Suspensions and Debarments of Misbehaving Contractors Drop

Annual report to Congress on contractor discipline stresses administrative alternatives.

Formal disciplinary actions against federal contractors in the form of suspensions, debarments and proposed debarments fell 3.7 percent in fiscal 2015 over the previous year, according to the annual report of the Interagency Suspension and Debarment Committee.

The survey of agencies found 918 suspensions, 2,196 proposed debarments and 1,873 debarments in fiscal 2015, according to a letter from Chairman David Sims to the chairman and ranking member of the House Oversight and Government Reform Committee.

The interagency body created to enforce a 1986 executive order monitors how agencies flag contracting companies, organizations and individuals that engaged in improper conduct and enters them in the General Services Administration’s System for Award Management database.

The body continually stresses that the rise and fall of punitive measures is based on current need and circumstances rather than a change in policy. But Sims highlighted “a plateauing of the number of suspension and debarment actions which may, at least in part, be indicative of programs becoming established throughout the Executive Branch and transitioning from start up into effective programs.”

The letter also noted a rise—by 30 percent—in use of “proactive engagement tools” such as pre-notice administrative agreements and show-cause letters that give companies a chance to remedy a situation and head off full suspension and debarment.

Contracting community observers viewed this in different ways.

Jessica Tillipman, assistant dean at The George Washington University Law School and blogger for an anti-corruption portal, welcomed the rising use of pre-notice engagement letters, saying they provide flexibility while giving “suspension and debarment officials the opportunity to engage with contractors in a proactive manner and create unique solutions to prevent misconduct going forward. They are also a highly effective driver of corporate cultural change,” she wrote. “This system recognizes that putting imperfect companies out of business is not a productive method of effectuating change.”

Neil Gordon, who investigates corporate misconduct for the nonprofit Project on Government Oversight, had a more wary reaction. Noting that the rise in suspensions and debarments of recent years had eased, he wrote, “We are a little worried that, for the fourth year in a row, the Nuclear Regulatory Commission, Social Security Administration, and Department of Labor all reported no suspensions, proposed debarments, debarments, or administrative agreements.”

But POGO is also heartened by a “flurry of new rules and orders [that] have imposed more restraints and responsibilities on contractors and other federal fund recipients,” he said, among them President Obama’s Fair and Safe Workplaces Executive Order, which many contractors are seeking to repeal.