Contractor suspensions and debarments on the rise, says White House

Suspensions and debarments of companies that violate federal contracting rules have increased across the government over the past three years, rising from just over 1,900 in fiscal 2009 to more than 3,000 in 2011, according to a new report.

In a blog post scheduled for release Tuesday, White House Administrator of Federal Procurement Policy Joe Jordan wrote,“while the vast majority of government contractors compete fairly to deliver the best value to the American people, it is critical that the government take a hard line against those who would defraud taxpayers. This report shows the Obama administration has made significant progress in cracking down on bad actors. Just as significant as the progress are the management actions that underlie it, and indicate an increased agency commitment to protecting taxpayer resources.”

The report, from a coordinating body called the Interagency Suspension and Debarment Committee, follows up on a November 2011 memorandum from then-Office of Management and Budget director Jack Lew directing 24 departments and agencies to step up efforts to combat waste, fraud and abuse, in part by appointing a senior official to be accountable for progress.

All 24 agencies -- which account for 98 percent of contracting -- now have such an officer in place, the report said. “These same agencies reported taking decisive steps to address resources, policies, or both, to ensure appropriate consideration of suspension and debarment when warranted,” Jordan wrote.

Some departments, such as Health and Human Services and Commerce, have formally established or revived suspension and debarment programs. Other agency actions included increasing personnel resources for existing programs, creating new internal monitoring mechanisms, simplifying referrals for potential suspension or debarment and implementing automatic referrals to the agency’s suspending and debarring official under certain circumstances, the report said.

The Interior Department, for example, was able to suspend and then debar a contractor within a week of learning from one of its contracting officers that the vendor -- who was about to receive a federal contract for demolition and removal of water monitoring stations -- had been indicted in Indiana for attempting to bribe a state official to win contracts.

The U.S. Agency for International Development debarred 16 people in 2012 for participating in a scheme to submit fraudulent receipts for the administration of federal foreign assistance to support public health, food aid and disaster assistance in Malawi.

The administration’s anti-waste campaign also involves increasing competition for contract awards, Jordan said. “There is no greater every-day remedy than competition for curbing fraud, improving contractor performance and promoting accountability for results. With concerted agency efforts, we have seen the amount of contract dollars competed over the last three years rise to 64 percent, the highest average level of competition in federal contracting we have seen over any three-year period in the last quarter century and 8 percent higher than the average level of competition reported during the last administration.”

The contracting community has mixed feelings on suspension and debarment. Last November’s memo was praised as “good cross-agency coordination” by Alan Chvotkin, executive vice president and counsel of the Professional Services Council. But he opposed plans by some lawmakers to step up pressure on agencies to use automatic suspension procedures against contractors suspected of bad behavior.

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