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Phyllis Harden

Legislative & Special Projects, Pine Bluff Sand & Gravel
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Preserve Due Process For Federal Constructors

Congress Should Preserve Due Process, Consider Mitigating Factors, and Preserve Judicial Review of Any Decision to Debar a Contractor

Background:

  • Recently, Congress resurrected the previously repudiated efforts designed to bar contractors from work without the full legal process being completed and efforts to use the procurement system as an enforcement tool have been proposed. During the 110th Congress, numerous legislative proposals were offered to impose mandatory debarment as a means of enforcing laws unrelated to Government contracting. These include recommendations to debar a company for ten years for alleged immigration violations, debar firms for being a “national security risk” (without defining what constitutes such a risk), and a mandatory five year debarment for violations of the Arms Export Control Act. While the underlying issues are cause for concern, existing statutes and punishments are in place for violations of these laws and the one-size-fits-all approach of mandatory debarment will yield unintended consequences.

AGC Message:

  • Current Federal Procurement Policy Already Carries Stiff Civil and Criminal Penalties, Including Debarment of Habitual Violators. Suspension and debarment are serious Executive Branch remedies. These penalties are set forth under Executive Order 12989 (February 15, 1996), the Federal Acquisition Regulations (FAR 9.406-2(b)(2)), and under the numerous procedural due process safeguards set by the FAR. Debarment will force a contractor to close their business and this form of sanction must be utilized after careful examination of the circumstances of any alleged violation. With many Federal contractors organized under multiple business units, employing tens of thousands of Americans, debarment of an entire company for the failure of one individual cannot be the penalty envisioned by Congress. Such complex business structures and varying circumstances are exactly the reason that the Executive Branch and its acquisition workforce must be left with discretionary authority to determine when debarment is appropriate.
  • The Federal Procurement System Is Not An Enforcement Tool. The primary function of the federal procurement system is to protect the government’s proprietary interests, its primary purpose is not punish contractors. The Federal Acquisition Regulation contains a thoughtfully laid out procedure for determining potential contractor wrongdoing. Accordingly, contractors should not be barred from competing for work until the full legal process has been completed. Mandatory debarment will have a serious chilling effect on potential new market entrants. Such an impediment to our global competitiveness would serve as a major disincentive to contracting with the Federal Government. Maintaining the discretionary nature of the current debarment rules would allow contracting officers to take such circumstances into account.
  • Current Law Provides Discretion, Consideration of Mitigating Factors, and Fines for Relatively Small Paperwork Violations. Congress should preserve due process and not impose penalties, such as mandatory debarment, that would create maximum penalties for minor violations. Current regulations governing debarment reflect an appropriate balance between seriousness of the offense, certainty of the offense, relationship to present circumstances (current responsibility), and recognition of minimal due process requirements. There is no indication that contracting officers are unable to make “responsibility” determinations before doing business with industry. The discretionary nature of existing debarment laws allow the Government to act in the Government’s best interest rather than mandating penalties that might cripple the procurement system.
  • Congress Should Preserve Due Process, Consider Mitigating Factors and Preserve Judicial Review of Any Decision to Debar a Contractor. Prohibiting judicial review denies the fundamental due process rights of contractors that currently exist within the debarment determination process. The FAR suspension and debarment rules contain well established and defined decision-making criteria and legal safeguards guaranteeing that all rights are protected and laws are followed without bias. This helps ensure that all companies are treated equitably and that penalties imposed are commensurate with the violations committed.
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