Federal Contractor Suspension vs. Debarment: What’s the Difference?
The Law Firm of J.W. Stafford | September 21, 2022
Suspension and debarment both present significant financial risks for federal contractors. While the federal government often lumps these two actions together (for example, in references to the “S&D process”), suspension and debarment are different—and understanding their differences is critical for making informed decisions when a contractor’s government business is in jeopardy.
Suspension vs. Debarment in the Federal Contract System
Suspension of Federal Contractors
A suspension is a time-limited ban on doing business with the federal government. Federal contractor suspensions can last up to 12 months. Suspended federal contractors are not only unable to perform under any pending contracts, but they are also prohibited from bidding on additional contracts or securing additional work. Additionally, suspended federal contractors are unable to secure subcontracts of $30,000 or more unless the government contractor awarding the subcontract provides “a compelling reason to do so[,] . . . first notifies the contracting officer and further complies with the provisions of FAR 9.405-2(b).”
Although the federal government can suspend contractors for a multitude of reasons, suspensions frequently go hand-in-hand with investigations into suspected fraud, waste and abuse (FWA). As a result, suspended federal contractors will be at risk for debarment in many cases.
Debarment of Federal Contractors
While suspensions last no more than 12 months, debarments can last as long as three years. Once a federal contractor has been debarred, it is ineligible to conduct business with the U.S. government throughout the period of debarment.
When a federal agency seeks a contractor’s debarment, it must first issue a notice of proposed debarment to the contractor. The contractor has an opportunity to respond, and, in order to avoid debarment, the contractor must convince the government that debarment is not warranted based on “a preponderance of the evidence.”
Suspension and Debarment Both Apply Across the Entire U.S. Government
With both suspensions and debarments, federal contractors are labeled as ineligible in the U.S. government’s System for Award Management (SAM). As the U.S. General Services Administration (GSA) explains, this means that the suspension or debarment “is effective throughout the Executive Branch of the Federal government and applies to procurement and non-procurement programs.”
Fighting Suspension or Debarment as a Federal Contractor
From the procedures involved to the burden of proof that applies, there are several key differences between federal contractor suspension and debarment proceedings. But, there are defense strategies available in both scenarios, and many federal contractors have succeeded in protecting their government business by playing a proactive role in the suspension or debarment process. The key is to make informed decisions—and to execute a focused defense strategy that takes into account all of the relevant facts and circumstances at hand.
Is Your Company At Risk for Suspension or Debarment? If So, We Can Help
If your company is facing suspension or debarment, we can help. Our attorneys have significant experience representing federal contractors in suspension and debarment proceedings. To discuss your company’s situation in confidence, call us at 410-514-6099 or tell us how we can reach you online today.