Jessica A. Berrada is a part-time evening student at George Washington University Law School where she is a George Washington Scholar (top 15% of class, as of Spring 2018) and was the Marketing Fellow for the George Washington Law Review. At the time of writing this Note, Ms. Berrada was a short-term consultant in the World Bank Office of Suspension and Debarment. Throughout the publication process, she has been working as a full-time Legal Analyst in the World Bank Integrity Vice Presidency Unit and Summer Associate at WilmerHale. The author thanks Brahim Berrada, Lois Shelton, Mathew Aldrich, Marianne Kies, Keturah Taylor, Steven Schooner, and Collin Swan for their valuable input throughout the process of writing this Note. Ms. Berrada maintains that this Note was written in her personal capacity, and she takes responsibility for any errors. The ideas and opinions presented herein are her own and do not reflect the view of her prior or current employers.
“One who has been dealing with the government on an ongoing basis may not be blacklisted, whether by suspension or debarment, without being afforded procedural safeguards including notice of the charges, an opportunity to rebut those charges, and, under most circumstances, a hearing.”1
Advocacy Resources Corporation (ARC) was a nonprofit organization that employed people with disabilities to fulfill government contracts, including a contract with the U.S. Department of Agriculture (USDA) to fortify vegetable oil with vitamin A.2 In 2006, ARC was on the verge of bankruptcy, struggling to obtain nonprofit funding.3 Jeff Callahan — who owned a management company overseeing several businesses performing government contracts — bought ARC and personally guaranteed the funds that ARC needed to keep its operations going.4 In 2009, a USDA auditor caught a single discrepancy amid multiple shipments totaling hundreds of thousands of dollars.5 The auditor reported the discrepancy to the USDA Office of Inspector General who executed a search warrant of ARC’s facilities without any prior communication with the company.6 In response to the search, ARC retained counsel, conducted an internal investigation, preserved records, and fully cooperated with the government’s investigation.7 ARC’s internal investigation revealed that a single rogue employee was responsible for the invoice falsification.8 The employee resigned and admitted wrongdoing to both the government and ARC’s counsel.9 ARC continued shipping the government vegetable oil for almost two years until, in 2011, the USDA suspended Callahan, his management company, and ARC by posting on a public website — the predecessor to the System for Award Management (SAM.gov).10 The USDA then notified Callahan and the other parties of their suspension.11 The basis for the suspension was that Callahan and his management company “knew or should have known” of the ARC employee’s misconduct.12
The twelve-month period of suspension expired without the government finding Callahan or his companies at fault.13 However, the temporary exclusion forced Callahan into bankruptcy and shut down all companies under his management.14 In particular, the government’s publication of the exclusion on SAM.gov had long-term effects on Callahan’s ability to win new federal, state, and local contracts.15
The U.S. government spends about $500 billion each year on contracts, making it “the largest buyer of goods and services in the world.”16 SAM.gov contains 530,693 entities registered to do business with the U.S. government as of July 2018.17 In Fiscal Year (FY) 2017, federal agencies and departments suspended, debarred, or proposed for debarment 3,642 companies and individuals,18 using procedures outlined in Federal Acquisition Regulation (FAR) subpart 9.4.19
Under the FAR,20 an agency Suspending and Debarring Official (SDO) may suspend a contractor upon receiving allegations that a contractor is not presently responsible. The SDO enacts the suspension by placing the contractor in excluded status on SAM.gov21 and then notifying the contractor of its temporary exclusion. The contractor has thirty days to oppose the temporary exclusion, raise issues of material fact, and request a meeting with the SDO, after which the SDO decides whether to proceed with debarment or lift the temporary exclusion.22 In this process, contractors are excluded temporarily before receiving notice and an opportunity to be heard. The current U.S. suspension and debarment procedure causes long-lasting and far-reaching harm that violates a contractor’s liberty interests and due process rights.
This Note proposes a two-part solution aimed at protecting contractors’ procedural due process rights before being publicly excluded. The first part of the proposed solution is to make pre-exclusion notification a mandatory first step in the suspension and debarment procedure.23 Second, SDOs should have the option to temporarily exclude contractors within a confidential, internal government system in the exceptional cases where the government requires immediate protection.24
Part I of this Note provides a brief overview of the suspension and debarment system and the consequences of temporary exclusions. Part II discusses the constitutional issues that arise when contractors are excluded temporarily without adequate procedural due process. Part III details the proposed two-part solution and explains its practicality. Finally, Part IV addresses potential counterarguments to the solution.
II. Background of the U.S. Suspension & Debarment System M
A. April Fool’s Day 1984: Twenty-Two Years in the Making
On April 1, 1984, the FAR became effective and, for a brief moment, all procurement regulation was perfectly consolidated and coherent,25 including guidance about how the government planned to exclude nonresponsible parties from government contracts.26 FAR subpart 9.1 outlines the government’s methodology for making responsibility determinations.27 The government uses criteria which include inter alia satisfactory performance and integrity records, the ability to obtain adequate financial resources to perform the con- tract, and subcontractor responsibility.28
Twenty-two years earlier, in 1962, Congress created the Administrative Conference of the United States (ACUS) partially in response to complaints about the existing suspension and debarment system.29 The ACUS found several issues with the suspension and debarment system, including “the absence of procedural safeguards” to protect contractors from being suspended or debarred without notice and an opportunity to present their case before an impartial fact finder.30
Following the ACUS findings, three D.C. Circuit decisions shaped contractors’ due process rights in the suspension and debarment system. In the first case, Gonzalez v. Freeman,31 the Commodity Credit Corporation debarred a firm for five years while providing neither an opportunity for the firm to present its case prior to the suspension nor the reasons for the final debarment.32 The D.C. Circuit upheld the debarment while firing a warning shot to the agency that administrative debarments require “minimal procedural safeguards” lacking in the Gonzalez debarment.33
Eight years later in 1972, the D.C. Circuit fired another warning, this time about temporary exclusions in Horne Brothers, Inc. v. Laird34 where the Navy summarily suspended the contractor based on suspected wrongdoing.35 Although the court again upheld the suspension, the court cautioned the government that when suspensions last more than one month, the government should provide a hearing to comport with procedural due process.36
Then, in 1980, the D.C. Circuit held in Old Dominion Dairy Products, Inc. v. Secretary of Defense37 that contractors’ liberty interest is violated when its reputation suffers serious irreparable harm due to temporary exclusion without adequate procedural due process.38 In Old Dominion, the government rejected bids of a contractor on two separate procurements based on an alleged lack of business integrity without notifying the contractor of the reasons, thus denying the contractor an opportunity to present its case.39 The government violates a contractor’s liberty interest when it imposes an improper exclusion causing serious irreparable harm to the contractor’s reputation and business dealings.40
These three cases set a modicum of procedural due process in the suspension and debarment system today.41 However, the modicum in the current procedure is still not enough to fully protect contractors’ rights since the government can still temporarily exclude a contractor before providing notice and an opportunity to be heard.42
B. Nuts and Bolts of the U.S. Suspension and Debarment System
The suspension and debarment system is designed to mitigate the risk of the government doing business with an “unethical or incompetent contractor.”43 FAR subpart 9.4 provides official guidance on how the government will make the business decision to exclude contractors.44 The government publishes a list of ineligible contractors on SAM.gov.45 The FAR gives each federal agency’s or department’s SDO significant discretion to decide whether to exclude a contractor from government business.46
The suspension and debarment process starts with the contractor disclosing misconduct or a third party bringing misconduct allegations against a contractor.47 The SDO engages agency officials to collect evidence about the allegations and create an administrative record, then scrutinizes the record to determine the present responsibility of the contractor.48 SDOs may seek immediate protection of the government’s interests while fact finding investigations or legal proceedings are underway if SDOs find adequate evidence showing the contractor committed a wrongful act or omission and a “real need for immediate action to protect the public interest.”49 Therefore, the SDO’s determination of present responsibility is central to the decision to exclude a contractor and bears considerably on a contractor’s reputation.50
The FAR states that the government should suspend and debar contractors only for “the [g]overnment’s protection and not for purposes of punishment.”51 Therefore, if the SDO decides that the record raises questions about the contractor’s present responsibility but does not warrant the immediate protection of the government, the SDO may request more information from the contractor by issuing a pre-exclusion notice.52 Pre-exclusion notices provide an opportunity for the contractor to respond with further information about, an explanation of, or a defense to the allegations within a set time period without triggering the harmful effects of a temporary exclusion.53
By contrast, if the SDO decides the government requires immediate protection from a contractor, the SDO may issue a temporary exclusion in the form of a notice of suspension.54 The contractor then has thirty days to respond, raise any genuine issues of material fact, and request a hearing.55 Unfortunately, this opportunity to be heard comes after the reputational harm has been inflicted because the temporary exclusion is posted on SAM.gov prior to or within days of notifying the contractor of the exclusion.56 The temporary exclusion is now a permanent part of the contractor’s record — no matter how brief the temporary exclusion or how inaccurate the allegations — and it carries with it not only reputational damage but also a host of direct and indirect consequences.57
The SDO includes any additional information or findings from the con- tractor’s hearing in the administrative record and resolves all disputes over material facts before issuing a determination.58 If there are no genuine disputes, the SDO has thirty working days after receiving a response or holding a meeting with the contractor to decide whether to terminate the temporary exclusion, extend the temporary exclusion, or debar the contractor.59
C. The Domino Effect: The Direct and Indirect Consequences of Temporary Exclusion
The FAR acknowledges the “serious nature of debarment and suspension” and encourages agencies not to use the suspension and debarment system as a means of punishment.60 It is easy to see, however, how a contractor might interpret the government’s exclusion as punishment considering the host of consequences that flow from that determination. The direct consequences of temporary exclusion are (1) ineligibility for awards of any new government contracts, (2) exclusion across all agencies, and (3) liability of company employees.61 However, the indirect effects of temporary exclusion extend far beyond the exclusion’s formal termination.
