Suspension and debarment often misunderstood, contractors told

Though viewed by industry as a punishment, the government’s suspension and debarment procedure for errant contractors is designed to be an “instantaneous” way to protect taxpayers from irresponsible spending, a panel of procurement officials agreed on Thursday. They parted ways, however, on whether the current rules afford sufficient due process to affected companies.

Speaking at the first Acquisition Excellence conference staged jointly by the General Services Administration and the American Council for Technology and Industry Advisory Council, current and former procurement officials expressed concern that suspension and debarment has become “a hot topic” in Congress. Government Executive was one of four media partners for the conference.

It’s being used to go after “bad actors in all sorts of endeavors, from failure to pay taxes to fraud convictions,” said William Woods, director of acquisition and sourcing management at the Government Accountability Office, which in October 2011 published a study comparing frequency of suspensions and departments at 10 agencies. Most of the contractors tagged as suspended on GSA’s Excluded Parties List System are there for reasons unrelated to federal contracting such as drug trafficking or violations of export controls, he said.

Seven of the fiscal 2012 appropriations bills contained language requiring use of suspensions and debarments, added Rob Burton, a top White House procurement administrator during the George W. Bush administration and now a partner at Venable LLP. But the purpose of suspension and debarment is “not complicated,” said Dan Gordon, former administrator of procurement policy for the Obama White House who is now associate dean for government contracts law at The George Washington University Law School. “The purpose is to protect the taxpayers, not to replace or supplement the Justice Department’s administration of justice -- they take care of the bad guys,” he said. Gordon warned that many misread the GAO report to imply that the more an agency suspends and debars, the better, as if “what this country needs is to hang more contractors high from a tree.”

What the process requires is “a matter of checking, of being careful,” Gordon said. “The system works pretty well,” and doesn’t require new legislation or regulation. The interagency committee on suspension and debarment can help by sharing best practices among specialized staff at agencies, he added.

Burton disagreed, calling the current regulations “flawed in a fundamental way because they allow for no due process.” He described how his private sector clients can suddenly receive a letter informing them they can’t do business with the federal government and “they get no opportunity to present their own information or defend themselves.” He added the current rules “would not pass constitutional muster.”

Joseph Neurauter, GSA’s top suspension and debarment official, stressed that the tool is not intended as punishment for contractors, though he acknowledged it can jeopardize an individual’s job. “It’s about minimizing risk for the federal government,” which is why the suspension is “instantaneous,” he said. His job is to view the problem from the point of view of agency acquisitions teams, Neurauter added. But he does regularly send letters to individuals who are suspended and invite them to meet informally and “show cause” as to why they should regain eligibility for government contracts.

Asked about new legislation that would impose suspension and debarment consideration for war zone contractors involved in human trafficking, Woods said, “that’s a policy call for Congress.” Gordon said he is “always concerned when Congress sets up an automatic system of suspension and debarment because it undercuts the process by precluding discretion by officials looking at the full picture.”

At other sessions of the all-day conference that assembled several hundred federal employees and contractors at the Grand Hyatt in Washington, GSA chief Martha Johnson opened proceedings by stressing the value of sustainability as a key to reframing procurement in an age of limited budgets. A related session was titled, Sustainable Acquisition: Is It a Dream or Is It Real?

At lunch, Lesley Field, acting White House administrator for federal procurement policy, and colleagues presented achievement awards to federal contracting professionals in categories of buying smarter, effective vendor communication and strategic sourcing.

In a nod to the challenge of preparing the next generation of acquisition officers, Steve Ressler, founder of the social networking tool GovLoop, moderated a panel of young federal contract specialists from several agencies who are in the Rising Acquisition Professionals program. It was set up in 2010 by the Office of Federal Procurement Policy and the Federal Acquisition Institute.

Other sessions focused on how tight budgets are affecting ongoing relationships among agency contracting officers, program managers and industry. Speakers stressed the importance of engagement and dialogue early in the acquisition process, and many complained that too many agency staff members are fearful of tapping the expertise of contractors for fear of violating the Federal Acquisition Regulation and favoring one potential bidder over others, possibly provoking a bid protest.

“Government and industry too often talk past each other on early engagement,” said Mark Day, director of the Office of Strategic Programs at GSA’s Federal Acquisition Service. “Government asks the wrong questions, asking about prices before we know the cost drives, and then they write requirements that drive costs up.” Contractors, in turn, too often target the title not the role, Day added, and he recommended they talk to the official actually writing the requirements. “Early engagement is a mystery to the government side, and they’re scared of it,” Day said. “But it is an opportunity to find the sweet spot between what the government needs, what the contractor can provide and what the FAR allows.”