(a) Investigation and referral. Matters appropriate for the debarring official's consideration shall be reported promptly to that official.

(b) Decisionmaking process. (1) Any Agency procedures that may be established to implement the debarment decisionmaking process of this subpart shall be as informal as practicable, consistent with the principle of fundamental fairness.

(2) The contractor (and any specifically named affiliates) shall be given an opportunity to submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment.

(3) In actions not based upon a conviction or judgment, if it is found that the contractor's submission in opposition raises a genuine dispute over facts material to the proposed debarment, factfinding shall be conducted. The official conducting the factfinding shall:

(i) Afford the contractor an opportunity to appear with counsel, submit documentary evidence, present witnesses, and confront any person the Agency presents; and

(ii) Ensure that a record of the factfinding is transcribed and made available at cost to the contractor upon request, unless the contractor and the Agency, by mutual agreement, waive the requirement for a transcript.

(c) Notice of proposal to debar. The contractor and any specifically named affiliates shall be advised, by certified mail, return receipt requested:

(1) That debarment is being considered;

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

(3) Of the cause(s) relied upon under § 7-1.605-2 for proposing debarment;

(4) That, within 30 days after the receipt of the notice, the contractor may, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment, including any additional specific information that raises a

genuine dispute over the material facts;

(5) That the Agency's procedures governing debarment decisionmaking are contained in this subpart (i.e., 41 CFR 7-1.6);

(6) Of the potential effect of the proposed debarment; and

(7) That if no suspension is in effect under § 7-1.606, bids or proposals shall not be solicited from, contracts shall not be awarded to, existing contracts shall not be renewed or otherwise extended, and subcontracts shall not be consented to or approved for the contractor by any component of the Agency pending a debarment decision unless the Administrator or his authorized representative states in writing the compelling reason to do so.

(d) Debarring official's decision. (1) In actions based upon a conviction or judgment, or in which there is no genuine dispute over material facts, the debarring official shall make a decision on the basis of all the information in the administrative record, including any submission made by the contractor. If no suspension is in effect under § 7-1.606, the decision shall be made within 30 working days after receipt of any information and argument submitted by the contractor, unless the debarring official extends this period for good cause.

(2) In actions in which factfinding is conducted as to disputed material facts, written findings of fact shall be prepared. The debarring official shall base the decision on the facts as found, together with any information and argument submitted by the contractor and any other information in the administrative record.

(i) The debarring official may refer matters involving disputed material facts to another official for findings of fact. The debarring official shall accept any such findings unless he specifically determines them to be arbitrary and capricious or clearly erro

neous.

(ii) The debarring official's decision shall be made after the conclusion of factfinding with respect to disputed facts.

(3) In any action in which the proposed debarment is not based upon a conviction or civil judgment, the facts

establishing the cause for debarment must be proved by a preponderance of the evidence.

(e) Notice of debarring official's decision.

(1) If the debarring official decides to impose debarment, the contractor and any affiliates involved shall be given prompt notice by certified mail, return receipt requested:

(i) Referring to the notice of proposed debarment;

(ii) Specifying the reasons for debarment;

(iii) Stating the period of debarment, including effective dates (see § 71.605-4); and

(iv) Advising that the debarment is effective throughout the Executive branch of the Government unless the Administrator, or his authorized representative, or other Federal agency taking the procurement action, states in writing the compelling reason for continued business dealings between the Agency or other Federal agency and the contractor.

(2) If debarment is not imposed, the debarring official shall promptly notify the contractor and any affiliates involved of that decision, by certified mail, return receipt requested.

§ 7-1.605-4 Period of debarment.

(a) Debarment shall be for a period sufficient to protect the Government's interest. Generally, a debarment should not exceed 3 years. If suspension precedes a debarment, the suspension period shall be considered in determining the debarment period.

(b) The debarring official may extend the debarment for an additional period, if that official determines that an extension is necessary to protect the Government's interest. However, a debarment may not be extended solely on the basis of the facts and circumstances upon which the initial debarment action was based. If debarment for an additional period is determined to be necessary, the procedures of § 7-1.605-3 of this part shall be followed to extend the debarment.

(c) The debarring official may reduce the period or extent of debarment, upon the contractor's request, supported by documentation, for reasons such as:

(1) Newly discovered material evidence;

(2) Reversal of the conviction or judgment upon which the debarment was based;

(3) Bona fide change in ownership or management; or

(4) Elimination of other causes for which the debarment was imposed.

§ 7-1.605-5 Scope of debarment (imputed conduct).

