Suspension and Debarment
Some Agency Programs Need Greater Attention, and Governmentwide Oversight Could Be Improved Gao ID: GAO-11-739 August 31, 2011The federal government spent more than $535 billion on contracted goods and services in fiscal year 2010. One tool for ensuring that agencies are only awarding contracts to responsible sources is the use of suspensions and debarments--actions taken by agencies to exclude firms or individuals from receiving federal contracts or assistance based on various types of misconduct. This report analyzed (1) the nature and extent of governmentwide exclusions reported in the Excluded Parties List System (EPLS) maintained by the General Services Administration; (2) the relationship, if any, between practices at various agencies and the level of suspensions and debarments under federal acquisition regulations; and (3) governmentwide efforts to oversee and coordinate the use of suspensions and debarments across federal agencies. GAO reviewed EPLS data and suspension and debarment programs at 10 federal agencies, including those with relatively more suspensions and debarments and those with few or none to identify differences between the two groups.
Suspensions and debarments made up about 16 percent of exclusions in EPLS for fiscal years 2006 through 2010. These are discretionary exclusions taken by agencies based on causes specified in regulations for acquisitions or grants and assistance, including fraud, bribery, or a history of failure to perform on government contracts. The remaining 84 percent were exclusions based on violations of statutes or other regulations, including health care fraud or illegal exports. In these cases, agencies are generally required to exclude the party from participating in specified government transactions or activities. More than half of the governmentwide suspensions and debarments were based on acquisition regulations. Several agencies did not report any such cases. The four agencies GAO reviewed with the most suspensions and debarments based on acquisition regulations shared certain characteristics that were not present at agencies with relatively few or no such cases. These agencies had staff dedicated to the suspension and debarment program, detailed implementing guidance, and practices that encourage an active referral process. The six agencies without such characteristics had virtually no suspensions or debarments, regardless of the dollar level of their contract obligations. For example, the Department of Health and Human Services, the civilian agency among those GAO reviewed with the highest amount of contract obligations, had no suspensions and debarments based on acquisition regulations. U.S. Immigration and Customs Enforcement had considerably less in contract obligations, but was one of the top four agencies of those GAO reviewed. The interagency committee responsible for governmentwide oversight and coordination of suspensions and debarments faces challenges as it relies on voluntary agency participation and only the limited resources of member agencies to fulfill its mission. For example, the committee took almost 2 years to submit a required annual report to Congress on agencies' suspension and debarment activities because agencies had been slow in providing needed information and it had limited resources to devote to the report. GAO recommends that the six agencies it examined that did not have the characteristics associated with active suspension and debarment programs incorporate those characteristics, and that the Office of Management and Budget (OMB) improve its governmentwide efforts and enhance governmentwide oversight. Five of the six agencies and OMB generally concurred with the recommendations. The Department of Justice believes its existing guidelines are sufficient, but GAO does not agree.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: William T. Woods Team: Government Accountability Office: Acquisition and Sourcing Management Phone: (202) 512-8214GAO-11-739, Suspension and Debarment: Some Agency Programs Need Greater Attention, and Governmentwide Oversight Could Be Improved
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United States Government Accountability Office:
GAO:
Report to Congressional Committees:
August 2011:
Suspension And Debarment:
Some Agency Programs Need Greater Attention, and Governmentwide
Oversight Could Be Improved:
GAO-11-739:
GAO Highlights:
Highlights of GAO-11-739, a report to congressional committees.
Why GAO Did This Study:
The federal government spent more than $535 billion on contracted
goods and services in fiscal year 2010. One tool for ensuring that
agencies are only awarding contracts to responsible sources is the use
of suspensions and debarments-”actions taken by agencies to exclude
firms or individuals from receiving federal contracts or assistance
based on various types of misconduct. This report analyzed (1) the
nature and extent of governmentwide exclusions reported in the
Excluded Parties List System (EPLS) maintained by the General Services
Administration; (2) the relationship, if any, between practices at
various agencies and the level of suspensions and debarments under
federal acquisition regulations; and (3) governmentwide efforts to
oversee and coordinate the use of suspensions and debarments across
federal agencies. GAO reviewed EPLS data and suspension and debarment
programs at 10 federal agencies, including those with relatively more
suspensions and debarments and those with few or none to identify
differences between the two groups.
What GAO Found:
Suspensions and debarments made up about 16 percent of exclusions in
EPLS for fiscal years 2006 through 2010. These are discretionary
exclusions taken by agencies based on causes specified in regulations
for acquisitions or grants and assistance, including fraud, bribery,
or a history of failure to perform on government contracts. The
remaining 84 percent were exclusions based on violations of statutes
or other regulations, including health care fraud or illegal exports.
In these cases, agencies are generally required to exclude the party
from participating in specified government transactions or activities.
More than half of the governmentwide suspensions and debarments were
based on acquisition regulations. Several agencies did not report any
such cases.
Figure: Basis of EPLS Cases, Fiscal Years 2006 through 2010:
[Refer to PDF for image: pie-chart and subchart]
Other exclusions: 84%:
Suspensions and debarments: 16%:
Of that 16%:
Based on federal grants and assistance regulations: 47%;
Based on federal acquisition regulations: 53%.
