(9) Defense Housing and Community Facilities and Services Act of 1951 (42 U.S.C. 1591).

(10) Federal Civil Defense Act of 1950 (50 App. U.S.C. 2281 (i)).

(11) Area Redevelopment Act of 1961 (42 U.S.C. 2518).

(12) Delaware River Basin Compact (sec. 15.1, 75 Stat. 714).

(13) Health Professions Educational Assistance Act of 1963 (sec. 721, 77 Stat. 167).

(14) Mental Retardation Facilities Construction Act (secs. 101, 122, 135, 77 Stat. 282, 284, 288).

(15) Community Mental Health Centers Act (sec. 205, 77 Stat. 292).

(d) Those the executive agency determines to debar administratively for any of the causes and under all of the appropriate conditions listed in § 1-1.604.

(e) Those debarred by the President's Committee on Equal Employment Opportunity, or by the head of the agency (with the prior approval of the Committee), from participation in Government contracting or subcontracting by reason of noncompliance with the Equal Opportunity Clause.

(f) Those the executive agency determines to suspend administratively for the reasons and under the conditions set forth in § 1-1.605.

(g) Those determined by an executive agency in accordance with section 3(b) of the Buy American Act (41 U.S.C. 10b (b)) to have failed to comply with the provisions of section 3(a) of that Act under any contract containing the specific provision required by said section 3(a) and made by the agency for construction, alteration, or repair of any public building or public work.

(h) Those found by the Secretary of Labor ineligible to be awarded contracts for the reason that they do not qualify as "manufacturers" or "regular dealers" within the meaning of section 1(a) of the Walsh-Healey Public Contracts Act (41 U.S.C. 35(a)).

§ 1-1.603 Treatment to be accorded firms or individuals in debarred, suspended, or ineligible status.

Firms or individuals listed by the agency as debarred, suspended, or ineligible shall be treated as follows:

(a) Total restrictions. A contract shall not be awarded to a concern or individual that is listed on the basis of § 1-1.602-1 (a), (b), (d), or (e) or to any concern, corporation, partnership, or association

in which the former concern or individual has a controlling interest, nor shall bids or proposals be solicited therefrom. However, when it is determined essential in the public interest by the head of an agency or his designee, an exception may be made with respect to a particular procurement action when a concern or individual is listed as debarred on the basis of § 1-1.602–1(d).

(b) Restrictions under statutes designated in the regulations of the Secretary of Labor. A contractor listed on the basis of § 1-1.602-1(c), or any concern, corporation, partnership, or association in which such contractor has a controlling interest, shall be ineligible for a period of three years (from the date of publication by the Comptroller General) to receive any contracts subject to any of the statutes listed in § 1-1.603 (c).

(c) Buy American Act restrictions. As specified in the Buy American Act (41 U.S.C. 10b (b)), contracts shall not be awarded for construction, alteration, or repair of public buildings or public works in the continental United States or elsewhere to concerns or individuals listed on the basis of § 1-1.602-1(g), nor shall bids or proposals therefor be solicited therefrom. However, firms or individuals listed on this basis may be awarded contracts and may be solicited for bids or proposals for other than construction, alteration, or repair of public buildings or public works in the continental United States or elsewhere.

(d) Ineligibility restrictions of the Walsh-Healey Act. Contracts shall not be awarded to firms or individuals in any amount exceeding $10,000 for those materials, supplies, articles, or equipment with respect to which the firm or individual has been found to be ineligible to be awarded a contract by the Secretary of Labor, as provided in § 1-1.602-1(h). However, firms or individuals listed on this basis may, in the discretion of each executive agency, be awarded contracts and may be solicited by bids or proposals, for (1) such materials, supplies, articles, or equipment when the amount does not exceed $10,000; (2) services regardless of amount; and (3) commodities in which not declared ineligible regardless of amount.

(e) Restrictions for non-compliance with the Equal Opportunity Clause. A concern or individual debarred for noncompliance with the Equal Employment Opportunity Clause shall not be awarded a Goverment contract.

