Proposal would take suspension, debarment powers from agencies

A senior House lawmaker is considering ending individual agency programs for suspending or debarring fraudulent contractors and creating a governmentwide board to handle the work.

Rep. Darrell Issa (R-Calif.), chairman of the Oversight and Government Reform Committee, released a discussion draft of the Stop Unworthy Spending, or SUSPEND, Act on Feb. 7. The bill would set up a Board of Civilian Suspension and Debarment to manage an accountability system and consolidate more than 41 civilian suspension and debarment offices under a single set of regulations.

Issa wants the board to actively engage with agency officials, expedite the review process and make the information publicly available.

"In the 21st century, we must have zero tolerance for fraudsters, criminals, or tax cheats receiving taxpayer money through grants or contracts," Issa said.

The bill would not end the existing Interagency Suspension and Debarment Committee. Instead, the new board and committee would work together, with the board's chairman taking charge of both.

The board could become influential depending on how aggressive its members are about suspending or debarring companies. Trey Hodgkins, senior vice president of TechAmerica's Global Public Sector, said if officials focus on making speedy decisions, they could hinder due process for the companies involved.

He added that regulations intend suspensions and debarments as protection for the government from possible irresponsibility, not as punishment for contractors. Furthermore, there are already legal penalties for companies that commit fraud, and Hodgkins said suspensions and debarments should not become an additional consequence.

At the same time, "bad actors make the competition field not an equitable one," he said.

He recommended giving companies a short "cure period" in which to address an agency's concerns. Often, a contractor does not know the agency is dissatisfied, and some companies first hear about their suspensions from the news media, as was the case for IBM in 2008 and GTSI in 2010.

At a time when saving money is paramount, a cure period could also save the government time and money. The company might have a quick fix for the problem, which could avoid the work of terminating an existing contract and putting the project out for bid again.

The legislation also raises questions about how the board would address a problem that is specific to one agency and whether agencies would lose the discretion to make such decisions on their own.

Meanwhile, the Obama administration has been talking up its efforts to invigorate suspensions and debarments.

In 2011, the Government Accountability Office studied 10 agencies' efforts to suspend or debar fraudulent contractors and found that six of them had little, if any, active programs in that regard. Administration officials told agencies to fully staff their programs and, in September 2012, touted the changes agencies had made. For instance, all of the 24 major agencies now report having a senior official in charge of the programs.

In addition, the interagency committee reported that suspensions and debarments have increased since fiscal 2009. The 24 executive agencies made 417 suspensions in fiscal 2009, 612 in fiscal 2010, and 928 in fiscal 2011, the latest year for which data is available. Agencies issued 1,501 debarments in fiscal 2009, 1,651 in fiscal 2010, and 2,398 in fiscal 2011.

"Agencies are now better equipped to protect the public from wrongdoers before critical agency resources are unnecessarily wasted," wrote Joe Jordan, administrator of the Office of Federal Procurement Policy, on the OMBlog in September 2012.