tion as an offeror or contractor, or other appropriate action.

§ 5-1.508-3 Misrepresentations or violations of the convenant against contingent fees.

If an award has been made, any action to enforce the terms of the convenant shall be taken only upon the recommendation of legal counsel.

Whether or not an award has been made, a suspected misrepresentation or anticipatory violation of the convenant against contingent fees shall be reported to the Office of Inspector General (JI for Central Office procuring activities) in the manner prescribed in § 5-1.508-2.

In addition to the definitions set forth in § 1-1.602, the following terms have special meanings as indicated:

(a) The "debarring official" and the "suspending official" for GSA is the Assistant Administrator for Acquisition Policy. The authority to act in these capacities may be delegated to his/her deputy.

(b) "Notice" means a written communication sent by certified mail, return receipt requested, to the last known address of a party, its identified counsel, or agent for service of process. In the case of a business, such notice may be sent to any partner, principal officer, director, owner or coowner, or joint venturer. If no return receipt is received within 10 calendar

days of mailing, receipt shall then be presumed.

(c) The "fact-finding official" for GSA is the Chairman of the General Services Administration Board of Contract Appeals or his/her designee(s).

§ 5-1.603 Establishment and maintenance of a list of debarred, suspended, or ineligible contractors and agency records.

§ 5-1.603-1 Consolidated list of debarred, suspended, and ineligible contractors. (a) The debarring and suspending official shall be responsible for the compilation, maintenance, revision, and distribution of the Consolidated List, including distribution to GSA contracting activities.

(b) Heads of procuring activities and other interested officials shall notify the debarring and suspending official of their distribution needs and shall ensure that the list is used effectively by agency contracting officers.

§ 5-1.603-2 Agency records.

The debarring and suspending official shall maintain records containing the information required by § 1-1.6032, in accordance with agency practices.

§ 5-1.604-2 Review procedures.

(a) Prior to initiating a pre-award survey or any of the procurement actions set forth in § 1-1.604-1 with respect to a particular bidder, offeror, or proposed subcontractor, the contracting officer shall review the current copy of the Consolidated List. If the

bidder, offeror, or proposed subcontractor is listed, the contracting officer shall accord the contractor such treatment as is appropriate according to the basis for its listing.

(b) Contractors who have been debarred, suspended, or declared ineligible to participate in GSA contracting programs shall be removed from agency bidders mailing lists for the period of the exclusion.

§ 5-1.604-3 Continuation of current contracts.

(a) Notwithstanding the debarment or suspension of a contractor, contracting officers may continue contracts or subcontracts in existence at the time of the debarment or suspension. However, termination of current contracts should be considered under the circumstances set forth in paragraphs (b), (c), and (d) of this section.

(b) Termination for default under a contract's "Default" clause is appropriate where the circumstances giving rise to the debarment or suspension also constitutes a default in the contractor's performance of the contract. Debarment or suspension of the contractor for reasons unrelated to the performance of the contract will not support a termination for default.

(c) Termination for convenience or cancellation under appropriate contract provisions should be considered where the contractor presents a significant risk to the Government in completing a current contract and such action is determined to be in the Government's best interests. In making this determination the contracting officer should consider such factors as the:

(1) Seriousness of the cause for debarment or suspension;

(2) Extent of contract performance; (3) Potential costs of termination and reprocurement;

(4) Urgency of the requirement and the impact of the delay of reprocurement;

(5) Availability of other safeguards to protect the Government's interests until completion of the contract.

(d) A decision to terminate an existing contract with a debarred or suspended contractor under a "Termination for Convenience" or "Cancella

(a) Investigation and referral. (1) Any constituent element of GSA that becomes aware of circumstances which may serve as the basis for a debarment shall refer those circumstances to the debarring official through appropriate channels for consideration of debarment action. However, circumstances that involve possible criminal or fraudulent activities shall first be reported to the Office of the Inspector General (OIG), which shall conduct an investigation and, if appropriate, make a referral to the debarring official.

(2) Referrals for consideration of debarment action at a minimum should include:

(i) The cause for debarment see (§ 11.605-2);

(ii) A statement of facts;

(iii) Copies of supporting documentary evidence and a list of all necessary or probable witnesses, including addresses and telephone numbers, together with a statement concerning their availability to appear at a factfinding proceeding and the subject matter of their testimony;

(iv) A list of all contractors involved, either as principals or as affiliates (including current or last known home and business addresses and zip codes);

(v) A statement of GSA's procurement history with such contractors, including any recent experience under a GSA contract;

(vi) A statement concerning any known pertinent active or potential criminal investigation, criminal or civil court proceeding, or administrative claim before Boards of Contract Appeals;

(vii) A statement from the cognizant contracting activity as to the impact of the debarment action on GSA programs.

