Debarment and Suspension of Government
Contractors: An Overview of the Law
Including Recently Enacted and Proposed
Amendments
Kate M. Manuel
Legislative Attorney
July 28, 2009
Congressional Research Service
7-5700
www.crs.gov
RL34753
CRS Report for Congress
P
repared for Members and Committees of Congress
Debarment and Suspension of Government Contractors
Summary
Debarment or suspension of contractors is one means agencies use to ensure that they deal only
with contractors who are responsible in fulfilling their legal and contractual obligations.
Debarment removes contractors’ eligibility for government contracts for a fixed period of time,
while suspension prohibits contractors from receiving government contracts for the duration of an
agency investigation or litigation. Like government procurement law generally, the law of
suspension and debarment has multiple sources, and contractors can currently be debarred or
suspended either under statutory provisions or under the Federal Acquisition Regulation (FAR).
Some statutes require or allow agency officials to exclude contractors that have engaged in
conduct prohibited under the statute. Such statutory debarments and suspensions are also known
as inducement debarments and suspensions because they further induce contractor compliance
with statutes. Statutory debarments and suspensions are federal-government-wide; they are often
mandatory, or at least beyond agency heads’ discretion; and they are punishments. Statutes
prescribe the debarments’ duration, and agency heads generally cannot waive statutory
debarments.
The FAR also authorizes debarment and suspension of contractors. Such administrative
debarments and suspensions are also known as procurement debarments and suspensions because
they protect government interests in the procurement process. Administrative debarments can
result when contractors are convicted of, found civilly liable for, or found by agency officials to
have committed certain offenses, or when other causes affect contractor responsibility.
Administrative suspensions can similarly result when contractors are suspected of, or indicted for,
certain offenses, or when other causes affect contractor responsibility. Administratively debarred
or suspended contractors are excluded from contracts with executive branch agencies.
Administrative exclusions are discretionary and can be imposed only to protect government
interests. Agencies can use administrative agreements instead of debarment and can continue the
current contracts of debarred contractors. The seriousness of a debarment’s cause determines its
length, which generally cannot exceed three years, but agency heads can waive debarments for
compelling reasons.
For debarment and suspension to operate most effectively, agency officials should know which
contractors have been excluded, and they also need information about contractors’ potentially
excludable conduct. The Excluded Parties List System (EPLS) (https://www.epls.gov) has long
listed presently ineligible contractors, and the 110th Congress enacted two laws increasing the
amount of information available to agency officials about potentially excludable conduct. One
law (P.L. 110-252, §§ 6101-6103) requires contractors to notify agency officials of overpayments
or federal crimes in connection with the award or performance of government contracts, and the
other law (P.L. 110-417, §§ 871-873) requires the creation of a database with information about
contractors beyond that in EPLS (e.g., administrative agreements, terminations for default).
The magnitude of federal spending on contracts, coupled with recent high-profile examples of
contractor misconduct, has prompted Congress to consider ways to make debarment and
suspension more effective means of ensuring that the government does not deal with
nonresponsible contractors. The 111th Congress has enacted one bill on debarment and suspension
(P.L. 111-8, § 507) and is considering additional legislation (H.R. 595, H.R. 1334, H.R. 1668,
H.R. 1983, H.R. 2349, H.R. 2568, H.R. 2708, H.R. 2825, S. 265, H.Amdt. 268 to H.R. 2647).
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Debarment and Suspension of Government Contractors
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Debarment and Suspension of Government Contractors
Contents
Overview of Debarment and Suspension ..................................................................................... 1
Statutory Debarment and Suspension .................................................................................... 1
Administrative Debarment and Suspension ........................................................................... 4
Debarment ...................................................................................................................... 5
Suspension...................................................................................................................... 7
Agency Discretion, Administrative Agreements, Continuation of Current
Contracts, and Waivers................................................................................................. 8
Excluded Parties List System and Information about Excluded or Potentially Excludable
Contractors ............................................................................................................................ 11
Recently Enacted and Proposed Amendments............................................................................ 12
Amendments Enacted in the 111th Congress......................................................................... 13
Amendments Proposed in the 111th Congress....................................................................... 13
Tables
Table 1. Statutory Debarments and Suspensions .......................................................................... 2
Table 2. Comparison of Statutory and Administrative Debarments............................................. 10
Contacts
Author Contact Information ...................................................................................................... 14
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Debarment and Suspension of Government Contractors
s a general rule, government agencies contract with the lowest qualified responsible
bidder or offeror. Debarment and suspension relate to the responsibility of bidders and
A offerors. Government agencies debar and suspend contractors in order to preclude future
contractual dealings with contractors that are “nonresponsible,” or not responsible, in fulfilling
their legal or contractual obligations. Debarment removes contractors’ eligibility for government
contracts for a fixed period of time, while suspension prohibits contractors from receiving
government contracts for the duration of an agency investigation or litigation. Debarment and
suspension are collectively known as exclusions.
This report reviews the legal framework for the exclusion of government contractors and
discusses recent congressional efforts to make contractor debarment and suspension more
effective means of ensuring that the government does not deal with nonresponsible contractors.
Another means of avoiding nonresponsible contractors, responsibility determinations, is
discussed in a separate report: CRS Report R40633, Responsibility Determinations Under the
Federal Acquisition Regulation: Legal Standards and Procedures, by Kate M. Manuel.
Overview of Debarment and Suspension
Contractors can currently be debarred or suspended under federal statutes or under the Federal
Acquisition Regulation (FAR), an administrative rule governing contracting by executive branch
agencies.1 There is only one explicit overlap between the causes of debarment and suspension
under statute and those under the FAR, involving debarments and suspensions for violations of
the Drug-Free Workplace Act of 1988.2 However, the “catch-all” provisions of the FAR—which
allow (1) debarment for “any ... offense indicating a lack of business integrity or business
honesty” and (2) debarment or suspension for “any other cause of [a] serious or compelling
nature”3—could potentially make the same conduct a grounds for debarment or suspension under
statute and under the FAR.