(a) The fraudulent, criminal, or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a contractor may be imputed to the contractor when the conduct occurred in connection with the individual's performance of duties for or on behalf of the contractor, or with the contractor's knowledge, approval, or acquiescence. The contractor's acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence.

(b) The fraudulent, criminal, or other seriously improper conduct of a contractor may be imputed to any officer, director, shareholder, partner, employee, or other individual associated with the contractor who participated in, knew of, or had reason to know of, the contractor's conduct.

point for such matters, i.e., the Assistant General Counsel for Litigation and Enforcement (GC/LE).

(b) Suspension is a serious action to be imposed on the basis of adequate evidence, pending the completion of an investigation or legal proceedings, when it has been determined that immediate action is necessary to protect the Government's interest. In assessing the adequacy of the evidence, consideration should be given to how much information is available, how credible it is given the circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment should include an examination of basic documents such as contracts, inspection reports, and correspondence.

(c) Suspension constitutes suspension of all divisions or other organizational elements of the contractor, unless the suspension decision is limited by its terms to specific divisions, organizational elements, or commodities. The suspending official may extend the suspension decision to include any affiliates of the contractor if they are: (1) Specifically named and (2) given written notice of the suspension and an opportunity to respond (see § 71.606-3(c)).

(d) A contractor's suspension shall be effective throughout the Executive branch of the Government, unless the head of the agency taking the procurement action, or his authorized representative, states in writing the compelling reason for continued business dealings between that agency or Department and the contractor.

§ 7-1.606-2 Causes for suspension.

(a) The suspending official may suspend a contractor suspected, upon adequate evidence, of:

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

(2) Violation of Federal or State antitrust statutes relating to the submission of bids or proposals;

(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false

statements, or receiving stolen property; 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 Government contractor or subcontractor.

A contractor may be suspended for any of the above causes based on a suspension by another Federal agency where the original suspension does not have Government-wide effect.

(b) Indictment for any of the causes in paragraph (a) of this section constitutes adequate evidence for suspension.

(c) The suspending official may upon adequate evidence also suspend a contractor for any other cause of so serious or compelling a nature that it affects the present responsibility of a Government contractor or subcontrac

(a) Investigation and referral. Matters appropriate for the suspending official's consideration shall be reported promptly to that official.

(b) Decisionmaking process. (1) Any Agency procedures that may be established to implement the suspension decisionmaking process shall be as informal as practicable consistent with the principle of fundamental fairness. These procedures shall afford the contractor (and any specifically named affiliates) an opportunity, following the imposition of suspension, to submit, in person, in writing or through a representative, information and argument in opposition to the suspension.

(2) In actions not based on an indictment, if it is found that the contractor's submission in opposition raises a genuine dispute over facts material to the suspension and if no determination has been made, on the basis of Department of Justice advice, that substantial interest of the Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced, factfinding shall be conducted. Then official conducting factfinding shall:

(i) Afford the contractor an opportunity to appear with counsel, submit

documentary evidence, present witnesses and confront any person the Agency presents; and

(ii) Ensure that a record of the factfinding is transcribed and made available at a cost to the contractor upon request, unless the contractor and the Agency, by mutual agreement, waive the requirement for a transcript.

(c) Notice of suspension. When a contractor and any specifically named affiliates are suspended, they shall be immediately advised by certified mail, return receipt requested:

(1) That they have been suspended and that the suspension is based on an indictment or other adequate evidence that the contractor has committed irregularities (i) of a serious nature in business dealings with the Government, or (ii) seriously reflecting on the propriety of further Government dealings with the contractor; any such irregularities shall be described in terms sufficient to place the contractor on notice without disclosing the Government's evidence;

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

(3) Of the cause(s) relied upon under § 7-1.606-2 for imposing suspension;

(4) Of the effect of the suspension (see § 7-1.606–1(d) and § 7-1.604-1(a));

or

(5) That, within 30 days after receipt of the notice, the contractor may submit, in person, in writing through a representative, information and argument in opposition to the suspension, including any additional specific information that raises a genuine dispute over material facts; and

(6) That factfindings to determine disputed material facts will be conducted unless: (i) The action is based on an indictment or (ii) a determination is made, on the basis of Department of Justice advice, that the substantial interests of the Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced.

(d) Suspending official's decision. (1) In actions: (i) Based on an indictment, (ii) in which the contractor's submission does not raise a genuine disputed over material facts; or (iii) in which factfinding to determine dis

pute material facts has been denied on the basis of Department of Justice advice, the suspending official's decision shall be based on all the information in the administrative record, including any submission made by the contractor.

