I. Introduction
“Human feces and bottles of urine . . . ; used condoms; significant amounts of trash and debris; broken glass; unsanitary elevators[,] and numerous overflowing trash cans” are all common sights in the stations and parking garages of the Washington Metropolitan Area Transit Authority (WMATA) Metro system. But these conditions are not due to a lack of funding for cleaning staff. In 2018 and 2019, WMATA’s Office of Inspector General investigated WMATA spending over a twenty-month period, during which WMATA spent over $2.2 million for janitorial services. Despite WMATA’s contract for daily janitorial services, trash and debris often went uncleaned for “days, weeks, and even months.” The investigation ultimately concluded that “[eighty-four] percent of the time contracted cleaning personnel were not performing their . . . cleaning duties.” In almost any procurement system, including WMATA’s, such conduct could trigger a debarment—but the contractor here, Community Bridge Incorporated, is presently eligible for future awards.
Unfortunately, reports such as this are hardly uncommon, and they illustrate broader issues in state and local procurement systems. State, local, and regional governments award over $1 trillion in contracts per year, but their procurement systems are poorly regulated and wildly inconsistent. All fifty states engage in some type of contracting, resulting in concerns about the ethical use of taxpayer dollars across the country. Yet at least four states have no mechanism in place to ensure that their contractors are responsible, and even states that do have such mechanisms irregularly enforce responsibility requirements.
Debarment is a responsibility mechanism that excludes a contractor from receiving public contracts for a set period of time—a drastic step by any accounts. Most consider alternatives to debarment “a good thing,” and recognize that, in most cases, debarment is, and should be, a last resort. As a result, more sophisticated procurement systems also incorporate mechanisms that serve as alternatives to debarment. But those alternatives are not always effective, and in many state and local jurisdictions, they may not exist at all. In those jurisdictions, what results is a system in which contractors are free to engage in corrupt and unethical practices, abusing taxpayer dollars, over and over again.
Like many other local jurisdictions, WMATA is a regional entity that has spent billions on public contracts in 2020 alone. However, unlike state and local counterparts, WMATA has sophisticated procurement regulations modeled after the federal system, but it lacks the capacity or infrastructure to actually support this model. Like the Federal Acquisition Regulation (FAR), WMATA’s Procurement Procedures Manual lays out formalized responsibility and exclusion mechanisms. At the federal level, FAR subpart 9.4 authorizes all federal Suspension and Debarment Officers (SDOs) to impose debarment “to protect the Government’s business interests from potential harm posed by individuals or entities whose conduct indicates either serious poor performance or a lack of business honesty or integrity.” Similarly, WMATA’s Procurement Procedures Manual provides specific requirements and factors to consider when evaluating contractor responsibility.
WMATA’s regulations include both debarment and its common alternatives. Despite these regulations, WMATA faces headline after headline detailing contractor abuses ranging from undelivered goods to falsified records to fraudulent invoices. The list goes on, WMATA continues to lose money, and the underperforming contractors remain eligible for awards. In the last two years alone, at least three WMATA contractors have faced felony charges for their conduct while performing WMATA contracts. Yet each of those contractors remain technically eligible for future WMATA contracts. WMATA has a robust procurement regime, including a sophisticated debarment system and alternatives, which demonstrates WMATA’s regulatory ability to enforce contractor integrity. However, there is evidence that its debarment alternatives are not working, and, despite a litany of issues and scandals, WMATA has still never debarred anyone.
This Note identifies why WMATA’s responsibility regulations continue to fail, despite their sophistication, and proposes modifications to enforce necessary debarment actions. Specifically, this Note suggests that WMATA’s lack of enforcement stems not from its regulations, but from its structural use of a panel that holds all exclusionary power. Instead of a single chief debarment officer, as seen in the federal system, WMATA employs a panel of high-ranking officials that together hold all exclusionary power. But the Metro Debarment Panel requires at least three officials with a myriad of other professional obligations to meet and come to a consensus before a single party can be excluded. This places extreme procedural burdens on WMATA’s contractor integrity mechanisms, resulting in an otherwise well-regulated and a sophisticated system on paper becoming dysfunctional in practice. This Note proposes two solutions to begin enforcing contractor integrity within WMATA. First, WMATA should employ a single and permanent SDO with limited discretion to debar non–responsible contractors. Second, WMATA should transform the Metro Debarment Panel into a review forum to ensure fairness and remedy concerns about the SDO’s lack of discretion.