Source: GAO analysis of EPLS data.
[End of figure]
The four agencies GAO reviewed with the most suspensions and
debarments based on acquisition regulations shared certain
characteristics that were not present at agencies with relatively few
or no such cases. These agencies had staff dedicated to the suspension
and debarment program, detailed implementing guidance, and practices
that encourage an active referral process. The six agencies without
such characteristics had virtually no suspensions or debarments,
regardless of the dollar level of their contract obligations. For
example, the Department of Health and Human Services, the civilian
agency among those GAO reviewed with the highest amount of contract
obligations, had no suspensions and debarments based on acquisition
regulations. U.S. Immigration and Customs Enforcement had considerably
less in contract obligations, but was one of the top four agencies of
those GAO reviewed.
The interagency committee responsible for governmentwide oversight and
coordination of suspensions and debarments faces challenges as it
relies on voluntary agency participation and only the limited
resources of member agencies to fulfill its mission. For example, the
committee took almost 2 years to submit a required annual report to
Congress on agencies‘ suspension and debarment activities because
agencies had been slow in providing needed information and it had
limited resources to devote to the report.
What GAO Recommends:
GAO recommends that the six agencies it examined that did not have the
characteristics associated with active suspension and debarment
programs incorporate those characteristics, and that the Office of
Management and Budget (OMB) improve its governmentwide efforts and
enhance governmentwide oversight. Five of the six agencies and OMB
generally concurred with the recommendations. The Department of
Justice believes its existing guidelines are sufficient, but GAO does
not agree.
View [hyperlink, http://www.gao.gov/products/GAO-11-739] or key
components. For more information, contact William T. Woods at (202)
512-4841 or woodsw@gao.gov.
[End of section]
Contents:
Letter:
Background:
Suspension and Debarment Cases Make Up a Small Percentage of All
Exclusions in the Govermentwide Database:
Agencies with Most Suspension and Debarment Cases Share Common
Characteristics Missing at Agencies with Few Cases:
Governmentwide Efforts to Oversee Suspensions and Debarments Face
Challenges:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Causes for Suspension or Debarment:
Appendix III: Comments from the Department of Commerce:
Appendix IV: Comments from the Department of Health and Human Services:
Appendix V: Comments from the Department of Homeland Security:
Appendix VI: Comments from the Department of Justice:
Appendix VII: Comments from the Department of State:
Appendix VIII: Comments from the Department of the Treasury:
Appendix IX: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: EPLS Other Exclusions Cases for Fiscal Years 2006 through
2010:
Table 2: EPLS Suspension and Debarment Cases by Agency and Contract
Obligations, Fiscal Years 2006 through 2010:
Table 3: Description of the Staffing at Four Agencies:
Table 4: Description of Detailed Policies and Procedures at Four
Agencies:
Table 5: Sample of Practices Encouraging Referrals at Four Agencies:
Table 6: Department or Agency Actions Reported in EPLS and Cases,
Fiscal Years 2006 through 2010:
Table 7: Departments or Agencies with Contract Obligations Greater
Than $1 Billion, Fiscal Year 2009:
Table 8: Causes for Debarment Listed in FAR § 9.406-2:
Figures:
Figure 1: Basis of EPLS Cases, Fiscal Years 2006 through 2010:
Figure 2: Analysis of Selected Agency Contract Obligations,
Procurement-Related Suspension and Debarment Cases for Fiscal Years
2006 through 2010, and Program Characteristics:
Abbreviations:
CIGIE: Council of the Inspectors General on Integrity and Efficiency:
DHS: Department of Homeland Security:
DLA: Defense Logistics Agency:
DOD: Department of Defense:
EPLS: Excluded Parties List System:
FAR: Federal Acquisition Regulation:
FEMA: Federal Emergency Management Agency:
GSA: General Services Administration:
HHS: Department of Health and Human Services:
ICE: U.S. Immigration and Customs Enforcement:
ISDC: Interagency Suspension and Debarment Committee:
NCR: Nonprocurement Common Rule:
OIG: Office of inspector general:
OMB: Office of Management and Budget:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
August 31, 2011:
The Honorable Joseph I. Lieberman:
Chairman:
The Honorable Susan M. Collins:
Ranking Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Darrell E. Issa:
Chairman:
The Honorable Elijah E. Cummings:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives:
The Honorable Claire McCaskill:
Chairman:
Subcommittee on Contracting Oversight:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
Federal government spending on contracted goods and services was more
than $535 billion in 2010. To protect the government's interests,
federal agencies are required to award contracts only to responsible
sources--those that are determined to be reliable, dependable, and
capable of performing required work. One way to protect the
government's interests is through suspensions and debarments, which
are actions taken to exclude firms or individuals from receiving
contracts or assistance based on various types of misconduct. A
suspension is a temporary exclusion pending the completion of an
investigation or legal proceeding, while a debarment is for a fixed
term that depends on the seriousness of the cause, but generally
should not exceed 3 years. These exclusions are reported in the
Excluded Parties List System (EPLS),[Footnote 1] maintained by the
General Services Administration (GSA), along with violations of
certain statutes and regulations, such as health care fraud.
