Yesterday, the GAO released a report on the DoD’s use of suspension and debarment procedures.

The GAO concluded that during fiscal years 2009-2011 (the years covered by the report), the DoD had active referral systems in place to initiate suspension and debarment proceedings, although the GAO determined that the DoD did not properly inform the GSA of its “compelling reasons” for doing business with suspended or debarred contractors in a handful of cases.

The report weighs in at 34 pages, so in case you did not have time to read the entire thing, here are some of the highlights.

• FAR 9.406-4(a)(1) states that “[g]enerally, debarments should not exceed 3 years,” but don’t tell that to the DoD.  According to the GAO report, during the years in question, 63% of Navy debarments, 61% of Air Force debarments, and 59% of Army debarments exceeded three years.  Of the four DoD components examined, only one–the Defense Logistics Agency–met the three-year period in the majority of cases.  DLA’s debarments exceeded three years 35% of the time.  Overall, 211 of 426 DoD debarments during the 2009-2011 fiscal years exceeded three years.  In my mind, these statistics raise a question: is a three-year debarment becoming the exception rather than the rule at DoD?
• The DoD uses a wide variety of sources to identify contractors for possible suspension or debarment actions.  These sources include DoD contracting officers and officials, DCAA audits, whistleblowers, news articles, indictments and convictions, and more.  As a government contracts attorney, the most interesting tidbit is that the GAO stated that the DoD monitors bid protests and Armed Services Board of Contract Appeals cases as means of developing leads for potential suspension and debarment cases.  Unfortunately, the report did not provide any examples of bid protest decisions or ASBCA appeals leading to a suspension or debarment.  I must admit, I am curious.
• Opposing a suspension or proposed debarment is not necessarily futile, despite common perception to the contrary.  Of 75 cases examined by the GAO, the contractors submitted evidence in opposition to the suspension or debarment in 31 cases.  Of those, 12 had their suspension or proposed debarment terminated.  In other words, nearly 40% of the time, if a contractor submitted evidence opposing a suspension or proposed debarment, it resulted in a favorable outcome for the contractor.
• The DoD used administrative agreements in 30 cases over the three-year period to, in essence, “settle” a suspension or debarment case.  These administrative agreements contain conditions the contractor must meet to have the suspension or debarment lifted, such as implementing an ethics program or making changes in management.  Notably, 12 of the 30 cases in which administrative agreements were used involved small businesses.

Of course, perhaps the most important statistic to be gleaned from the report is the fact that on average the DoD debars more than 100 contractors annually–and is actively seeking leads for new suspensions and debarments.  It’s just another reason, as a small government contractor, to always stay on the straight and narrow.