Federal Debarment Defense: Protecting Your Ability to Do Business with the Government

For federal contractors, facing debarment is an extremely serious matter. As the U.S. General Services Administration (GSA) explains, the debarment process “protects the federal government from fraud, waste and abuse by using a number of tools to avoid doing business with non-responsible contractors.” With the government’s current focus on fighting fraud, waste and abuse, facing debarment is a very real concern, and federal contractors that are facing debarment must fight to protect themselves by all means available. This starts with engaging an experienced Delaware federal discrimination lawyer to provide legal representation during the debarment process.

Here are some more key facts for federal contractors that are concerned about facing debarment:

A Notice of Proposed Debarment Has Immediate Consequences

In many cases, federal contractors will learn that they are facing scrutiny when they receive a notice of proposed debarment from the government. However, despite the fact that the government’s investigation is ongoing and the contractor has yet to be formally debarred, this notice of proposed debarment has immediate consequences.

Under the Federal Acquisition Regulations (FAR), the issuance of a notice of proposed debarment results in immediate exclusion from further contracting with the government. Federal contractors that have received a notice of proposed debarment are ineligible to submit bids for new contracts or serve as subcontractors under new contracts awarded to other contractors. As a result, an immediate response is essential, and contractors that are facing debarment must work closely with experienced legal counsel to try to restore their ability to do business with the government going forward.

Federal Contractors Can Face Debarment on Several Grounds

When facing debarment from federal contracting, understanding why is critical to building a sound and strategic defense. Federal contractors cannot afford to make assumptions about why they are facing debarment, as this can lead to both (i) failing to defend against the allegations at issue and (ii) exposing potential bidding or contracting violations that were not previously known to the government.

Federal contractors can face debarment for several reasons. Under Section 9.406-2 of the FAR, grounds for debarment include (but are not limited to):

• Criminal convictions or civil judgments for fraud during the federal procurement process or during the performance of a federal contract or subcontract
• Criminal convictions or civil judgments for anti-trust violations related to the submission of bids for federal contracts
• Criminal convictions or civil judgments for embezzlement, theft, forgery, bribery, falsification or destruction of records, false statements, and tax crimes
• Criminal convictions or civil judgments for other offenses “indicating a lack of business integrity or business honesty that seriously and directly affects the [contractor’s] present responsibility”
• Violation of the terms of a federal contract or subcontract that is “so serious as to justify debarment” (i.e., willful non-compliance with contract terms or a history of performance failures)
• Non-compliance with the employment provisions of the Immigration and Nationality Act
• “[A]ny other cause of so serious or compelling a nature that it affects the present responsibility of the contractor or subcontractor.”

Again, these are just examples. Once you engage an experienced Delaware federal discrimination lawyer for federal debarment defense, your company’s lawyer will be able to assess the circumstances at hand and identify the specific allegations your company needs to defend against.

A Proactive Defense Strategy is Critical

Regardless of the reason (or reasons) for a proposed debarment, a proactive defense strategy is critical. Contractors who are facing debarment must work with their legal counsel to assess all potential defense strategies and then choose the best path forward based on the circumstances at hand.

In some cases, fighting debarment may involve challenging the underlying allegations at issue. If your company has not committed an act or omission that warrants debarment—or if the government cannot prove that your company has committed an act or omission that warrants debarment—demonstrating that this is the case may be enough to protect your company’s contracting eligibility going forward.

On the other hand, if the allegations against your company can be substantiated, then the best approach may be to target a settlement that protects your company’s ability to do business with the government. This may involve coming into compliance, agreeing to strictly comply with the FAR in the future, implementing additional internal controls, and/or taking various other steps focused on ensuring federal bidding and contracting compliance. If it appears that targeting a settlement may be necessary, your company’s Delaware federal discrimination lawyer should be able to assist with crafting a settlement that protects your company’s financial interests with as few adverse consequences as possible.

When considering potential defense strategies, it is also important to consider the possibility that your company is being targeted for unlawful reasons. For example, if your company is in compliance and is being targeted on a discriminatory basis, debarment is clearly unwarranted. Here, too, an experienced Delaware federal discrimination lawyer should be able to assess the circumstances surrounding your company’s proposed debarment and provide custom-tailored advice based on the circumstances at hand.

Fighting Debarment is Often a Multi-Step Process

In many cases, fighting debarment will be a multi-step process. For example, if a Suspension & Debarment Official (SDO) determines that debarment is warranted, the next step may be to meet and confer with the SDO to understand the reasons for his or her determination and discuss potential alternatives. If this still does not produce a satisfactory resolution, the next step may be to challenge your company’s debarment at the Office of Grants and Debarment (OGD) or in federal court.

Speak with a Delaware Federal Discrimination Lawyer in Confidence

If your company is facing debarment from federal contracting, it is critical that you take action promptly. A Delaware federal discrimination lawyer at The Law Firm of J.W. Stafford can help you assess the circumstances at hand and make informed decisions about your next steps. To schedule a confidential consultation as soon as possible, give us a call at 410-514-6099 or tell us how we can reach you online today.