Given your interest in ensuring that the government only does business
with responsible contractors, we analyzed (1) the nature and extent of
governmentwide exclusions reported in EPLS; (2) the relationship, if
any, between practices at selected agencies and the level of
suspensions and debarments under federal acquisition regulations; and
(3) governmentwide efforts to oversee and coordinate the use of
suspensions and debarments across federal agencies. Based on
discussions with your staff, we particularly focused on agency
practices for suspensions and debarments under federal acquisition
regulations.
To determine the nature and extent of governmentwide suspensions and
debarments, we analyzed data for fiscal years 2006 through 2010 from
EPLS. We analyzed the various codes used by agencies entering data
into EPLS that specify the cause of the action and the effect of the
listing to identify (1) suspension and debarment actions taken under
the Federal Acquisition Regulation (FAR); (2) suspension and debarment
actions taken under the Nonprocurement Common Rule (NCR), which covers
grants and other assistance; and (3) other exclusions.[Footnote 2] To
provide information on the level of agency activity, we aggregated
related actions, such as those involving affiliates and related
parties, to identify the number of cases.[Footnote 3] We used cases to
provide a common comparison among the agencies. A case may include
separate actions for an individual, a business, and each affiliate,
and it may entail dedication of resources and the potential for
separate representation by a party's counsel and separate resolution.
Analysis of agency activity included all agencies. We assessed the
reliability of EPLS data by performing electronic testing, reviewing
system documentation, and interviewing knowledgeable officials about
data quality and reliability. We determined that the data were
sufficiently reliable for the purpose of this review. To identify
agency practices for suspension and debarment taken under the FAR, we
reviewed a mix of 10 agencies from among all agencies having more than
$1 billion in contract obligations in fiscal year 2009.[Footnote 4]
These agencies included the Defense Logistics Agency (DLA), the
Department of the Navy (Navy), GSA, and the Department of Homeland
Security's (DHS) U.S. Immigration and Customs Enforcement (ICE)--all
of which had relatively more cases involving actions taken under the
FAR than other agencies--as well as the Departments of Commerce
(Commerce), Health and Human Services (HHS), Justice (Justice), State
(State), and the Treasury (Treasury), and DHS's Federal Emergency
Management Agency (FEMA)--all of which had relatively few or no
suspensions or debarments under the FAR.[Footnote 5] At these 10
agencies, we focused on certain attributes of the suspension and
debarment process, including the organizational placement of the
suspension and debarment official, staffing and training, guidance,
and the referral process, including triggering events. To identify
governmentwide efforts to oversee and coordinate the suspension and
debarment system, we met with officials from the Office of Management
and Budget (OMB), which through its Office of Federal Procurement
Policy provides overall direction of governmentwide procurement
policies, including suspensions and debarments under the FAR;
officials at the Interagency Suspension and Debarment Committee
(ISDC);[Footnote 6] the Council of the Inspectors General on Integrity
and Efficiency's (CIGIE) Suspension and Debarment Working Group;
[Footnote 7] and GSA. We also met with or obtained information from
suspension and debarment and inspector general officials at the 10
selected agencies.
We conducted this performance audit from September 2010 to August 2011
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives. For more
information on our scope and methodology, see appendix I.
Background:
Suspensions and debarments are tools that may be used at the
discretion of agencies to protect the government's interest. The FAR
prescribes overall policies and procedures governing the suspension
and debarment of contractors by agencies and directs agencies to
establish appropriate procedures to implement them. This flexibility
enables each agency to establish a suspension and debarment program
suitable to its mission and structure. The FAR specifies numerous
causes for suspensions and debarments, including fraud, theft,
bribery, tax evasion, or lack of business integrity.[Footnote 8] (See
appendix II for a list of potential causes listed in the FAR.) The
existence of one of these causes does not necessarily require that the
party be suspended or debarred; agencies are directed to consider the
seriousness of the act and any remedial measures or mitigating
factors. Agencies are to establish procedures for prompt reporting,
investigation, and referral to the agency suspension and debarment
official. A suspension or debarment action may also include related
business entities or individuals associated with the business. Parties
that are suspended, proposed for debarment,[Footnote 9] or debarred
are precluded from receiving new contracts, and agencies must not
solicit offers from, award contracts to, or consent to subcontracts
with these parties, unless an agency head determines that there is a
compelling reason for such action.
The NCR[Footnote 10] provides a suspension and debarment process,
which is parallel to the suspension and debarment process specified by
the FAR, for nonprocurement transactions, such as grants or other
assistance.[Footnote 11] The FAR and NCR provide for reciprocity--that
is, a suspension or debarment under either the FAR or the NCR is
recognized under the other, and a party precluded from participating
in federal contracts is also excluded from receiving grants, loans,
and other assistance and vice versa. Suspensions and debarments apply
governmentwide--one agency's action precludes all executive agencies
from doing business with the excluded party.
