2209.400 Scope.

(a) These regulations:

(1) Prescribe policies and procedures governing the debarment and suspension of contractors by SBA for the causes given in 2209.406-2 and 2209.407-2;

(2) Provide for the listing of these debarred and suspended contractors, and of contractors declared ineligible (see the definition of "ineligible" in 2209.403; and

(3) Set forth the consequences of this listing.

(b) These regulations do not prescribe policies and procedures governing declaration of ineligibility. However, they do cover the listing of ineligible contractors and the effect of this listing.

2209.401 Applicability.

These regulations apply to contractors doing business directly with SBA. They do not apply to recipients of SBA

financial or guarantee assistance, nor do they apply to SBA's small business set aside or Section 8(a) programs.

2209.402 Policy.

(a) SBA shall solicit offers from, award contracts to, and consent to subcontracts with responsible business concerns and individuals only. Debarment and suspension by SBA are discretionary actions that, taken in accordance with these regulations, are appropriate means to effectuate this policy.

(b) The serious nature of debarment and suspension requires that these sanctions be imposed only in the public interest, for the Government's protection and not for purposes of punishment. SBA shall impose debarment or suspension to protect the Government's interest and only for the causes and in accordance with the procedures set forth in these regulations.

(a) Adequate evidence means information sufficient to support the reasonable belief that a particular act or omission has occurred.

(b) Affiliates. Business concerns or individuals are affiliates if, directly or indirectly, (1) either one controls or can control the other or (2) a third party controls or can control both.

(c) Agency, as used in these regulations means, SBA, or any other agency of the Executive Branch consistent with the context in which the term is used.

(d) Consolidated list of debarred, suspended, and ineligible contractors means a list compiled, maintained, and distributed by the General Services Administration containing the names of contractors debarred or suspended by agencies under the procedures of OMB Policy Letter 82-1 (June 24, 1982), as well as contractors declared ineligible under other statutory or regulatory authority.

(e) Contractor, as used in these regulations, means any individual or other legal entity that:

(1) Submits offers for or is awarded, or reasonably may be expected to submit offers for or be awarded, a contract by SBA or a subcontract under a contract with SBA, or

(2) Conducts business with SBA as an agent or representative of another contractor.

(f) Conviction means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere.

(g) Debarment, as used in these regulations, means action taken by a debarring official under 2209.406 to exclude a contractor from Government contracting for a reasonable, specified period; a contractor so excluded is "debarred."

(h) Debarring official means (1) the SBA Administrator or (2) a designee authorized by the SBA Administrator to impose debarment. That designated official is the SBA's Associate Administrator for Procurement and Technical Assistance.

(i) Indictment means indictment for a criminal offense. An information or other filing by competent authority charging a criminal offense shall be given the same effect as an indictment.

(j) Ineligible, as used in these regulations, means excluded from Government contracting (and subcontracting, if appropriate) pursuant to statutory, Executive Order, or regulatory authority other than these regulations; for example, the Davis-Bacon Act and its related statutes and implementing regulations, the Service Contract Act, the Equal Employment Opportunity Acts and Executive orders, the WalshHealey Public Contracts Act, the Buy American Act, and the Environmental Protection Acts and Executive orders.

(k) Legal Proceedings means any civil judicial proceeding to which the Government is a party or any criminal proceeding. The term includes appeals from such proceedings.

(1) Preponderance of the evidence means proof by information that, compared with that opposing it, leads to the conclusion that the fact at issue is more probably true than not.

(m) Suspending official means (1) the SBA Administrator or (2) a designee authorized by the SBA Administrator

to impose suspension. That designated official is SBA's Associate Administrator for Procurement and Technical Assistance.

(n) Suspension, as used in these regulations, means action taken by a suspending official under 2209.407 to disqualify a contractor temporarily from Government contracting; a contractor so disqualified is "suspended."

2209.405 Effect of listing.

(a) Contractors debarred or suspended by SBA, under 2209.406 or 2209.407 of these regulations, or by any other executive agency are excluded from receiving contracts, and SBA shall not solicit offers from, award contracts to, or consent to subcontracts with these contractors, unless SBA determines that there is a compelling reason for such action (see 2009.405-2, 2209.406-1(c) and 2209.407–1(d)).

(b) SBA will establish a list of its debarred or suspended contractors, and the Associate Administrator for Procurement and Technical Assistance will distribute this list to the General Services Administration within five working days after the action becomes effective.

(c) Contractors listed as having been declared ineligible on the basis of statutory or other regulatory procedures are excluded from receiving contracts and, if applicable, subcontracts, under the conditions and for the period set forth in the statute or regulation. SBA shall not solicit offers from, award contracts to, or consent to subcontracts with these contractors under those conditions and for that period.

