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(2) The existence of any of the furnished to that concern or individucauses set forth in (a) of this § 1-1.604 al in accordance with $ 1-1.604-1. does not necessarily require that a Except as precluded by statute, a defirm or individual be debarred. In each barment may be removed or the instance, whether the offense or fail- period thereof may be reduced by the ure, or inadequacy of performance, be head of the agency or by his authorof a criminal, fraudulent, or serious ized representative, upon the submisnature, the decision to debar shall be sion of an application, supported by made within the discretion of the ex documentary evidence, setting forth ecutive agency and shall be rendered appropriate grounds for the granting in the best interests of the Govern- of relief; such as newly discovered mament. Likewise, all mitigating factors terial evidence, reversal of a convicmay be considered in determining the tion, bona fide change of ownership or seriousness of the offense, failure, or management, or the elimination of the inadequacy of performance, and in de causes for which the debarment was ciding whether debarment is warrant imposed.

(2) Debarment of a firm or individu(3) The existence of a cause set forth al for failure to comply with the proviin (a)(1), (2) and (3) of this § 1-1.604 sions of the Equal Opportunity clause shall be established by criminal con- generally shall continue until removed viction by a court of competent juris- by the Director of the Office of Federdiction. In the event that an appeal

al Contract Compliance, Department taken from such conviction results in a of Labor, or by the agency itself with reversal of the conviction, the debar

the concurrence of the Director of the ment shall be removed upon the re- Office of Federal Contract Compliquest of the bidder (unless other cause ance. for debarment exists).

(29 FR 10104, July 24, 1964, as amended at (4) The existence of a cause set forth 37 FR 23337, Nov. 2, 1972) in (a)(4) and (5) of this $ 1-1.604 shall be established by evidence which the $ 1-1.604-1 Procedural requirements relatexecutive agency determines to be ing to the imposition of debarment. clear and convincing in nature.

(a) Initiation of debarment action. (5) Debarment for the cause set

An agency seeking to debar a concern forth in (a)(6) of this § 1-1.604 (debar- or individual (or any affiliate thereof) ment by another agency) shall be for cause shall furnish that party with proper provided that one of the causes a written notice: (1) Stating that defor debarment set forth in (a)(1)

barment is being considered, (2) setthrough (5) of this § 1-1.604 was the

ting forth the reasons for the probasis for debarment by the original de posed debarment, and (3) indicating barring agency. Such debarment may that such party will be accorded an opbe based entirely on the record of portunity for a hearing if he so refacts obtained by the original debar quests within a stated period of time. ring agency, or upon a combination of (b) Hearings. An opportunity for a such facts and additional facts.

hearing conducted in a manner pre(c) Period of debarment. (1) Debar- scribed by agency regulations shall be ment of a firm or individual for causes accorded to any concern or individual other than failure to comply with the which the agency proposes to debar. provisions of the Equal Opportunity Such regulations shall establish proceclause (see § 1-1.602-1(e)) shall be for a dural safeguards which satisfy the dereasonable, definitely stated period of mands of fairness, and which, at a time commensurate with the serious minimum, shall provide that informaness of the offense or the failure or in tion in opposition to the proposed adequacy of performance. As a general action may be presented, in person or rule, a period of debarment shall not in writing, and, if desired, through an exceed 3 years. However, when debar. appropriate representative. However, ment for an additional period is where one agency has imposed debardeemed necessary, notice of the pro- ment upon a concern or individual, a posed additional debarment shall be second agency may also impose a simi

lar debarment for a concurrent period 81-1.605-1 Causes and conditions under without according an opportunity for

which executive agencies may suspend a hearing provided that the second

contractors. agency furnishes notice of the proposed similar debarment to that party,

(a) An agency may, in the interest of and accords that party an opportunity

the Government, suspend a firm or in

dividual: to present information in his behalf to explain why the proposed similar de

(1) Suspected, upon adequate evi.

dence, of barment should not be imposed in

(i) Commission of fraud or a crimi. whole or in part.

nal offense as an incident to obtaining, (c) Scope of debarment. (1) A debar

attempting to obtain, or in the perment may include all known affiliates

formance of a public contract: of a concern or individual. (See $ 1

(ii) Violation of the Federal anti1.603(a)).

trust statutes arising out of the sub(2) Each decision to include a known

mission of bids and proposals; or affiliate within the scope of a pro

(iii) An act in violation of the Orgaposed debarment is to be made on a

nized Crime Control Act of 1970, or case by case basis, after giving due

commission of embezzlement, theft, regard to all the relevant facts and cir

forgery, bribery, falsification, or decumstances.

struction of records, receiving stolen (3) The criminal, fraudulent, or seri property, or any other offense indicatously improper conduct of an individu

ing a lack of business integrity or busial may be imputed to the business con ness honesty which seriously and dicern with which he is connected, rectly affects the question of present where such grave impropriety was ac responsibility as a Government concomplished within the course of his of. tractor; or ficial duty or was effected by him with (2) For other cause of such serious the knowledge or approval of that con and compelling nature, affecting recern. Likewise, where a concern is in sponsibility as a Government contracvolved in criminal, fraudulent, or seri tor, as may be determined by the ously improper conduct, any individu agency to warrant suspension. Howeval who was involved in the commission er, suspensions related to matters inof the grave impropriety may be de volving the EEO clause shall be hanbarred.