1. Direct Effects of Temporary Exclusion
Contracting Officers review SAM.gov twice during the procurement cycle.62 The first time is at the preliminary stages, “after the opening of bids or receipt of proposals.”63 The second time is at the end of the procurement stage, right before the government awards a contract “to ensure that no award is made to a listed contractor.”64 If a contractor is excluded on SAM.gov, the disqualification extends across all executive branch agencies and precludes a contractor from bidding on contracts as either a prime or subcontractor.65 An agency may override the exclusion if there is a compelling reason and the contractor was not statutorily debarred.66
Temporary exclusion of a company often also applies to affiliates, officers, and directors.67 Specifically, the theory is that affiliates, officers, and directors knew or should have known of misconduct by employees under their supervision.68 This extended liability means that individual officers and directors, like Callahan in the case study presented in the Introduction of this Note, carry the stigma of a temporary exclusion with them when they apply for jobs or try to start a new business.69
2. Indirect Effects of Temporary Exclusion
Contractors face myriad collateral consequences when their temporary exclusion is publicized on SAM.gov. Commentators have described the effect of exclusion as a “corporate death sentence” due to its attendant stigma and permanency.70 Several state and local governments have reciprocal exclusion policies or use federal grant funds for certain projects that preclude them from doing business with excluded entities listed on SAM.gov.71 Accordingly, an excluded contractor will have a hard time getting work, even outside the federal government.
The FAR bans temporarily excluded contractors from acting as a surety.72 Additionally, banks often find excluded companies ineligible for commercial credit73 or call for the full payment of a loan’s balance when the company is excluded from government contracting.74 In short, temporary exclusion affects a company’s credit worthiness in the same way a person fired from a job may find his mortgage and credit card companies seeking reassurance of his ability to make monthly payments. Suspension also can affect overseas operations because the U.S. State Department has the power to deny or revoke particular types of export licenses from temporarily excluded entities.75 Additionally, commercial clients may end “purely commercial contracting relationships” with excluded entities upon their discovery of the exclusion through corporate due diligence systems.76
Unfortunately, contractors facing temporary exclusion have little recourse. In the current system, once a contractor’s temporary exclusion is published on SAM.gov, there is no way to expunge the temporary exclusion from the contractor’s record and virtually no way for the contractor to regain its tarnished reputation.77 Costly and protracted litigation in either a federal district court78 or the U.S. Court of Federal Claims79 carries its own financial and reputational risks, which deter contractors from suing. Litigation oftentimes exacerbates a contractor’s already desperate financial situation. Reputationally, contractors suing the U.S. government may garner more attention (from the media, bloggers following the case, etc.) than they want in an already uncomfortable situation where their integrity has been called into question. Thus, a contractor’s decision to litigate in an attempt to regain what has been lost through temporary exclusion is taking into account more than simply seeking a just result.
III. Publishing Temporary Exclusions without Pre-Exculsion Notice Violates Due Process Rights
A. Due Process in the Context of Government Contracting
Famed advocate Daniel Webster articulated one of history’s most succinct and compelling definitions of the due process requirement during an oral argument in Trustees of Dartmouth College v. Woodward:80 “[A] law, which hears before it condemns; which proceeds upon inquiry, and renders judgment only after trial. The meaning is, that every citizen shall hold his life, liberty, property, and immunities, under the protection of the general rules which govern society.”81 The U.S. Supreme Court has held that the due process rights guar- anteed by the Fifth and Fourteenth Amendments apply not only to persons but also to corporations.82 The Court has interpreted due process broadly, stating that “due process is flexible and calls for such procedural protections as the particular situation demands.”83 Therefore, once a party establishes the right to due process, the judicial system should be flexible in applying the appropriate kind of due process for each particular type of situation.84 Federal contractors have a right to procedural due process in the face of a temporary exclusion because of the serious consequences that flow from its permanent stain on the contractor’s public record.85 The government must update the suspension and debarment procedures to protect contractors’ rights.
B. Due Process in U.S. Procurement Temporary Exclusion Actions
The Supreme Court in Mathews v. Eldridge86 explained that procedural due process “imposes constraints on governmental decisions which deprive individuals of ‘liberty’ . . . interests.”87 Under the Fifth Amendment, therefore, the government must provide procedural safeguards in connection with temporary exclusion decisions to avoid improperly depriving contractors of their liberty interests.
Within the meaning of the Due Process Clause, liberty interests are the constitutional freedoms guaranteed by the Bill of Rights.88 Although contractors do not have a constitutional right to do business with the government, a contractor has a liberty interest in maintaining a viable business, including protection from improper government action that risks causing reputational damage and ongoing harm.89 Appropriate procedural safeguards are necessary to protect contractors’ liberty interests.90 As was the case in Reeve Aleutian Airways, Inc. v. United States,91 the U.S. Department of Defense (DoD) temporarily excluded a contractor transporting military personnel due to concerns about the safety of the contractor’s facility.92 The U.S. Court of Appeals for the D.C. Circuit upheld the temporary exclusion because the DoD followed appropriate procedures while explaining that a contractor’s ability to maintain a business was a liberty interest protected by due process.93 The contractor, therefore, had a right to redress from “the damage to its reputation and business caused by a stigmatizing suspension.”94
To prove the stigma created by reputational harm, a contractor must show that the temporary exclusion changed its status in relation to its other business dealings.95 In Old Dominion, for instance, the court held that the contractor was entitled to due process when, as a result of the government’s conduct, the contractor lost government employment and was precluded from other employment opportunities.96 As explained earlier, an SDO’s deliberations about a contractor’s present responsibility temporarily changes the contractor’s status to receive government contracts.97 From the government’s perspective, the exclusion is nullified after it is lifted, but the exclusion remains a permanent part of the contractor’s public record.98 The government will require the contractor to disclose that it was once excluded from government contracting in perpetuity, regardless of the accuracy of the allegations or the duration of the temporary exclusion.99 Contractors should be free from the stigmatization resulting from improper temporary exclusions when their livelihood is on the line.100
C. Under the Mathews v. Eldridge Three-Factor Analysis, the Temporary Exclusion Process Requires Additional Procedural Safeguards.