These solutions are based in part on the structure of the World Bank Sanctions system. Unlike the federal system, the World Bank’s two-tiered mechanism includes an investigative branch and an adjudicatory branch in the first tier, and an independent review body in the second tier. Once excluded by the first tier, contractors can contest their sanction at the Sanctions Board—a panel of officials that together serve as a final, non–appealable review forum. Using the World Bank Sanctions Board as a model, WMATA should transform the current Metro Debarment Panel into a review forum, which would minimize necessary procedural and structural changes and provide contractors with a consistent forum in which to challenges to exclusions.
Part II of this Note details WMATA’s structure and regulations, specifically in comparison to the jurisdictions that fund it, and how those jurisdictions may impact WMATA’s present ability to enforce its own regulations. This Part identifies the similarities between WMATA’s procurement regulations and those of the federal government. It also highlights WMATA’s use of the Metro Debarment Panel as a key distinguishing factor in enforcing integrity. Part III examines WMATA’s present ability to enforce contractor compliance and integrity. It further explains how this ability created a system where procurement officials have the regulatory power to exclude contractors but fail to use it. Finally, Part IV details the World Bank’s system, explains its advantages, and then recommends that WMATA model its own system after that of the World Bank by (1) employing a single, permanent SDO, and (2) transforming its Metro Debarment Panel into a review forum for exclusionary decisions made by that SDO.
II. A System Spanning Multiple Systems: How WMATA Fits into a Regime of Jurisdictions with Competing Interests
WMATA holds a unique position as a regional authority. Its jurisdiction is not limited to a single forum like the federal or individual state systems. Rather, WMATA operates in three separate and independent jurisdictions but also functions as an independent entity. Specifically, WMATA is funded by and operates in Virginia, Maryland, and the District of Columbia (D.C.). This Note argues that WMATA’s multi-jurisdictional span impacts its ability to effectively enforce its regulations. All of these jurisdictions have unique procurement regulations and debarment lists, and the differences among them demonstrate that each jurisdiction may have independent interests when it comes to contractor responsibility. WMATA also receives federal funding, and as a result must enforce additional responsibility requirements that mirror those of the federal system. The following sections detail differences in the procurement regimes in Virginia, Maryland, D.C., and the federal government to demonstrate how those systems influence WMATA’s own procurement regime. Then, this Note identifies WMATA’s use of the Metro Debarment Panel as a key difference in WMATA’s enforcement procedures and explains why that panel precludes integrity enforcement.
A. Money Talks: Where WMATA Gets Its Funding, and What That Means in Terms of Contractual Spending
Because WMATA’s contracts are funded by multiple jurisdictions, it is important to understand how those funds, and the jurisdictions that provide them, influence WMATA’s enforcement against contractor misconduct. WMATA’s budget for fiscal year 2019 was $3.2 billion, almost three-quarters of which comes from jurisdictional contributions. Just over half of this—$1.8 billion—comes from the state and local jurisdictions in which WMATA operates. The federal government provides an additional $500 million in grants. Contributions from these states and the federal government carry unique priorities, particularly regarding contractor responsibility. Each of these jurisdictions has individual responsibility regulations that permit debarment under varying circumstances and provide excluding officials different amounts of discretion.
For example, debarment systems in Virginia and Maryland prioritize flexibility and discretion over heavy regulation. In contrast, the debarment system in D.C. emphasizes formalized processes and protections, like notice and opportunity to respond, that make it harder to exclude parties. Funding from all of these jurisdictions necessarily influences WMATA, particularly with regard to the interests of those jurisdictions. Further, WMATA’s procurement officials represent those different jurisdictions, which aggravates potential tensions between those interests. WMATA may also answer to Virginia, Maryland, and D.C. in their respective courts, where an excluded contractor could theoretically appeal a debarment decision. In the context of debarment, this could pose forum shopping problems for WMATA, as contractors may be more likely to appeal debarment determinations in courts that are more favorable to contractor interests (D.C.) as opposed to courts in jurisdictions with more flexibility that will defer to government or agency determinations (Virginia).
