LAW360 is reporting here (subscription required) that the VA was recently sued for failing to consider mitigation, remediation and separation of affiliation arising in a suspension matter. The suit also challenges the SDO’s impartiality as a member of the acquisition chain with an IG member also on the debarment committee.

Some quick analysis:

1) The VA has statutory debarment authority with a legislative/regulatory history that causes it to want to “be tough” in these cases and, presumably, not consider mitigation.

2) However, the VA Acquisition Regulation Supplement doesn’t show sufficient rules for accomplishing #1, so they piggyback on the FAR system which encourages (suspension) or requires (debarment) consideration of mitigation and remediation. And it doesn’t work well.

For example, in a prior unrelated case, my colleagues at Shulman Rogers and I tried to reopen a case under FRCP 60(b) to argue that the VA failed to make imputation findings on the face of its exclusion documents, therefore separating the alleged “bad actor” from the company destroyed affiliation and necessitated the end of the incredibly lengthy proposed debarment under the FAR. We inherited the case late and couldn’t get past 60(b) (which is almost never granted). But we felt it was important to try. I hope this aspect of the current case gets a fair hearing. It seems to be an area of exposure for the agency.

3) The impartiality arguments are interesting. This lack of impartiality made a big difference in the recent IRD case, but the 2013 NDAA expressly applied to the agency involved in that case. I will be interested to see if the court deals with this argument and how it’s interpreted. We have express legislative language saying impartiality is required in a subset of agencies. That will be hard for the court to ignore, if it decides to take up the argument.

When agencies fail to administer their suspensions/debarments fairly, companies backed against the wall are increasingly likely to file suit as there are very few viable alternatives. Recent favorable decisions for contractors and grantees, coupled with increasing activity by federal agencies with perhaps less institutional knowledge of the process make these suits more attractive to file. It will be interesting to see what changes to the overall suspension/debarment system result.