Consolidated Appropriations Act of 2012

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In January and February, my colleague, Bob Wagman, wrote about complications related to provisions on suspension and debarment in the Consolidated Appropriations Act of 2012 (Pub. L. 112-74) (1/18/12) (2/23/12). The provisions in the 2012 Appropriations Act were all premised on the conviction of a corporation (or in certain provisions, its officer or agent) of a felony criminal violation. This month we look at a proposed bill that would mandate suspension (not debarment) for mere allegations of fraud, among other things.

Around February 29, 2012, Senators Claire McCaskill (Mo.) and Jim Webb (Va.) introduced legislation called the Comprehensive Contingency Contracting Reform Act of 2012. S.2139, 112th Cong. (2nd Sess. 2012) (Act). Intended to “overhaul the federal government’s planning, management, and oversight of contracting during overseas contingency operations” (Sen. Webb Press Release, Mar. 1, 2012), the bill includes a section on “Additional bases for suspension of contractors from contracting with the Federal Government.” Act sec. 113.

Section 113 of the Act provides for the automatic suspension of a contractor in three situations:

          (1) If a contractor is charged with a criminal federal offense related to the performance of a
          contract related to “overseas contingency operations” for the Department of Defense, 
          Department of State, or U.S. Agency for International Development.

          (2) If the head of one of the above named agencies makes a final determination that the
          contractor failed to pay or refund amounts due or owed to the federal government in
          connection with an “overseas contingency operation.”

          (3) If the federal government alleges fraud against a contractor in a civil or criminal 
          proceeding related to a federal contract, whether or not connected to “overseas contingency
          operations,” and whether or not the alleged acts were committed by the contractor, its 
          employee, affiliate, or subsidiary, or any business owned or controlled by the contractor.Continue Reading Attempting to Broaden the Mandatory Suspension & Debarment Net: McCaskill – Webb Senate Bill 2139

Guaranteed to create uncertainty, the Consolidated Appropriations Act of 2012 (Pub. L. 112-74), which President Obama signed into law on December 23, 2011 (the “Act”), included several little-noticed provisions generally excluding the use of federal funds for any corporation convicted of a felony within the past 24 months. All of these provisions establish a unique procedure whereby the statutory exclusion is only triggered when the awarding agency is “aware of the conviction” and the agency’s consideration of suspension and debarment provides the relief from the statutory exclusion for the contractor. 

And it gets even more curious. The Act is a consolidation of nine different appropriations bills (delineated as Divisions under the Act) appropriating funds for FY 2012. As set forth below, Congress has inexplicably included the exclusion provisions in only five of the nine divisions comprising the Act, and equally inexplicably used different standards in the exclusion provisions. The covered divisions of the Act and the specific language include:

DIVISION A—DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2012

SEC. 8125. None of the funds made available by this Act may be used to enter into a contract, memorandum of understanding, or cooperative agreement with, make a grant to, or provide a loan or loan guarantee to, any corporation that was convicted of a felony criminal violation under any Federal law within the preceding 24 months, where the awarding agency is aware of the conviction, unless the agency has considered suspension or debarment of the corporation and made a determination that this further action is not necessary to protect the interests of the Government.

DIVISION B—ENERGY AND WATER DEVELOPMENT APPROPRIATIONS ACT, 2012

SEC. 504. None of the funds made available by this Act may be used to enter into a contract, memorandum of understanding, or cooperative agreement with, make a grant to, or provide a loan or loan guarantee to any corporation that was convicted (or had an officer or agent of such corporation acting on behalf of the corporation convicted) of a felony criminal violation under any Federal law within the preceding 24 months, where the awarding agency is aware of the conviction, unless the agency has considered suspension or debarment of the corporation, or such officer or agent, and made a determination that this further action is not necessary to protect the interests of the Government.

(emphasis added). Continue Reading Suspension and Debarment – What have they done now?