(f) Restrictions on subcontracting. Where a concern or individual listed on the debarred bidders' list is proposed as a subcontractor, the contracting officer should decline to approve subcontracting with that firm or individual in any instance in which consent is required of the Government before the subcontract is made, unless it is determined by the agency to be in the best interest of the Government to do so.

§ 1-1.604 Causes and conditions applicable to determination of debarment by an executive agency.

Subject to the following conditions, each executive agency is authorized to debar a firm or individual in the public interest for any of the following causes:

(a) Causes. (1) Conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract, or subcontract thereunder, or in the performance of such contract or subcontact.

(2) Conviction under the Federal Antitrust Statutes arising out of the submission of bids or proposals.

(3) Violation of contract provisions, as set forth below, of a character which is regarded by the agency involved to be SO serious as to justify debarment action

(i) Willful failure to perform in accordance with the specifications or within the time limit provided in the contract.

(ii) A record 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 has occurred 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 firm or individual as a contractor shall not be considered to be a basis for debarment.

(iii) Violation of the contractual provision against contingent fees.

(iv) Acceptance of a contingent fee, which is paid in violation of contractual provision against contingent fees.

(4) Any other cause of such serious and compelling nature, affecting responsibility as a Government contractor, as may be determined by the head of the agency to warrant debarment.

(5) Debarment by some other executive agency.

(b) Conditions. (1) Debarment for any of the causes set forth in (a) of this § 1-1.604 shall be made only upon approval of the head of the executive agency or his duly authorized representative.

(2) The existence of any of the causes set forth in (a) of this § 1-1.604 does not necessarily require that a firm or individual be debarred. In each instance, whether the offense or failure, or inadequacy of performance, be of a criminal, fraudulent, or serious nature, the decision to debar shall be made within the discretion of the executive agency and shall be rendered in the best interests of the Govermnent. Likewise, all mitigating factors may be considered in determining the seriousness of the offense, failure, or inadequacy of performance, and in deciding whether debarment is warranted.

(3) The existence of a cause set forth in (a) (1) and (2) of this § 1-1.604 shall be established by criminal conviction by a court of competent jurisdiction. In the event that an appeal taken from such conviction results in a reversal of the conviction, the debarment shall be removed upon the request of the bidder (unless other cause for debarment exists).

(4) The existence of a cause set forth in (a) (3) and (4) of this § 1-1.604 shall be established by evidence which the executive agency determines to be clear and convincing in nature.

(5) Debarment for the cause set forth in (a) (5) of this § 1-1.604 (debarment by another agency) shall be proper provided that one of the causes for debarment set forth in (a) (1) through (4) of this § 1-1.604 was the basis for debarment by the original debarring agency. Such debarment may be based entirely on the record of facts obtained by the original debarring agency, or upon a combination of such facts and additional facts.

(c) Period of debarment. (1) Debarment of a firm or individual for causes other than failure to comply with the provisions of Equal Opportunity Clause (see § 1-1.602–1(e)), shall be for a reasonable, definitely stated period of time commensurate with the seriousness of the offense or the failure or inadequacy of performance. As a general rule, a period of debarment shall not exceed three years. However, when debarment for an additional period is deemed necessary

notice of the proposed additional debarment shall be furnished to that concern or individual in accordance with § 11.604-1. Except as precluded by statute, a debarment may be removed or the period thereof may be reduced by the head of the agency or by his authorized representative, upon the submission of an application, supported by documentary evidence, setting forth appropriate grounds for the granting of relief; such as, newly discovered material evidence, reversal of a conviction, bona fide change of ownership or management, or the elimination of the causes for which the debarment was imposed.

(2) Debarment of a firm or individual for failure to comply with the provisions of the Equal Opportunity Clause generally shall continue until removed by the President's Committee or by the agency itself with the concurrence of the President's Committee.

(a) Initiation of debarment action. An agency seeking to debar a concern or individual (or any affiliate thereof) for cause shall furnish that party with a written notice: (1) stating that debarment is being considered, (2) setting forth the reasons for the proposed debarment, and (3) indicating that such party will be accorded an opportunity for a hearing if he so requests within a stated period of time.

(b) Hearings. An opportunity for a hearing conducted in a manner prescribed by agency regulations shall be accorded to any concern or individual which the agency proposes to debar. Such regulations shall establish procedural safeguards which satisfy the demands of fairness, and which, at a minimum, shall provide that information in opposition to the proposed action may be presented, in person or in writing, and, if desired, through an appropriate representative. However, where one agency has imposed debarment upon a concern or individual, a second agency may also impose a similar debarment for a concurrent period without according an opportunity for a hearing provided that the second agency furnishes notice of the proposed similar debarment to that party, and accords that party an opportunity to present information in his behalf to explain why the proposed similar

debarment should not be imposed in whole or in part.

(c) Scope of debarment. (1) A debarment may include all known affiliates of a concern or individual. (See § 1-1.603 (a)).

(2) Each decision to include a known affiliate within the scope of a proposed debarment is to be made on a case by case basis, after giving due regard to all the relevant facts and circumstances.

(3) The criminal, fraudulent, or seriously improper conduct of an individual may be imputed to the business concern with which he is connected, where such grave impropriety was accomplished within the course of his official duty or was effected by him with the knowledge or approval of that concern. Likewise, where a concern is involved in criminal, fraudulent, or seriously improper conduct, any individual who was involved in the commission of the grave impropriety may be debarred.

§ 1-1.605

Suspension of bidders.

(a) Agencies electing to utilize a suspension procedure shall employ the procedure set forth in this section.

(b) Suspension is a drastic action and, as such, shall not be based upon an unsupported accusation. In assessing whether adequate evidence exists for invoking a suspension, consideration should be given to the amount of credible evidence which is available, to the existence or absence of corroboration as to important allegations, as well as to the inferences which may properly 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. A suspension may be modified whenever it is determined to be in the interest of the Government to do so.

§ 1-1.605-1 Causes and conditions under which executive agencies may suspend contractors.

(a) An agency may, in the interest of the Government, suspend a firm or individual:

(1) Suspected, upon adequate evidence, of

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

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

(iii) 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; or

(2) For other cause of such serious and compelling nature, affecting responsibility as a Government contractor, as may be determined by the agency to warrant suspension.

an

(b) A suspension invoked by agency for any of the causes set forth in (a) (1) and (2) of this § 1-1.605-1 may be the basis for the imposition of a concurrent suspension by another agency.

§ 1-1.605-2 Period and scope of suspension.

(a) Period of suspension. All suspensions shall be for a temporary period pending the completion of an investigation and such legal proceedings as may ensue. In the event that prosecutive action has not been 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 shall a suspension continue beyond 18 months unless prosecutive action has been initiated within that period. Whenever prosecutive action has been 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 of this subpart.

(b) Scope of suspension. (1) Suspension may include all known affiliates of a concern (firm) or individual.

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

(3) The criminal, fraudulent, or seriously improper conduct of an individual may be imputed to the business firm with which he is connected when the impropriety involved was performed within the course of his official duty, or with

knowledge or approval of the business firm.

§ 1-1.605-3 Restrictions during period of suspension.

During a period of suspension of a firm or individual, the following policies and procedures shall be applicable:

(a) Bids and proposals shall not be solicited from suspended contractors. If received, bids and proposals shall not be considered and awards for contracts shall not be made to suspend contractors unless it is determined by the agency to be in the best interest of the Government.

(b) Suspended contractors will be subject to the provisions of § 1-1.603 (f) regarding restrictions on subcontractors. § 1-1.605-4 Notice of suspension.

