Procurement Lawyer

Advocating for State-Level Debarment Systems: Lessons from the MPC and GAO

by Cory A. Chipman

Cory A. Chipman (cachipman@law.gwu.edu) is a JD candidate (2018) at The George Washington University Law School. He recently completed an externship with the General Services Administration (GSA) division of Suspension and Debarment. Cory would like to thank Professor Christopher Yukins, who taught the spring 2017 State and Local Procurement course for which this article was written, and Mr. Gerard Wimberly and Taylor Menlove for their support and guidance throughout the publication process.

The Purposes of Debarment

The purpose of an effective debarment system is to ensure that responsible contractors receive government contracts.1 A responsible contractor has, among other things: (1) the financial resources; (2) the ability to comply with delivery schedules; (3) the necessary quantity and quality of facilities and equipment; (4) the performance record; (5) the will to perform; (6) the record of business ethics; (7) the expertise, management, and technical capability; (8) the internal controls; and (9) of course, the appropriate licenses and permits to contract with the government.2 Contractors lacking these qualifications may be deemed nonresponsible and barred from contracting with the government.3 The Federal Acquisition Regulation (FAR) and the Model Procurement Code (MPC) detail these qualifications to promote an accountable and efficient debarment system4 and provide procedural processes to help both government officials and contractors navigate the potentially litigious waters of debarment proceedings.5

Accountability. Debarment provides government officials and their taxpaying constituents a tool to hold contractors accountable. Governments rely on taxes for much of their work.6 Taxes come from individuals and corporations through general income and targeted taxes.7 Taxpayers hold government officials accountable by electing representatives who match their own fiscal policies and values.8 Because taxpayers hold elected officials responsible for public expenditures, governments try to avoid contracting with companies and individuals who lack business integrity,9 have seriously violated past contract terms,10 or generally lack present responsibility.11

A lack of business integrity may arise from certain criminal convictions.12 The causes for conviction-based debarment under the MPC include criminal offenses “incident to obtaining or attempting to obtain a public or private contract or subcontract, or in the performance of such contract or subcontract.”13 Additionally, convictions under state or federal statutes for “embezzlement, theft, forgery, bribery, falsification or destruction of records, [or] receiving stolen property” are grounds for debarment.14 The MPC also contains a catchall phrase for conviction of “any other offense indicating a lack of business integrity or business honesty which currently, seriously, and directly affects responsibility as a [State] contractor.”15

States may adopt other conviction-based debarments like convictions under state or federal antitrust statutes during bid or proposal submission.16 “States that have formal procedures for [debarring] a contractor focus upon criminal indictments or convictions as the primary basis for excluding a contractor as non-responsible.”17 Another basis for debarment is committing a serious violation of contract terms.18

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