In many state and local jurisdictions, where fewer resources are devoted to public procurement, more flexibility in a procurement system may be beneficial because it allows governments to enforce contractor integrity without significant regulatory and procedural burdens. However, WMATA has sophisticated procurement regulations and significant resources dedicated to procurement, suggesting that it may not need the same level of flexibility. Further, if WMATA is to separate its own interests from the states that fund it, WMATA may need more structure to prevent those competing interests from stalling enforcement.
B. Looking in a Mirror: Striking Similarities in Debarment and Responsibility Findings of the Federal Government and the WMATA Procurement Regulations
Along with funding from its component jurisdictions, WMATA also receives funding from the federal government through annual grants. As a condition of these grants, grantees like WMATA “must manage and administer [its programs] in a manner so as to ensure that Federal funding is expended and associated programs are implemented in full accordance with U.S. statutory and public policy requirements . . . .” Specifically, federal grants subject WMATA to a host of additional regulations under Title 2 of the Code of Federal Regulations Part 200 (Uniform Guidance).
The Uniform Guidance shapes WMATA’s general procurement standards, including the restrictions on underperforming parties that should be “debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.” More specifically, WMATA “must award contracts only to responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement . . . consider[ing] . . . contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” In practice, this means that WMATA must follow federal exclusions listed in the System for Award Management at SAM.gov, the federal database of excluded parties, and must enforce federal responsibility standards for contractors or lose its federal funding. It is therefore not surprising that WMATA’s regulations on contractor debarments and responsibility determinations are almost identical to those of the federal procurement system.
At the federal level, the FAR implements a uniform system governing federal suspensions and debarments. Before the FAR, suspensions and debarments were handled on an agency-by-agency basis, which led to problems stemming from lack of uniform procedures and lack of reciprocity. The FAR was designed to address these concerns, mandating uniform debarment provisions across federal agencies, and it largely accomplishes this. Each year, the federal government publicly excludes a few thousand contractors, ensuring that contractors that have abused federal funds are, for a period of time, ineligible to receive federal contracts. However, the same cannot be said for WMATA’s strikingly similar regulatory scheme, which currently does not exclude a single contractor.
Under both the FAR and WMATA’s Procurement Procedures Manual, a contracting individual or entity may be debarred if it is in the public interest to prevent that contractor from doing business with the government or WMATA. This is because public interest: “(1) safeguard[s] public funds by excluding contractors who may be nonresponsible from contracting with the government and (2) avoid[s] economic injury to contractors who might technically be excludable but are fundamentally responsible and safe for the government to contract with.” The FAR and WMATA lay out identical specific grounds for debarment, in addition to catchall provisions that permit debarment where a contractor has committed “any other offense indicating a lack of business integrity or honesty.”
Debarment under both systems is usually discretionary. Contractors who meet one or more causes for debarment may be eligible for exclusion, but they are not required to be excluded. Once debarments are imposed, debarring officials in both systems can consider mitigating factors when determining whether debarment is appropriate. Such factors include internal control mechanisms, cooperation, remedial measures, other potential collateral consequences, reversal of a criminal or civil conviction, or any other reason the debarring official may deem pertinent. Further, a debarring official can reduce the length of a debarment: (1) if there is new evidence of the contractor’s alleged misconduct; (2) if the judgment serving as a basis for the debarment is reversed; (3) if the contractor’s management team has significantly changed since the debarment; or (4) if there are “other appropriate reasons” to lessen the sentence. Already-debarred contractors can continue performing their other existing federal or WMATA contracts, and may even be eligible to receive new contracts if a compelling need arises. However, even if a contractor’s debarment term changes or a compelling need to award a contract despite debarment is assessed, the debarred entity is publicly placed on an excluded parties list, located at SAM.gov and wmata.com, respectively.
Accordingly, WMATA’s decision not to enforce responsibility is not due to a difference in the grounds for debarment or exclusion that prevents WMATA’s enforcement. Additionally, WMATA’s responsibility determination mechanisms provide an alternative to debarment and show that WMATA recognizes contractor responsibility as an important safeguard. This comparison further demonstrates that WMATA has the necessary tools to reach such determinations. However, there is one key difference between the two systems: WMATA uses a panel rather than an individual to enforce these actions. The next section details how that panel operates and why WMATA’s use of a panel system likely places procedural burdens on the ability to impose responsibility standards.
