August 30, 2018

Federal Contractors and Environmental Compliance

Douglas Morrison

While it is in the interest of every business to ensure environmental compliance as much as possible, it is especially important for businesses engaged in federal contracting. Both the Clean Air Act and Clean Water Act include a mandatory bar on federal contracting for any organization convicted of a related crime. Clean Water Act § 508(a), 33 U.S.C. § 1368(a); Clean Air Act § 306(a), 42 U.S.C. § 7606(a). Federal contracting laws also allow for suspension or debarment of any organization that the U.S. Environmental Protection Agency (EPA) finds is not “presently responsible” for contracting because of conduct involving, for example, fraud, false statements, unfair trade practices, delinquent taxes, and, more generally, issues of “business integrity.” 48 C.F.R. § 9.406-2 (debarment), 48 C.F.R. § 9.407-2 (suspension). Suspension is an immediately effective but temporary order to cease all transactions, followed by due process. 48 C.F.R. § 9-407-1. Debarment is a final order to cease all transactions, issued after due process. 48 C.F.R. § 9-406-1. Similar rules apply as well to nonprocurement transactions such as certifications, grants, loans, agreements, and scholarships. 2 C.F.R. Part 180.

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