Additionally, violations of certain statutes and regulations other
than the FAR and NCR also exclude a party from specified government
transactions. The prohibited behavior could involve, for example,
fraudulently receiving payments under federal health care programs or
violating export control regulations. These statute-and regulation-
based exclusions are often mandatory, while those taken under the FAR
and NCR are discretionary. Although the violations that led to the
exclusions may be unrelated to federal contracts, grants or
assistance, they may result in sanctions that exclude the party from
some or all procurement or federal financial and nonfinancial
assistance and benefits as set out in the statute or regulation.
OMB provides overall direction of governmentwide procurement policies,
including those on suspensions and debarments under the FAR, and has
the authority to issue guidelines for nonprocurement suspensions and
debarments. ISDC, established in 1986, monitors the governmentwide
system of suspension and debarment.[Footnote 12] The committee
consists of representatives from agencies designated by the Director
of OMB.[Footnote 13] ISDC provides support to help agencies implement
their suspension and debarment programs. It serves as a forum for
agencies to share ideas and assists in coordinating suspension and
debarment actions among agencies.
To facilitate the identification of parties that have been suspended
or debarred and are excluded from receiving federal contracts, certain
subcontracts, and certain federal financial and nonfinancial
assistance and benefits, GSA operates the web-based EPLS. The FAR
requires agencies to enter information about a firm or individual that
has been suspended, proposed for debarment, or debarred by the agency,
including the party's name and address, the cause for the action, the
effect of the action, and the end date of the debarment action.
[Footnote 14] Other exclusions are also entered into EPLS, generally
by the agency with designated enforcement authority.[Footnote 15]
Contracting officers are responsible for checking EPLS to ensure that
they do not award contracts to these firms or individuals.
In 2005, we reported that federal agencies may not be consistently
identifying suspended or debarred contractors when awarding new
contracts.[Footnote 16] In 2009, we found that some contractors
nevertheless received federal funds during their period of
ineligibility.[Footnote 17] We made recommendations for improving EPLS
to enhance agencies' confidence that they can readily identify these
contractors, which GSA subsequently addressed by making system
modifications. More recently, several agencies' offices of inspector
general (OIG) have reported on challenges in their agencies'
suspension and debarment programs and made recommendations to improve
the programs, including developing procedures for documenting
decisions and metrics for timely processing of suspension and
debarment referrals. The Department of Defense (DOD) OIG recently
reported that the services and DLA had an effective suspension and
debarment process, but recommended that DOD develop a working group to
review and improve the process for referring poorly performing
contractors for potential suspensions or debarments, develop a
training program to inform contracting personnel of the suspension and
debarment program and the process for referring poorly performing
contractors, and conduct training for contracting personnel on
checking the EPLS before awarding contracts.[Footnote 18]
Suspension and Debarment Cases Make Up a Small Percentage of All
Exclusions in the Govermentwide Database:
The governmentwide database on excluded parties includes suspension or
debarment actions taken under the FAR or regulations pertaining to
federal grants and other financial assistance, as well as exclusions
related to other laws and regulations. Over the past 5 fiscal years,
about 16 percent of cases included in EPLS were suspensions or
debarments, while the remaining 84 percent of cases were other
exclusions based on violations of laws and regulations resulting from
certain prohibited conduct.[Footnote 19] (See fig. 1.) DOD accounted
for most of the suspension and debarment cases. Slightly more than
half of the governmentwide suspension and debarment cases involved
actions taken under the FAR. Several civilian departments and agencies
had few or no such cases.
Figure 1: Basis of EPLS Cases, Fiscal Years 2006 through 2010:
[Refer to PDF for image: pie-chart and subchart]
Other exclusions: 84%:
Suspensions and debarments: 16%:
Of that 16%:
Based on federal grants and assistance regulations: 47%;
Based on federal acquisition regulations: 53%.
Source: GAO analysis of EPLS data.
[End of figure]
For fiscal years 2006 through 2010, about 4,600 cases--about 16
percent of all cases in EPLS--involved suspension and debarment
actions taken at the discretion of agencies against firms and
individuals based on any of the numerous causes specified in either
the FAR or NCR, such as fraud, theft, or bribery or history of failure
to perform on government contracts or transactions. Such cases
generally result in exclusion from all federal contracts, grants, and
benefits. About 47 percent of suspension and debarment cases were
based on the NCR, which covers federal grants and assistance, with the
Department of Housing and Urban Development accounting for over half
of these grant and assistance-related cases. The other 53 percent of
suspension and debarment cases were based on causes specified in the
FAR and related to federal procurements.
During this same time period, about 84 percent--or about 24,000 of the
approximately 29,000 total cases reported in EPLS--were other
exclusions based on a determination that the parties had violated
certain statutes or regulations. For example, prohibited conduct, such
as health care fraud, export control violations, or drug trafficking,
can result in an EPLS listing. In these types of cases, once an agency
with the designated authority has determined that a party has engaged
in a prohibited activity, such as fraudulently receiving payments
under federal health care programs, or violating export control
regulations, the law generally requires that the party be declared
ineligible for specified government transactions or activities.