Statutory Debarment and Suspension
Some federal statutes include provisions specifying that contractors who engage in certain
conduct prohibited under the statute shall or may be debarred or suspended from future contracts
with the federal government.4 Because they are designed to provide additional inducement for
contractors’ compliance with the statutes, such statutory debarments and suspensions are also
known as inducement debarments and suspensions. The terms “statutory debarment” and
“statutory suspension” are also used in reference to exclusions that result under executive orders,5
1 The FAR is promulgated by the General Services Administration (GSA), the Department of Defense (DOD), and the
National Aeronautics and Space Administration (NASA) under the authority of the Office of Federal Procurement
Policy Act of 1974. See Office of Federal Procurement Policy Act of 1974, P.L. 93-400, 88 Stat. 796 (codified at 41
U.S.C. §§ 401-38); DoD, GSA & NASA, Establishing the Federal Acquisition Regulation: Final Rule, 48 Fed. Reg.
42,102, 42,142 (Sept. 19, 1983).
2 The Drug-Free Workplace Act of 1988, P.L. 100-690, §§ 5151-5160, 102 Stat. 4181 (codified at 41 U.S.C. §§ 701-
07), is mentioned in FAR 9.406-2(b)(1)(ii) and 9.407-2(a)(4), which corresponds to 48 C.F.R. § 9.406-2(b)(1)(ii) and
9.407-2(a)(4).
3 48 C.F.R. § 9.406-2(a)(5) & (c); 48 C.F.R. § 9.407-2(c).
4 See, e.g., 21 U.S.C. § 862 (authorizing debarment for violations of federal or state controlled substance laws).
5 See, e.g., Executive Order 11246, as amended (providing for suspension of contractors who fail to comply with equal
(continued...)
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even though executive orders are not statutes, as a way of grouping exclusions that result from
executive orders with other inducement-based exclusions and contrasting them with
administrative or procurement exclusions.
Statutes providing for debarment and suspension often require that the excluded party be
convicted of wrongdoing under the statute, but at other times, findings of wrongdoing by agency
heads suffice for exclusion.6 Sometimes the exclusion applies only to certain types of contractors,
or dealings with specified agencies (e.g., institutions of higher education who contract with the
government, contracts with the Department of Defense).7 Most of the time, however, the
exclusion applies more broadly to all types of contractors dealing with all federal agencies.8
Persons identified by statute—often the head of the agency administering the statute requiring or
allowing exclusion—make the determinations to debar or suspend contractors.9 Debarments last
for a fixed period specified by statute, while suspensions last until a designated official finds that
the contractor has ceased the conduct that constituted its violation of the statute.10 Generally,
statutory exclusions can only be waived by a few officials under narrow circumstances, if at all.11
Agency heads generally cannot waive exclusions to allow debarred or suspended contractors to
contract with their agency. Table 1 surveys the main statutory debarment and suspension
provisions presently in effect.
Table 1. Statutory Debarments and Suspensions
Statute
Cause of
Mandatory or
Decision
Duration &
Waiver of
Debarment
Discretionary
Maker
Scope
Debarment
Buy American
Violations of the
Mandatory
Head of the
3 years;
Not provided for
Act (41 U.S.C.
Buy American Act
agency that
government-wide
§ 10(b))
in constructing,
awarded the
altering, or
contract under
repairing any public
which the
building or work in
violation
the United States
occurred
using appropriated
funds
Clean Air Act
Conviction for
Mandatory EPA
Lasts until EPA
Waiver by
(42 U.S.C. §
violating 42 U.S.C. §
Administrator
Administrator
President when
7606)
7413(c)
certifies the
he or she
condition is
determines it is
corrected;
in the paramount
(...continued)
employment opportunity and affirmative action requirements).
6 Compare 21 U.S.C. § 862 (debarment based on conviction) with 41 U.S.C. § 10(b) (debarment based on agency
head’s findings).
7 See, e.g., 10 U.S.C. § 983 (debarment for institutions of higher education only); 48 C.F.R. § 209.470 (same); 10
U.S.C. § 2408 (debarment from Department of Defense contracts only).
8 See, e.g., 40 U.S.C. § 3144 (government-wide debarment for failure to pay wages under the Davis-Bacon Act).
9 See, e.g., 42 U.S.C. § 7606 (Administrator of the Environmental Protection Agency to debar contractors for certain
violations of the Clean Air Act).
10 Compare 41 U.S.C. § 701(d) (providing for debarment for up to five years) with 33 U.S.C. § 1368 (suspensions for
certain violations of the Clean Water Act end with the violation).
11 Compare 33 U.S.C. § 1368 (allowing the President to waive a debarment “in the paramount interests of the United
States” with notice to Congress) with 40 U.S.C. § 3144 (making no provisions for waiver).
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Debarment and Suspension of Government Contractors
Cause of
Mandatory or
Decision
Duration &
Waiver of
Statute
Debarment
Discretionary
Maker
Scope
Debarment
government-wide interests of the
but limited to the United States
facility giving rise
and notifies
to the conviction
Congress
Clean Water
Conviction for
Mandatory EPA
Lasts until EPA
Waiver by
Act (33 U.S.C.
violating 33 U.S.C. §
Administrator
Administrator
President when
§ 1368)
1319(c)
certifies the
he or she
condition is
determines it is
corrected;
in the paramount
government-wide interests of the
but limited to the United States
facility giving rise
and notifies
to the conviction
Congress
Davis-Bacon
Failure to pay
Mandatory Comptroller
3 years;
Not provided for
Act (40 U.S.C.
