The Congressional War on Contractors

Article excerpt

What about mandatory suspension for criminal activity[?] . . . [SJhould we not, just as a matter of character of our Nation, say if you are indicted-like Halliburton was for bribery in Africa-for criminal activity in connection with your government contracting activities, that you are done with us?1

This comment by Senator Claire McCaskill, which is typical of the congressional attitude towards government contractors, dem- onstrates a fundamental misunderstanding of the suspension and debarment2 regime, located in Part 9.4 of the Federal Acquisition Regulations (FAR). While inflammatory anti-contractor rhetoric is not a new congressional phenomenon, it is no longer limited to stump speeches, press releases, or politicized hearings. Recent congressional initiatives demonstrate many legislators' desire to transform debarment into a tool of punishment by banishing con- tractors from the procurement system without regard to contractor due process rights and "with little consideration of whether such action is needed or fair."3

As FAR 9.4 clearly states, "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."4 Contrary to statements often made by certain members of Congress, the FAR prohibits Suspension & Debarment Officiais (SDOs) from using debarment for the purpose of punish- ing past misconduct. Yet, despite the plain language of the FAR, the punishment/protection distinction is often misunderstood or simply ignored.5 Some critics of the U.S. system, and quite a few members of Congress, see debarment primarily as a punitive mea- sure without regard to a contractor's present responsibility.6 Indeed, immediately following BP's recent suspension from the procurement system, Representative Ed Markey issued a press release that stated: "BP Suspension of Government Contracts Proper Punishment."7 This stunning mischaracterization of the FAR 9.4 debarment regime not only contradicts the plain language of the regulation, but contributes to the propagation of misinforma- tion to a public that is largely under-informed about this process.

I. FAR 9.4: Present Responsibility-not Punishment

The FAR 9.4 regime is designed to ensure that the federal gov- ernment does business only with "responsible" partners.8 Debar- ment reinforces this policy by precluding the award of new contracts to companies whose misconduct indicates they are no longer responsible enough to do business with the U.S. govern- ment.9 Debarment is government-wide and precludes contractors from obtaining any new government contracts or subcontracts.10 It is a discretionary, administrative remedy that enables agencies to exclude contractors from the federal procurement system only to protect the government from the imminent harm that may result from doing business with a non-responsible contractor.11 "Debar- ment may last for up to three years, and may be as broad or as limited as the government deems necessary to protect its interests, ranging from the debarment of the entire company to the debar- ment of a division, facility, or even a single individual."12 While it is always reasonable to expect ethical conduct from companies that receive taxpayer dollars, the debarment regime must be used appropriately-to protect the government, and not to punish con- tractors that do not pose a threat to government interests.

What critics of the FAR debarment system often fail to under- stand is that debarment is a business decision13-it is not designed to punish past misconduct or put companies out of business. Fines and incarceration are prosecutors' tools designed solely for the purpose of punishing past misconduct. In contrast, the FAR 9.4 regime protects the government's diverse interests by requiring SDOs to consider a multitude of factors that help the SDO deter- mine whether a contractor is a "presently responsible" business partner. …