“[W]here a person’s good name, reputation, honor, or integrity is at stake because of what the government is doing to him, notice and an opportunity to be heard are essential.”101
Courts must determine what process is due before the government may take an action that deprives an individual of his or her liberty interest.102 Courts look to the Supreme Court’s 1976 decision in Mathews v. Eldridge103 that distilled due process precedent into a three-factor analysis:
(1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and (3) the [g]overnment’s interest, including the fiscal and administrative burdens that the additional or substitute procedures would entail.104
Although Mathews involved termination of Social Security disability benefits, the three-factor analysis described therein has been used by federal courts in cases covering a variety of topics, including suspension and debarment.105
The Mathews three-factor due process test first requires courts to consider the “private interest that will be affected by the official action.”106 A contractor’s private interest is twofold: (1) continuing to earn a livelihood by being able to do business with the government, and (2) avoiding the collateral consequences of temporary exclusion.107
A contractor must suffer serious hardship or harm to its private interest for courts to weigh this factor in the contractor’s favor.108 In determining the seriousness of hardship, the D.C. Circuit has considered factors such as the contractor’s economic dependence on government contracts, the economic hardship of losing business due to reputation loss, and the contractor’s inability to obtain government work.109 However, the D.C. Circuit should reexamine its hardship analysis in light of the temporary exclusion’s permanent mark on a contractor’s SAM.gov record.110 Contractors face broader risk exposure to stigma today than before widespread Internet use.111
The second factor that courts weigh under Mathews is “the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards.”112 The procedures at issue in the suspension and debarment context are the following: (1) the order in which notification takes place, after exclusion; and (2) the permanent publication of exclusion before a contractor is afforded a meaningful opportunity to be heard.113 Although there are no available statistics about the number of erroneous temporary exclusions imposed, anecdotal evidence, such as the case study of Callahan in this Note’s Introduction, evinces that errors do happen, and, when they do, the inadequacy of pre-exclusion procedural due process is stark.
Because of the risk of erroneous decisions, SDOs are placed in a difficult position. On one side of the risk scale, the SDO is charged with ensuring that the government is protected, weighing the risk that a bad actor is going to be doing business with the government. On the other side, there is a risk that an innocent party will suffer a permanently tarnished reputation, economic hard- ship, or complete professional and financial ruin. When weighing these two risks, the scale favors a more balanced approach — that is, one with additional or substitute procedural safeguards for both parties.114
The third factor in Mathews’s due process analysis considers “the [g]overnment’s interest” in avoiding the fiscal and administrative burdens that the additional or substitute procedural requirement would incur.115 In other words, the government may protect its interest and exclude a contractor to (1) execute its fiduciary responsibility in spending taxpayer dollars, (2) protect its reputation by only engaging with businesses determined presently responsible, and (3) remove the risk of doing business with “unethical or incompetent contractor[s].”116
The case of Cleveland Board of Education v. Loudermill117 is instructive as an analogy for exclusion. In Loudermill, the Court balanced the due process rights of a state employee facing termination against the government’s interests.118 The civil employee was terminated without notice or an opportunity to be heard.119 In evaluating that termination, the Court considered the interests of the private party in being able to earn a livelihood, the fairness of being able to present his case before the termination took effect, and the general importance of reaching an accurate decision.120 Then, the Court considered the government’s interests in the immediate termination of unsatisfactory employees, the financial and administrative burdens that “some form of pretermination hearing” would impose, and the risk of an erroneous termination.121 In weighing these competing interests, the Court held that the factors and principles of fundamental fairness weighed in favor of providing the state employee a pre-termination hearing.122
The Court’s decision in Loudermill is analogous to excluded contractors. As the Court acknowledged, a terminated employee’s ability to earn a livelihood is impaired severely. Similarly, a temporarily excluded contractor’s ability to earn a livelihood, either through bidding on government contracts or in the commercial sector, is impaired severely.123 The second interest that the Court weighed was the fairness of an employee’s opportunity to present his case before the termination takes effect.124 Analogously, a contractor should be able to present its case before the temporary exclusion takes effect.125 Lastly, courts possess a general interest in ensuring accurate decisions, which is applicable in temporary exclusion situations.126 Employment terminations involve factual disputes — like temporary exclusions on fact-based allegations. Each case may include clear facts, but not a clear decision that considers “the appropriateness or necessity” of terminating the employee or excluding the contractor.127 The Court in Loudermill concluded that the only way to ensure an accurate decision was by allowing the employee, or in this case a contractor, an opportunity to be heard before the government takes adverse administrative action.128
IV. Two Minor Adjustments to Temporary Exclusion Procedures to Balance Government Interests with Due Process Rights of Contractors
Currently, the FAR does not require the government to provide notice to contractors being considered for temporary exclusion.129 This inadequate procedure has a two-part solution. First, the FAR Council should amend the FAR to make pre-exclusion notification a mandatory first step in the suspension and debarment procedures.130 Second, in the exceptional cases where the government requires immediate protection, SDOs should publish temporary exclusions within a confidential, internal government system available only to procurement personnel.131
A. Part One: Make Pre-Exclusion Notice Compulsory for Temporary Exclusions
“[T]he only meaningful opportunity to invoke the discretion of the decision maker is likely to be before the termination takes effect.”132
A basic due process requirement is providing contractors notice before the government imposes a temporary exclusion. Therefore, the FAR Council should amend the FAR to make pre-exclusion notice compulsory for suspensions and proposed debarments.133 This Note proposes amending FAR section 9.407(3)(b)(1), which currently provides: “These procedures shall afford the contractor (and any specifically named affiliates) an opportunity, following the imposition of suspension, to submit, in person, in writing, or through a representative, information and argument in opposition to the suspension.”134
This Note proposes to change the word “following” to “prior to” and adding the sentence: “In cases where the government would be harmed by waiting any period of time to suspend the contractor, agencies may impose a thirty-day confidential suspension by updating the confidential SAM Exclusions system.” With the changes, the new regulation would read:
These procedures shall afford the contractor (and any specifically named affiliates) an opportunity, prior to the imposition of suspension, to submit, in person, in writing, or through a representative, information and argument in opposition to the suspension. In cases where the government would be harmed by waiting any period of time to suspend the contractor, agencies may impose a thirty-day confidential suspension by updating the confidential SAM Exclusions system.
The corresponding FAR subsection for proposed debarments135 does not have language about submission timing: “These procedures shall afford the contractor (and any specifically named affiliates) an opportunity to submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment.”136 This Note proposes to add the phrase “prior to the publication of the proposed debarment” so that the new regulation would read: “These procedures shall afford the contractor (and any specifically named affiliates) prior to the publication of the proposed debarment an opportunity to submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment.” The government can ensure that due process and basic principles of fairness are incorporated into its dealings with contractors by making these minor adjustments to the regulations that control the government’s uniform approach to temporary exclusions.
B. Part Two: Use a Confidential System for Urgent Temporary Exclusions
The solution proposed in this Section is conceptualized best as a procedure supported by technology. The procedure would change the steps and time- frames for temporary exclusion to align with the FAR amendments proposed in the previous Section. The changes to technology would create a confidential option in SAM.gov, provide automatic notifications to contractors, and expire and expunge any confidential temporary exclusion after thirty days.