Although most other exclusions are based on violations that are not
related to federal procurements or grants, the party is excluded from
some or all procurement and nonprocurement transactions as set out in
the statute.[Footnote 20] As shown in table 1, HHS, Justice, and
Treasury recorded the most other exclusion type cases. These cases
were related to health care fraud, drug abuse, and drug-trafficking
violations.
Table 1: EPLS Other Exclusions Cases for Fiscal Years 2006 through
2010:
Department/agency: Department of Health and Human Services;
Violation: Health care regulations;
Cases: 15,371.
Department/agency: Department of Justice;
Violation: Anti-Drug Abuse Act;
Cases: 4,301.
Department/agency: Department of Justice;
Violation: Defense regulations;
Cases: 100.
Department/agency: Department of the Treasury;
Violation: Foreign asset control provisions - drug trafficking;
Cases: 1,192.
Department/agency: Department of the Treasury;
Violation: Foreign asset control provisions - various;
Cases: 743.
Department/agency: Department of the Treasury;
Violation: Foreign asset control provisions - terrorism;
Cases: 189.
Department/agency: Office of Personnel Management;
Violation: Health care regulations;
Cases: 1,503.
Department/agency: Department of Homeland Security;
Violation: Immigration and Nationality Act;
Cases: 284.
Department/agency: Environmental Protection Agency;
Violation: Clean Air/Water Acts;
Cases: 255.
Department/agency: Department of Labor;
Violation: Labor - various;
Cases: 165.
Department/agency: Department of Labor;
Violation: Labor - Davis-Bacon Act;
Cases: 2.
Department/agency: Department of State;
Violation: Export control;
Cases: 122.
Department/agency: Department of State;
Violation: Iran sanctions/nonproliferation;
Cases: 60.
Department/agency: Department of Agriculture;
Violation: Crop Insurance Act;
Cases: 40.
Department/agency: Government Accountability Office;
Violation: Labor - Davis-Bacon Act;
Cases: 19.
Department/agency: Department of Education;
Violation: Higher Education Act;
Cases: 13.
Department/agency: Department of Veterans Affairs;
Violation: Veteran-owned business;
Cases: 2.
Department/agency: U.S. Agency for International Development;
Violation: Foreign Assistance Act;
Cases: 1.
Department/agency: General Services Administration;
Violation: Buy American Act;
Cases: 1.
Department/agency: Total;
Cases: 24,363.
Source: GAO analysis of EPLS data.
[End of table]
As shown in table 2, the number of suspension and debarment cases
related to federal procurement varied widely among departments or
agencies over the last 5 fiscal years. DOD accounted for about two-
thirds of all suspension and debarment cases related to federal
procurements with almost 1,600 cases. Of all the agencies, almost 70
percent had fewer than 20 suspension and debarment cases related to
federal procurements. Six agencies--HHS, Commerce, and the Departments
of Labor, Education, and Housing and Urban Development and the Office
of Personnel Management--had no such cases over the last 5 fiscal
years.[Footnote 21]
Table 2: EPLS Suspension and Debarment Cases by Agency and Contract
Obligations, Fiscal Years 2006 through 2010:
Department/agency[A]: Department of Defense;
Contract obligations: $1.776 trillion;
Suspension and debarment cases related to[B]:
Federal procurement: 1,592;
Grants and other assistance: 24;
Total suspension and debarment cases: 1,616.
Department/agency[A]: Department of Energy;
Contract obligations: $129.70 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 82;
Grants and other assistance: 0;
Total suspension and debarment cases: 82.
Department/agency[A]: Department of Health and Human Services;
Contract obligations: $80.15 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 0;
Grants and other assistance: 29;
Total suspension and debarment cases: 29.
Department/agency[A]: General Services Administration;
Contract obligations: $73.44 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 269;
Grants and other assistance: 0;
Total suspension and debarment cases: 269.
Department/agency[A]: National Aeronautics and Space Administration;
Contract obligations: $72.56 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 41;
Grants and other assistance: 1;
Total suspension and debarment cases: 42.
Department/agency[A]: Department of Homeland Security;
Contract obligations: $70.79 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 116;
Grants and other assistance: 8;
Total suspension and debarment cases: 124.
Department/agency[A]: Department of Veterans Affairs;
Contract obligations: $69.00 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 4;
Grants and other assistance: 11;
Total suspension and debarment cases: 15.
Department/agency[A]: Department of State;
Contract obligations: $33.20 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 6;
Grants and other assistance: 1;
Total suspension and debarment cases: 7.
Department/agency[A]: Department of Justice;
Contract obligations: $31.97 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 8;
Grants and other assistance: 3;
Total suspension and debarment cases: 11.
Department/agency[A]: Department of Agriculture;
Contract obligations: $25.55 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 3;
Grants and other assistance: 105;
Total suspension and debarment cases: 108.
Department/agency[A]: U.S. Agency for International Development;
Contract obligations: $24.36 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 18;
Grants and other assistance: 18;
Total suspension and debarment cases: 36.
Department/agency[A]: Department of the Treasury;
Contract obligations: $23.67 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 8;
Grants and other assistance: 1;
Total suspension and debarment cases: 9.
