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Thursday, February 25, 2010

US Government slow to sanction slack contractors

DHS officials reluctant to debar, suspend contractors, IG reports
Homeland Security Department contracting officials are reluctant to pursue suspension and debarment actions against contractors even when those actions may be warranted, according to a new audit released today by DHS Inspector General Richard Skinner.

“The Department of Homeland Security has suspension and debarment policies and procedures in place. However, the department is reluctant to apply the policies and procedures against poorly performing contractors,” Skinner wrote.

"Department procurement officials characterized the suspension and debarment process as being too resource-intensive, punitive and as negatively impacting the size of the contractor pool. The procurement officials prefer to use other administrative remedies to address poor contractor performance,” the report stated.

But reluctance to pursue suspension and debarment actions could put the government at risk of doing business with poor contractors, Skinner warned.

The IG recommended that DHS develop policies to ensure that contracts that are terminated for cause are evaluated for possible suspension or debarment actions as well as policies to record all pertinent information on contractor performance.

Read the IG report here. It notes:
The Department of Homeland Security spends an estimated 40% of its annual congressional appropriation through contracts and grants. The department’s FY 2009 appropriation was $43 billion, of which an estimated $17 billion is expected to be spent through federal contracts and grants.

Federal Acquisition Regulations (FAR) require agencies to solicit offers from, award contracts to, and consent to subcontracts only with responsible contractors. Suspensions and debarments are discretionary actions that agencies implement to protect the federal government by excluding contractors who commit fraud, behave unethically, or willfully fail to perform or have a history of failure to perform according to the terms of a contract from conducting business with the federal government.

Suspensions are temporary in nature and are used to protect the federal government until investigations and any ensuing legal proceedings that could lead to debarment actions are completed.

Causes for suspension actions include, among others, adequate evidence of the following:
>> Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public contract or state contract;
>> Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, violating federal criminal tax laws, or receiving stolen property;
>> Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a government contractor or subcontractor; or
>> Any other cause of so serious or compelling a nature that it affects the present responsibility of a government contractor or subcontractor.

Debarments, on the other hand, generally do not exceed 3 years but can be extended if it is determined that it is in the government’s best interest.

Causes for debarment actions include, among others, the following:
>> Conviction of or civil judgment for fraud, violation of antitrust laws, embezzlement, theft, forgery, bribery, false statements, or other offenses indicating a lack of business integrity;
>> Violation of the terms of a government contract or subcontract so serious as to justify debarment, such as a willful failure to perform in accordance with the terms of one or more contracts or a history of failure to perform, or of unsatisfactory performance of, one or more contracts;
>> Noncompliance with Immigration and Nationality Act employment provisions; or
>> Any other cause of so serious or compelling a nature that it affects the present responsibility of the contractor or subcontractor.

The FAR requires agencies to list all suspended or debarred contractors in the General Services Administration’s Excluded Parties List System.

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