prescribed wages
General
government-wide
§ 3144)a
for laborers and
mechanics
Drug-Free
Violations of the
Mandatory
Head of the
Up to 5 years;
Waiver under
Workplace Act act as shown by
contracting
government-wide FAR procedures
of 1988 (41
repeated failures to
agency
U.S.C. §
comply with its
701(d))
requirements, or
employing
numerous
individuals
convicted of
criminal drug
violations
Executive
Failure to comply
Discretionary
Secretary of
Lasts until the
Not provided for
Order 11246,
with equal
Labor
contractor
as amended
employment
complies with the
opportunity and
EEO and
affirmative action
affirmative action
requirements
requirements;
government-wide
Military
Policy or practice
Mandatory
Secretary of
Lasts so long as
Not provided for
Recruiting on
prohibiting military
Defense
the policy or
Campus (10
recruiting on
practice
U.S.C. § 983;
campus
triggering the
48 C.F.R. §
suspension;
209.470)
limited to
Department of
Defense
Contracts
Service
Failure to pay
Mandatory Secretary
of 3 years;
Waiver by the
Contract Act
compensation due
Labor or the
government-wide Secretary of
(41 U.S.C. §
to employees
head of any
Labor because of
354)
under the act
agency
unusual
circumstances
Walsh-Healey
Failure to pay the
Mandatory Secretary
of 3 years;
Waiver by the
Act (41 U.S.C.
minimum wage,
Labor
government-wide Secretary of
§ 37)
requiring
Labor; no
mandatory and
criteria for
uncompensated
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Cause of
Mandatory or
Decision
Duration &
Waiver of
Statute
Debarment
Discretionary
Maker
Scope
Debarment
overtime, use of
waiver specified
child labor, or
maintenance of
hazardous working
conditions
Sudan
Falsely certifying
Discretionary Any
executive-
3 years;
Not provided for
Accountability
that the contractor
branch agency
government-wide
and Divestment does not “conduct
head
Act (P.L. 110-
business
174)
operations” in the
Sudan
Source: Congressional Research Service.
Notes: The term “statutory” is used here, as is customary, to contrast al types of inducement exclusions—
whatever their legal basis—with those exclusions under the FAR that are designed to protect the government’s
interests in the procurement process.
There are two other statutory provisions discussing debarment that are not included in this table because they
provide for personal debarment. Section 862 of Title 21 of the United States Code al ows the court sentencing
an individual for violating federal or state laws on the distribution of controlled substances to debar that
individual for up to one year, in the case of first-time offenders, or for up to five years, in the case of repeat
offenders. Section 2408 of Title 10 of the United States Code similarly prohibits persons who have been
convicted of fraud or any other felony arising out of a contract with DOD from working in management or
supervisory capacities on any DOD contract, or engaging in similar activities. Contractors who knowingly
employ such “prohibited persons” are themselves subject to criminal penalties.
a. The statutory debarment provided for in the Davis-Bacon Act is better known under its former location
within the United States Code, 40 U.S.C. § 276a-2(a).
Administrative Debarment and Suspension
As a matter of policy, the federal government seeks to “prevent improper dissipation of public
funds”12 in its contracting activities by dealing only with responsible contractors.13 Debarment
and suspension promote this policy by precluding agencies from entering into new contractual
dealings with contractors whose prior violations of federal or state law, or failure to perform
under contract, suggest they are nonresponsible.14 Because exclusions under the FAR are
designed to protect the government’s interests, they may not be imposed solely to punish prior
contractor misconduct.15 Federal courts will overrule challenged agency decisions to debar
12 United States v. Bizzell, 921 F.2d 263, 267 (10th Cir. 1990) (“It is the clear intent of debarment to purge government
programs of corrupt influences and to prevent improper dissipation of public funds. Removal of persons whose
participation in those programs is detrimental to public purposes is remedial by definition.”) (internal citations
omitted).
13 48 C.F.R. § 9.402(a) (directing agency contracting officers to “solicit offers from, award contracts to, and consent to
subcontracts with responsible contractors only”).
14 See id. (“Debarment and suspension are discretionary actions that ... are appropriate means to effectuate [the] policy
[of dealing only with responsible contractors].”).
15 48 C.F.R. § 9.402(b) (“The serious nature of debarment and suspension requires that these sanctions be imposed only
in the public interest for the Government’s protection and not for purposes of punishment.”).
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contractors when agency officials seek to punish the contractor—rather than protect the
government—in making their exclusion determinations.16
Debarment
The FAR allows agency officials to debar contractors from future executive branch contracts
under three circumstances. First, debarment may be imposed when a contractor is convicted of or
found civilly liable for any integrity offense. Integrity offenses include the following:
• fraud or criminal offenses in connection with obtaining, attempting to obtain, or
performing a public contract or subcontract
• violations of federal or state antitrust laws relating to the submission of offers
• embezzlement, theft, forgery, bribery, falsification or destruction of records,
making false statements, tax evasion, violating federal criminal tax laws, or
receipt of stolen property
• intentional misuse of the “Made in America” designation
• other offenses indicating a lack of business integrity or honesty that seriously
affect the present responsibility of a contractor17
Second, in the absence of convictions or civil judgments, debarment may be imposed when
government officials find, by a preponderance of the evidence, that the contractor committed
certain offenses. These offenses include the following:
• serious violations of the terms of a government contract or subcontract18
• violations of the Drug-Free Workplace Act of 198819
• intentionally affixing a “Made in America” label, or similar inscription, on
ineligible products
• commission of an unfair trade practice as defined in Section 20120 of the Defense
Production Act
16 See, e.g., IMCO, Inc. v. United States, 97 F.3d 1422, 1427 (Fed. Cir. 1996) (upholding an agency’s debarment
determination but noting that the outcome would have been different had the debarment been imposed for purposes of
punishment).
17 48 C.F.R. § 9.406-2(a)(1)-(5).
18 For purposes of the FAR, serious violations of the terms of a government contract or subcontract include (1) willful
failure to perform in accordance with a term of the contract or (2) a history of failure to perform or unsatisfactory
performance under contract. 48 C.F.R. § 9.406-2(b)(1)(i)(A)-(B).
