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Suspension and debarment practice in 2017 is very different than it was just five or 10 years ago, and it continues to evolve.  Historically active programs, such as the Department of the Air Force, show few actions initiated in the last three months, while the Environmental Protection Agency has been heavily involved in excluding contractors and awardees.  Awareness of the current activity level and preferences of relevant agency suspension and debarment offices is one key to successfully managing your relationship with key federal agencies.  But successfully navigating the current suspension/debarment landscape is often more complicated than a single agency analysis.

Lead Agency

The “lead” federal agency is the decision-maker for purposes of effecting suspension or debarment.  Historically, the lead agency had been determined by the largest government customer for a specific contractor.  Easy, right?  Aerospace manufacturers had an Air Force lead, shipbuilders had Navy, federal supply schedule contractors had the General Services Administration.  What about large conglomerates that provide land assault vehicles, plus supplies for ships, plus navigation instruments for aircraft, plus cybersecurity software, plus manpower to service it all?  What federal agency is lead?  The answer is not so clear.  Contractors may have more business one year with the Army, the next year with the Navy, and the next with GSA.  The traditional concept of lead agency that follows contracting dollars on an annual basis does not necessarily permit contractors to have a consistent relationship with a federal agency, or an understanding of the depth of commitment to compliance, or the strength of an ethics program in the face of the usual (and perhaps inevitable) issues that arise in the government contracting business.

Nowhere is this challenge more apparent – and more fraught with problems – as when contractors seek to bring certain conduct to the attention of a suspension and debarment official.  Contractors frequently contact the agency they believe is “lead” for their company, or an agency with which the contractor has invested substantial time and resources into developing a relationship and a knowledgebase about the business, only to be contacted later by another agency claiming to be “lead.”  Then the education process starts anew, and throws substantial uncertainty and unease into an already extremely serious interaction.

Given the consolidation in the government contracting industry, as well as trends in government buying that encourage this consolidation, the historical “lead agency” concept is ripe for revision.  Indeed, the government already is moving toward informal changes in the lead agency processes, and contractors should be aware of how these changes impact the dynamics of proactive as well as reactive communications with suspending and debarring officials.

* Multiple Agency Involvement: One such change underway is a move to multiple agency consideration of proactive disclosures as well as traditional suspension/debarment matters.  Multiple agencies may be overtly involved and apparent to the contractor, or consultation and coordination may be less visible.  A uniform communications strategy is important to contractors navigating this dynamic.  Alignment between legal and business teams, across government customer-bases is vital.

* Dynamics in Multiple-Agency Reviews:  The dynamic in multi-agency suspension/debarment interactions can be somewhat counterintuitive.  A contractor might expect the government to prepare, compare concerns, and present a unified government-side position.  However, that planning does not always occur, and contractors can face a hodgepodge of questions and concerns that do not necessarily follow a path that makes sense.  Instead, contractors should realize that each agency will need to satisfy itself that its particular concerns are addressed – and there may be (and often is) tension and misalignment between the priorities of different federal agencies.  While this process is set up with the best of intentions on the government side, and desiring to have all interested agencies’ views considered, in our experience this process increases costs and delays, as well as the overall client anxiety level.  Unless and until federal agencies consolidate suspension/debarment activities into a centralized body, awareness of these dynamics, and the ability to preview issues and drive the process to a timely conclusion is an important skill in today’s suspension/debarment arena.

Proactive Engagement

The desire of suspension and debarment officials to hear about problems proactively varies greatly among agencies.  Yet, the mitigating factors relevant for debarment include FAR 9.406-1(a)(2), “[w]hether the contractor brought the activity cited as a cause for debarment to the attention of the appropriate Government agency in a timely manner.”  Additionally, because show cause letters (semi-formal engagement with suspending and debarring officials before an exclusion occurs) are not required in the FAR, if contractors do not bring problems to the SDO’s attention proactively, they may lose the chance to their “side of the story” before an exclusion occurs.  Knowing with which agency a contractor is dealing—whether they appreciate advance engagement, or whether a letter would only preserve the ability to argue mitigation after an exclusion and in a potential eventual appeal—makes a difference.

One of the more challenging developments in suspension/debarment practice is the government’s inability to articulate a standard for which agency a contractor should deal when bringing a matter to the attention of the cognizant suspending and debarring official.  This has been a persistent problem in suspension/debarment practice, and one that the government may end up trying to resolve by inviting more agencies to the table to consider proactive disclosures.  But that dynamic proves especially challenging because of the government’s coordination challenges, and lack of a regulatory framework that provides meaningful credit in terms of reduced potential sanctions for proactive disclosures.  Clients may need to be prepared to feel like their efforts to lay bare their challenges before their customer are not appreciated, and met with an opaque (and occasionally hostile) process.

These are just some of the developments shaping modern suspension and debarment practice.  With more agencies than ever before excluding companies and individuals from the federal marketplace, awareness of these trends is increasingly important to avoid or defend a suspension/debarment action.