1. Procedural Changes Under the Proposed Solution
The procedure would start the same way it currently does: an agency learns of conduct that puts a contractor’s present responsibility in question. The agency would send a pre-exclusion notice to the contractor. The contractor would have a thirty-day safe harbor within which to provide a written explanation or request a meeting with the SDO to address the agency’s concern. At any point within the thirty-day window, the contractor could apply for an extension of the response period, but the extension would be granted only at the SDO’s discretion.137 If the contractor makes a compelling case to forego the temporary exclusion action, the SDO would take no further action.138 If the SDO still questions the contractor’s present responsibility after this preliminary explanation, the temporary exclusion would be published on SAM.gov and advance as under current procedures with the important distinction that the contractor’s right to notice and an opportunity to be heard before publication would be protected.
2. Addressing the Government’s Need for Immediate Protection
For cases in which the SDO believes the government would be harmed by waiting thirty days to exclude the contractor, the SDO would post the exclusion on SAM.gov immediately, but mark the exclusion as “confidential” so it does not appear in a public search. At the time that the contractor’s record is updated in SAM.gov with a confidential exclusion, the contractor would be notified electronically of the changed record and be provided with a point of contact in the SDO’s office. The confidential exclusion listing on SAM.gov would appear only to designated government procurement personnel such as Contracting Officers. The confidential exclusion system would automatically expire and expunge the contractor’s confidential exclusion after thirty days unless action is taken by the SDO to extend or remove the confidential exclusion status, or to proceed with debarment.139 The General Services Administration (GSA) administers SAM.gov and would be responsible for implementing the addition of a confidential option in SAM.gov, the automatic notifications, and programmed expirations.140
3. A Sticky Issue: Partnering with Potentially Excluded Entities
One of the reasons that the government publishes temporary exclusions is to notify contractors of the status of their potential bid partners.141 If temporary exclusions are published confidentially and only when the government requires immediate protection, how can the government provide notice to other contractors about their bid partners? It is not hard to imagine a situation in which a partner would fail to disclose a pending temporary exclusion before submitting a bid.142 The FAR accounts for this possibility by requiring contractors to obtain written disclosures from proposed subcontractors regarding the subcontractors’ exclusion status.143 A prime contractor would, therefore, not be liable for failing to identity and disclose subcontractor exclusions if the exclusions are confidential and the subcontractor does not reveal the exclusion.
The proposed solution protects the due process rights of contractors to be notified and have an opportunity to respond before suffering adverse administrative action by providing a confidential system in which the government could seek immediate protection. Furthermore, the proposed solution is consistent with the spirit of the FAR, which encourages informality, agency collaboration, and use of exclusion as a protection mechanism, not punishment.144
C. The Two-Part Solution Is Practicable
Several practical arguments support this Note’s solution. First, compulsory pre-exclusion notice and a confidential system protect both the government’s and contractors’ reputations by allowing parties to deal with any misunderstandings without invoking public scrutiny or creating undue uncertainty for other agencies. There are already other federal systems that interact with SAM.gov that provide for confidentiality in situations where a contractor’s reputation is at stake.145 Therefore, the government already has taken due process into consideration in similar circumstances. Even more encouraging, SAM.gov already has the capability to hold a contractor’s record confidential at a contractor’s choosing.146 Finally, other institutions, such as the World Bank, use a confidential temporary exclusion method in a cross-debarment system as part of their due process guarantee to contractors.147 For these several reasons, among others, the government should consider implementing compulsory pre-exclusion notice and a confidential temporary exclusion system.
1. A Confidential Temporary Exclusion System Protects Agencies’ Reputations As Much As Contractors
In 2009, the Environmental Protection Agency (EPA) temporarily excluded IBM without prior notice based on allegations of misconduct related to a bid.148 Due to IBM’s wide range of contracts among several agencies, the suspension cast uncertainty upon IBM’s other work, pending bids, and other agencies’ ability to enforce the exclusion.149 In addition to the uncertainty, the EPA SDO was criticized heavily, and the agency was at the center of public scrutiny until the exclusion was resolved.150 Under these conditions and with IBM’s willingness to resolve the issue, the temporary exclusion was lifted within eight days.151 If the EPA SDO had had access to a confidential system, the agency’s reputation would not have been placed in the spotlight of public scrutiny, media hype, and uncertainty.
2. Other Federal Procurement Systems Provide for Confidentiality
SAM.gov is part of a network of interrelated technology platforms that make up the U.S. procurement system. Other systems feed into and interact with the records in SAM.gov. One such system is the Contractor Performance Assessment Reporting System (CPARS). CPARS is the government-wide system that processes and collects performance information about contractors.152 Contracting Officers submit written reports on contractors’ performance into CPARS.153 Contractors then have sixty days to provide comments and challenges to the performance report.154 CPARS is not publicly available; only source selection officials within the government can access the information to make bid evaluations.155
Another U.S. procurement tool is the Past Performance Information Retrieval System (PPIRS), which collects and consolidates information from other sources, including CPARS and SAM.gov, to create a past performance record for contractors.156 All data in PPIRS are classified as “Source Selection Sensitive,” meaning that the information in the system is available only to the contractor and designated government procurement personnel working on source selections.157
CPARS and PPIRS are just two examples of federal procurement systems that hold proprietary or sensitive government contractor information confidential. It is possible for the government also to make temporary exclusion information confidential. Thus, the confidentiality of these systems illustrates that the government already has taken steps to hold information confidential where it affects contractors’ liberty interests.
3. SAM.gov Already Has the Capability to Hold Records Confidential When performing a search on SAM.gov, the search tips advise that no one but government employees will be able to see “registrants who chose to opt out of the public search.”158 The opt-out choice warns contractors that failure to publicly display their registration information could reduce the contractor’s “business opportunities, and subcontractors who choose this option will not be visible to prime contractors.”159 Contractors who opt out will not show up on the SAM.gov public search, but will remain visible to government users for official use and Freedom of Information Act requests.160 Because SAM.gov already has the capability to make contractors’ records available only to government users, the technical capability of the current system conceivably could incorporate changes to make temporary exclusions confidential.
4. A Confidential Temporary Exclusion Method Is Currently Used Successfully by the World Bank
The World Bank’s Sanctions Procedures provide for immediate protection for the organization by imposing a temporary suspension on a contractor.161 The temporary suspension excludes a contractor upon a determination by the SDO that two criteria are met: (1) sufficient evidence, pending the completion of the investigation, indicates that the contractor engaged in “a sanctionable practice” and (2) the type of sanctionable practice at issue would impose “a minimum period of debarment of at least [two] years.”162 While the World Bank follows the same procedure as the United States in simply notifying a contractor of the temporary suspension before providing an opportunity to be heard,163 the temporary suspension is not made public until the conclusion of debarment proceedings.164 Since 2010, the World Bank has used the confidential system along with several other multilateral development banks to enforce each bank’s sanctions under the Agreement for Mutual Enforcement of Debarment Decisions.165
V. Why the Administrative Burden of Changes is Not Too Great & Other Solutions Fall Short
The government’s administrative burden arising from the proposed solution does not tip the scales of due process in its favor when weighed against the potential harm to contractors. Additionally, while other commentators have called for different solutions to the due process issues raised by temporary exclusions, they fall short of addressing the full problem.
A. The Two-Part Solution Would Not Create an Unreasonable Administrative Burden
If the government implements the proposed solution, the administrative burden would fall into two categories. First, the development costs of promulgating amendments to the FAR and coordinating changes to SAM.gov would be an up-front investment.166 However, amending the FAR would be incorporated into the current review and revision cycles of the councils that promulgate FAR changes and, therefore, not present any additional burden to the government.167 Secondly, the costs of making technical changes to SAM.gov would likely require more than a routine update to the system, but given the technical capability of the system for confidentiality,168 the changes would not likely be extensive.169
While the government may lose some of the discretion that SDOs currently possess to exclude a contractor without notice for the government’s immediate protection, the SDOs would still have the confidential temporary exclusion option. The confidential option would accomplish the same ends as public exclusion in protecting the government, but without unduly harming the contractor. Furthermore, the new procedures could just as easily be viewed as increasing the tools available to the SDO. Under the proposed procedures, the false dichotomy of exclusion or nothing170 would be replaced with an SDO protecting government interests in a variety of ways depending on the situation: (1) by not excluding (sending a pre-exclusion notice and starting the conversation), (2) by excluding without causing lasting harm (through the confidential system), (3) by imposing temporary exclusion (after the thirty-day safe harbor response period), or (4) by debarring in cases where it is warranted.