dled in accordance with regulations

which may be prescribed by the Secre8 1-1.605 Suspension of bidders.

tary of Labor. (a) Agencies electing to utilize a sus

(b) A suspension invoked by an pension procedure shall employ the

agency for any of the causes set forth procedure set forth in this section.

in (a)(1) and (2) of this § 1-1.605-1 may (b) Suspension is a drastic action

be the basis for the imposition of a and, as such, shall not be based upon

concurrent suspension by another an unsupported accusation. In assess

agency. ing whether adequate evidence exists (29 FR 10104, July 24, 1964, as amended at for invoking a suspension, considera 37 FR 23338, Nov. 2, 1972; 39 FR 13777, Apr. tion should be given to the amount of 17, 1974) credible evidence which is available, to the existence or absence of corrobora

$ 1-1.605-2 Period and scope of suspention as to important allegations, as

sion. well as to the inferences which may (a) Period of suspension. All suspenproperly be drawn from the existence sions shall be for a temporary period or absence of affirmative facts. This pending the completion of an investiassessment should include an exami gation and such legal proceedings as nation of basic documents, such as may ensue. In the event that prosecucontracts, inspection reports, and cor- tive action has not been initiated by respondence. A suspension may be the Department of Justice within 12 modified whenever it is determined to months from the date of the notice of be in the interest of the Government suspension, the suspension shall be to do so.

terminated unless an Assistant Attor

ney General requests continuance of an investigation and such legal prothe suspension. If such a request is re- ceedings as may ensue; ceived the suspension may be contin (c) Bids and proposals will not be soued for an additional six months. licited from the firm or individual and, Notice of the proposed removal of the if received, will not be considered, and suspension shall be given to the De awards of contracts may not be made partment of Justice 30 days prior to unless it is determined by the head of the expiration of the 12-month period. the agency or his authorized repreIn no event shall a suspension contin

sentative to be in the best interest of ue beyond 18 months unless prosecu

the Government; tive action has been initiated within

(d) The firm or individual will not be that period. Whenever prosecutive

eligible for the award of a subcontract action has been initiated, the suspen

and whenever the firm or individual is sion may continue until the legal pro proposed as a subcontractor, the conceedings are completed. Upon removal

tracting officer will decline to approve of a suspension, consideration may be

subcontracting with that firm or indigiven to debarment in accordance with

vidual in any instance in which con8 1.604 of this subpart.

sent is required of the Government

before the subcontract is made, unless (b) Scope of suspension. (1) Suspen

it is determined by the agency to be in sion may include all known affiliates

the best interest of the Government to of a concern (firm) or individual.

grant approval; (2) A decision to include known af

(e) The suspension is effective filiates in a proposed suspension is an

throughout the agency; and individual determination and, as such,

(f) A request for hearing will be conmust be made on a case by case basis.

sidered unless the suspension is based (3) The criminal, fraudulent, or seri. upon an outstanding indictment or ously improper conduct of an individu upon advice from either the Departal may be imputed to the business ment of Justice or the Department of firm with which he is connected when Labor that such a hearing would prej. the impropriety involved was per- udice the substantial interests of the formed within the course of his offi.

Government, and the hearing will be cial duty, or with knowledge or ap held within 20 calendar days if the reproval of the business firm.

quest is granted. 8 1-1.605-3 Notice of suspension.

(39 FR 13777, Apr. 17, 1974) A firm or individual that has been 81-1.605-4 Hearings. suspended shall be furnished immedi

(a) Request for hearing. A hearing ately with a notice of the suspension,

may be requested upon receipt of the by registered mail, by the head of the

notice of suspension unless the basis agency or his designee. The notice of

for suspension is an outstanding insuspension shall state that:

dictment against the firm or individu(a) The suspension is based on (1) an outstanding indictment, or (2) ade

(b) Coordination with Department quate evidence that the firm or indi.

of Justice. The formal advice of the vidual has committed irregularities of

Department of Justice concerning the a serious nature in business dealings

impact of release of evidentiary matewith the Government, or (3) adequate

rial on possible civil or criminal action evidence of irregularities which seri

against a firm or individual shall be reously reflect on the propriety of fur.

quested upon receipt of a request for a ther dealings of the firm or individual

hearing, except when the basis for suswith the Government. (The notice pension is already known to involve shall identify the indictment or de possible civil or criminal prosecution scribe the nature of the irregularities, against the firm or individual. If such in general terms, without disclosing advice is orally given, the Department the Government's evidence);

of Justice shall be requested to (b) The suspension is for a tempo- promptly confirm the advice in writrary period pending the completion of ing. The agency head or his designee

al.

ble:

shall grant the request and hold a firm or individual shall promptly be hearing or deny the request, as pro- notified by registered mail whether vided in paragraphs (d) and (e) of this the suspension is to be continued or § 1-1.605-4.

terminated. (c) Coordination with the Depart

(39 FR 13777, Apr. 17, 1974) ment of Labor. The formal advice of the Associate Solicitor (for General 81-1.605-5 Restrictions during period of Legal Services) of the Department of

suspension. Labor shall be sought concerning the possible impact of the release of evi.