C. Too Many Conductors on the Train: The Metro Debarment Panel System
Rather than a typical hierarchical structure where a reporting employee provides documents to an SDO who then makes a determination as to a contractor’s fate, WMATA employs a more convoluted panel system to make exclusionary determinations. Though this system has definite advantages, it is also slower to function.
At the federal level, enforcement is a relatively straightforward process. A federal SDO can receive information regarding contractor responsibility through investigations, prosecutors, competitors, press, or any other reliable source, and this evidence can trigger a suspension or debarment action. Ultimately, the SDO considers whether a preponderance of the evidence presented both for and against the contractor demonstrates sufficient grounds to exclude a party. The SDO then issues a written determination of findings and, if applicable, places the company or individual on the public debarment list.
For its part, WMATA similarly separates the investigation and enforcement functions: Contracting Officers conduct preliminary findings, but their authority stops short of making final determinations. Instead, the Contracting Officer make referrals of suspension or debarment to the Chief Procurement Officer, who oversees what is known as the Metro Debarment Panel (the Panel). The Panel is a group of officials who review evidence and decide ultimately whether to debar a contractor or reinstate an already-debarred contractor.
This distinguishes WMATA’s enforcement regime from the federal system, which places all of the power and discretion into the hands of a single SDO, because debarment decisions at WMATA are made by consensus of multiple authorities. The Panel must include representatives from: (1) the Office of Management and Budgeting Services under the Chief Financial Officer of WMATA; (2) Management, Audits, Risk and Compliance Office under the Office of Internal Compliance of WMATA; (3) The Office of Government Relations under the Officer of External Relations of WMATA; and (4) “a representative from either the Federal Transit Administration . . . or United States Department of Transportation,” in addition to (5) the Chief Procurement Officer, who serves as the Chair of the Panel. To make a determination, at least three members of the panel must be present and the decision is made by a simple majority vote.
Like the adage that “two heads are better than one,” WMATA’s procurement process prioritizes a consensus of opinion from multiple authorities over a determination made by a single officer after independently reviewing evidence. WMATA is not necessarily wrong to place exclusionary power in the hands of a group. Group decisions are often more likely to be fully supported by evidence, and unsupported exclusionary determinations may be subject to judicial reversal. Further, panels of decisionmakers are less likely to be improperly influenced by external factors.
However, a meeting of the minds—or a meeting in general—is not always easy. None of the officials sitting on the Metro Debarment Panel are exclusively debarment officers, or even compliance officials; they all have other duties and responsibilities besides exclusionary decisions. And with WMATA’s already-complacent attitude toward non–responsibility, meetings of the Metro Debarment Panel to reach those decisions are unlikely to be a priority for the Panel’s members. Further, a group setting inherently reduces individual accountability which compounds the issue of deprioritized enforcement actions.
Practically, this means that debarment in the WMATA system may be harder to enforce than in the federal system, despite mirroring regulations. In comparison to the federal debarment list, which currently has thousands of entities and individuals presently excluded, the WMATA debarment list has none. Even considering the difference in spending power between WMATA and the federal government, this disparity is alarming, and it demonstrates that WMATA’s current integrity enforcement system is not working as it should.
III. Talking the Talk but Not Walking the Walk: Addressing Concerns About WMATA’s Sophisticated Exclusion Regime but Lackluster Enforcement
Part III details WMATA’s failure to enforce its own compliance regulations, despite its regulatory power to debar contractors and awareness of this power by those that hold it. WMATA has expressed concern about the constant reports of corruption by contractors and frequently condemns such conduct. WMATA officials also know of WMATA’s procurement regulatory regime, including their ability to debar or otherwise exclude contractors for such misconduct. However, the next section explains that despite WMATA appearing to take contractor integrity seriously, it fails to enforce integrity compliance on its own. The following section then argues that WMATA fails to act because of its overlap with other enforcement regimes, including the federal debarment system as well as the criminal justice system. It seems that WMATA depends on those other systems to debar those contractors for the purposes of WMATA contracts rather than officially debarring them itself.