The enforcement costs for the new procedures are not as concrete or particularized as for development, implementation, and administrative costs. One potential enforcement cost is the reputational risk the government will run in potentially awarding new contracts to parties with questionable present responsibility. However, other procurement tools, such as the government’s unilateral right to terminate a contract for convenience,171 mitigate the reputational risk to the government and allow the government to remove nonresponsible contractors post-award.172 Additionally, the reputational risk to the government would be only marginally higher than it is today, since suspended or debarred contractors still are allowed to continue performing on existing contracts after exclusion under the current system.173
The proposed solution in this Note attempts to address the government’s interests in only doing business with presently responsible contractors while minimizing the increased administrative burden. Despite the admitted costs of adjusting a well-established and long-standing procedure and system, the benefits to the contracting community and to the government clearly favor adoption of the proposed solution.
B. Leveraging Technology to Address Both Government and Contractors’ Interests
In his 2009 article Shoot First, Ask Questions Later, government contracts attorney Todd Canni proposed FAR amendments that would make pre-exclusion notice and an opportunity to be heard compulsory with a brief response period of thirty days.174 In addressing the immediate need for government protection, Canni suggested shortening the response period to fifteen days, while requiring the SDO to “render a prompt determination” justifying the shortened period.175
Canni’s solution has merit for the following reasons: (1) there would be absolutely no exclusion without an opportunity for the contractor to be heard, (2) the shortened response period provides the government some protection, and (3) the proposed FAR amendment would apply a uniform standard across the government.176 While concurring with Canni’s general solution of amending the FAR, this Note approaches the immediate protection situation differently: by not only making pre-exclusion notice and an opportunity to be heard compulsory, but also by providing a confidential system for temporary exclusion in situations where the government requires immediate protection.
The proposed solution leverages technology to address both the government’s and contractors’ concerns in three ways. First, in situations like the EPA found itself with IBM where the government was about to award a bid to a contractor, the government cannot wait for even fifteen days for immediate protection from the contractor.177 The confidential temporary exclusion system would protect the government’s interests in the same way as Canni’s response period, with the two added benefits: (1) preventing a potentially nonresponsible contractor to receive an award within the response period, or (2) causing award delays during the fifteen- or thirty-day response period.
Secondly, growing delays in the suspension and debarment system make it less likely that an SDO would be able to meet an accelerated timeline of fifteen days when the government needs immediate protection.178 The two- part solution is sufficiently flexible to account for reasonable delays.179 Lastly, technology has evolved since Canni’s article was published in 2009. The suspension and debarment system can now leverage a single unified platform of SAM.gov for exclusion actions. Adding a confidential view of temporary exclusion actions to SAM.gov would balance the fairness of providing pre-exclusion notice to contractors with immediate protection for the government.
VI. Making the Right Choice to Protect Contractors' Due Process During Temporary Exclusions
The U.S. procurement suspension and debarment system is designed to be open-ended and flexible enough that SDOs can make the right choice when faced with allegations that a contractor is not presently responsible.180 However, an SDO’s overzealous focus on protecting the government, political pressures pushing for a high number of exclusion actions, or the false dichotomy that the only two choices are “letting the bad guy go free” or excluding a contractor may all weigh on an SDO’s temporary exclusion decision. Agency SDOs are generally fair and reasonable. By providing SDOs with a procedure that ensures the due process rights of contractors while simultaneously providing a system that protects government interests, the U.S. procurement suspension and debarment system can continue to evolve and align with the goal of guaranteeing due process protections and exemplifying principles of fundamental fairness.
- Transco Secur., Inc. v. Freeman, 639 F.2d 318, 321 (6th Cir. 1981).
- AUI Mgmt., LLC v. U.S. Dep’t of Agric., No. 2:11-cv-0121, 2015 U.S. Dist. LEXIS 37628, at *1 (M.D. Tenn. Mar. 23, 2015). Vitamin A deficiencies have been linked to blindness and inability to fight childhood illnesses. Vitamin A is added to vegetable oil as a dietary supplement due to the high retention value of the vitamin in oil and the relative simplicity that it takes to supplement the oil. See Jack Bagriansky & Peter Ranum, Vitamin A Fortification of P.L. 480 Vegetable Oil, SUSTAIN, 1998, at 2, http://pdf.usaid.gov/pdf_docs/Pnack055.pdf.
- The U.S. Department of Agriculture (USDA) had failed to pay months of invoices to the company, forcing it into a precarious financial position and making it high risk. AUI Mgmt., 2015 U.S. Dist. LEXIS 37628, at *2–3.
- Id. at *3.
- Id. at *4. The record did not specify the amount of the discrepancy or its part within the total order.
- Id. at *5.
- Id. at *5–7. The Excluded Parties List System preceded SAM.gov as the public system in which government contractors would be suspended or debarred.
- See id. at *5. Currently, the government is not required to notify a contractor before publicly excluding the contractor from future contracts. See FAR 9.406–3, 9.407–3.
- AUI Mgmt., 2015 U.S. Dist. LEXIS 37628, at *5.
- See id. The suspension ran from May 2011 until May 2012 and expired without moving to debarment.
- Id. at *6. Due to the substantial similarities of suspensions and proposed debarments, for the purposes of this Note, the two actions will be referred to collectively as “temporary exclusions,” except when key differences between them necessitate explanation.
- State and local government contracts require disclosure of any prior suspension—essentially rendering Callahan and his other businesses unable to operate in one of the largest procurement markets in the world. Id. at *6–8.
- Kate M. Manuel et al., Cong. Research Serv., R42826, The Federal Acquisition Regulation (FAR): Answers to Frequently Asked Questions 2 (2015), https://fas.org/sgp/crs/misc/R42826.pdf; U.S. Treasury, The Federal Government Spends About $500 Billion Each Year on Contracts—That’s Roughly the Size of Sweden’s Economy, DataLab (2018), https://datalab.usaspending.gov/contract-explorer.html (last visited July 22, 2018).
- Only the most recent month’s data are available through the government’s data catalog. General Services Administration (GSA), SAM Public Monthly Extract (July 1, 2018), https://catalog.data.gov/dataset/system-for-award-management-sam-public-extract; E-mail from Meredith Whitehead, Maintainer, System for Award Management (SAM) Public Extract—Entity Registration Dataset, to author (Feb. 27, 2017, 12:10 EST) (on file with author).
- David Sims & Lori Vassar, Interagency Suspension and Debarment Committee Report to Congress on the FY17 Suspension and Debarment System 3 (2018) (showing that U.S. government exclusion actions have increased in each of the seven years compared to the inception of reporting in FY2009).
- Id. at 2; FAR 9.400(a)(1).
- The Federal Acquisition Regulation is the set of rules and procedures which regulates public procurement, including how companies and individuals can be suspended, proposed for debarment, or debarred. ABA Comm. on Debarment & Suspension, The Practitioner’s Guide to Suspension and Debarment iv (Richard J. Bednar ed., 3d ed. 2002).
