Protecting the ability of companies and individuals to do business with the federal government.
Suspension and debarment can be among the most consequential actions the government takes against a contractor. An exclusion is recorded publicly in the System for Award Management (SAM.gov), generally applies across the entire Executive Branch, and can cut off a company’s federal business—and an individual’s career in government contracting—almost overnight.
Compass Rose Legal Group represents government contractors, grantees, and individuals facing suspension, proposed debarment, and related agency inquiries. Because these actions turn on whether a contractor is presently responsible, an early, well-supported response can often avoid or shorten an exclusion.
Types of Actions
- Suspension. An immediate, temporary exclusion based on adequate evidence—often an indictment or an ongoing investigation—pending the completion of investigation or legal proceedings. A suspension is generally limited to 12 months unless legal proceedings have begun, with a limited extension available at the request of the Department of Justice.
- Proposed debarment. A notice that the agency is considering debarment. It takes effect immediately: a contractor proposed for debarment is excluded while the matter is pending.
- Debarment. An exclusion for a fixed period, generally not more than three years, based on a preponderance of the evidence—often a conviction or civil judgment.
- Pre-notice inquiries. Agencies may first issue a show cause letter or a request for information. These are not public, but they are a critical early opportunity to persuade the agency that no exclusion is warranted.
Procurement exclusions are governed by Subpart 9.4 of the Federal Acquisition Regulation (FAR); exclusions from grants, loans, cooperative agreements, and other nonprocurement transactions are governed by the government-wide rules at 2 C.F.R. Part 180 and agency regulations. An exclusion under either system generally has reciprocal effect under the other. As part of the ongoing government-wide overhaul of the FAR, agencies have adopted revised suspension and debarment provisions through class deviations, and a formal rulemaking is pending.
Who Can Be Excluded, and Why
Exclusions can reach companies, their affiliates, and individual officers, employees, and owners whose conduct is imputed to—or from—the company. Common causes include:
- Fraud or criminal offenses in connection with obtaining or performing a public contract;
- Bribery, false statements, embezzlement, theft, falsification of records, tax evasion, and similar offenses;
- Antitrust violations relating to the submission of offers;
- Willful or repeated failure to perform government contracts;
- Delinquent federal taxes above a regulatory threshold;
- Knowing failure by a principal to timely disclose credible evidence of certain violations of law or significant overpayments; and
- Any other cause so serious or compelling that it affects present responsibility.
Present Responsibility: The Central Question
Suspension and debarment are meant to protect the government, not to punish. Even where a cause for exclusion exists, the Suspension and Debarment Official must consider whether the contractor is presently responsible. Factors include whether the contractor had effective compliance and ethics standards in place, brought the issue to the government’s attention, fully investigated and cooperated, took disciplinary action against those responsible, paid or agreed to pay restitution, implemented remedial measures, and instituted new or revised controls. Demonstrating these steps convincingly is often the key to resolving a case.
The Process
After receiving a notice of suspension or proposed debarment, a contractor generally has 30 days to submit information and argument in opposition and may request a meeting with the Suspension and Debarment Official. Where there is a genuine dispute over material facts, additional fact-finding may be available. The official then decides whether to continue, terminate, or narrow the action. In appropriate cases, the matter may be resolved through an administrative agreement, under which the contractor commits to specific compliance measures—sometimes including an independent monitor—in exchange for avoiding or ending an exclusion.
How We Help
- Assessing suspension and debarment exposure as soon as an investigation, indictment, or contract dispute arises;
- Engaging proactively with Suspension and Debarment Officials before a formal action is taken;
- Responding to show cause letters and requests for information;
- Preparing written submissions and presentations demonstrating present responsibility;
- Negotiating administrative agreements and helping clients meet their obligations under them;
- Conducting independent internal investigations and recommending remedial measures and compliance improvements; and
- Coordinating with parallel criminal, civil, and Inspector General proceedings. See our page on Representation in Criminal & Administrative Investigations.
Experience That Matters
Inspectors General are among the most frequent sources of suspension and debarment referrals. Our attorneys have led and conducted federal Inspector General investigations—I. Charles McCullough III served as Inspector General of the Intelligence Community and, earlier, as Assistant Inspector General for Investigations at the National Security Agency, and Andrew P. Bakaj served in the Offices of Inspector General at the Department of Defense and the Central Intelligence Agency. That experience helps us understand how referrals are built and how to address an agency’s concerns about present responsibility.
If your company or you personally may be facing suspension or debarment, contact Compass Rose Legal Group as early as possible. The earliest stages often present the best opportunity to avoid an exclusion.
This information is general in nature and is not legal advice. Suspension and debarment rules and procedures vary by agency and are subject to ongoing regulatory changes.
