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role in a national program to prevent water pollution. It was passed during the last few days of the 92nd Congress.
The law authorizes debarment in the same manner as does the Clean Air Act; that is, by prohibiting Government contracts to be performed in a facility where the violation arises. A conviction of the offense is required for debarment. The law also provides for the President to issue an order to implement the purposes and policy of the act and to prescribe “procedures, sanctions, penalties.” The implementing order is yet to be issued.
REGULATORY BASES FOR DEBARMENT
Regulations in addition to those issued pursuant to statute, as discussed above, provide further bases for debarment. For purposes of discussion the Armed Services Procurement Regulation (ASPR) has been chosen since its treatment of debarment is similar to that in the regulations of other agencies.17
(ii) 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
(A) willful failure to perform in accordance with the specifications or delivery requirements in a contract (including violations of the Buy American Act with respect to other than construction contracts); (B) 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 perform or unsatisfactory performance caused by acts beyond the control of the contractor shall not be considered as a basis for debarment); (C) violation of the contractural provision against contingent fees; or (D) violation of the Gratuities clause, as determined by the Secretary in accordance with the provisions of the clause. (iii) 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 (iv) 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 additional facts with the record of facts obtained by the original debarring agency.) 18
The regulation provides for a three-year maximum for a debarment, with shorter periods commensurate with the seriousness of the cause. Debarment may not be extended past the original period solely on the basis of initial findings. Notice of an extension must be given and the safeguards present in the initial debarment continue to apply.
The rules require that written notice be given of the proposed action. Such notice must include the reasons why debarment is
AGENCY DEBARMENTS-CAUSES AND PROCEDURES
The basis for agency debarments set out by ASPR are:
(i) conviction by or a judgment obtained in a court of competent jurisdiction for
(A) commission of fraud or a criminal
17 See FPR 1-1.600 to 1-1.607 and NASA PR 1.600 to 1.607.
18 Z.SPR 1-604.1.
quired to discuss its evidence but merely describe it in general terms. The suspended contractor must be told that the period of suspension is temporary pending completion of investigation and such legal proceedings as may be appropriate. Bids and proposals will not be accepted nor may contracts be awarded unless the Government determines that such action is in its best interest.
being considered and the period of time during which the contractor may present information for consideration by the agency. Evidence may be presented ir. person, in writing, or through a representative and usually must be presented within 30 days, although this period can be extended upon request. If a suspension is not in effect at the time, the notice of proposed debarment will act as such, and no contracts will be awarded until determination is made.
Finally, the contractor must be notified in writing within ten days if a debarment is put into effect. The reasons and time period for the debarment must be stated, and the contractor must be informed that the action is effective throughout the Department of Defense. If the debarment is not to be effected, the contractor must be notified in writing as soon as that decision is made.
COMPARISON WITH FEDERAL PROCUREMENT REGULATIONS (FPR) PROCEDURES
COMPARATIVE CAUSES AND PROCEDURES FOR SUSPENSION
There are some differences between the rules established for debarment and suspension in ASPR and the counterpart rules of FPR that govern the activities of the civilian agencies. Perhaps the most significant difference is that the FPR, by stating as its goal the satisfaction of “demands of fairness," in effect prescribes a hearing.22 ASPR says merely that “information in opposition to a proposed debarment may be presented in person, in writing or through representation.”
There are no provisions in ASPR or FPR for several of the elements of an adversary hearing; for example, subpoena, rights to cross-examination, and clear separation of functions between those who propose debarment and those who decide the issue. Suspension rules in both regulations appear to be essentially the same.
Suspension is intended to avoid fraud, criminal offenses, Federal antitrust violations, embezzlement, and other business-related dishonesty incident to public contracts. “Causes for Suspension,” 19 is the same as its counterpart, “Causes for Debarment,” 20 except that a contractor need only be suspected of the offenses to be suspended.
The period of suspension is limited to 12 months unless an Assistant Attorney General requests continuance. In this event, six months may be added, but in no case will suspension continue beyond 18 months unless "prosecutive action has been initiated within that period,” in which case suspension continues until legal proceedings are completed.21 The scope of suspension is the same as for debarment.
A firm or individual is entitled to written notice of a suspension within ten days after its effective date. The notice must describe the irregularities on which the suspension is based. However, the Government is not re
Executive Order-Equal Employment Opportunity
Violation by a contractor of the Equal Opportunity provision prescribed by Executive Order 11246 and repeated in the rules issued by the Secretary of Labor can result in debarment of a noncomplying contractor. Responsibility for administering the program was assigned to the Department of Labor's Office of Federal Contract Compliance (OFCC).
