Suspensions, debarments jump 73 percent in federal contracting in 2011

September 30, 2012

Federal agencies are taking a harder line on contractors who cheat or otherwise fail to measure up to government procurement standards.

Some 3,326 federal contractors were suspended or debarred last year, a 73 percent increase from 1,918 contractors sanctioned in 2009.

The increase comes as federal procurement officers are under pressure to monitor contracts more rigorously. A Government Accountability Office report released in August 2011 said six out of 10 executive-branch agencies studied weren’t doing enough to weed out contractors that fail to play by the rules and urged the White House Office of Management and Budget to step up oversight.

“The ability to debar or ban a certain company from doing business with the U.S. government is an important tool we have to protect taxpayer dollars from waste, fraud and abuse,’’ Joe Jordan, administrator of the White House Office of Federal Procurement Policy, said in a Sept. 18 blog post introducing a report on contractor oversight by the Interagency Suspension and Debarment Committee.

While the Obama administration takes credit for greater vigilance, the rise in bans may also reflect the government’s increased reliance on outside vendors.

“The number of dollars under contract has doubled over the past 10 years,’’ said Michael Fischetti, executive director of the Ashburn-based National Contract Management Association. “It just stands to reason that suspensions and debarments will go up proportionally, if nothing else.’’

“Maybe it’s an overdue correction, maybe we were more tolerant in the past, or maybe there’s more politics in the process,’’ Fischetti said.

Then-OMB Administrator Jacob Lew in November ordered agencies to appoint senior officials to ride herd on suspension and debarment processes and take other steps to strengthen sanctions programs.

“For too long, too many Federal agencies have failed to adequately use the suspension and debarment tools that are placed at their disposal or have failed even to maintain the most basic program capabilities required to suspend or debar non-responsible parties,’’ Lew wrote.

Agencies with the most suspensions and debarments in 2011 include the Defense Department, with 859, the Department of Housing and Urban Development, 554, the Department of Homeland Security, 235, and the Environmental Protection Agency, 231, according to the suspension and debarment committee report.

Suspension, Debarment

A suspension temporarily excludes a contractor pending completion of a legal proceeding or investigation. A debarment makes a contractor ineligible for government awards for a fixed time, usually three years or less.

Contractors covered by debarment and suspension include for-profit companies, nonprofits and individuals.

Most of those who are kicked out of government contracting are individuals, according to Stan Soloway, president and chief executive of the Professional Services Council, an Arlington-based contractors trade association.

The purpose of suspension and debarment is to manage the government’s business risk, not punish contractors, Soloway said.

“The Obama administration has had a very consistent, and I think very balanced, approach to this,’’ Soloway said. “They’ve also been very careful and very forceful in opposing proposals in which suspension and debarment are used inappropriately or where there’s not due process.’’

— Bloomberg Government

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