Suspension & Debarment Defense

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A notice of proposed debarment or suspension can shut a company out of federal work almost overnight. Once a contractor is listed in SAM.gov as excluded, agencies generally cannot award it new contracts, and primes may be barred from subcontracting with it. Because the consequences are so serious and the response deadlines are short, contractors should involve experienced counsel as soon as a notice arrives, or earlier if an investigation suggests one may be coming.

Suspension and debarment are administrative tools that agencies use to protect the government from doing business with contractors that are not "presently responsible." They are not supposed to be punishment. A suspension is a temporary exclusion that can be imposed while an investigation or legal proceeding is pending, based on adequate evidence of misconduct. A debarment is a longer exclusion, usually up to three years, based on a conviction, a civil judgment or a preponderance of the evidence of a serious lapse such as fraud, false statements, antitrust violations or a history of poor performance.

A contractor generally has 30 days from receipt of the notice to submit information and argument in opposition. That submission is often the most important document in the entire matter. An effective response typically:

• Addresses the specific allegations and corrects factual errors in the agency's record.
• Explains what went wrong, who was responsible and what the company has done about it.
• Demonstrates present responsibility through new controls, training, personnel changes and an effective ethics and compliance program.
• Walks the suspending and debarring official through the mitigating factors listed in FAR 9.406-1(a).
• Requests a meeting with the debarring official and, where facts are genuinely in dispute, fact-finding.

Many matters are resolved through an administrative agreement instead of a debarment. Under these agreements, the contractor commits to specific compliance measures, which may include an independent monitor and regular reporting, and the agency agrees not to exclude it. Negotiating terms that are workable for the business, and then meeting them, is a critical part of protecting the company's ability to keep competing.

Exclusion risk often arises alongside other issues. We regularly counsel clients on Inspector General subpoenas and investigations, mandatory disclosure obligations under FAR 52.203-13, False Claims Act exposure, terminations for default and negative past performance evaluations that can lead to a referral. We also help companies that have been named in a referral but have not yet received a notice, when early engagement with the agency can head off formal action.

Suspending and debarring officials have wide discretion, and the outcome often turns on how credibly a contractor tells its story and shows that the problem has been fixed. Baker, Cronogue, Tolle & Werfel, LLP has represented government contractors since 1984, and our attorneys understand both the regulations and how agency officials evaluate present responsibility. If your company has received a notice of proposed debarment, a suspension or a show cause letter, contact us right away so we can protect your response deadlines.