- In the suspension and debarment system, there are two broad categories of exclusion: (1) statutory debarments and suspensions, and (2) administrative debarments. Within the category of administrative debarments, an SDO may exclude a contractor for reasons in one or both of two sub-categories: (1) criminal charges or investigation by the Department of Justice (DoJ), or (2) fact-based allegations coming from sources including audits, mandatory disclosures, or allegations by other contractors. Although there is a plethora of angles from which to explore the U.S. procurement suspension and debarment system, this Note will address only those affecting companies and individuals (“contractors”) facing administrative suspension or proposed debarment for fact-based allegations. Kate M. Manuel et al., Cong. Research Serv., RL34753, Debarment and Suspension of Government Contractors: An Overview of the Law Including Recently Enacted and Proposed Amendments 1–5 (2008), https://fas.org/sgp/crs/misc/RL34753.pdf.
- ABA Comm. on Debarment & Suspension, supra note 20, at 205, app. D; FAR 9.407–3.
- Currently, an SDO has the option to provide pre-exclusion notification through the use of a show cause notice, cure notice, or request for information. The term “pre-exclusion notice” most accurately captures the intent of the current forms: to provide notice before taking adverse administrative action against a contractor. This Note does not seek to create a new type of notice requirement, but only to make a currently optional practice mandatory.
- FAR 9.407–1(b)(1) requires SDOs to impose suspension based on adequate evidence that the government requires immediate protection. However, the corresponding proposed debarment procedures in FAR 9.406–3(b)(1) lack the immediate protection requirement.
- John Cibinic Jr., James F. Nagle & Ralph C. Nash Jr., Administration of Government Contracts 23 (5th ed. 2016).
- See FAR 9.402.
- FAR 9.100.
- See FAR 9.104–1.
- ABA Comm. on Debarment & Suspension, supra note 20, at 19–20.
- Id. at 20.
- Gonzalez v. Freeman, 334 F.2d 570 (D.C. Cir. 1964).
- Id. at 572.
- Id. at 580 & n.21; see also ABA Comm. on Debarment & Suspension, supra note 20, at 21–22.
- Horne Brothers, Inc. v. Laird, 463 F.2d 1268 (D.C. Cir. 1972).
- Id. at 1270–71; see also ABA Comm. on Debarment & Suspension, supra note 20, at 23–24.
- Old Dominion Dairy Prods., Inc. v. Secretary of Defense, 631 F.2d 953 (D.C. Cir. 1980).
- Id. at 963–65; see also ABA Comm. on Debarment & Suspension, supra note 20, at 24–25.
- The de facto debarment, causing the contractor to lose bids, combined with the stigmatization of the government allegation, drove the contractor out of business. Old Dominion, 631 F.2d at 963–64.
- Id. at 962–67; see also ABA Comm. on Debarment & Suspension, supra note 20, at 24–25.
- See ABA Comm. on Debarment & Suspension, supra note 20, at 21.
- Old Dominion, 631 F.2d at 966–67.
- See Caiola v. Carroll, 851 F.2d 395, 398–99 (D.C. Cir. 1988).
- FAR 9.4.
- When referring to an SDO in this Note, the term applies equally to the SDO’s staff since it is impractical for just one person to handle the caseload of an entire agency. See ABA Comm. on Debarment & Suspension, supra note 20, at iv, vi (defining debarring official and suspending official as including those who are designated by the agency head). See generally FAR 9.406–3(a) (allowing agencies to establish separate procedures to facilitate “prompt reporting, investigation, and referral” of allegations and evidence for SDO determinations).
- See ABA Comm. on Debarment & Suspension, supra note 20, at 205 app. D. In FY 2015, federal government agencies and departments received 3,920 referrals of potential contractor misconduct. Sims & Vassar, supra note 18, at 3.
- However, in some cases, an agency will be precluded from further evidence-gathering if the DoJ notifies the agency that “substantial interests of the [g]overnment in pending or contemplated legal proceedings . . . would be prejudiced” if the investigation were to continue. FAR 9.407–3(c)(6)(ii); see Gerald P. Norton, The Questionable Constitutionality of the Suspension and Debarment Provisions of the Federal Acquisition Regulations: What Does Due Process Require?, 18 Pub. Cont. L.J. 633, 637 (1989); ABA Comm. on Debarment & Suspension, supra note 20, at 63–64.
- Sloan v. HUD, 231 F.3d 10, 17 (D.C. Cir. 2000) (“[T]here must be a real need for immediate action to protect the public interest in order to justify a suspension.”); see also GSA, Could Suspension and Debarment Happen to You? 15 (2014); Lion Raisins, Inc. v. United States, 51 Fed. Cl. 238, 247–48 (2001) (finding USDA SDO’s order of immediate suspension without pointing to the issue of immediacy was arbitrary and capricious); Coleman Am. Moving Rys., Inc. v. Weinberger, 716 F. Supp. 1405, 1409 (M.D. Ala. 1989) (holding that adequate evidence of violation of antitrust laws by moving and storage contractors justified immediate protection of the government through suspension).
- See Manuel, supra note 21, at 4–5, 7–8.
- FAR 9.402.
- ABA Comm. on Debarment & Suspension, supra note 20, at 61–62, 74 (noting show cause notices are intentionally informal and therefore are not included in the FAR).
- Id. The Interagency Suspension and Debarment Committee and some agencies have recognized the value of pre-exclusion notice and have encouraged its use as a first step in suspension and debarment proceedings even though it is not mandated in FAR 9.4. Sims & Vassar, surpra note 18, at 2–3; Memorandum from Don Yockey, Under Secretary of Defense, to the Secretaries of the Military Departments et al. (Sept. 28, 1992) (directing the use of show cause notices before taking exclusion action); see 69 Fed. Reg. 34, 248 (June 18, 2004) (proposing the addition of show cause notices as a mandatory first step in exclusion actions as an amendment to the GSA’s FAR supplement) (not adopted); ABA Comm. on Debarment & Suspension, supra note 20, at 62 n.242.
- FAR 9.407–1(b)(1). One difference between suspension and proposed debarment is the lack of an immediacy requirement for proposed debarments under FAR 9.406–3.
- FAR 9.406–3, 9.407–3(c)(5).
- FAR 9.407–3(c) (authorizing SDOs to suspend contractors without first providing a pre-exclusion opportunity to be heard); Todd J. Canni, Shoot First, Ask Questions Later: An Examination and Critique of Suspension and Debarment Practice Under the FAR, Including a Discussion of the Mandatory Disclosure Rule, the IBM Suspension, and Other Noteworthy Developments, 38 Pub. Cont. L.J. 547, 553–54, (2009).
- David Robbins et al., A Scarlet Letter: Do the Exclusion Archives on SAM.gov Violate Contractors’ Liberty Interests?, 106 Fed. Cont. Rep. (BNA) 317, 2 (Sept. 27, 2016).
- Norton, supra note 48, at 637; FAR 9.406–3(d)(2).
- FAR 9.406–3(d)(1), 9.407–3(d)(1).
- FAR 9.402.
- FAR 9.405; 9.406–1(c); 9.406–5.
- FAR 9.405.
- FAR 9.405(d)(1).
- Id.; FAR 9.405(d)(4).
- FAR 9.401; Federal Acquisition Institute, Suspension and Debarment: The Fundamentals, FAI Media Library 6 (last accessed July 22, 2018), https://www.fai.gov/media_library/items/show/68.
- FAR 9.405(a).
- Memorandum from Deputy Att’y Gen. Sally Yates to All U.S. Att’ys 2–3, 5 (Sept. 9, 2015) (on file with the Dep’t of Justice) [hereinafter Yates Memo].
- Id. at 4–5.
- While this viewpoint is sympathetic to contractors, it is worth noting that excluding “bad actor” individuals who would just leave one company and start up another company is one good reason individuals are, and should be, excluded from government contracting.
- See Angela Styles, Peter Eyre, Richard Arnholt & Jason Crawford, How Proposed Debarment Became Equal to Suspension, Law360 2 (Feb. 2, 2015), http://www.law360.com/articles/616957/how-proposed-debarment-became-equal-to-suspension; Robbins et al., supra note 57, at 2.