19 Such violations include (1) failure to comply with the requirements in Section 52.223-6 of the FAR or (2)
employment of so many persons who have been convicted of violating criminal drug statutes in the workplace as to
indicate that the contractor failed to make good faith efforts to provide a drug-free workplace. 48 C.F.R. § 9.406-
2(b)(1)(ii)(A)-(B). FAR 52.223-6 requires that contractors (1) publish a statement notifying employees that the
manufacture, distribution, possession, or use of controlled substances in the workplace is prohibited and specifying
actions to be taken in response to employee violations; (2) establish drug-free awareness programs to inform employees
of the policy; (3) provide employees with a written copy of the policy; (4) notify employees that their continued
employment is contingent upon their compliance with the policy; (5) notify agency contracting officials of employee
convictions for violations of controlled substance laws; and (6) take steps to terminate or ensure treatment of
employees convicted of violating controlled substance laws.
20 Section 201 covers (1) violations of Section 337 of the Tariff Act of 1930; (2) violations of agreements under the
(continued...)
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• delinquent federal taxes in an amount exceeding $3,00021
• knowing failure by a principal to timely disclose to the government credible
evidence of (1) violations of federal criminal laws involving fraud, conflict of
interest, bribery, or gratuity offenses covered by Title 18 of the United States
Code; (2) violations of the civil False Claims Act; or (3) significant
overpayments on the contract22 that occurred in connection with the award,
performance or closeout of a federal contract or subcontract and were discovered
within three years of final payment23
Debarment can also result, under this provision of the FAR, when the Secretary of Homeland
Security or the Attorney General finds, by a preponderance of the evidence, that a contractor has
not complied with the employment provisions of the Immigration and Nationality Act.24
Third, and finally, debarment may be imposed whenever an agency official finds, by a
preponderance of the evidence, that there exists “any other cause of so serious or compelling a
nature that it affects the present responsibility of a contractor.”25
Debarments last for a “period commensurate with the seriousness of the cause(s),” generally not
exceeding three years.26 Debarment-worthy conduct can be imputed from officers, directors,
shareholders, partners, employees, or other individuals associated with a contractor to the
contractor, and vice versa, as well as between contractors participating in joint ventures or similar
arrangements.27 Due process requires that contractors receive written notice of proposed
debarments and of debarring officials’ decisions, as well as the opportunity to present evidence
within the decision-making process for all debarments except those based upon contractors’
convictions.28
(...continued)
Export Administration Act of 1979 or similar bilateral or multilateral export control agreements; or (3) knowingly false
statements regarding material elements of certifications concerning the foreign content of an item.
21 Federal taxes are considered delinquent, for purposes of this provision, when (1) tax liability is finally determined
and (2) the taxpayer is delinquent in making payment. See 48 C.F.R. § 9.406-2(b)(v)(A)(1)-(2).
22 Overpayments resulting from contract financing payments, as defined under 48 C.F.R. § 32.001, are excluded here.
See 48 C.F.R. § 9.406-2(b)(vi)(C).
23 48 C.F.R. § 9.406-2(b)(1)(i)-(vi).
24 48 C.F.R. § 9.406-2(b)(2).
25 48 C.F.R. § 9.406-2(c).
26 48 C.F.R. § 9.406-4(a)(1). Debarments are limited to one year for violations of the Immigration and Nationality Act,
but can last up to five years for violations of the Drug-Free Workplace Act. 48 C.F.R. § 9.406-4(a)(1)(i)-(ii). The FAR
allows debarring officials to extend the debarment for an additional period if they determine that an extension is
necessary to protect the government’s interests. 48 C.F.R. § 9.406-4(b). Extension cannot be based solely upon the
facts and circumstances upon which the initial debarment was based, however. Id.
27 48 C.F.R. § 9.406-5(a)-(c).
28 48 C.F.R. § 9.406-3. When debarment is based on a conviction, the hearing that the contractor received prior to the
conviction suffices for due process in the debarment proceeding.
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Suspension
The FAR also allows agency officials to suspend government contractors (1) when the officials
suspect, upon adequate evidence, any of the following offenses, or (2) when contractors are
indicted for any of the following offenses:
• fraud or criminal offenses in connection with obtaining, attempting to obtain, or
performing a public contract
• violation of federal or state antitrust laws relating to the submission of offers
• embezzlement, theft, forgery, bribery, falsification or destruction of records,
making false statements, tax evasion, violations of federal criminal tax laws, or
receipt of stolen property
• violations of the Drug-Free Workplace Act of 198829
• intentional misuse of the “Made in America” designation
• unfair trade practices, as defined in Section 201 of the Defense Production Act30
• delinquent federal taxes in an amount exceeding $3,00031
• knowing failure by a principal to timely disclose to the government credible
evidence of (1) violations of federal criminal laws involving fraud, conflict of
interest, bribery, or gratuity offenses covered by Title 18 of the United States
Code; (2) violations of the civil False Claims Act; or (3) significant
overpayments on the contract32 that occurred in connection with the award,
performance or closeout of a federal contract or subcontract and were discovered
within three years of final payment
• other offenses indicating a lack of business integrity or honesty that seriously
affect the present responsibility of a contractor33
Agency officials may also suspend a contractor when they suspect, upon adequate evidence, that
there exists “any other cause of so serious or compelling a nature that it affects the present
responsibility of a ... contractor or subcontractor.”34
A suspension lasts only as long as an agency’s investigation of the conduct for which the
contractor was suspended, or any ensuing legal proceedings. It may not exceed 18 months unless
legal proceedings have been initiated within that period.35 Suspension-worthy conduct can be
imputed, just like debarment-worthy conduct,36 and similar due-process protections apply.37
29 See supra note 19 for a description of what conduct violates the Drug-Free Workplace Act.
30 See supra note 20 for a listing of unfair trade practices under Section 201 of the Defense Production Act.
31 See supra note 21 for a discussion of what makes federal taxes delinquent for purposes of this provision of the FAR.
32 Overpayments resulting from contract financing payments, as defined under 48 C.F.R. § 32.001, are excluded here.
See 48 C.F.R. § 9.406-2(b)(vi)(C).
