Suspension and Debarment: Emerging Issues in Law and Policy

Abstract:     
The George Washington University Law School's Government Procurement Law Program hosted this discussion of emerging issues related to suspension and debarment of contractors and attempted to include voices representing the interests implicated by the policy: the legislature, the major buying agencies, the oversight community, and the private sector. Given the draconian nature of this administrative remedy, far too little attention has focused upon the topic. For most successful government contractors, any perceived threat of disqualification was hollow. But recent events, proceedings against high-profile firms such as Enron, Arthur Andersen, Boeing, and MCI/WorldCom, cast these remedies into the spotlight.

Professor Schooner introduces the discussion and raises concerns regarding the purpose of the policy, its effectiveness, the fairness of its application, recent activity which suggests the politicisation of the process, and potential ramifications in terms of credibility and public trust. U.S. Senator Susan M. Collins discusses what lessons might be learned from a recent, high-profile matter that resulted in the temporary exclusion of a major player in the government marketplace. Richard Bednar, a former Army debarment and suspension official who coordinates the Defense Industry Initiative on Business Ethics and Conduct (DII), comments on: (1) the imputation of individuals' actions to the corporation; (2) suspension or debarment for conduct unrelated to public contracting; and (3) the propriety of awarding new government work to excluded firms. Steven A. Shaw, the U.S. Air Force's debarment and suspension authority, addresses the procedural importance of a contractor's response to the allegations of misconduct and stakes out the policy position that a broad range of contractor misconduct can, and indeed should, justify suspension or debarment.

Danielle Brian, executive director of the Project on Government Oversight (POGO), offers empirical evidence to bolster her criticism that the existing suspension and debarment regime fails to deter improper activity by major contractors operating within the federal public procurement space. James J. McCullough and Abram J. Pafford caution contractors, particularly commercial firms new to the public procurement arena, to be cognizant of the risks associated with the government's suspension and debarment regime. John S. Pachter reinforces this message, suggesting that contractors employ defensive measures intended to avoid suspension and debarment, and specifically reminding firms of the potential benefits of vigilant internal compliance and voluntary disclosures of improper activity. Marcia G. Madsen then criticizes the current debarment and suspension regime, suggesting that both the system and the Government's implementation of that system lag behind the Government's renewed emphasis on corporate integrity and heightened expectations with regard to corporate governance. Finally, Professor Christopher R. Yukins asserts that a more limited focus, or narrowing the potential bases for suspension and debarment, might ultimately enhance the regime's credibility and, in so doing, enhance public trust.

Keywords: contractor disqualification, suspension, debarment, public procurement, corruption, oversight

JEL Classifications: H57, K23, K42, L14

Accepted Paper Series