- See Styles et al., supra note 70, at 2; Robbins et al., supra note 57, at 3; ABA Comm. on Debarment & Suspension, supra note 20, at 138–39.
- A surety, as used in this context, means the excluded company would be precluded from entering into a contract to perform the work of another contractor if the first contractor failed to perform. FAR 28.203–7.
- ABA Comm. on Debarment & Suspension, supra note 20, at 141.
- Styles et al., supra note 70, at 2.
- See ABA Comm. on Debarment & Suspension, supra note 20, at 139–40; Styles et al., supra note 70, at 2.
- Styles et al., supra note 70, at 2. A hypothetical example of a purely commercial contracting relationship that could be affected by a temporary exclusion is a construction firm doing business with the U.S. government and also building hotels and resorts for private investors abroad. If the U.S. government temporarily excludes the construction firm, the private investors who have a purely commercial contracting relationship with the firm may turn to other construction firms to build their hotels and resorts to mitigate risks to reputation, financing, or performance that the excluded construction firm now poses.
- See Robbins et al., supra note 57, at 3.
- Federal district courts have jurisdiction to review agency decisions. ABA Comm. on Debarment & Suspension, supra note 20, at 8–9.
- The U.S. Court of Federal Claims has the authority to review debarment and suspension decisions “in the context of a pre-award bid protest or termination.” Id.
- Trustees of Dartmouth College v. Woodward, 17 U.S. 518 (1819).
- Id. at 624.
- Grosjean v. Am. Press Co., 297 U.S. 233, 244 (1936) (“[A] corporation is a ‘person’ within the meaning of the equal protection and due process of law clauses . . . .”).
- Morrissey v. Brewer, 408 U.S. 471, 481 (1972).
- See, e.g., Robbins et al., supra note 57, at 5–6; FAR 9.407–1(b)(1) (noting that “[s]uspension is a serious action”); see also supra text accompanying notes 67–85.
- Mathews v. Eldridge, 424 U.S. 319 (1976).
- Id. at 332.
- See Paul v. Davis, 424 U.S. 693, 707 n.5 (1976).
- Ongoing harm includes exclusion from “future government employment opportunities.” Doe v. U.S. Dep’t of Justice, 753 F.2d 1092, 1105–06 (D.C. Cir. 1985). These two elements combined are referred to as the “stigma plus” test, given that reputational harm is not, standing alone, a cognizable constitutional injury. See, e.g., id. at 1108–09; Hill v. Borough of Kutztown, 455 F.3d 225, 236 (3d Cir. 2006) (“[T]o make out a due process claim for deprivation of a liberty interest in reputation, a plaintiff must show a stigma to his reputation plus deprivation of some additional right or interest.”).
- See Old Dominion Dairy Prods., Inc. v. Sec’y of Def., 631 F.2d 953, 966 (D.C. Cir. 1980) (applying liberty interests to government contractors by holding that “the ‘accompanying loss of government employment’ and the ‘foreclosure from other employment opportunity’ . . . is the injury resulting from the [g]overnment defamation . . . [and, therefore, is] a liberty interest recognized by the Fifth Amendment”).
- Reeve Aleutian Airways, Inc. v. United States, 982 F.2d 594 (D.C. Cir. 1993).
- Id. at 597.
- Id. at 599.
- See Bd. of Regents v. Roth, 408 U.S. 564, 573 (1972) (holding that in cases where government action “might seriously damage [someone’s] standing and associations in his community . . .due process would accord an opportunity to refute the charge”); see also Paul v. Davis, 424 U.S. 693, 712 (1976) (holding that where a change in status has not resulted from reputational harm, no deprivation of due process has occurred).
- Old Dominion Dairy Prods., Inc. v. Sec’y of Def., 631 F.2d 953, 964 (D.C. Cir. 1980).
- See supra text accompanying notes 48–53 (noting that the collateral consequences of temporary exclusion are long lasting and far-reaching).
- The public record referred to is part of SAM.gov.
- This is especially problematic for individuals subject to the U.S. procurement suspension and debarment system. A company, on the one hand, can take mitigating steps like changing leadership, instituting compliance programs, or changing its name. See Manuel, supra note 21, at 9. Individuals, on the other hand, can do none of these things and therefore are more severely impacted by a temporary exclusion than a company. See generally U.S. Office of Personnel Management, Standard Form 85P Questionnaire for Public Trust Positions 18(b) (1995), https://www.opm.gov/forms/pdf_fill/sf85p.pdf (Security clearance questionnaire asking: “To your knowledge, have you ever . . . been debarred from government employment?”); Yates Memo, supra note 67.
- Doe v. U.S. Dep’t of Justice, 753 F.2d 1092, 1106 (D.C. Cir. 1985) (citing Paul v. Davis, 424 U.S. 693 (1976)).
- Bd. of Regents v. Roth, 408 U.S. 564, 573 (1972).
- See Morrissey v. Brewer, 408 U.S. 471, 481 (1972).
- Mathews v. Eldridge, 424 U.S. 319 (1976).
- Id. at 321; see also Norton, supra note 48, at 637–40.
- See, e.g., Reeve Aleutian Airways, Inc. v. United States, 982 F.2d 594, 598–602 (D.C. Cir.1993) (suspension from federal contracting); Kaley v. United States, 571 U.S. 320, 334–38 (2014) (pre-trial forfeiture); Turner v. Rogers, 564 U.S. 431, 432–33 (2011) (civil contempt proceedings for failure to pay child support); Wilkinson v. Austin, 545 U.S. 209, 213–30 (2005) (state policy assigning inmates to maximum security prison).
- Mathews, 424 U.S. at 334–35.
- See supra Part I.C.
- Compare City of Los Angeles v. David, 538 U.S. 715, 717–19 (2003) (finding that the private interest of “maintaining the use of money” between paying fees and hearing was not sufficient to weigh in favor of the non-governmental party), with Goldberg v. Kelly, 397 U.S. 254, 264 (1970) (holding that deprivation of welfare benefits was a serious harm).
- Compare Horne Bros., Inc. v. Laird, 463 F.2d 1268, 1271 (D.C. Cir. 1972) (admonishing the government where a DoD contractor was suspended more than a month without notice or an opportunity to be heard that principles of fundamental fairness required the government to provide the contractor an opportunity to be heard because “the contractor[’s] . . . economic life may depend on his ability to bid on government contracts”), with Reeve, 982 F.2d at 598 (holding that despite “depriv[ing] Reeve of a significant liberty interest,” the collateral consequences of the deprivation were not severe enough to weigh this factor in the contractor’s favor because “(at least formally) [the temporary exclusion] did not affect Reeve’s ability to obtain government work outside of the DoD and . . . ceased as soon as corrective actions were taken”).
- See supra text accompanying notes 67–85.
- See supra text accompanying notes 67–85.
- Mathews v. Eldridge, 424 U.S. 319, 335 (1976).
- See supra text accompanying notes 61–62.
- See infra Part IV.
- Mathews, 424 U.S. at 334–35.
- See Caiola v. Carroll, 851 F.2d 395, 398–99 (D.C. Cir. 1988); Canni, supra note 56, at 578–79, 602 (“[T]he current system favors the [g]overnment’s need to eradicate swiftly perceived wrongdoers at the expense of ensuring a fundamentally fair system that preserves the system’s integrity and its overall effectiveness.”).
- Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985).
- Id. at 535, 538.
- Id. at 535.
- Id. at 542–44.
- See supra Part I.C.
- Cleveland Bd. of Educ., 470 U.S. at 543.
- Canni, supra note 56, at 575–76.
- Cleveland Bd. of Educ., 470 U.S. at 544 n.8.
- Id. at 543.
- Id. at 545–46.
- See FAR 9.407–3(c).
