April 10, 2020 Public Contract Law Journal

Commentary and Proposed Unified Suspension & Debarment Rule for Procurement and Nonprocurement Activities1

by Robert F. Meunier & Trevor B. A. Nelson

Robert F. Meunier is the owner of Debarment Consulting Services, LLC, which provides training, interpretation, and policy and procedural advisory services in all aspects of the Federal Suspension and Debarment Program. Mr. Meunier served as Chair of the Office of Management and Budget’s Interagency Suspension and Debarment Committee (ISDC) from 1988, until his retirement from federal service in 2008. He served thirteen years as the Environment Protection Agency (EPA), Suspension and Debarment Official (SDO) from 1995 to 2008.

Trevor B. A. Nelson has been an attorney for over eight years with the Department of the Army, Office of the Judge Advocate General Corps, Procurement Fraud Division. Mr. Nelson also serves as a current member of the ISDC. The authors are deeply grateful to Professor Christopher C. Yukins for his assistance and guidance in preparing this article. The views expressed in the article are solely those of the authors and do not reflect the official policy or position of the ISDC, EPA, U.S. Army, Department of Defense, U.S. Government, or any other entity or individual.

I.  Introduction

In the early 1980s, the federal government significantly improved how executive branch agencies addressed fraud, waste, abuse, poor performance, and noncompliance in government funded transactions. One important part of that effort standardized executive branch discretionary suspension and debarment procedures (sometimes referred to in the private sector as “blacklisting”)2 in two separate rulemakings — one governing federal procurement transactions3 under the Federal Acquisition Regulation (FAR); the second for federal assistance, loans, and other benefits (ALOB) under a jointly issued set of agency regulations known as the “Nonprocurement Common Rule” (NCR).4 Both initiatives were coordinated by the Office of Management and Budget (OMB).5 These government-wide rules were the direct result of several decades of criticism by the legal and business communities,6 a study by the Administrative Conference of the United States (ACUS),7 and several court decisions that established a constitutional basis for a fundamentally fair debarment process.8 Congressional oversight committees, government watchdog organizations, and the inspectors general community also helped develop today’s regulatory scheme.9

While critical parts of the rules relating to the legal standards of evidence, criteria for suspension, nature and duration of sanctions, and fundamental elements of official notice and opportunity to contest were consistent, the two rules have never enjoyed full symmetry. Each rule was drafted to reflect the technical language common to the target audience, and reflective of its relationship to the federal government. For example, the FAR uses many terms applicable to federal business and commercial relationships, while the NCR uses more generic terms that apply to a wide universe of ALOB relationships with the federal government.10 Over the last thirty-five years, amendments to each rule have moved the language, interpretation, and practical application of the rules farther apart. For example, the original exclusionary treatment that applied to a Notice of Proposed Debarment (NPD) issued under the FAR was enlarged in 1989.11 This change was totally out of harmony with the effect of issuing an NPD under the NCR and blurred the distinction between suspension and debarment.12 Another example is the redrafting of the NCR in a plain language question-and-answer format published in 2003 as part of the National Performance Review under the Clinton administration spearheaded by former U.S. Vice President Albert A. Gore during his reinventing government initiative.13 Other significant changes included adding a cause for debarment for tax deficiency under the FAR14 that is in total contradiction to the express language and treatment regarding tax deficiency under the NCR.15 

In recent years, many in the private bar have called for improvements to the federal debarment and suspension system, including reconciliation of the substantive differences between the FAR and the NCR.16 In an article appearing in the Spring 2017 edition of the Public Contract Law Journal (PCLJ), the authors addressed some of the more significant differences between the rules and some of the factors that led to those differences.17 That information will not be repeated here. Instead, this follow-up article proposes a draft Uniform Suspension and Debarment Rule (USDR) that attempts to reconcile those differences. The draft USDR in this article incorporates some of the simplified and generic features of the NCR but in the more traditional regulatory format of the FAR. Whether the OMB and the federal agencies will embrace a unified rule for debarment and suspension is essentially a decision to be made solely by the government.18 The authors believe that any attempt by interested parties outside the government to diminish the authority suspension and debarment officials (SDOs) presently enjoy, or to make the process more legalistic, is unlikely to succeed. Accordingly, the draft USDR does not seek to alter federal SDOs’ authority or flexibility in any way. It preserves that authority and merely offers a context in which to advance uniformity within a single and easy-to-understand rule. It also includes some provisions that reflect practices and policies already in place, but that are not as visible under the current language and structure of the rules.

While the authors believe that the inspectors general community was correct in its 1982 assessment that a single debarment and suspension sys- tem was feasible,19 and that a USDR would virtually guarantee consistency in debarment and suspension practice under federal contracts and assistance activities, the authors believe a single rule is not absolutely necessary to achieve substantive and technical harmony. With discipline in the rulemaking process, coordination between the Office of Federal Procurement Policy (OFPP) and the Office of Federal Financial Management (OFFM), and regular communication between the FAR Council and OMB’s Interagency Suspension and Debarment Committee (ISDC), a single debarment and suspension system with consistent requirements may be accomplished and maintained under separate rules that employ language common to each community.20

The draft USDR in this article is intended to be a catalyst for further meaningful discussion between those with serious interests in improving the way the Federal Suspension and Debarment Program operates. The rest of this article consists of two parts. First, it highlights some of the more significant  subject areas that are currently at variance between the FAR and the NCR and suggests how to reconcile those provisions.21 Second, it provides a full text version of a draft USDR incorporating those reconciled provisions.22

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