The Department of Labor's rules of practice, to be followed prior to a debarment action under the Executive order, call for a written notice, a period for voluntary compliance, a further notice of proposed debarment, opportunity for the contractor to request a hearing, and a set of standards for the conduct of hearings.23
19 ASPR 1-605.1. 20 ASPR 1-604.1.
1 ASPR 1-605.2. But see note 25, infra, for a case in which the Court of Appeals for the District of Columbia disapproved such a suspension beyond one month.
22 FPR 1-1.604-1(b).
PROCEDURAL DUE PROCESS
It is well established that lack of procedural fairness in a debarment proceeding will invalidate those proceedings. Yet questions remain about the extent of due process required in debarment proceedings.24
Recently a court has indicated that safeguards similar to those that apply to debarment proceedings are essential for suspension proceedings.25
• Debarment based on a debarment by another Government agency should be preceded by notice to the contractor and an opportunity for him to reply. (This recommendation is not yet reflected in practice.) • “Lack of Responsibility” determinations should be governed by the overall conference recommendation. (The Administrative Conference intended that debarment “be interpreted broadly to include every type or kind of agency action, however called ... at whatever level . . ., which has the effect or result of"' excluding individuals or firms from participation in the procurement process. Hence, “review lists," "experience lists," and the like having this effect and the processes by which lack of "responsibility” is determined under certain statutes, 27 orders, 28 and regulations 29 would fall within the definition of "lack of responsibility” determinations. The Conference further intended that its overall recommendations as to kinds of procedures to apply to debarment proceedings would apply equally to the kinds of actions amounting to debarments just discussed, though perhaps not precisely so-entitled.) (Not followed uniformly in practice except to the extent indicated in the comment above concerning Walsh-Healey and Service Contract acts and Executive Order 11246.) • Notice of proposed debarment may include immediate suspension if in connection with a criminal prosecution or civil action and may continue for the period of trial of the first instance plus 120 days. If indictment is not returned within one year following notice, the suspension should be terminated unless the Attorney General de
Administrative Conference Recommendation 29
Following a thorough study of debarment and suspension in the early 1960's, the Administrative Conference of the United States advocated measures to improve procedural fairness.26 These recommendations and implementing actions to date, are summarized below:
• Prior to an initial debarment or suspension action, the contractor should be given notice, with reasons, for the proposed action and an opportunity to be heard at an impartial trial-type hearing. (To date, adversary hearings are required only for debarments under the Walsh-Healey and Service Contract acts, and Executive Order 11246.)
23 41 CFR § 60–1.26, as supplemented by recently proposed detailed procedures for such hearings (see 41 CFR § 60-1.26 (b) and 41 CFR Part 60-30, in 37 Fed. Reg. 5957-63 (1972)) go far in providing the “safeguards" normally associated with adversary hearings and the standards set by the courts for debarment and suspension hearings.
24 See Gonzalez v. Freeman, 334 F.2d 570 (D.C. Cir., 1964); Copper Plumbing and Heating Co. v. Campbell, 290 F.2d 368 (D.C. Cir., 1961) ; Schlesinger v. Gates, 249 F.2d 111 (D.C. Cir., 1957); and Framlau Corp. v. Dembling, note 7, su pra.
25 Horne Bros., Inc. v. Laird, No. 72–1392 (D.C. Cir., May 17, 1972). See 51 Comp. Gen.
- (B-175777, June 15, 1972). 34 See recommendations in Selected Reports of the Administrative Conference of the United States, S.Doc. No. 24, 88th Cong., 1st Sess., 265-307 (1963).
27 See generally 10 U.S.C. & 2305 (c) and 41 U.S.C. $ 253 (b) (1970) which provide that contracts are to be awarded only to “responsible" bidders.
29 Exec. Order No. 11246, Sept. 24, 1965, 3 CFR, 1964-65 Comp., at 339, 42 U.S.C. 2000e (1970). See discussion of the order and its penalties in the text above.