(3) Referrals may be returned to the originator for further information, investigation, or development.

(b) Notice of proposal to debar. (1) Upon receipt of a completed referral, the debarring official shall decide

whether to initiate debarment action, after coordinating the matter with assigned legal counsel.

(2) Where a determination is made to initiate action, affected contractors and any specifically named affiliates shall be given written notice of the information required by § 1-1.605-3(c) and contained in § 5-1.605-3(c).

(3) A copy of the notice shall be given to affected agency components.

(4) Where a determination is made not to initiate action, notice shall be given to the agency official who made the referral.

(c) Decision-making process. (1) Contractors shall be given opportunity to submit, in person, in writing, or through a representative, information and arguments in opposition to a proposed debarment. However, if a response to the debarment notice is not received by the debarring official within 30 calendar days of receipt of the notice, the debarment shall become final.

(2) If, in response to the debarment notice, the contractor, or a representative, desires to present information and arguments in person to the debarment official, an oral presentation will be held within 20 calendar days of receipt of the request, unless a longer period of time is requested by the contractor. The oral presentation shall be informally conducted and a transcript need not be made. The contractor may, however, supplement the oral presentation with written information and arguments for inclusion in the administrative record.

(3) In actions not based upon a conviction, civil judgment, or a debarment by another agency, and where the contractor disputes facts relating to the proposed debarment, the contractor may also request, and shall be entitled to, a hearing before the agency factfinding official. The hearing will be conducted within 20 calendar days of receipt of the contractor's response, unless a longer period of time is requested by the contractor.

(4) The purpose of a hearing is to: (i) Afford the affected contractor the opportunity to dispute facts relating to the proposed debarment through the submission of oral and written evidence;

(ii) provide the debarring official with findings of fact based on a preponderance of evidence; and

(iii) provide the debarring official with a determination as to whether a cause for debarment exists, based on the facts as found.

(5) Hearings will be conducted by the fact-finding official in accordance with rules promulgated by that official. The rules shall be as informal as is practicable, consistent with principles of fundamental fairness and Subparts 1-1.6 and 5-1.6; they shall provide an opportunity for the affected contractor to appear with counsel, submit documentary evidence, present witnesses, and cross-examine any witness GSA presents. The fact-finding official shall make a transcribed record of the hearing and make it available at cost to the affected contractor upon request, unless the contractor and GSA, by mutual agreement, waive the requirement for a transcript.

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(6) The hearing shall be initiated by formal written transfer of the matter by the debarring official to the fact-finding official.

(7) Upon receipt of such a transfer, the fact-finding official shall notify the affected contractor, schedule a hearing date, and provide the contractor an opportunity to present written evidence and oral testimony and to cross examine opposing witnesses. The fact-finding official shall deliver written findings to the debarring official (together with a transcription of the proceeding, if made) within 10 calendar days after the hearing. The findings shall resolve any facts in disputes based on a preponderance of the evidence presented and determine whether a cause for debarment exists.

(d) Debarring official's decision. The debarring official's final decision shall be made in writing in accordance with § 1-1.605-3(d) and notice of the decision will be given in accordance with § 1-1.605-3(e). A copy of the notice shall be given to affected agency components.

§ 5-1.606 Suspension.

§ 5-1.606-2 Procedures.

(a) Investigation and referral shall be accomplished as provided in § 51.605-3(a), except that referrals will be made to the suspending official and will contain information pertinent to a suspension action.

(b) Notice of suspension. (1) Upon receipt of a completed referral, the suspending official shall decide whether to suspend, after coordinating the matter with assigned legal counsel.

(2) In cases not based on an indictment or suspension by another agency, the suspending official shall, in appropriate cases, obtain through OIG the written advice of the Department of Justice or state prosecutorial authority as to whether substantial interests of the Federal or state government in pending or comtemplated legal proceedings based on the same facts as the suspension would be prejudiced by the conduct of a hearing before the agency fact-finding official. If, on the basis of advice received, the suspending official determines that substantial interests of the Federal or a state government would be impaired he/she shall so advise the contractor in the notice.

(3) Notice shall be provided as provided in § 5-1.605-3(b) except that notice to the contractor shall contain the information required by § 1-1.6063(c) and contained in § 5-1.606-3(c).

(c) Decision-making process. (1) Contractors shall be given an opportunity to submit, in person, in writing, or through a representative, information and arguments in opposition to a suspension. However, to be considered, a response must be received by the suspending official within 30 calendar days of receipt of the suspension notice.

(2) When requested, an oral presentation before the suspending official shall be conducted as in § 5-1.6053(c)(2).