Department/agency[A]: Department of Transportation;
Contract obligations: $23.41 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 11;
Grants and other assistance: 193;
Total suspension and debarment cases: 204.
Department/agency[A]: Department of the Interior;
Contract obligations: $23.04 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 94;
Grants and other assistance: 10;
Total suspension and debarment cases: 104.
Department/agency[A]: Department of Commerce;
Contract obligations: $14.10 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 0;
Grants and other assistance: 0;
Total suspension and debarment cases: 0.
Department/agency[A]: Department of Labor;
Contract obligations: $9.76 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 0;
Grants and other assistance: 0;
Total suspension and debarment cases: 0.
Department/agency[A]: Environmental Protection Agency;
Contract obligations: $7.81 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 1;
Grants and other assistance: 332;
Total suspension and debarment cases: 333.
Department/agency[A]: Department of Education;
Contract obligations: $7.59 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 0;
Grants and other assistance: 163;
Total suspension and debarment cases: 163.
Department/agency[A]: Department of Housing and Urban Development;
Contract obligations: $5.38 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 0;
Grants and other assistance: 1,141;
Total suspension and debarment cases: 1,141.
Department/agency[A]: Social Security Administration;
Contract obligations: $5.30 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 1;
Grants and other assistance: 0;
Total suspension and debarment cases: 1.
Department/agency[A]: Office of Personnel Management;
Contract obligations: $4.89 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 0;
Grants and other assistance: 0;
Total suspension and debarment cases: 0.
Department/agency[A]: National Science Foundation;
Contract obligations: $2.08 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 40;
Grants and other assistance: 1;
Total suspension and debarment cases: 41.
Department/agency[A]: All other agencies;
Contract obligations: $9.83 billion;
Suspension and debarment cases related to[B]:
Federal procurement: 124;
Grants and other assistance: 136;
Total suspension and debarment cases: 260.
Department/agency[A]: Total;
Suspension and debarment cases related to[B]:
Federal procurement: 2,418;
Grants and other assistance: 2,177;
Total suspension and debarment cases: 4,595.
Source: GAO analysis of Federal Procurement Data System-Next
Generation and EPLS data.
[A] This table lists departments and agencies with over $2 billion in
contract obligations for fiscal years 2006 through 2010. "All other
agencies" includes those agencies with less than $2 billion in
contract obligations.
[B] Agencies may suspend or debar federal contractors utilizing the
NCR, and such suspensions and debarments would be listed in EPLS as
cases related to grants and other assistance.
[End of table]
Agencies with Most Suspension and Debarment Cases Share Common
Characteristics Missing at Agencies with Few Cases:
Of the agencies we studied, those with the most procurement-related
suspension and debarment cases share common characteristics. Agencies
with few or no such suspensions or debarments for the same period do
not have these characteristics regardless of the agency's volume of
contracting activity. Officials at most of these agencies acknowledged
that suspension and debarment is an underutilized tool at their
agencies.
Agencies with More Active Suspension and Debarment Programs Share
Common Characteristics:
While each agency suspension and debarment program we reviewed is
unique, the four with the most suspension and debarment cases for
fiscal years 2006 through 2010--DLA, Navy, GSA, and ICE--share certain
characteristics. These include a dedicated suspension and debarment
program with full-time staff, detailed policies and procedures, and
practices that encourage an active referral process, as shown in
figure 2.[Footnote 22]
Figure 2: Analysis of Selected Agency Contract Obligations,
Procurement-Related Suspension and Debarment Cases for Fiscal Years
2006 through 2010, and Program Characteristics:
[Refer to PDF for image: illustrated table]
Department/agency: Defense Logistics Agency;
Percentage of procurement-related suspension and debarment cases
governmentwide: 15.8%;
Percentage of total federal contract obligations: 6.8%;
Suspension and debarment program characteristics:
Dedicated suspension and debarment program with full-time staff;
Detailed policies and procedures;
Practices that encourage an active referral process.
Department/agency: Department of the Navy;
Percentage of procurement-related suspension and debarment cases
governmentwide: 14.2%;
Percentage of total federal contract obligations: 17.4%;
Suspension and debarment program characteristics:
Dedicated suspension and debarment program with full-time staff;
Detailed policies and procedures;
Practices that encourage an active referral process.
Department/agency: General Services Administration;
Percentage of procurement-related suspension and debarment cases
governmentwide: 11.1%;
Percentage of total federal contract obligations: 2.9%;
Suspension and debarment program characteristics:
Dedicated suspension and debarment program with full-time staff;
Detailed policies and procedures;
Practices that encourage an active referral process.
Department/agency: U.S. Immigration and Customs Enforcement;
Percentage of procurement-related suspension and debarment cases
governmentwide: 4.3%;
Percentage of total federal contract obligations: 0.4%;
Suspension and debarment program characteristics:
Dedicated suspension and debarment program with full-time staff;
Detailed policies and procedures;
Practices that encourage an active referral process.
Department/agency: Department of Justice;
Percentage of procurement-related suspension and debarment cases
governmentwide: 0.3%;
Percentage of total federal contract obligations: 1.3%;
Suspension and debarment program characteristics: [Empty].