33 48 C.F.R. § 9.407-2(a)(1)-(9) (suspicion on adequate evidence) & 48 C.F.R. § 9.407-2(b) (indictment).
34 48 C.F.R. § 9.407-2(c).
35 48 C.F.R. § 9.407-4(a).
36 48 C.F.R. § 9.407-5.
37 48 C.F.R. § 9.407-3(a)-(d). The due process protections with suspension are not as extensive as those with debarment
(continued...)
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Agency Discretion, Administrative Agreements, Continuation of Current
Contracts, and Waivers
Not all contractors who engage in conduct that could lead to debarment or suspension under the
FAR are actually excluded, permanently or temporarily, from contracting with executive branch
agencies. Nor does the debarment or suspension of a contractor guarantee that executive branch
agencies do not presently have contracts with that contractor, or will not contract with that
contractor before the exclusion period ends. Several aspects of the exclusion process under the
FAR explain why this is so.
First, under the FAR, debarment or suspension of contractors is discretionary.38 The FAR says that
agencies “may debar” or “may suspend” a contractor when grounds for exclusion exist,39 but it
does not require them to do so.40 Rather, the FAR advises contracting officers to focus upon the
public interest in making debarment determinations.41 The public interest encompasses both (1)
safeguarding public funds by excluding contractors who may be nonresponsible from contracting
with the government and (2) avoiding economic injury to contractors who might technically be
excludable but are fundamentally responsible and safe for the government to contract with.42
Because of this focus on the public interest, agency officials can find that contractors who
engaged in exclusion-worthy conduct should not be excluded because they appear unlikely to
engage in similar conduct in the future.43 Any circumstance suggesting that a contractor is
unlikely to repeat past misconduct—such as changes in personnel or procedures, restitution, or
cooperation in a government investigation—can potentially incline an agency’s decision against
debarment.44 Moreover, exclusion can be limited to particular “divisions, organizational elements,
or commodities” of a company if agency officials find that only segments of a business engaged
in wrongdoing.45 Other contractors cannot challenge agency decisions not to propose a contractor
for debarment or not to exclude a contractor proposed for debarment.46 They can only contest an
(...continued)
because suspension is “less serious” than debarment.
38 48 C.F.R. § 9.402(a) (“Debarment and suspension are discretionary actions.”).
39 48 C.F.R. § 9.406-2(a), 9.407-1(a).
40 48 C.F.R. § 9.406-1(a) (“The existence of a cause for debarment ... does not necessarily require that the contractor be
debarred.”).
41 Id. Suspensions under the FAR are based on the standard of the “government’s interests.” 48 C.F.R. § 9.407-1(a).
This is broadly similar, but not identical, to the “public interest,” which is why the focus of this paragraph is limited to
debarments.
42 See, e.g., Commercial Drapery Contractors, Inc. v. United States, 133 F.3d 1, 14-15 (D.C. Cir. 1998) (“Suspending a
contractor is a serious matter. Disqualification from contracting ‘directs the power and prestige of government’ at a
single entity and may cause economic injury.”).
43 48 C.F.R. § 9.406-1(a). See, e.g., Roemer v. Hoffman, 419 F. Supp. 130, 132 (D.D.C. 1976) (stating that the proper
focus, in debarment determinations, is upon whether the contractor is presently responsible notwithstanding the past
misconduct).
44 48 C.F.R. § 9.406-1(a)(1)-(10).
45 Id. at (b). See, e.g., Peter Kiewit Sons’ Co. v. Army Corp. of Eng’rs, 534 F. Supp. 1139, 1155 (D.D.C. 1982), rev’d
on other grounds, 714 F.2d 170 (D.C. Cir. 1983) (holding that an agency cannot properly debar a corporation-
contractor based upon the misconduct of two subsidiaries and a corporate division).
46 See, e.g., Heckler v. Chaney, 470 U.S. 821, 832 (1985) (holding that agency refusal to act is generally not judicially
reviewable).
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agency’s certification of a contractor’s present responsibility,47 which is required prior to a
contract award.48
Second, agencies can use administrative agreements as alternatives to debarment.49 In these
agreements, the contractor generally admits its wrongful conduct and agrees to restitution;
separation of employees from management or programs; implementation or extension of
compliance programs; employee training; outside auditing; agency access to contractor records;
or other remedial measures.50 The agency, for its part, reserves the right to impose additional
sanctions, including debarment, in the future if the contractor fails to abide by the agreement or
engages in further misconduct.51 Such agreements are not explicitly provided for within the FAR,
but are within agencies’ general authority to determine with whom they contract.52 Only the
agency signing the agreement is a party to it, and other agencies may not be aware of the
agreement’s existence, a situation which the Government Accountability Office (GAO) has
suggested should be remedied in order to provide contracting officers with more complete
information about contractors’ responsibility when making awards.53
Third, even when a contractor is debarred, suspended, or proposed for debarment under the FAR,
an agency may generally allow the contractor to continue performance under any current
contracts or subcontracts unless the agency head directs otherwise.54 The debarment or
suspension serves only to preclude an excluded contractor from (1) receiving contracts from
executive branch agencies; (2) serving as a subcontractor on certain contracts with executive
branch agencies;55 or (3) serving as an individual surety for the duration of the debarment or
suspension.56 Any contracts that the excluded contractor presently has remain in effect unless they
are terminated for default or for convenience under separate provisions of the FAR.57
47 See, e.g., Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1334-39 (Fed. Cir. 2001)
(upholding a challenged agency responsibility determination).
48 48 C.F.R. § 9.103(b) (“No purchase or award shall be made unless the contracting official makes an affirmative
determination of responsibility.”).
