Senators propose automatic contractor suspensions

Four Democratic senators are advocating an unrelenting crackdown on defense contractors through automatic suspensions for allegations of bad behavior related to an overseas contingency operation.

Under a new bill, companies would face suspension from their government work for criminal charges, accusations of fraud or if a federal official determines that the contractor failed to pay the government what’s due in connection specifically with an operation overseas.

In February, Sens. Claire McCaskill (D-Mo.) and Jim Webb (D-Va.) introduced the bill, called the Comprehensive Contingency Contracting Reform Act (S. 2139), a follow-up to a report by the Commission on Wartime Contracting in Iraq and Afghanistan. Sens. Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.) quickly added their support for the bill.

The legislation includes another important provision that would forbid contractors to  respond to past-performance evaluations.

The automatic suspension requirement is a bad idea in the eyes of many experts. The Wartime Contracting Commission, backed off its earlier support for the automatic action in its final report. Commission members had concerns that the government doesn’t use its suspension authority enough. Early on, commissioners had said that the government needed to mandate suspensions.

“In its February 2011 interim report, the commission recommended mandatory suspension for contractors indicted on contract-related charges. Following additional research and deliberation, the commission has withdrawn that provision from its recommendations to strengthen enforcement,” reads a footnote in the final report.

The commission instead suggested lawmakers make it less difficult to suspend or debar contingency contractors and require a written rationale if an agency decides against it.

A former senior administration procurement official also disagreed with the automatic suspensions.

Testifying Nov. 16 before Sen. McCaskill, Dan Gordon, former administrator of the Office of Federal Procurement Policy, said mandatory suspensions and debarments undermine the judgment of the agency official who is charged to make those decisions.

“We’re deciding no matter what you’ve done to correct the problem, no matter what remedial measures you’ve taken, you’re going to automatically suspend or debar,” he said. Gordon is now the associate dean for government procurement law studies at George Washington University Law School.

Testifying before the Wartime Contracting Commission in 2011, Gordon said the issues surrounding agencies’ use of suspensions and debarments tie back to managing contracts and overseeing a contractor.

“For too long, we have focused so much on contract awards that we have neglected what must come before and after contract awards—sound acquisition planning and consistent contract management,” Gordon said.

The automatic suspension could cause the entire package to fail to get the Homeland Security and Governmental Affairs Committee’s approval, Alexina Jackson, an associate at the Crowell and Moring law firm, wrote on the firm’s Government Contracts Legal Forum blog.

“The mandatory nature and broad reach of the proposed legislation has drawn significant criticism and concern, leading to questions about the likelihood that the bill will make it out of the committee,” she wrote.

McCaskill is the only committee member among the four supporters. She is chairwoman of its contracting oversight subcommittee.

If the legislation becomes law, contractors will face some stern rules.

“Contractors and agencies could be impacted in their ability to contract and subcontract as charges, agency determinations, and allegations are often made early in a fact-finding process and may take time to reach resolution,” Jackson wrote.

Officials have recognized that need for more contract management, especially after awarding the contract.

In an interview about the upcoming 2012 Acquisition Excellence conference March 29, Kathleen Turco, assistant administrator for governmentwide policy at the General Services Administration, said the topic of suspensions and debarments is “hot, hot, hot.”

The conference’s panel of experts that will discuss the issues surrounding it has generated a lot of interest from industry, the administration and even committee staff in Congress.

Turco and Diana Gowen, senior vice president and general manager at CenturyLink, are co-chairwomen of the conference, which is being hosted by GSA and the American Council for Technology/Industry Advisory Council.

Turco said suspensions and debarments cost money for both agencies and industry. And Gowen said the government shouldn’t be working to have more suspensions and debarments.

“The goal is to educate folks so we don’t have those problems. And if we’ve done that and we don’t have suspensions and debarments, that’s a good thing, not a bad thing,” Gowen said in the interview.