A. WMATA’s Awareness of Contractor Responsibility as a Prevalent Issue and Its Regulatory Power to Address It
In 2017, WMATA recruited an esteemed “internal watchdog” from the State Department, Geoff Cherrington, to serve as its new Inspector General. In response, Cherrington, completely unaware that WMATA had an Inspector General position, said “[w]ell, I think Metro needs an [Inspector General] . . . I don’t think it’s lost on anyone that Metro has its problems.” Perhaps it is unsurprising that Cherrington was unaware of the position prior to his appointment, as he is only the second person to hold it. Having an Inspector General position is an important step in Metro’s compliance system, but it has not been particularly effective. In the past, WMATA’s Office of Inspector General rarely made public details of fraud or corruption investigations, leaving citizens frustrated by what appeared to be inaction in the face of blatant corruption. When he accepted the role, Cherrington committed to changing this by making cases more public and by opening a hotline for employees and citizens to report abuses. That hotline receives about 400 tips per year, ten percent of which lead to opened cases. But since 2017, WMATA has issued only six substantive news reports relating to contractor abuses, and fewer than ten general audit reports per year, despite receiving thousands of tips.
Cherrington also promised to be proactive in his role as Inspector General, stating “[w]e can’t be the Maytag repairman, waiting for the next hotline call,” and WMATA backed up his statement. Cherrington’s position is supported by thirty-four staff members, including twenty auditors and seven investigators, all of whom report directly to him; Cherrington himself reports directly to WMATA’s Board of Directors. Combined with the appointment of seven officials to sit on the Metro Debarment Panel, WMATA allocates a significant number of positions to ensure contractor responsibility. WMATA’s stated goal in doing so was to “get a return on investment for [their] office where [they’re] bringing back far more than it costs” to ensure integrity. This implies that, at the time of Cherrington’s appointment, WMATA intended to place more emphasis on its own formal mechanisms, including debarments. However, that mechanism has not been used, and statements from Cherrington and others indicate that it is not for lack of awareness.
In September 2018, WMATA formally suspended Potomac Construction Inc. after a Maryland grand jury indicted its Vice President, Hardutt Singh, for attempting to bribe WMATA’s manager of the Disadvantaged Business Enterprise Department. In light of this indictment, WMATA’s Chief Procurement Officer stated:
Indictment for bribery is a basis for suspension. The actions identified in the indictment raise additional concerns regarding Mr. Singh’s and Potomac Construction Inc.’s business practices that are so serious and compelling in nature that it affects Potomac Construction Inc.’s present responsibility to conduct business with WMATA in the future, and provide an independent basis for suspension.
This acknowledgment alone demonstrates that WMATA officials in charge of procurement and procurement-related decisions are aware of the procedural safeguards WMATA has in place, and how they should operate in practice. In reality, however, WMATA traditionally leaves enforcement to external processes rather than exercising its own enforcement authority. The next section discusses why that approach is neither always effective nor in WMATA’s best interests.
B. Turning a Blind Eye: WMATA’s Overreliance on Other Systems to Document and Enforce Compliance Sanctions
At the federal level, contractor responsibility factors are heavily documented, and exclusion records are meticulously maintained. In a database called the Federal Awardee Performance and Integrity Information System, contracting officers can (and may be required to) view details about all “civil, criminal, and administrative proceedings involving federal contracts [resulting] in a conviction or finding of fault, as well as all terminations for default, administrative agreements, and nonresponsibility determinations . . . within the past five years for all entities holding a federal contract or grant worth $500,000 or more.” Because WMATA is partially funded by the federal government, WMATA contracts technically fall within the scope of federal data collection. However, it is unclear if federal investigators take the time or effort to compile such information on WMATA contractors.
While WMATA keeps its own records, they are significantly more limited than those of the federal system. For example, non–responsibility findings are documented by “placing in the contract file a determination of non–responsibility, which shall state the basis for the determination . . . [and] documents and reports supporting a responsibility determination, including any pre–award survey reports and applicable information.” However, it is not clear what happens to that information once placed in the contract file, and there is no evidence that it is ever compiled into a publicly-available database. In practice, this likely means that WMATA’s documentation and record-checking procedures rely on federal databases significantly.
