]

The lists shall be kept current by issuance of notices of additions or deletions and by periodic reprinting. Copies of the lists shall be distributed to contracting officers as the unified commanders and their component commanders direct. CINCEUR, CINCPAC, and CINCSOUTH shall exchange lists directly. Copies shall also be furnished the Assistant Secretary of Defense (Installations and Logistics), the Assistant Secretary of Defense (International Security Affairs), and the authorized representative of the Secretaries (see § 1.600 (b)).

[30 F.R. 5965, Apr. 29, 1965]

§ 1.609-6 Basis of addition of firms and individuals to lists.

In addition to the names of offshore firms or individuals which may be included on the lists as falling into the categories outlined in § 1.603, the names of firms or individuals abroad shall be included on the list in the following additional categories: