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awarded contracts which are subject to any of the foregoing statutes.

Type F includes concerns which have been debarred by the appropriate Secretary or the Executive Vice Chairman of the President's Committee on Equal Employment Opportunity for noncompliance with the Equal Opportunity clause. Concerns under Type F listings may not be awarded contracts or be solicited for bids.

(b) Administration of current contracts in all phases may be continued, notwithstanding the listing of a contractor, unless otherwise directed by the Secretary concerned or his representative. However, payment of all or part of funds due or to become due may be withheld when such action is determined to be in the best interest of the Government by the Secretary concerned or his representative.

(c) Where a listed concern is proposed as subcontractor, the contracting officer should decline to consent to subcontracting with such concern in any instance in which consent is required of the Government before the subcontract is made, unless it is determined to be in the best interest of the Government by the Secretary of the Department or his authorized represenative.

[29 F.R. 2811, Feb. 29, 1964, as amended at 29 F.R. 14818, Oct. 31, 1964]

§ 1.604 Causes and conditions under which departments may debar con

tractors.

The Secretary of each Department, or his authorized representative except as limited below, is authorized to debar in the public interest a firm or an individual for any of the causes and under all the conditions set forth below. Debarment of a firm or individual under this Subpart F shall operate to debar such firm or individual throughout the Department of Defense. 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.

§ 1.604-1 Causes for debarment.

(a) Conviction by or a judgment obtained in a court of competent jurisdiction for (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 or proposals; or (3) commission of embezzlement, theft, forgery, bribery, falsi

fication 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:

or

(1) Willful failure to perform in accordance with the specifications delivery requirements in a contract;

(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 perform 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.

(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 additional facts with the record of facts of the original debarring agency.

[25 F.R. 14088, Dec. 31, 1960, as amended at 29 F.R. 2812, Feb. 29, 1964]

§ 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 should 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 on the basis of a new evaluation of current facts it is determined that debarment for an additional period is required in order to protect the Government's interests. 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 nondiscrimination 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 performed in the course of official duty or with the knowledge or approval of the business firm.

[29 F.R. 2812, Feb. 29, 1964]

§ 1.604-3 Notice of debarment.

(a) The firm or individual and its known affiliates concerned shall be furnished with a written notice of the proposed debarment stating as a minimum (1) the fact that debarment is being considered, (2) the reasons for the proposed debarment, and (3) the period of time to

be afforded to present information for consideration. 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 reference the earlier notice of proposed debarment; specify the reasons for debarment; state the period of debarment, including effective dates; and advise that the debarment is effective throughout the Department of Defense. 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.

[29 F.R. 2812, Feb. 29, 1964]

§ 1.605 Suspension of bidders.

Suspension of a contractor or bidder 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

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(a) The Secretary of a Department or his authorized representative 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 Secretary of the Department concerned to justify suspension.

(b) Suspension of a firm or individual by the Secretary of a Department, or his authorized representative, shall operate to suspend such firm or individual throughout the Department of Defense. [29 F.R. 2813, Feb. 29, 1964]

§ 1.605-2 Period and scope of suspen

sion.

(a) Period of Suspension. All suspensions shall be for a temporary period pending the completion of investigation and such legal proceedings as may ensue. In 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 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 will not be solicited from suspended contractors. If received, bids and proposals will not be considered and award for contracts may not be made to suspended contractors unless it is determined to be in the best interest of the Government by the Secretary of a Department or his authorized representative.

(b) Suspended contractors will be subject to the provisions of § 1.603 (b) and (c).

§ 1.605-4 Notice of suspension.

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

(1) That 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;

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

(3) That 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 of the Department or his authorized representative to do so; and (4) That the suspension is effective throughout the Department of Defense.

(b) All inquiries concerning suspended contractors shall be referred to the Secretary of the Department concerned or his authorized representative for appropriate action. 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. [25 F.R. 14088, Dec. 31, 1960, as amended at 29 FR. 2813, Feb. 29, 1964] § 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 responsible official shall decide whether the debarment or suspension should extend to procurement contracts or to sales contracts or to both. If the debarment or suspension is limited either to procurement contracts or to sales contracts the listing should so indicate.

§ 1.607 Interchange of debarment in

formation.

(a) The General Services Administration is charged by GSA Regulation 1-II-207.07 with compiling from the notifications of debarments furnished them by the Military Departments and executive agencies, a combined list of such debarments, including the basis of action, and distributing a copy of such lists to all executive agencies including the Military Departments. In general application, this listing will be for information purposes only and it is not intended to take the place of, or be in

addition to, the lists maintained by the various agencies.

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

(c) Each Department will 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 F.

(d) On specific request, the General Services Administration has agreed to furnish to the Military Departments 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.

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The Commander-in-Chief, United States European Command, the Commander-in-Chief, Pacific, and the Commander-in-Chief, Caribbean, or the Commanders of a component command which each of the these unified commanders may designate, will 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 United States Territories and possessions. The CINCARIB consolidated list will include names in Cen

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The lists shall show as a minimum the following information:

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

(b) The basis or authority for each action;

(c) The extent of restrictions imposed;

(d) The termination date for each debarred listing; and

(e) The originating activity, component or agency.

§ 1.609-3 Protection of lists.

The lists and all correspondence relative thereto shall be protected to prevent inspection of contents by personnel who are not required to have access to such information. The lists shall be marked "For Official Use Only."

§ 1.609-4 Maintenance and distribution of lists.

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 CINCARIB will exchange lists directly. Copies will also be furnished to the Assistant Secretary of Defense (Installations and Logistics); the Assistant Secretary of Defense (International Security Affairs); the Assistant Secretary of the Army (Installations and Logistics) (Assistant Judge Advocate General); the Chief of Naval Material (Code M 22); Commander, Air Force Logistics

Command; and the Counsel, Defense

Supply Agency.

[27 F.R. 11644, Nov. 27, 1962]

§ 1.609-5

§ 1.609-6

[Reserved]

Basis of addition of firms and individuals on 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:

(a) Those who are "designated nationals" under the Foreign Assets Control Regulations;

(b) Those found by the Assistant Secretary of Defense (ISA) or his authorized representative to have engaged in improper East-West trade activity;

(c) Those found by the Assistant Secretary of Defense (ISA) or his authorized representative to be ineligible because they do not meet the political or security criteria;

(d) Those found by a United States Diplomatic Mission or a Country Team (consisting of members of the United States Diplomatic Mission in the country or countries in which the firms or individuals are located) to be ineligible because they do not meet the labor-political criteria; and

(e) Those who for other causes of a serious and compelling nature are so designated by the unified commander. § 1.609-7 Treatment to be accorded firms or individuals in debarred or ineligible status.

The provisions of § 1.603 will be complied with, if applicable. In addition, contracts will not be awarded to, nor shall bids or proposals be solicited from, or furnished to firms or individuals abroad which come into the categories (a) through (e) of § 1.609-6. With respect to (a) of § 1.609-6, an exception may be made by the Secretary of the Treasury only. With respect to (b), (c), and (d) of § 1.609-6, an exception may be made by the Assistant Secretary of Defense (ISA) or his authorized representative.

§ 1.609-8 Causes and conditions under which unified commanders may place names on the consolidated list. CINCEUR, CINCPAC, and CINCARIB, or their designated component commanders are respectively authorized to

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