(a) The firm or individual concerned shall be furnished a written notice of the suspension by the agency within 10 days after the effective date. The notice shall state as follows:

(1) The suspension is based (1) on the information that the firm or individual has committed irregularities of a serious nature in business dealings with the Government or (ii) on irregularities which seriously reflect on the propriety of further dealings of the firm or individual with the Government. (The irregularities should be described in general terms without disclosing the Government's evidence);

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

(3) Bids and proposals will not be solicited from the firm or individual and, if received, will not be considered for award unless determined by the agency to be in the best interest of the Government.

(4) The suspension is effective throughout the agency. All inquiries concerning suspended contractors shall be handled in accordance with agency procedures. Where a matter has been referred to the Department of Justice, the agency shall not give further information to the firm or individual concerning the reasons for suspension beyond that stated in the notice of suspension set forth in this § 1-1.605-4 until the Department of Justice has been advised of the inquiry and acquiesces in any such disclosure.

§ 1-1.606 Agency procedure.

Each agency shall:

(a) Establish internal procedures and methods for giving effect to this Subpart 1-1.6.

(b) Notify the General Services Administration (GSA) of the name and address of its central office where debarment information should be sent.

(c) Furnish to GSA a copy of the notice of debarment (at time of issuance) on those debarments made under provisions of § 1-1.604 (a), or the Buy American Act, and provide GSA with information as to any removals of such debarments.

(d) Check the list of debarred bidders furnished by GSA, and consider firms or individuals listed thereon for inclusion upon its own list, in accordance with the provisions of this Subpart 1-1.6.

(e) As needed, request from GSA a copy of the notice on any debarment case appearing on the list herein provided to be compiled and distributed by GSA. If desired, direct inquiry concerning any debarment case may be made of the agency which originated the action.

(f) Make its list available to all contracting officers within the agency.

§ 1-1.607 General Services Administration responsibility.

In addition to the agency procedure provided in § 1-1.606, GSA will:

(a) Compile and distribute to the designated central office address of each agency a listing of the administrative debarments and debarments under the Buy American Act made by the agencies, including the basis of action, in order that each executive agency may be informed of actions taken by each other agency. In general application, this listing will be for information purposes only and it is not intended to take the place of, or be an addition to, the lists maintained by the various agencies.

(b) Furnish to any agency, on specific request, a copy of the notice reflecting the basis for debarment action taken by another agency for causes contained in § 1-1.604(a) or under the Buy American Act.

Subpart 1-1.7-Small Business
Concerns

(SBA) and the Government agencies having procurement responsibility, sets forth (1) procurement policy with reference to small business concerns; (2) policy governing the relationship of procurement agencies with SBA; (3) SBA certificate of competency program; (4) small business set-aside procedures; (5) small business subcontracting policies; and (6) information concerning SBA's size standards.

(b) This subpart applies only in the United States, its territories and possessions, Puerto Rico, and the District of Columbia.

The definitions in this section apply throughout this Subpart 1-1.7. Those definitions relating to SBA size standards for procurement purposes are based on the governing regulations of SBA on the subject (13 CFR Part 121).

§ 1-1.701-1 Small business concern (for Government procurement).

(a) General. A small business concern for the purpose of Government procurement is a concern, including its affiliates, which is independently owned and operated, is not dominant in the field of operation in which it is bidding on Government contracts, and can further qualify under the criteria set forth in this section. ("Concern" means any business entity organized for profit with a place of business located in the United States, its possessions, and Puerto Rico, including but not limited to, an individual, partnership, corporation, joint venture, association, or cooperative. "Annual receipts" means the annual receipts less returns and allowances of a concern and its affiliates.) For the purpose of a procurement of a product classified into two or more industries with different size standards, the smallest of such size standards shall be used in determining a bidder's size status. If no standard for an industry, field of operation, or activity (e.g., animal specialty; fin fish; anthracite mining; management-logistics support to be performed outside of the several States, Puerto Rico, Virgin Islands, or the District of Columbia) has been set forth in this § 1-1.701-1, a concern bidding on a Government contract is a small business if, including its affiliates, it is independently owned and operated, is not dominant in the field of operation in which it is