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(b) SBA shall not renew current contracts or subcontracts of debarred or suspended contractors, or otherwise extend their duration, unless SBA's Administrator or the Associate Administrator for Procurement and Technical Assistance states in writing the compelling reasons for renewal or extension.

2209.406–2 Restrictions On sub

contracting. When a debarred or suspended contractor is proposed as a subcontractor for any subcontract subject to SBA's consent, approval shall not be given unless the SBA Administrator or SBA's Associate Administrator for Procurement and Technical Assistance states in writing the compelling reasons for this approval.

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 (1) obtaining, (ii) attempting to obtain, or (111) 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 prop erty; 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 Debarment.

2209.406-1 General.

(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.

2209.4063 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) Decision making 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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(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

(1) Referring to the notice of proposed debarment;

(ii) Specifying the reasons for debarment;

(iii) Stating the period of debarment, including effective dates (see 2209.406– 4); and

(iv) Advising that the debarment is effective throughout the Executive Branch of the Government unless the head of an acquiring agency or a designee makes the statement called for by 2209.406–1(c).

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

2209.4064 Period of debarment.

(a) Debarment shall be for a period commensurate with the seriousness of the cause(s). Generally, a deb ment 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 necessary, the procedures of 2209.406–3 of this subpart shall be followed to extend the debarment.

(c) The debarring official may reduce the period or extent of debarment, upon the contractor's request, sup ported 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 of the debarred concern;

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

(5) Other reasons the debarring official deems appropriate. 2208.4065 Scope of debarment

(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 if, or had reason to know of the contractor's conduct.

(c) The fraudulent, criminal, or other seriously improper conduct of one contractor participating in a joint venture or similar arrangement may be imputed to other participating contractors if the conduct occurred for or on behalf of the joint venture or similar arrangement or with the knowledge, approval, or acquiescence of these contractors. Acceptance of the benefits derived from the conduct shall be evidence of such knowledge, approval, or acquiescence. 2209.407 Suspension 2209.407-1 General.

(a) The suspending official may, in the public interest, suspend a contractor for any of the causes in 2209.407-2, using the procedures in 2209.407-3.

(b) Suspension is a serious action to be imposed on the basis of adequate evidence, pending the completion of 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, SBA will consider how much information is available, how credible it is given the

(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.

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

circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. This assessment will 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 2209.407-3(c)).

(d) A contractor's suspension 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.

or

2209.407–2 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, (i) attempting to obtain, or (ii) performing a public contract 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 prop erty; 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) Indictment for any of the causes in paragraph (a) of this section, constitutes adequate evidence for suspension.

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

2209.407-3 Procedures.

(a) Investigation and referral. Whenever cause for suspension 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 suspension 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 suspension decisionmaking process that are as informal as is practicable, consistent with principles of fundamental fairness and due process. These procedures 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 the Department of Justice advice, that substantial interests of the Government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced, SBA will also

(i) Afford the contractor an opportunity to appear before SBA's Office of hearings and Appeals with counsel, submit documentary evidence, present witnesses and confront any person SBA 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 suspension. When a contractor and any specifically named affiliates are suspended, they shall be immediately advised by the suspending official 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 proceeding as may ensue.

(3) Of the cause(s) relied upon under 2209.407-2 for imposing suspension;

(4) Of the effect of the suspension;

(5) 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 suspension, including any additional specific information that raises a genuine dispute over material facts; and

(6) That additional proceedings 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 sub

stantial interests of the Government in pending or contemplated legal proceedings based on the same facts as the suspensions would be prejudiced.

(d) Suspending official's decision. (1) In actions (1) based on an indictment, (ii) in which the contractor's submission does not raise a genuine dispute over material facts; or (iii) in which additional proceedings to determine disputed material facts have 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)(1) In actions in which additional proceedings are necessary as to disputed material facts, the suspending official shall refer such matters to SBA's Office of Hearings and Appeals for findings of fact and recommended decision. The suspending official may adopt, reject, modify or remand any such decision for further appropriate findings. The suspending official shall then base the final Agency 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 suspending 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) The suspending official may modify or terminate the suspension or leave it in force (for example, see 2209.407-4(c) for the reasons for reducing the period or extent of debarment). However, a decision to modify or terminate the suspension shall be without prejudice to the subsequent imposition of suspension by any other agency or the imposition of debarment by any agency.

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

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