(3) In actions not based on an indictment or a suspension by another agency, and where the contractor disputes facts relating to the suspension, the contractor may also request, and shall be entitled to, a hearing before the agency fact-finding official, unless

a determination has been made that substantial interests of the Government would be prejudiced by a hearing. The hearing will be conducted within 20 calendar days of receipt of the contractor's response, unless a longer period of time is requested by the contractor.

(4) The purpose of a hearing is to:

(i) Afford the affected contractor the opportunity to dispute facts relating to the suspension action through the submission of oral and written evidence, and

(ii) provide the suspending official with a determination as to whether adequate evidence exists to support the cause for suspension. Hearings shall be conducted as in § 5-1.605-3(c) (5), (6), and (7).

(d) The suspending official's decision shall be made in writing and notice shall be given in accordance with § 11.606(3)(d).

This subpart implements and supplements § 1-1.7 by prescribing procedures for implementing the GSA small business program, including set-asides.

§ 5-1.701-8 Set-aside for small business.

(a) Clarification of class set-aside definition. In further explanation of § 1-1.705-3(b), a class set-aside may consist of an item (or service), a group of related items under a Federal Supply Class (FSC), or a whole FSC class when restricted to small business on a continuing, as distinct from a one-time, basis. Under this definition, a single item or a group of items restricted to small business on a continuing basis, even though constituting only a small portion of an FSC class, is defined as class set-aside.

(b) Determining the set-aside status of an item. The fact that an item, group of items, or a class is the subject of a class set-aside, and presumptively will be set aside on the next procurement, does not mean that it is auto

matically set aside without consideration of events which may have occurred since the last procurement. The contracting officer must determine if intervening events have changed the situation so that it is no longer in the best interest of the Government to make a particular set-aside (either individual or class set-aside). When the conclusion is reached that a set-aside should be dissolved, it must be accomplished in accordance with § 1-1.7063(b) and considered only as one-time dissolution if feasible.

(c) Class set-aside determination. Except for construction contracts subject to provisions of § 5-1.706 (b) and (c) small business class set-asides will normally be made on a unilateral basis by the contracting officer and documented in accordance with § 5-1.70651(a), class set-aside determinations shall be reviewed at least annually.

§ 5-1.703-2 Protest regarding small business status.

(a) Even though an offeror's representation as a small business concern is not protested by another offeror, contracting officers should question the small business status whenever that status is in doubt and shall refer all questionable cases to Small Business Administration (SBA) for determination.

(b) When the solicitation provides for a total or partial small business set-aside, or labor surplus area setaside, it is essential that the applicable small business size standard be set forth clearly in the schedule (see §§ 11.706-5(c) and 1-1.706-6(c)). In addition, the following notice shall be included in all solicitations for supplies and services (other than construction):

NOTICE CONCERNING SIZE STATUS

The small business representation appearing on page 2 of the solicitation is a material representation of fact upon which the Government relies when making award. If it is later determined that the small business representation was erroneous, and the Contractor was not a small business on the date of award of this contract, the contract may be canceled by the Government and the Contractor charged with any damages sustained by the Government as a result of such cancellation. Any offeror who has a question as to whether he is or is not a small business concern shall contact the

nearest office of the Small Business Administration for guidance and assistance. In case of conflict between standards set forth in the solicitation and those of the SBA, the SBA regulations as of the time of bid opening shall control.

(End of Clause)

(c) In addition to the usual preaward actions, the following procedures shall be followed when evaluating offers for supplies or services (other than construction) involving preference for small business concerns.

(1) When submitting GSA Form 894, Financial Responsibility-Inquiry and Reply (see § 5-1.1205(b)), a notation shall be entered in the "Remarks" block requesting the appropriate GSA finance activity to furnish any available information such as corporate affiliation, franchise arrangements, number of employees, volume sales, and other information which may have a bearing on the small business status of the prospective contractor. A copy of the Standard Form 33, Solicitation, Offer, and Award, executed by the offeror (or an appropriate extract of the offer) shall be attached to the GSA Form 894 in order to provide the finance activity with the necessary information.

(2) When submitting GSA Form 353, Plant Facilities Report (see § 5-1.12054) enter in Block 2 of the form "Being considered for preferential award as a small business concern" and request information as to:

(i) The firm's number of employees, and

(ii) evidence of apparent affiliation relationships such as joint occupancy of premises.

(d) In cases involving equal low offers, when requesting the written statement required by § 1-2.407-6(c), a concern which is to receive preference based on its small business representation shall be specifically advised of the applicable small business size standard and requested to confirm that it will perform the contract as a small business concern in accordance with that standard. The procedures in paragraphs (c) and (e) of this section shall also be followed when applicable.

(e) If a protest regarding small business size status is received after expi