- The FAR Council is comprised of the Administrator for Federal Procurement Policy, the Secretary of Defense, the Administrator of the National Aeronautics and Space Administration (NASA), and the Administrator of GSA. The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council solicit and review proposed changes to the FAR and as authorized under 48 CFR 1.2. GSA, Federal Acquisition Regulatory Council, Acqusition.gov (July 22, 2018), https://www.acquisition.gov/far-council-members; GSA, Civilian Agency Acquisition Council (CAAC), Acqusition.gov (July 22, 2018), https://www.acquisition.gov/?q=CAAC.
- The proposed changes to the FAR would include a thirty-day safe harbor response window within which a contractor would not be excluded and have an opportunity to be heard before the SDO could make a temporary exclusion determination.
- Cleveland Bd. of Educ., 470 U.S. at 543.
- The FAR is promulgated by the GSA, the DoD, and NASA. GSA, Federal Acquisition Regulatory Council, supra note 130; see also Office of Federal Procurement Policy Act of 1974, P.L. 93–400, 88 Stat. 796 (codified at 41 U.S.C. §§ 401–438).
- FAR 9.407–3(b)(1).
- FAR 9.406–3(b)(1).
- This extension is included in the process because there are conceivably situations in which an SDO would not be available to meet within a thirty-day window, the contractor has shown good faith in conducting an investigation but needs more time, or external circumstances necessitate a longer window.
- This outcome could be either at the SDO’s discretion or could be a standardized burden of proof such as “preponderance of the evidence.”
- The contractor would be relieved of its burden to disclose prior exclusions once the system expunges the confidential exclusion from SAM.gov. It is likely that further amendments to FAR language are necessary to effectuate the relief of the contractor’s burden, but that discussion is outside the scope of this Note.
- FAR 9.404(a).
- See FAR 9.405–2(b).
- FAR 52.209–6, Protecting the Government’s Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment (Oct. 2015).
- FAR 52.209–6(c).
- See FAR 9.406-3(b)(1); Silverman v. U.S. Dep’t of Def., 817 F. Supp. 846, 849 (S.D. Cal. 1993).
- See infra text accompanying notes 152–157.
- See infra text accompanying notes 158–160.
- See Pascale H. Dubois, Paul Ezzeddin & Collin D. Swan, Suspension and Debarment on the International Stage: Experiences in the World Bank’s Sanctions System, 3 Pub. Procurement L. Rev. 61, 64–65 (2016); World Bank, World Bank Sanctions Procedures 7–9 (Jan. 1, 2011), http://siteresources.worldbank.org/EXTOFFEVASUS/Resources/WBGSanctionsProceduresJan2011.pdf.
- Canni, supra note 56, at 592 (explaining that the lack of pre-exclusion notice was due to suspicions that an EPA employee had leaked confidential bid-sensitive information to IBM and that the government needed immediate protection).
- Id. at 593 (“If no suitable replacement existed, agencies wondered whether they would need to waive IBM’s suspension—a decision that may undermine the integrity of the suspension and debarment system.”); see also Manuel, supra note 21, at 2, 10 (explaining that agency heads can waive exclusions for “compelling reason[s]”).
- Canni, supra note 56, at 593.
- Id. at 594.
- CPARS, https://www.cpars.gov/cparsmain.htm (last visited July 22, 2018).
- CPARS, https://www.cpars.gov/index.htm (last visited July 17, 2018).
- Naval Sea Logistics Center Portsmouth, User Manual for Contractor Performance Assessment Reporting System (CPARS) (2018).
- Bruce Shirk & David Gallacher, Deciphering the Alphabet Soup—FAPIIS, CPARS, and PPIRS; Don’t Look for All This in the FAR, Government Contracts & Investigations Blog (Apr. 16, 2012), http://www.governmentcontractslawblog.com/2012/04/articles/compliance/deciphering-the-alphabet-soup-fapiis-cpars-and-ppirs-dont-look-for-all-this-in-the-far.
- PPIRS, https://www.ppirs.gov/ (last visited July 17, 2018) (“A contractor must be registered in the [SAM] . . . to access their [PPIRS] information.”). A third system called the Federal Awardee Performance and Integrity Information System also feeds into PPIRS, but is not discussed in this Note as the in-text examples are illustrative, not exhaustive. See FAPIIS Overview, https://www.cpars.gov/pdfs/FAPIIS_Overview.pdf (last visited July 23, 2018).
- FAR 42.1503(d)–(f); PPIRS, https://www.ppirs.gov/ (last visited July 17, 2018).
- System for Award Management (SAM), https://www.sam.gov/portal/SAM (click on “Search Records”).
- GSA, System for Award Management User Guide § 184.108.40.206 (2018), https://www.sam.gov/sam/SAM_Guide/SAM_User_Guide.htm.
- Id. (stating contractors will “still be visible to users with For Official Use Only (FOUO) data access and will be provided in accordance with Freedom of Information Act requests”).
- World Bank Sanctions Procedures, supra note 147, at 7.
- World Bank, Early Temporary Suspensions of Companies Involved in World Bank-Financed Projects, ETS Announcement, http://pubdocs.worldbank.org/en/104871449169630809/ETS-Announcement.pdf (last visited Jan. 19, 2017).
- Nathaniel E. Castellano, Suspensions, Debarments, and Sanctions: A Comparative Guide to United States and World Bank Exclusion Mechanisms, 45 Pub. Cont. L.J. 403, 422 (2016).
- World Bank, supra note 162; World Bank Office of Suspension and Debarment, Report on Functions, Data and Lessons Learned 2007–2015, at 15 (2d ed. 2015), http://siteresources.worldbank.org/EXTOFFEVASUS/Resources/OSDReport.pdf (stating that temporary suspensions are posted “on the World Bank’s intranet and the ‘Client Connection’ extranet site used by borrowing countries”).
- See Dubois, supra note 147, at 63; Rohan Schaap & Cecile Divino, The AMEDD Five Years On: Trends in Enforcement Actions and Challenges Facing the Enforcement Landscape 57 Harv. Int’l L.J. Online 1 (2016), http://www.harvardilj.org/wp-content/uploads/January-2016-Vol-57-Schaap-Divino.pdf.
- The FAR guidance on promulgation of new rules, regulations, and policies is to drive efficiency by only establishing new procedures “when their benefits clearly exceed the costs of their development, implementation, administration, and enforcement.” FAR 1.102–2(b)(1)–(2).
- See supra note 130.
- See supra Part III.C.4.
- The amount of work it takes to change a system would be a determination for the government. It is this author’s opinion, having worked in government systems for almost a decade, that the change would not be extensive, but it is impossible to know until requirements are complete, a Request for Proposals is released, and the government receives proposals for the work.
- See Brian Young, Suspension and Debarment: Why the Commission on Wartime Contracting’s Recommendations Miss the Mark, J. Cont. Mgmt., Summer 2012, 59, 62, http://www.ncmahq.org/docs/default-source/default-document-library/m/articles/jcm12---59-74.
- See FAR 52.249.
- See id.; Cibinic et al., supra note 25, at 787.
- Canni, supra note 56, at 607–08.
- Id. at 608.
- On this last point, agencies may promulgate supplemental guidance to the FAR for their particular agency. To ensure the due process rights of contractors uniformly governmentwide, it would be necessary to amend the FAR as opposed to relying on agencies to provide piecemeal guidance in agency supplements to the FAR.
- See Canni, supra note 56, at 591–98 (illustrating through IBM case study).
- See David Robbins & Laura Baker, The (Unacceptable) Cost of Growing Delays in the Suspension and Debarment System, 45 Pub. Cont. L.J. (2015).
- See supra note 137 and accompanying text.
- See Christopher R. Yukins, Rethinking the World Bank’s Sanctions System, 55 Gov’t Cont. no. 42, 2–4 (Nov. 13, 2013).