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Federal Contractors Feel New Heat

Friday, September 21, 2012

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Suspension and debarment of “bad actor” federal contractors has soared in the wake of stepped-up enforcement efforts in the trillion-dollar program, according to a new report.

 Suspension and debarment of federal contractors has increased by more than one-third in three years, the report to Congress said.
Suspension and debarment of federal contractors has increased by more than one-third in three years, the report to Congress said.

In each of the last three years, federal agencies have collectively increased suspensions and debarments of companies that violate various integrity, performance or quality guidelines, according to a new report by the Interagency Suspension and Debarment Committee (ISDC), a coordinating body of federal representatives.

More than 3,000 contractors and grantees were debarred or suspended in FY 2011—an increase of more than one-third over the 1,900 similarly sanctioned in FY 2009, the committee reported to Congress.

Enforcement Crackdown

The report follows a government-wide crackdown on contractors and grantees announced last fall.

In a  November 2011 memorandum, then-Office of Management and Budget Director Jacob J. Lew said that “too many” federal agencies” had “failed to adequately use the suspension and debarment tools that are placed at their disposal or have failed even to maintain the most basic program capabilities required to suspend or debar non-responsible parties.”

Lew said that a report by the Government Accountability Office had found that more than half of the 10 agencies it reviewed “lacked the characteristics common among active and effective suspension and debarment programs.”

The directive specified a series of structural, procedural, staffing and training changes to improve enforcement.

‘Bad Actors’

Less than a year later, the system has made inroads against “bad actor” contractors, Joe Jordan, Administrator of OMB’s Office of Federal Procurement Policy, blogged recently.

Jordan said that all of the 24 major executive branch agencies, which account for more than 98 percent of federal procurement spending, now report having a senior accountable official in place, as called for by last November’s memorandum, with responsibility for assessing the agency’s suspension and debarment program.

These same agencies reported “taking decisive steps to address resources, policies, or both, to ensure appropriate consideration of suspension and debarment when warranted.”

The measures include increased personnel resources, new internal monitoring systems, simplifying referrals for potential suspension or debarment, and implementing automatic referrals to the agency’s suspending and debarring official under certain circumstances.

‘Significant Progress’

Jordan noted two examples of what he called “significant progress.”

By revamping its debarment and suspension program in 2009, the Department of Interior was able to suspend a contractor within a week of learning from one of its contracting officers that the contractor – who was about to receive a federal contract for demolition and removal of water monitoring stations -- had been indicted in the State of Indiana on charges of attempting to bribe a state official to get state contracts.  Upon conviction, DOI imposed debarment on the contractor.

In addition, the United States Agency for International Development (USAID), which now maintains a dedicated staff focused on suspension and debarment activities, debarred 16 people in 2012 for their participation in a scheme to submit fraudulent receipts for the administration of federal foreign assistance to support public health, food aid, and disaster assistance in Malawi. 

“With more than one out of every six dollars of federal government spending going to contractors, that is good news for America’s taxpayers,” said Jordan.


Tagged categories: Contractors; Contracts; Enforcement; Government

Comment from John Fauth, (9/24/2012, 8:54 AM)

Investigation without enforcement is both a waste of money, and an invitation to violate regulations. Kudos to the administration for putting some teeth into the process.

Comment from Chuck Pease, (9/24/2012, 12:20 PM)

follow this link to see just how great this program is working in NYC

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