2209.405-1 Continuation of current contracts.

(a) Notwithstanding the listing of a contractor for the causes set forth in these regulations, SBA may continue contracts or subcontracts in existence at the time the contractor was debarred or suspended, unless SBA's Administrator directs otherwise. A decision as to the type of termination action, if any, to be taken will be made only after review by agency contracting and technical personnel and by counsel to ensure the propriety of the proposed action.

(a) The debarring official may, in the public interest, debar a contractor for any of the causes in 2209.406-2, using the procedures in 2209.406-3. The existence of a cause for debarment under 2209.406-2, however, does not necessarily require that the contractor be debarred; the seriousness of the contractor's acts or omissions and any mitigating factors will be considered in making any debarment decision.

(b) Debarment constitutes debarment of all divisions or other organizational elements of the contractor, unless the debarment decision is limited by its terms to specific divisions, organizational elements, or commodities. The debarring official may extend the debarment decision to include any affiliates of the contractor if they are (1) specifically named and (2) given written notice of the proposed debarment and an opportunity to respond (see 2209.406-3(c)).

(c) A contractor's debarment shall be effective throughout the Executive Branch of the Government, unless an acquiring agency's head or a designee states in writing the compelling reasons justifying continued business dealings between that agency and the contractor.

2209.406-2 Causes for debarment.

The debarring official may debar a contractor for any of the causes listed in paragraphs (a) through (c) of this section:

(a) Conviction of or civil judgment for

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

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

(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.

(b) Violation of the terms of a Government contract or subcontract so serious as to justify debarment, such as

(1) Willful failure to perform in accordance with the terms of one or more contracts; or

(2) A prolonged history of failure to perform, or of extremely unsatisfactory performance of, one or more contracts.

(c) Any other cause so serious or compelling that it affects the present responsibility of a Government contractor or subcontractor.

2209.406-3 Procedures.

(a) Investigation and referral. Whenever cause for debarment becomes known to a contracting officer, the matter shall be referred through the Assistant Administrator for Administration to the Associate Administrator for Procurement and Technical Assistance. Information concerning actual or suspected fraudulent or criminal conduct and other irregularities which might serve as the basis for debarment of a concern or an individual shall be forwarded by the Associate Administrator for Procurement and Technical Assistance to SBA's Office of Inspector General. Upon receipt of such reports, or upon otherwise becoming aware of

such actual or suspected conduct and irregularities, the Office of Inspector General will conduct, supervise, or coordinate such investigation as that office deems necessary and, pursuant to any such investigation, will forward a report or findings to the Associate Administrator for Procurement and Technical Assistance.

(b) Decisionmaking process. (1) SBA has established procedures governing the debarment decisionmaking process that are as informal as practicable, consistent with principles of fundamental fairness and due process of law. These procedures afford the contractor (and any specifically named affiliates) an opportunity to submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment.

(2) 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, SBA shall also

(i) Afford the contractor an opportunity to appear before its Office of Hearings and Appeals with counsel and consistent with the procedures established by that Office, submit documentary evidence, present witnesses, and confront any person the agency presents; and

(ii) Make a transcribed record of the proceedings and make it 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. Debarment shall be initiated by the debarring official advising the contractor and any specifically named affiliates, by certified mail, return receipt requested

(1) That debarment is being proposed; (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 2209.406-2;

(4) That, within 30 days after receipt of the notice, the contractor may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed de

barment, including any additional specific information that raises a genuine dispute over the material facts;

(5) of SBA's procedures governing debarment decisionmaking;

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

(7) If no suspension is in effect under 2209.407, that no contracts will be awarded to the contractor pending a debarment decision.

(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 2209.407, 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)(i) In actions in which additional proceedings are necessary as to disputed material facts, the debarring official shall refer the matter to SBA's Office of Hearings and Appeals for findings of fact and a recommended decision. The debarring official may adopt, reject, modify or remand such decision for further appropriate findings. The debarring official shall then base the final decision on the facts as found, together with any information and argument submitted by the contractor and any other information in the administrative record.

(ii) In actions in which there are no material facts in dispute, a final decision and written findings of fact shall be prepared by the debarring official which shall be concurred in by the SBA's General Counsel. The final decision will be based upon the facts as found in the administrative record, together with any information and argument submitted by the contractor and any other information in the administrative record.

(3) In any action in which the proposed debarment is not based upon a conviction or civil judgment, the cause for debarment must be established by a preponderance of the evidence.

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