Beyond documentation, it seems that WMATA’s exclusionary practices also rely on external systems to make and enforce necessary integrity determinations. As mentioned above, in September 2018, WMATA publicly suspended Potomac Construction Inc. and its Vice President, Hardutt Singh, after a Maryland state court indicted Singh for bribery on a WMATA contract. However, in February 2019, a jury acquitted Singh of all charges. At trial, Singh’s attorney argued that because Singh never actually paid any money pursuant to the bribe, he could not be convicted of bribery. However, Singh never denied attempting to bribe. Singh’s acquittal indicates only that prosecutors were unable to prove beyond a reasonable doubt that he committed an act of bribery. In light of his acquittal, WMATA revoked Singh’s and Potomac Construction’s suspensions and reinstated their eligibility for awards.
This raises concerns about WMATA’s reliance on external systems to make exclusionary determinations. While conviction or civil judgment may result in mandatory debarments, acquittal does not resolve a discretionary debarment decision. WMATA can debar a contractor for “any . . . cause of so serious or compelling a nature that it affects the present responsibility of an Authority contractor or subcontractor.” In Singh’s case, though the Maryland prosecutors did not have evidence to prove guilt beyond a reasonable doubt, WMATA almost certainly could exclude Singh and Potomac because Singh more likely than not committed an offense affecting his present responsibility by attempting to bribe a WMATA official. The fact that Singh never denied attempted bribery should itself be enough to raise concerns for WMATA. But instead of enforcing its own contractor integrity regulations, WMATA relied on the Maryland criminal justice system to protect its interests. When it failed, WMATA simply looked away.
Despite the revolving door of headline news stories, WMATA’s procedures rely on other systems to weed out non–responsible contractors, resulting in a scarecrow-like system that has all the linguistic appearance of the federal system, but the force of an inanimate bundle of hay. Combined with the procedural burdens of the Metro Debarment Panel, WMATA is systematically disincentivized to take independent action in enforcing its own responsibility standards. Employing a single SDO and a panel only for the purposes of appellate review will alleviate some of these structural barriers.
IV. Proposed Solutions: A Streamlined Process for Decision-Making by Implementing a Single SDO and Review Panel
This Note proposes two solutions to increase contractor responsibility enforcement in the WMATA system. First, WMATA should employ a single SDO to review all cases handed down by the Chief Procurement Officer. That SDO will exercise limited discretion in enforcing debarment decisions. This will compel WMATA to enforce its own responsibility standards, remove the procedural burdens of requiring a panel consensus, and ultimately eliminate WMATA’s ability to shift the burdens to external systems. Second, WMATA should maintain its current Debarment Panel as an appellate forum rather than a mechanism to make initial determinations. Allowing a panel to review decisions made by the SDO will remediate concerns about arbitrary or erroneous decisions, and will also provide a clear forum in which challenges can be brought.
A. The World Bank’s Two-Tiered Approach as a Framework
These recommendations look to the World Bank Sanctions System as a model. The World Bank’s debarment system, unlike the federal system, implements a two-tiered mechanism involving an investigative branch and an adjudicatory branch in the first tier, and an independent review body in the second tier. These tiers address different concerns about the exclusionary process, including evidence-based determinations and fairness complaints.
Within the first tier, the Integrity Vice Presidency investigates contractors and compiles evidence of misconduct. The Office of Suspension and Debarment then “impartially review[s] accusations against respondent firms and individuals” and must temporarily suspend or debar those respondents if it finds sufficient evidence. Debarment decisions are ultimately made public when a final sanction is imposed.
Within ninety days, a respondent may appeal the first tier’s determination to the Sanctions Board, which serves as a final, non–appealable review forum. The Sanctions Board employs a panel of seven representatives external to the World Bank, appointed by the Executive Directors of the World Bank Group, the International Finance Corporation, and the Multilateral Investment Guarantee Agency. Acting like a panel of judges, these Sanctions Board members hold administrative hearings “either upon a party’s request or at the discretion of the Sanctions Board Chair.” The Sanctions Board is not required to defer to the recommendations of the Office of Suspension and Debarment—rather, it conducts an independent de novo review to conclude whether “it is ‘more likely than not’ that the respondent engaged in a sanctionable practice.” If so, the Sanctions Board will publicly impose an appropriate sanction, which often includes debarment.
