Debarment From Government Contracts

The government may suspend a contractor based upon “adequate evidence” that it has engaged in certain misconduct. The suspension continues for 12-18 months, or until the completion of any investigation or legal proceeding. An indictment constitutes “adequate evidence” as a matter of law, but is not required. A conviction or civil judgment is not a necessary prerequisite to debarment. The government can also debar a contractor for poor or negligent performance, and for any other misconduct so serious as to affect the contractor’s “present responsibility.” Debarments generally may not exceed three years.

If a contractor disputes the facts, it will typically set forth its version in a written submission and, frequently, in a meeting with the suspension debarment offical (SDO). Rather than contest the facts alleged in the notice of suspension or proposed debarment, many contractors focus their submissions on their present responsibility. Such an approach, based upon changed circumstances, can be effective. This is precisely because the issue in a suspension/debarment action is not whether the alleged misconduct actually occurred, but whether the contractor is presently responsible.

Contractors may contest the findings and decisions of SDOs internally within the agency imposing the action, in federal district court, or both, depending on the individual agency’s regulations. The EPA, for example, has a procedure allowing contractors to seek review of debarment decisions with an EPA official senior to the SDO. There is no such internal remedy within the Department of Defense.