During a period of suspension of a dentiary material on Department of

firm or individual, the following poliLabor proceedings against a firm or in

cies and procedures shall be applica dividual when a suspension is based upon a contractor's violations of labor

(a) Bids and proposals shall not be standards subject to legal proceedings solicited from suspended contractors.

pre administrative law indges of If received, bids and proposals shall the Department of Labor. The agency

not be considered and awards for conhead or his designee shall grant the

tracts shall not be made to suspended request and hold a hearing or shall

contractors unless it is determined by deny the request, as provided in para the agency to be in the best interest of graphs (d) and (e) of this g 1-1.605-4.

the Government. (d) Hearing granted. If a decision is (b) Suspended contractors will be made to grant a hearing, the firm or subject to the provisions of g 1-1.603(e) individual shall be immediately in regarding restrictions on subcontracformed and the hearing shall be held tors. not later than 20 calendar days after

(39 FR 13777, Apr. 17, 1974) receipt of the request. The head of the agency or his authorized representa $ 1-1.606 Agency procedure. tive shall promptly decide after the

Each agency shall: hearing whether to continue or terminate the suspension and shall prompt

(a) Establish internal procedures ly notify the firm or individual of this

and methods for giving effect to this decision by registered mail.

Subpart 1-1.6. (e) Hearing denied. If it is deter

(b) Notify the General Services Admined, based upon the advice received

ministration (GSA) of the name and from the Department of Justice or the address of its central office where deDepartment of Labor, that to hold a

barment information should be sent. hearing would adversely affect possi

(c) Furnish to GSA a copy of the ble civil or criminal prosecution or pos- notice of debarment (at time of issusible Labor proceedings against the ance) on those debarments made firm or individual, this determination under provisions of $ 1-1.604(a), or the will be reduced to writing and made a

Buy American Act, and provide GSA part of the formal record. Notice shall with information as to any removals of then be furnished to the firm or indi. such debarments. vidual within 20 calendar days after (d) Check the list of debarred bidreceipt of the request for a hearing ders furnished by GSA, and consider that substantial interests of the Gov. firms or individuals listed thereon for ernment would be prejudiced if a hear inclusion upon its own list, in according were held but that any informa ance with the provisions of this Subtion or argument in opposition to the part 1-1.6. suspension may be presented in (e) As needed, request from GSA a pers son, in writing, or through repre- copy of the notice on any debarment sentation. Any information or argu case appearing on the list herein proment submitted will be promptly con- vided to be compiled and distributed sidered by the head of the agency or by GSA. If desired, direct inquiry conhis authorized representative and, if cerning any debarment case may be such action is deemed warranted, the made of the agency which originated suspension shall be terminated. The the action.

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

81-1.701 Definitions.

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).

1-1.607 General Services Administration

responsibility. In addition to the agency procedure 'ovided in § 1-1.606, GSA will: (a) Compile and distribute to the esignated central office address of ach agency a listing of the adminisrative debarments and debarments ndes the Buy American Act made by he agencies, including the basis of ction, in order that each executive gency may be informed of actions aken by each other agency. In generI application, this listing will be for nformation purposes only and it is not intended to take the place of, or be in addition to, the lists maintained by he various agencies.

(b) Furnish to any agency, on specif. c 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 1-1.1-Small Business

Concerns

$ 1-1.700 General.

(a) This subpart, which implements programs developed cooperatively with the Small Business Administra. tion (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 setaside procedures; (5) small business subcontracting policies; and (6) information concerning SBA's size standards.

(b) This subpart applies only in the United States. As used in this subpart the term United States means the States, its territories and possessions, Puerto Rico, the Trust Territory of the Pacific Islands, and the District of Columbia. [29 FR 10104. July 24, 1964, as amended at 35 FR 8482, June 2, 1970)

$ 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 § 1-1.701. "Concern" means any business entity organized for profit with a place of business located in the United States which makes a significant contribution to the U.S. economy through payment of taxes and/or use of American products, material, and/or labor, etc. “Concern" includes but is not limited to an individual, partnership, corporation, joint venture, association, or cooperative. For the purpose of making affiliation findings (see $ 1-1.701-2) any business entity, whether organized for profit or not, and any foreign entity; i.e., any entity located outside the United States, shall be included. “Annual receipts" means the gross income (less returns and allowances, sales of fixed assets, and interaffiliate transactions) of a concern (and its domestic and foreign affiliates) from sales of products and services, interest, rents, fees, commissions, and/or from whatever other source derived, as en tered on its regular books of account for its most recently completed fiscal year (whether on a cash, accrual, completed contracts, percentage of completion, or other acceptable accounting basis) and, in the case of a concern subject to U.S. Federal income taxation, reported or to be reported to the Department of the Treasury, Internal Revenue Service, for Federal income tax purposes. If a concern has been in business less than a year its annual receipts shall be computed by determining its average weekly receipts for the period in which it has

30-103 0-7945

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