49 Office of Management and Budget, Suspension and Debarment, Administrative Agreements, and Compelling Reason
Determinations, Aug. 31, 2006, available at http://www.whitehouse.gov/omb/memoranda/fy2006/m06-26.pdf
(“Agencies can sometimes enter into administrative agreements ... as an alternative to suspension or debarment.”).
50 Alan M. Grayson, Suspension and Debarment 37-38 (1991).
51 See, e.g., United States Department of State, Bureau of Political Military Affairs, In the Matter of General Motors
Corporation & General Dynamics Corporation, Oct. 22, 2004, available at http://www.contractormisconduct.org/ass/
contractors/26/cases/108/528/general-dynamics-4_ca.pdf.
52 48 C.F.R. § 1.601(a) (“Unless specifically prohibited by another provision of law, authority and responsibility to
contract ... are vested in the agency head.”).
53 GAO, Federal Procurement: Additional Data Reporting Could Improve the Suspension and Debarment Process 12-
13 (2005), available at http://www.gao.gov/highlights/d05479high.pdf.
54 48 C.F.R. § 9.405-1(a). However, when the existing contracts or subcontracts are “indefinite quantity” contracts, an
agency may not place orders exceeding the guaranteed minimum. 48 C.F.R. § 9.405-1(b)(1). Similarly, an agency may
not (1) place orders under optional use Federal Supply Schedule contracts, blanket purchase agreements, or basic
ordering agreements with excluded contractors or (2) add new work, exercise options, or otherwise extend the duration
of current contracts or orders. 48 C.F.R. § 9.405-1(b)(2)-(3).
55 With subcontracts that are subject to agency consent, there can be no consent unless the agency head provides
compelling reasons for the subcontract. 48 C.F.R. § 9.405-2(a). With subcontracts that are not subject to agency
consent, there must be compelling reasons for the subcontract only when its amount exceeds $30,000. 48 C.F.R. §
9.405-2(b).
56 48 C.F.R. § 9.405(a)-(c); § 9.405-2(a)-(b).
57 See 48 C.F.R. § 49.000-607.
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Finally, the FAR authorizes agencies to waive a contractor’s exclusion and enter into new
contracts with a debarred or suspended contractor.58 For an exclusion to be waived, an agency
head must “determine, in writing, that there is a compelling reason to do so.”59 Compelling
reasons exist when (1) goods or services are available only from the excluded contractor; (2) an
urgent need dictates dealing with the excluded contractor; (3) the excluded contractor and the
agency have entered an agreement not to debar the contractor that covers the events upon which
the debarment is based; or (4) reasons relating to national security require dealings with the
excluded contractor.60 Waivers are agency-specific and are not regularly communicated to other
agencies, a situation which the GAO has also suggested remedying.61 Agency determinations
about the existence of compelling reasons are not, per se, reviewable by the courts; however,
other contractors can challenge awards to formerly excluded contractors through the customary
bid protest process.62 Moreover, even when an agency does not waive a contractor’s exclusion, it
can reduce the period or extent of debarment if the contractor shows (1) newly discovered
material evidence; (2) reversal of the conviction or civil judgment on which the debarment was
based; (3) bona fide changes in ownership or management; (4) elimination of other causes for
which the debarment was imposed; or (5) other appropriate reasons.63
Table 2. Comparison of Statutory and Administrative Debarments
Characteristic
Statutory Debarments
Administrative Debarments
Authority for
Various statutes
FAR (Part 9); Office of Federal Procurement
debarments
Policy Act
Basis for debarments
Specified violations of statutes (e.g.,
1. Contractors convicted of or found civilly
violations of federal or state controlled
liable for specified offenses
substance laws; certain violations of the Buy
American Act, Clean Air Act, Clean Water
2. Agency officials found contractors
Act; etc.)
engaged in specified conduct
3. Other causes affect present responsibility
Debarring official
General y head of the agency administering
Head of the contracting agency or a
the statute
designee
Purpose
Often mandatory, occasional y discretionary Always discretionary
Scope
Punitive
Preventative; cannot be punitive
Duration
Prescribed by statute
Commensurate with the offense, generally
not over 3 years
Extent
Government-wide
Executive branch agencies
Waiving official
Generally the head of the agency
Head of the contracting agency
administering the statute
Source: Congressional Research Service.
58 48 C.F.R. § 9.405(a).
59 Id.
60 Defense Federal Acquisition Regulation Supplement (DFARS) § 209.405(a)(2)(i)-(iv), available at
http://www.acq.osd.mil/dpap/dars/dfarspgi/current/index.html.
61 Federal Procurement, supra note 53, at 14.
62 48 C.F.R. § 33.103 & 104. See CRS Report R40228, GAO Bid Protests: An Overview of Timeframes and
Procedures, by Kate M. Manuel and Moshe Schwartz for more information on bid protests generally.
63 48 C.F.R. § 9.406-4(c)(1)-(5).
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Excluded Parties List System and Information about
Excluded or Potentially Excludable Contractors
For debarment and suspension to operate most effectively, agency officials should know which
contractors have been excluded, and they also need information about contractors’ potentially
excludable conduct. The Excluded Parties List System (EPLS) (https://www.epls.gov) has long
listed contractors who are presently ineligible because of statutory or administrative debarments
or suspensions. Agency officials must submit information on all excluded contractors to EPLS
within five working days of the exclusion determination.64 They also must check EPLS prior to
awarding a contract because executive branch agencies may not award contracts to contractors
listed in EPLS.65 However, EPLS includes only contractors who are currently debarred or
suspended, have previously been debarred or suspended, or have been proposed for debarment.66
It does not include contractors who made voluntary changes to their personnel or policies in order
to show continuing responsibility, or who entered administrative agreements with government
agencies. In fact, the inclusion of administrative agreements in EPLS is one of the changes that
the GAO has recommended to improve the suspension and debarment process.67
The 110th Congress enacted two laws increasing the amount of information available to agency
officials about potentially excludable conduct. One law was the Close the Contractor Fraud
Loophole Act, §§ 6101-6103 of the Supplemental Appropriations Act of 2008 (P.L. 110-252),68
which amended the FAR’s provisions on debarment to require that contractors timely notify
agency officials of overpayments or federal crimes connected with the award or performance of a
“covered contract or subcontract.”69 The act itself did not specify whom contractors are to notify,
but regulations implementing the act require notification of both the contracting agency’s
inspector general and the contracting officer.70 The other law was the Clean Contracting Act, §§
871-873 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (P.L.