29 See ASPR 1-904 and FPR 1-1.1204 specifically. See also 41 CFR Part 60–2 (1972) implementing Exec. Order No. 11246, su pra note 28, under which the Comptroller General recently decided (Comp. Gen. Dec. B-174816, Mar. 2, 1972, Unpublished) that lack of a hearing before a first-time finding of “non responsibility" for failure to generate a satisfactory "Affirmative Action Program" did not constitute lack of due process. GAO characterized the first finding as a "temporary or limited suspension" and said that it did not consider the first nonresponsibility finding an "order for debarment" under Exec. Order No. 11246 so as to afford the contractor an opportunity for hearing.
(iv) applicability of extending a debarment to other agencies. Fraud should be based upon substantial evidence. Debarment for a reasonable time shall not exceed three years and shall be terminable upon showing of current responsibility. (The regulations appear to have followed the substance of these recommendations.) • The Buy American and Davis-Bacon acts should be amended to authorize administrative discretion regarding scope and period of debarment. (Neither act has been amended.) 31
termines that disclosure of the Government's evidence (at the trial-type hearing) would be harmful to law enforcement. Based on this determination, the suspension may continue up to 18 months before an indictment is returned. Suspension may be reimposed if an indictment is subsequently returned following termination of the original suspension. Suspensions based on other reasons should not exceed 90 days except when based on written determination of an Assistant Secretary for additional 90 day periods, maximum suspension not to exceed one year. No summary suspension without notice and trial-type hearing. (As previously indicated,30 summary suspension beyond one month has been disapproved recently by a Federal Circuit Court of Appeals. Revision of the pertinent regulations has not yet been made. Other aspects of the foregoing recommendations have been only partially put into effect.) • Rejection of an otherwise successful bid for reasons of lack of business integrity or honesty requires written explanations to the bidder and opportunity for reply, consistent with need for making temporary contract award. (Not yet implemented.) • Agency rules on debarment procedures and practice should be published, be uniform, and provide for speedy and fair determinations. (Not implemented, especially with regard to uniformity, although regulations applying beyond the preliminary investigative stage are generally published and require notice of findings and determinations.) • Debarment decisions (including findings, conclusions, and reasons) should be in writing and copies should be given to the debarred contractor. Decisions should be published. Grounds for debarment should be set forth in agency regulations, should be published, should be uniform, and should include standards for determining (i) business affiliations; (ii) extending debarments to affiliates; (iii) when debarments of an individual will be imputed to a firm; and
Authorizations to debar are set forth in, referred to in, or inferred from dozens of statutes. Most of those providing such authority expressly or by reference have a common concern with wages and labor conditions. The statutes differ in their coverage with respect to the scope and term of debarment, the authority to hold hearings, confrontation of witnesses, subpoena power, appointment of hearing examiners, and a number of attributes of the traditional adversary hearing. They say little about what procedural safeguards are available to a contractor in a debarment proceeding and nothing about the procedures appropriate for proceedings to suspend a contractor.
To the extent that there are procedures for these actions, they are almost entirely the subject of regulations. This applies to both statutory and regulatory debarment and suspension. Procedures vary depending on which statute serves as a basis for the action. This is the case even within the same agency–when the agency is charged with administering debarments under more than one statute. The Department of Labor is the notable example. Variations in procedures also occur with regard to actions which are rooted in different administrative or executive regulations. In effect, procedural safeguards apparently considered essential to one debarment or suspension proceeding have not been considered necessary for another, although the nature of the offense and the penalty may be similar or even the same.
31 Removal from the debarred list of violators of Davis-Bacon related statutes is provided for upon appropriate findings by 29 CFR $ 5.6 (b) (1) and g 5.6(d) (1972).
30 See Horne Bros. Inc. v. Laird, supra note 25.
It is now established that debarment and suspension actions are judicially reviewable, but it is still unclear what kind of administrative proceeding is essential to satisfy due process requirements. The fundamental question is to what extent a number of the elements of a trial-type hearing—notice, appointment of hearing examiner, subpoena, evidence, crossexamination, to mention several—are required for debarment and suspension hearings.
Clearly, the lack of uniformity and the substantial questions regarding due process dictate a thorough, expert policy review of debarment and suspension proceedings, and the enactment of legislative changes if necessary. Bearing in mind the caution of the court in Gonzales v. Freeman that to the debarment power there attaches an obligation to deal with uniform fairness to all,32 such a review should have as its goal published, uniform, expeditious, and fair rules. The proposed Office of Federal Procurement Policy would appear to be well suited for this task. 32 334 F.2d 570, 580 (D.C. Cir. 1964).