Contractors, regardless of size and no matter how “indispensable” they think they are to their Government customers, should be prepared for a possible up tick in suspension and debarment (S/D) activity in the next year. Congress has taken an increased interest in S/D, requiring in the FY 2009 DoD Authorization Act that the Interagency Committee on Debarment and Suspension submit an annual report to Congress on each agency’s “activities and accomplishments in the Government wide debarment system.” And the House Committee on Oversight and Government Reform recently took three agencies to task for the slow pace and low number of S/D actions (the Department of Homeland Security has had only ten debarment cases in four years).
In addition, an attorney from the Army Procurement Fraud Branch stated publicly at a recent ABA conference that no company is “too big to fail,” echoing the sentiment of the Commission on Wartime Contracting during a hearing a few weeks ago. The Commission rejected a suggestion by Special Inspector General for Iraq Reconstruction that the Government’s dependence on a small number of large prime contractors in Iraq and Afghanistan is a legitimate consideration that might counsel against debarment in some cases for practical reasons. As Commissioner Dov Zackheim put it:
“Well, let me just point out that too-big-to-fail practically wrecked this economy of ours, and I think if we worry about too big to fail, particularly as there are more than one contractor always bidding, we worry about too big to fail, we’re going to fail anyway.”
The Commissioners made it abundantly clear that they wanted to see more suspensions and debarments all around, including for “willful bad performance.” And they want to see primes suspended or debarred for the malfeasance of their subs.