110-417), which requires the creation of a database with information about contractors beyond
that in EPLS.71 This database is to cover all contractors that have at least one government contract
64 48 C.F.R. § 9.404(a)(1), (c)(3).
65 48 C.F.R. § 9.405(a).
66 48 C.F.R. § 9.404(c)(6).
67 Federal Procurement, supra note 53, at 14.
68 P.L. 110-252, §§ 6101-03, 122 Stat. 2323.
69 Covered contracts or subcontracts are those that are greater than $5 million in amount and more than 120 days in
duration, regardless of whether they are performed outside the United States or include commercial items. Id.
Previously, under FAR §§ 9.405 and 52.209-5(a), contractors with awards worth more than $30,000 had to disclose the
existence of indictments, charges, convictions, or civil judgments against them. Disclosure of existing legal
proceedings is, however, different from disclosure of grounds upon which future legal proceedings could be based.
70 DoD, GSA & NASA, Contractor Business Ethics Compliance Program and Disclosure Requirements, 73 Fed. Reg.
67,064, 67,093 (Nov. 12, 2008). On May 27, 2009, the General Services Administration issued a memorandum
establishing procedures that contracting officers should follow when receiving such disclosures. See Contractor Fraud
Disclosure Requirements, available at http://www.gsa.gov/graphics/staffoffices/AcquisitionLetter_V-09-05.pdf.
71 P.L. 110-417, §§ 871-73, 122 Stat. 4356. The act also calls for the Interagency Committee on Debarment and
Suspension to resolve which of multiple agencies wishing to exclude a contractor should be the lead agency in bringing
exclusion proceedings and to coordinate exclusion actions among agencies. Id. at § 873(a)(1)-(2). The involvement of
the Interagency Committee is potentially significant because although the FAR previously encouraged agencies to
coordinate their exclusion efforts, it provided no requirement or mechanism for them to do so. See 48 C.F.R. § 9.402(c)
(“When more than one agency has an interest in the debarment or suspension of a contractor, consideration shall be
(continued...)
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worth $500,000 or more.72 For these contractors, the database is to include a brief description of
all civil, criminal, or administrative proceedings involving contracts with the federal government
that resulted in a conviction or a finding of fault within the past five years, as well as all
terminations for default, administrative agreements, and nonresponsibility determinations relating
to federal contracts within the past five years.73 Entities with contracts worth more than $10
million, in total, are required to submit this information as part of the award process and update
the information semiannually.74 Access to the database is currently limited to acquisition officials
of federal agencies, other government officials as appropriate, and the chairman and ranking
Member of the congressional committees with jurisdiction.75 However, legislation introduced in
the 111th Congress would expand access to the database, as is discussed below.
Recently Enacted and Proposed Amendments
The magnitude of federal spending on contracts, coupled with recent high-profile examples of
contractor misconduct, has heightened congressional interest in debarment and suspension. As the
largest purchaser of goods and services in the world, the federal government spent more than
$517.9 billion on government contracts in FY2008 alone.76 Some of this spending was with
contractors who reportedly received contract awards despite having previously engaged in serious
misconduct, such as failing to pay taxes, bribing foreign officials, falsifying records submitted to
the government, and performing contractual work so poorly that fatalities resulted.77 Given this
context, the 111th Congress has enacted one bill on debarment and suspension (P.L. 111-8, § 507)
and is considering additional legislation (H.R. 595, H.R. 1334, H.R. 1668, H.R. 1983, H.R. 2349,
H.R. 2568, H.R. 2708, H.R. 2825, S. 265, H.Amdt. 268 to H.R. 2647).
(...continued)
given to designating one agency as the lead agency for making the decision. Agencies are encouraged to establish
methods or procedures for coordinating their actions.”). The Federal Acquisition Regulation councils issued the final
rule implementing this section on July 1, 2009. See Dep’t of Def., Gen. Servs. Admin., & Nat’l Aeronautics & Space
Admin., FAR Case 2008-028: Role of Interagency Committee on Debarment and Suspension, 74 Fed. Reg. 31,564
(July 1, 2009).
72 P.L. 110-417, at § 872(b)(1).
73 Id. at § 872(c).
74 Id. at § 872(f).
75 Id. at § 872(e)(1).
76 USASpending.gov, Contracts and Other Spending in Billions of Dollars (2009), available at
http://www.usaspending.gov/index.php.
77 See, e.g., Project on Government Oversight, Federal Contractor Misconduct: Failures of the Suspension and
Debarment System (2002), available at http://www.pogo.org/pogo-files/reports/contract-oversight/federal-contractor-
misconduct/co-fcm-20020510.html (“[S]ince 1990, 43 of the government’s top contractors paid approximately $3.4
billion in fines/penalties, restitution, and settlements. Furthermore, four of the top 10 government contractors have at
least two criminal convictions. And yet, only one of the top 43 contractors has been suspended or debarred from doing
business with the government, and then, for only five days.”); Kathleen Day, Medicare Contractors Owe Taxes, GAO
Says, The Washington Post, Mar. 20, 2007, at D1 (failure to pay taxes); Contract Fraud Loophole Exempts Overseas
Work, Grand Rapids Press, Mar. 2, 2008, at A9 (bribery of foreign officials); Ron Nixon & Scott Shane, Panel to
Discuss Concerns on Contractors, New York Times, July 18, 2007, at A15 (falsified records); Terry Kivlan, Shoddy
Standards Blamed for Troop Electrocutions in Iraq, National Journal’s Congress Daily, PM Edition, July 11, 2008
(poor quality work causing fatalities).
