Procurement:

Suspension and Debarment Procedures

NSIAD-87-37BR: Published: Feb 13, 1987. Publicly Released: Mar 9, 1987.

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In response to a congressional request, GAO reviewed the implementation of suspension and debarment procedures at selected major procuring agencies to determine whether procurement officials should: (1) take specific actions to strengthen the suspension and debarment process; (2) establish suspension and debarment procedures by statute; (3) assign suspension and debarment actions to the various boards of contract appeals; or (4) give explicit guidance to explain what types of business practices could subject businesses to suspension and debarment proceedings.

GAO found that: (1) none of the agencies had completely implemented effective procurement fraud coordination and oversight systems to ensure that they referred all appropriate fraud investigations for action and would not inadvertently award new contracts to ineligible contractors; (2) the General Services Administration (GSA) continued to have difficulty providing the Consolidated List of Suspended, Debarred, and Otherwise Ineligible Contractors on a timely basis, even though it published monthly updates; (3) existing regulations contained some deficiencies and loopholes, which could enable suspended or debarred contractors to directly or indirectly continue contracting with the government; and (4) provisions governing the continuation and termination of existing contracts needed clarification or change. In one particular case, the Department of Health and Human Services (HHS) proposed a firm for debarment, precluding it from contracting with HHS; however, the Department of Defense (DOD) continued to award it new contracts. GAO believes that: (1) each procuring agency should coordinate and monitor all procurement fraud investigations to ensure that all available remedies are considered; (2) a statute would not be in the government's best interest because it would unduly delay the suspension and debarment process; and (3) it would not be in the government's interest to add to the appeals boards' work loads to hear debarment and suspension cases.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: The Committee will decide when it will make inquiries from GSA and DOD.

    Matter: The House Committee on Government Operations may wish to periodically inquire about the status of procuring agencies' efforts to improve the suspension and debarment process, and to alleviate deficiencies. Specifically, these would include: (1) GSA efforts to provide governmentwide access to its computerized Consolidated List; (2) improvements to the coordination and monitoring of procurement fraud investigations and remedies; and (3) efforts to take suspension and debarment actions on preindictment and noncriminal grounds, in addition to indictments and convictions.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In the July 31, 1987, Federal Register, CAAC and DARC cited GAO report NSIAD-87-37BR, and invited comments on proposed changes to FAR. GAO/OGC commented on September 25, 1987. FAR changes were made in April 1988.

    Recommendation: The Civilian Agency Acquisition Council and the Defense Acquisition Regulatory Council should adopt changes to the Federal Acquisition Regulation (FAR) presently under consideration by the councils to: (1) make proposed debarments effective governmentwide; (2) better define affiliation, and require that all prospective contractors certify whether they are affiliated with a suspended or debarred contractor; and (3) extend the coverage of the regulations to include all subcontractors.

    Agency Affected: Department of Defense: Defense Acquisition Regulatory Council

  2. Status: Closed - Not Implemented

    Comments: In the July 31, 1987, Federal Register, CAAC and DARC cited GAO report NSIAD-87-37BR, and invited comments on proposed changes to FAR. The GAO Office of General Counsel (OGC) commented on September 25, 1987. FAR changes were made in April 1988.

    Recommendation: The Civilian Agency Acquisition Council and the Defense Acquisition Regulatory Council should adopt changes to the Federal Acquisition Regulation (FAR) presently under consideration by the councils to: (1) make proposed debarments effective governmentwide; (2) better define affiliation, and require that all prospective contractors certify whether they are affiliated with a suspended or debarred contractor; and (3) extend the coverage of the regulations to include all subcontractors.

    Agency Affected: General Services Administration: Civilian Agency Acquisition Council

  3. Status: Closed - Implemented

    Comments: DOD commented on the report on December 4, 1987.

    Recommendation: For those deficiencies that are not currently being addressed, the Civilian Agency Acquisition Council and the Defense Acquisition Regulatory Council should adopt changes to FAR to alleviate these problems. These would require that contractor hearings be carried out under a uniform set of procedures and the regulations covering the continuation and termination of existing contracts be clarified. FAR should also be amended to define to what extent procurement orders placed under optional contractual arrangements, such as nonmandatory multiple awards schedules and basic ordering agreements, are to be considered contracts for the purpose of FAR suspension and debarment provision 9.405-1.

    Agency Affected: Department of Defense: Defense Acquisition Regulatory Council

  4. Status: Closed - Implemented

    Comments: DOD commented on the report on December 4, 1987, and concurred, or partially concurred, with most of this recommendation.

    Recommendation: For those deficiencies that are not currently being addressed, the Civilian Agency Acquisition Council and the Defense Acquisition Regulatory Council should adopt changes to FAR to alleviate these problems. These would require that contractor hearings be carried out under a uniform set of procedures and the regulations covering the continuation and termination of existing contracts be clarified. FAR should also be amended to define to what extent procurement orders placed under optional contractual arrangements, such as nonmandatory multiple awards schedules and basic ordering agreements, are to be considered contracts for the purpose of FAR suspension and debarment provision 9.405-1.

    Agency Affected: General Services Administration: Civilian Agency Acquisition Council

  5. Status: Closed - Not Implemented

    Comments: DOD commented on the report on December 7, 1987; however, it did not agree with this recommendation.

    Recommendation: The Civilian Agency Acquisition Council and the Defense Acquisition Regulatory Council should amend FAR to require that each government procurement contract contain a clause which states that the government may terminate the contract under default conditions if the contractor is debarred during the course of the contract because of a conviction of a crime or a civil judgement for fraud in connection with the award or the performance of any government contract. The clause should specify that the decision to terminate be made only by the procuring agency head or a designee.

    Agency Affected: Department of Defense: Defense Acquisition Regulatory Council

  6. Status: Closed - Implemented

    Comments: DOD commented on the report on December 4, 1987.

    Recommendation: The Civilian Agency Acquisition Council and the Defense Acquisition Regulatory Council should amend FAR to require that each government procurement contract contain a clause which states that the government may terminate the contract under default conditions if the contractor is debarred during the course of the contract because of a conviction of a crime or a civil judgement for fraud in connection with the award or the performance of any government contract. The clause should specify that the decision to terminate be made only by the procuring agency head or a designee.

    Agency Affected: General Services Administration: Civilian Agency Acquisition Council

 

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