Separating the functions of investigation and decision-making through the Integrity Vice Presidency and the Office of Suspension and Debarment ensures that decisions are unbiased and factually supported. This means that debarment is less likely be used as punishment, and will instead “protect the funds entrusted to the World Bank.” Further, having the Sanctions Board as a review panel offers “the firms and individuals involved an opportunity to respond to the allegations against them.” This built-in review forum is unique to the World Bank and alleviates many of the due process concerns that plague the federal debarment system, as it provides contractors with notice and the opportunity to respond before being publicly debarred.
Adopting a similar approach for WMATA will alleviate the procedural and structural roadblocks that currently prevent WMATA from enforcing its own regulations. By hiring a single, permanent SDO, WMATA can allocate all exclusionary power to a single individual, rather than requiring consensus among a group of officials with other priorities. Additionally, by keeping the Metro Debarment Panel, but only as a review forum for the SDO’s decisions, WMATA can ensure fairness and due process to excluded contractors without sacrificing efficiency.
B. A Single and Permanent SDO as a Decision-Maker
The practical burdens of WMATA’s current panel system result in a non–functioning system. This Note proposes that WMATA reorganize its exclusionary process to incorporate a single, permanent SDO. A single, visible figure who is responsible for integrity enforcement will create greater accountability and require action in the face of a constant stream of headlines. Additionally, authorizing a single individual to exclude contractors will relieve the administrative burdens that the Panel currently faces and streamline the system. This centralization will result in “more uniform and predictable” practices, which ensure that the same facts are treated similarly, and will “adhere to similar procedural, evidentiary, or due process burdens.” A single decision-maker will also promote transparency for WMATA contractors and may aid WMATA in collecting and organizing its own data.
WMATA faces many of the same challenges that the World Bank does, including the risks of corrupt influences from multiple sources, leading to concerns about too much discretion. Unlike the World Bank, however, WMATA should not reform its procurement regulations to require mandatory exclusions in all cases if there is sufficient evidence. Further, WMATA should not allow for the same level of discretion and flexibility that is permitted at the federal level because WMATA faces different concerns than the federal government. Exclusion from WMATA contracts does not render a contractor ineligible for all federal contracts the way that debarment by a single federal agency would. It is therefore unlikely that debarment by WMATA would be disastrous to the survival of an entire business. Additionally, too much discretion raises concerns with WMATA that are not present in the federal system. SDOs in the federal system routinely debar contractors if it is in the best interests of the government, demonstrating that their discretion does not always deter or prevent exclusion. WMATA, on the other hand, never uses these same mechanisms to deal with contractor responsibility abuses; when it does, those in charge have used their discretion to impose lesser sanctions, if any at all. The litany of contractor misconduct demonstrates that this method is failing WMATA and wasting millions of taxpayer dollars.
Accordingly, WMATA’s SDO should exercise less discretion, which would be more akin to the World Bank model than the federal model. WMATA’s SDO should be tasked with reviewing all allegations of contractor misconduct that the Chief Procurement Officer believes trigger a debarment action. If the SDO finds clear and convincing evidence to support a finding of contractor misconduct, and there are no mitigating factors that outweigh the risks to WMATA funds in the future, the SDO should be required to exclude that contractor. Vesting all exclusionary power into a single SDO will provide for a more efficient system in which “a single decision-maker is able to make a single decision about a contractor’s eligibility.” Limiting the SDO’s discretion will also prevent the current cycle of inaction by WMATA officials, and it will compel WMATA to enforce its own regulations.
Providing less discretion to the WMATA SDO may lead to a narrowing of the competition pool. To remedy these concerns, WMATA should incorporate two safeguards: first, an exception to allow awards to excluded contractors if in the best interest of WMATA (taken from the federal system), and second, transformation of the current Metro Debarment Panel into an internal review system and appellate forum (taken from the World Bank model).