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Amendments Enacted in the 111th Congress
Section 507 of the Omnibus Appropriations Act of 2009 requires that contractors found to have
intentionally affixed a “Made in America” inscription or similar designation on ineligible
products be debarred, under the FAR’s procedures, from contracts funded under the act.78
Congress included similar provisions in prior legislation,79 and such provisions arguably represent
a hybrid of the statutory and administrative debarment regimes. Section 507 addresses a grounds
for debarment that is included in the FAR,80 but it removes the discretion that agency officials
would have under the FAR in determining whether to debar the contractor for the conduct in
question.81
Amendments Proposed in the 111th Congress
Members of the 111th Congress have also proposed several other amendments to debarment and
suspension law. Some amendments would create new statutory debarments for contractors who
commit fraud;82 have “seriously delinquent tax debt”;83 have engaged in a pattern or practice of
paying workers “poverty-level” wages;84 or cause serious injury or death to civilian or military
personnel through gross negligence or reckless disregard of their safety.85 Other proposed
legislation would (1) amend the FAR to create additional grounds for administrative debarment
(e.g., evasion of service of process or refusal to appear in suits brought against the contractor by
the U.S. government or a U.S. citizen or national in connection with the performance of a federal
contract);86 (2) specify that certain conduct indicates a lack of business integrity subjecting the
contractor to possible debarment under the FAR;87 or (3) require debarment, under the FAR’s
78 P.L. 111-8, § 507, 123 Stat. 595 (Mar. 11, 2009). A similar provision is pending as part of the Indian Health Care
Improvement Act Amendments. See H.R. 2708, § 315.
79 See, e.g., Science, State, Justice, Commerce, and Related Agencies Appropriations Act, P.L. 109- 108, Title VI, §
607, 119 Stat. 2335 (Nov. 22, 2005). Some statutes give agency officials more discretion in determining whether to
debar contractors for intentional misuse of “Made in America” designations. See, e.g., P.L. 109-148, § 8041(b) (“If the
Secretary of Defense determines that a person has been convicted of intentionally affixing a label bearing a ‘Made in
America’ inscription to any product sold in or shipped to the United States that is not made in America, the Secretary
shall determine, in accordance with section 2410f of title 10, United States Code, whether the person should be
debarred from contracting with the Department of Defense.”) (emphasis added).
80 See 48 C.F.R. § 9.406-2(a)(4) (allowing agencies to debar contractors for intentional misuse of the “Made in
America” designation).
81 See P.L. 111-8, § 507 (requiring debarment from funds made available under the act for intentional misuse of the
“Made in America” designation).
82 Safety in Defense Contracting Act, H.R. 2825, § 2.
83 Contracting and Tax Accountability Act, S. 265, § 3 (requiring that contractors who have “seriously delinquent tax
debt” be proposed for debarment).
84 An Act to Provide for Livable Wages for Federal Government Workers and Workers Hired Under Federal Contracts,
H.R. 1334, § 3 (authorizing the Secretary of Labor to debar for up to five years contractors found to have engaged in a
pattern or practice of paying “poverty-level” wages).
85 Safety in Defense Contracting Act, H.R. 2825, § 2; National Defense Authorization Act for Fiscal Year 2010, H.R.
2647, § 824(b).
86 “Rocky” Baragona Justice for American Heroes Harmed by Contractors Act, H.R. 2349, § 5. The debarment would
be only from contracts for the same or similar goods or services that the contractor was providing when it was judged
to have harmed someone.
87 A Bill to Enact Certain Laws Relating to Small Business as Title 53 U.S.C., H.R. 1983, § 10504 (misrepresentation
of a firm’s status as a small business, Historically Underutilized Business Zone (HUBZone) small business; woman-
(continued...)
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procedures, for certain conduct (e.g., intentionally affixing a “Made in America” label on
ineligible products, fraudulently representing that a firm is a small business, knowingly
employing aliens without proper employment authorizations).88 Yet other amendments would
allow any Member of Congress to access the database of contractor information created under the
Clean Contracting Act,89 or require agencies to report annually to Congress on debarments under
the act, apparently in the hope that problematic agency actions could be more readily detected and
corrected.90
Author Contact Information
Kate M. Manuel
Legislative Attorney
kmanuel@crs.loc.gov, 7-4477
(...continued)
owned-and-controlled small business; or small business owned and controlled by socially and economically
disadvantaged individuals); id. at § 10505 (falsely certifying compliance with the requirements of another section of the
act).
88 Indian Health Care Improvement Act Amendments, H.R. 2708, § 315 (requiring that contractors found to have
intentionally affixed a “Made in America” designation on illegible products be debarred from procurements funded
under the act); Fairness and Transparency in Contracting Act, H.R. 2568, § 9 (requiring debarment of contractors found
to have fraudulently misrepresented their status as small businesses or otherwise violated the act); Border Control and
Contractor Accountability Act of 2009, H.R. 1668, § 2 (requiring contractors found to have directly employed, or to
have known of a subcontractor’s employment of, an alien whose immigration status does not authorize employment).
89 H.Amdt. 268 to H.R. 2647, National Defense Authorization Act for Fiscal Year 2010. The sponsor of this
amendment, Representative Janice Schakowsky, reportedly said that “Members of Congress making important
decisions about ... contracting need all the facts. The [database] is a tremendous resource that until now has been off-
limits to policy makers.” See Geoffrey Emeigh, House Passes FY2010 DOD Authorization Measure; Administration
Sends Veto Warning, Fed. Contacts Daily, June 26, 2009.
90 Border Control and Contractor Accountability Act of 2009, H.R. 1668, § 2. Cf. United States v. New York & Puerto
Rico Steamship Co., 239 U.S. 88, 93 (1915) (noting that the government needs the “protection of publicity”).
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