Additional Data Reporting Could Improve the Suspension and Debarment Process
GAO-05-479: Published: Jul 29, 2005. Publicly Released: Aug 29, 2005.
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Federal government purchases of contracted goods and services have grown to more than $300 billion annually. To protect the government's interests, the Federal Acquisition Regulation (FAR) provides that agencies can suspend or debar contractors for causes affecting present responsibility--such as serious failure to perform to the terms of a contract. The FAR provides flexibility to agencies in developing a suspension or debarment process. GAO was asked to (1) describe the general guidance on the suspension and debarment process and how selected agencies have implemented the process, and (2) identify any needed improvements in the suspension and debarment process. We examined the FAR and the regulations of 24 agencies that have FAR supplements governing suspension and debarment procedures. We selected 6 defense and civilian agencies representing about 67 percent of fiscal year 2003 federal contract spending for in-depth review.
The FAR prescribes policies governing the circumstances under which contractors may be suspended or debarred, the standards of evidence that apply to exclusions, and the usual length of these exclusions. To implement these policies, 24 agencies developed FAR supplementation. In fiscal year 2004, the 6 agencies we reviewed in depth suspended a total of 262 parties and debarred a total of 590 parties. Five agencies entered into a total of 38 administrative agreements, which permit contractors that meet certain agency-imposed requirements to remain eligible for new contracts. Agency officials said that such agreements can help improve contractor responsibility, ensure compliance through monitoring, and maintain competition. In certain circumstances, agencies can continue to do business with excluded contractors, such as when there is a compelling need for an excluded contractor's service or product. In fiscal year 2004, two of the agencies we reviewed in depth--the Air Force and the Army--issued compelling reason waivers to continue doing business with excluded parties. To help ensure excluded contractors do not unintentionally receive new contracts during the period of exclusion, the FAR requires contracting officers to consult the Excluded Parties List System (EPLS)--a governmentwide database on exclusions--and identify any competing contractors that have been suspended or debarred. However, the data in EPLS may be insufficient for this purpose. For example, as of November 2004, about 99 percent of records in EPLS for the 6 agencies we reviewed in depth did not have contractor identification numbers--a unique identifier that enables agencies to conclude confidently whether a contractor has been excluded. In the absence of these numbers, agencies use the company's name to search EPLS, which may not identify an excluded contractor if the contractor's name has changed. Further, information on administrative agreements and compelling reason determinations is not routinely shared among agencies. Such information could help agencies in their exclusion decisions and promote greater transparency and accountability.
Recommendations for Executive Action
Status: Closed - Implemented
Comments: GSA has agreed with GAO's recommendation and is in the process of modifying the Excluded Parties List System (EPLS) software to require contractor identification numbers for all actions entered into the system. To ensure the quality of contractor identification data, the modified system will interface with Central Contractor Registration. GSA provided a copy of the action plan for EPLS, and reported that the system is in the process of obtaining its Certification & Accreditation. In September 2006, GSA implemented its new version of EPLS, which requires agencies, among other things, to enter contractors' unique identification number for for each firm, business and organization entered into the system. This action makes available in EPLS the information needed to identify contractors in order to verify whether a contractor has been suspended or debarred.
Recommendation: To improve the effectiveness of the suspension and debarment process, the Administrator of General Services should modify the EPLS database to require contractor identification numbers for all actions entered into the system.
Agency Affected: General Services Administration
Status: Closed - Implemented
Comments: OMB and the Interagency Suspension and Debarment Council (ISDC) have taken some steps to address this recommendation. On August 31, 2006, OMB issued a memo to agency heads, and in June 2008, an OMB representative explained the current process that agency officials notify a member of the ISDC to report administrative agreements and compelling reason determinations. The 2009 National Defense Authorization Act requires the General Services Administration to construct a database on contractor past performance subject to the direction of OMB, and OMB plans to determine whether collection of administrative agreement and compelling reason determination data will be best accomplished through the use of this database or through some other method.
Recommendation: To improve the effectiveness of the suspension and debarment process, the Director of the Office of Management and Budget should require agencies to collect and report data on administrative agreements and compelling reason determinations to the Interagency Suspension and Debarment Committee and ensure that these data are available to all suspension and debarment officials.
Agency Affected: Executive Office of the President: Office of Management and Budget