C. Transformation of the Metro Debarment Panel into a Review Forum for Arbitrary and Erroneous Decisions Made by the SDO
Recognizing that the panel system is not without merit, the Metro Debarment Panel should be converted into an appellate review forum. Contractors who receive notice of debarment should be provided a ninety-day window to appeal their case to the entire Metro Debarment Panel. Until that ninety-day window has expired, the contractor’s debarment should remain effective but confidential within WMATA in order to preserve the rights of those contractors to appeal those decisions. This system will maintain the benefits of a multi-person review and minimize WMATA’s restructuring. In addition, modifying the Metro Debarment Panel to serve as a review mechanism will simplify decision-making and provide for a review process for contractors who wish to challenge their exclusions.
This proposal would mimic the structure of the World Bank Sanctions Board, which reviews exclusionary determinations made by the SDO if appealed by the respondent within a set period of time. Though Sanctions Board decisions represent a small portion of World Bank cases and agreements, the Sanctions Board sometimes reaches different conclusions, which demonstrates the importance of an internal appellate review mechanism—something the WMATA system is currently lacking. A review panel will allow WMATA contractors to defend themselves before being publicly excluded, which will alleviate concerns about arbitrary decisions made by WMATA’s SDO.
A review panel is particularly important because multiple jurisdictions could theoretically hear these appeals in court. Virginia, Maryland, and D.C. courts all have jurisdiction to hear claims brought by or against WMATA generally. Further, under the federal system, all of the United States District Courts and the United States Circuit Courts of Appeals have jurisdiction to hear debarment appeals under the Administrative Procedure Act. However, such cases are uncommon. Debarment challenges are typically handled within the excluding agency because that agency has the necessary expertise and specialized knowledge to appropriately evaluate the measures necessary to protect the government’s interests. Further, courts review debarment challenges under an extremely deferential “arbitrary and capricious” standard, which discourages such challenges.
Unlike the World Bank, WMATA is not a completely independent organization, but rather a regional entity with close ties to at least four different governments. WMATA, then, cannot itself strip away all jurisdiction from the courts of those governments, but it can and should implement its own administrative safeguards by requiring a final determination by WMATA before a contractor appeals to court. These safeguards would either require expiration of the proposed ninety-day window for appeal to the Metro Debarment Panel, or an affirmative decision by the Metro Debarment Panel to uphold the SDO’s exclusion of the contractor. This system accounts for the fact that WMATA, like federal agencies dealing with federal government contracts, likely has the necessary expertise and specialized knowledge necessary to most appropriately evaluate an exclusionary decision under its own regulations.
Requiring a final determination by WMATA before an appeal in court would also reduce the numbers of those appeals, which will in turn alleviate concerns about forum shopping. As mentioned above, the procurement regulations of Virginia, Maryland, and D.C. suggest that those jurisdictions may have independent priorities when it comes to enforcement decisions. By allowing any of them to hear appeals of WMATA exclusionary systems, forum shopping may become a problem when contractors are more likely to appeal in one jurisdiction over another purely because of higher changes of success. Because a final WMATA determination would be required before such an appeal, concerns about forum shopping will be minimized because appeals to a state court would become exceedingly rare. Reframing WMATA’s current Debarment Panel to serve as an independent appellate forum will provide an additional safeguard within the system that currently does not exist, clearing the path for WMATA to begin enforcement of its contractor integrity regulations.
V. Conclusion
WMATA spends billions of taxpayer dollars on contracts for various supplies and services. However, contractor fraud and corruption are likely to continue. To reconcile its spending and lack of enforcement with persistent contractor misconduct, WMATA must take steps to begin actively enforcing its own regulations. The proposed solutions of this Note offer mechanisms to replace the current system of effectively optional enforcement—a change that is essential for the future of WMATA. The issues of corruption and contractor misconduct jeopardize WMATA’s ability to function and enter into future contracts. But the implications of an ineffective system of suspension and debarment do not stop there. Every day, D.C. residents, commuters, and visitors rely on WMATA to travel to their respective destinations. Each and every one of these riders depends on a metro system that functions reliably, prioritizes safety, and serves as an efficient mode of transit. If that very system allows contractors to abuse their positions of power and responsibility with impunity, those assumptions that every WMATA rider makes every day must be called into question. Without those fundamental guarantees of safety, efficiency, and reliability, we can no longer expect—nor want—the public to place its trust in WMATA as an institution.