Department/agency: Department of the Treasury;
Percentage of procurement-related suspension and debarment cases
governmentwide: 0.3%;
Percentage of total federal contract obligations: 0.9%;
Suspension and debarment program characteristics: [Empty].
Department/agency: Department of State;
Percentage of procurement-related suspension and debarment cases
governmentwide: 0.2%;
Percentage of total federal contract obligations: 1.3%;
Suspension and debarment program characteristics: [Empty].
Department/agency: Department of Health and Human Services;
Percentage of procurement-related suspension and debarment cases
governmentwide: 0%;
Percentage of total federal contract obligations: 3.2%;
Suspension and debarment program characteristics: [Empty].
Department/agency: Department of Commerce;
Percentage of procurement-related suspension and debarment cases
governmentwide: 0%;
Percentage of total federal contract obligations: 0.6%;
Suspension and debarment program characteristics: [Empty].
Department/agency: Federal Emergency Management Agency;
Percentage of procurement-related suspension and debarment cases
governmentwide: 0%;
Percentage of total federal contract obligations: 0.5%;
Suspension and debarment program characteristics: [Empty].
Source: GAO analysis of Federal Procurement Data System-Next
Generation, EPLS data, and agencies' procedures and guidance.
[End of figure]
Dedicated Program and Staff:
One of the shared traits we identified among the four most active
agencies is a dedicated suspension and debarment program with full-
time staff (see table 3). Officials from the four agencies stated that
having dedicated staff cannot be accomplished without the specific
focus and commitment of an agency's senior officials.
Table 3: Description of the Staffing at Four Agencies:
Department/agency: Defense Logistics Agency (DLA);
Description: DLA's suspension and debarment activity is part of the
agency's larger contracting integrity issue area. The activity is
administered by full-time and part-time staff all with legal
backgrounds from the Office of the General Counsel. Suspension and
debarment staff responsibilities include processing referrals from the
agency's primary field activity offices, assisting in coordination
with the Department of Justice, and coordinating lead agency
determinations with other relevant agencies;
Staffing: Full-time: 3 Attorneys;
Part-time: 1 Paralegal.
Department/agency: Department of the Navy (Navy);
Description: The suspension and debarment program within the agency's
Acquisition Integrity Office carries out the Navy's suspension and
debarment activities as part of a larger fraud prevention program.
This office has attorneys and staff support dedicated to developing
and processing suspension and debarment cases referred by other
offices;
Staffing: Full-time: 14 Attorneys; 3 Staff support.
Department/agency: General Services Administration (GSA);
Description: GSA has a Center for Suspension and Debarment within the
Office of Acquisition Policy.[A] Most staff have law degrees--and
attend the Federal Law Enforcement Training Center's suspension and
debarment training. Staff duties include referral processing, case
development, and coordination with internal offices such as the Office
of Inspector General, when appropriate;
Staffing: Full-time: 1 Division Director; 4 Staff members.
Department/agency: Department of Homeland Security, U.S. Immigration
and Customs Enforcement (ICE);
Description: The Suspension and Debarment Division administers ICE's
suspension and debarment program. Full-and part-time staff in the
division research referrals, coordinate with other offices within the
Department of Homeland Security, track cases, and enter excluded
parties into the Excluded Parties List System to handle ICE's
substantial suspension and debarment caseload;
Staffing: Full-time: 1 Division Director; 1 Procurement analyst;
1 Staff assistant;
Part-year: 2 Summer interns (fiscal year 2010).
Source: GAO analysis of agency documentation and discussions with
agency suspension and debarment officials.
[A] The office has since been renamed the Suspension and Debarment
Division and is now part of GSA's Office of Governmentwide Policy.
[End of table]
Other reviews of agency suspension and debarment programs also have
recognized the importance of having dedicated suspension and debarment
staff. For example, responding to a February 2010 OIG report,[Footnote
23] DHS reviewed its suspension and debarment practices and concluded
in October 2010 that it needed to establish and fully resource the
suspension and debarment function throughout the department.[Footnote
24] Additionally, in October 2009, the U.S. Agency for International
Development's Inspector General recommended that the agency consider
forming a dedicated division for suspension and debarment.[Footnote
25] In response, the agency created and staffed the Compliance and
Oversight of Partner Performance Division, which is dedicated to
business integrity issues, including suspension and debarment.
Furthermore, ISDC officials stated that without dedicated staff, none
of the other essential functions of an agency suspension and debarment
program can be carried out. During a recent hearing of the Commission
on Wartime Contracting in Iraq and Afghanistan,[Footnote 26] it was
noted by the Administrator for Federal Procurement Policy that
management and resources devoted to suspension and debarment are
inconsistent across agencies and more could be done to protect the
government and taxpayers from bad contractors.[Footnote 27]
Detailed Policies and Procedures:
The agencies we reviewed with active suspension and debarment programs
each had detailed policies and procedures that supplement FAR
requirements. This generally included guidance on things such as
referrals, investigations, and legal review. Table 4 shows how each of
the top four agencies has developed agency-specific guidance that goes
well beyond the suspension and debarment guidance in the FAR.