(2) In actions in which factfinding is conducted as to disputed material facts, written findings of fact shall be prepared. The suspending official shall base the decision on the facts as found, together with any information and argument submitted by the contractor and any other information in the administrative record.

(i) The suspending official may refer matters involving disputed material facts to another official for findings of fact. The suspending official shall accept any such findings, unless he specifically determines them to be arbitrary and capricious or clearly erro

neous.

(ii) The suspending official's decision shall be made after the conclusion of factfinding with respect to disputed facts.

(3) The suspending official may modify or terminate the suspension or leave it in force (for sample reasons, see § 7-1.605-4(c)). However, a decision to modify or terminate the suspension shall be without prejudice to the subsequent imposition of suspension by any other Federal Agency or the imposition of debarment by any other Federal agency.

(4) Prompt written notice of the suspending official's decision shall be sent to the contractor by certified mail, return receipt requested.

§ 7-1.606-4 Period of suspension.

(a) Suspension shall be for a temporary period pending the completion of investigation and any ensuing legal proceedings, unless sooner terminated by the suspending official or as provided in this paragraph § 7-1.606-4.

(b) If legal proceedings are not initiated within 12 months after the date of the suspension notice, the suspension shall be terminated unless an Assistant Attorney General requests its extension, in which case it may be extended for an additional 6 months. In no event may a suspension extend

beyond 18 months, unless legal proceedings have been initiated within that period.

(c) The suspending official shall notify the Department of Justice of the proposed termination of the suspension at least 30 days before the 12 month period expires to give it an opportunity to request an extension.

§ 7-1.606-5 Scope of suspension.

The scope of suspension shall be the same as that for debarment (see § 71.605-5), except that the procedures of § 7-1.606-3 shall be used in imposing the suspension.

§ 7-1.607 Interchange of information.

Debarment or suspension of a contractor by one Department or Federal agency can have an adverse impact on the missions of other Departments or agencies with which the contractor does business. Accordingly, if it appears that there is the potential for such an adverse impact, the cognizant debarring or suspending official should solicit the comments of those Departments or Federal agencies that he believes could be affected before taking action. A Department or Federal agency that believes it could be affected by the proposed action should comment directly to the cognizant debarring or suspending official of the agency. If several Departments or Federal agencies independently are contemplating a debarment or suspension action against the same contractor, consideration should be given to designating one Department or Federal agency as the lead agency for making the decision.

Subpart 7-1.7-Small Business Concerns

SOURCE: 38 FR 28666, Oct. 16, 1973, unless otherwise noted.

§ 7-1.702 Small business policies.

(a) In keeping with section 602 of the Foreign Assistance Act of 1961 (22 U.S.C. 2352), as amended, AID shall, insofar as practicable and to the maximum extent consistent with the accomplishment of the purposes of said Act, assist United States small business to participate equitably in the

furnishing of supplies and services for Foreign Assistance activities.

(b) It is the policy of AID to:

(1) Fully endorse and carry out the Government's small business program for placing a fair proportion of its purchases and contracts for supplies, construction (including maintenance and repair), research and development, and services (including personal, professional, and technical services) with small business, including minority small business concerns; and (2) Increase their participation in AID procurement.

(c) In furtherance of this policy:

(1) Program/project officers shall make positive efforts (see AIDPR 7– 1.704-5) to identify potentially qualified small and minority business firms during precontract development of programs/projects and shall, with the responsible contracting officers, assure that such firms are given full opportunity to participate equitably;

(2) Small business set-asides shall be made for all contracts to be executed in AID/Washington which qualify for small business set-aside action under Subpart 1-1.7 of the Federal Procurement Regulations; and

(3) Consideration shall be given in appropriate cases to the award of the contract to the Small Business Administration for subcontracting to small business firms pursuant to section 8(a) of the Small Business Act (15 U.S.C. 637(a)).

(d) This program shall be implemented by all AID/Washington procuring activities in order to attain these policy objectives. In accordance with AIDPR 7-1.704, all AID/Washington direct-procurement requirements which exceed $5,000.00 shall be screened for small business opportunities by the Office of Small and Disadvantaged Business Utilization except those:

(1) Set-aside unilaterally or by class set-aside;

(2) Where the Contracting Officer certifies in writing that the public exigency will not permit the delay incident to screening;

(3) That will result in an institution building contract (see AIDPR 7-1.7046(a)(3)) with an educational or nonprofit institution; or that will result in