Table 4: Description of Detailed Policies and Procedures at Four
Agencies:
Department/agency: Defense Logistics Agency (DLA);
Description: DLA's Business Integrity Program Handbook has operational
guidance for the suspension and debarment program, including
definitions of roles and responsibilities at the field office and
headquarters levels and notification of senior officials prior to high-
risk exclusions. It also includes protocols for working with other
defense and civil agencies, making lead agency determinations, and
coordinating legal review.[A]
Department/agency: General Services Administration (GSA);
Description: GSA's policies and procedures include the Suspension and
Debarment Standard Operating Procedures Manual, which contains
detailed information on the Center for Suspension and Debarment,
including its mission and structure. The manual also has a step-by-
step guide for compiling an action referral memorandum and assistance
in the application of the evidence standards for suspension and
debarment.
Department/agency: Department of the Navy (Navy);
Description: Navy suspension and debarment policies and procedures
include a Secretary of the Navy Instruction, which establishes the
Acquisition Integrity Office as the lead on all fraud matters and
outlines the suspension and debarment function. The instruction
includes guidance on timely preparation of referrals based on
indictments or convictions and coordinating with investigative units,
such as the Naval Criminal Investigative Service.
Department/agency: Department of Homeland Security (DHS), U.S.
Immigration and Customs Enforcement (ICE);
Description: ICE's suspension and debarment program procedures include
detailed guidance on conducting online database research, coordinating
with other DHS components, preparing for legal review, and tracking
cases in their database.
Source: GAO analysis of agency documentation and discussions with
agency suspension and debarment officials.
[A] Defense Logistics Agency, Business Integrity Program Handbook,
DLSA P2 (February 2002).
[End of table]
Several of the reports we reviewed by inspectors general and others
regarding agency suspension and debarment programs cited the
importance of agency-specific, detailed policies and procedures to an
active agency suspension and debarment program. For example, in August
2010, the Department of Agriculture's Inspector General reported that
developing suspension and debarment policies and procedures is
important to ensuring that regulations are consistently applied
throughout an agency.[Footnote 28]
Practices That Encourage Referrals:
Finally, each of the four agencies we studied with the most active
suspension and debarment programs engage in practices that encourage
an active referral process. The FAR directs agencies to refer
appropriate matters to their suspension and debarment officials for
consideration, and it allows agencies to develop ways to accomplish
this task that suit their missions and structures. According to agency
officials at these four agencies, when senior agency officials
communicate the importance of suspension and debarment through their
actions, speeches, and directives, they help to promote a culture of
acquisition integrity where suspension and debarment is understood and
utilized by staff (see table 5).
Table 5: Sample of Practices Encouraging Referrals at Four Agencies:
Department/agency: Defense Logistics Agency;
Practices: Staff outside of the Suspension and Debarment Office
regularly trained on how and when to make referrals. Meeting regularly
with other agencies within department to discuss intended actions.
Department/agency: Department of the Navy;
Practices: Senior official issues agencywide directive stressing
importance of fraud prevention, including suspension and debarment, as
everyone's responsibility. Meeting with the Department of Justice
regularly and demonstrating agency's ability to take suspension and
debarment actions without jeopardizing potential legal proceedings.
Department/agency: General Services Administration;
Practices: Use of a case management tool that allows for referral
tracking and case reporting, and provides internal controls, all of
which are intended to emphasize the importance of submitting and
following up on referrals. Office of Inspector General looks for and
refers cases based on investigations and legal proceedings.
Department/agency: Department of Homeland Security, U.S. Immigration
and Customs Enforcement;
Practices: Use of the Suspension and Debarment Case Management system
that allows for tracking and follow-up on all referrals, which
supports an active referral process.
Source: GAO analysis of agency documents and discussions with agency
suspension and debarment officials.
[End of table]
Government officials made similar observations about what actions
agencies need to take to improve how they use suspension and
debarment. For example, in February 2011, the Administrator for
Federal Procurement Policy within OMB outlined progress among federal
agencies' suspension and debarment programs and highlighted those same
characteristics we identified at the agencies we studied with the most
suspension and debarment activity.[Footnote 29] The Administrator
acknowledged that there is much room for improvement among agency
suspension and debarment programs and noted that more agencies are
establishing formal suspension and debarment programs, dedicating
greater staff resources to handling referrals and managing cases,
strengthening policies, providing training, and taking action to root
out illegal behavior and irresponsible actors. In addition, the DHS
Inspector General, a member of the National Procurement Fraud Task
Force, testified before Congress that the task force formed a
Suspension and Debarment Committee, which concluded that several
elements were necessary for an effective suspension and debarment
program. Similar to our observations, he noted the need for a
dedicated person or group responsible for identifying potential
suspension and debarment cases and effective coordination with the
agency's OIG. He also noted the need for protocols that identify the
officials responsible for compiling suspension and debarment referral
packages, as well as for legal support to pursue suspension or
debarment actions against contractors.[Footnote 30]
Agencies with Few or No Procurement-Related Suspension and Debarment
Cases Lacked the Traits Common among Agencies with More Active
Programs:
The remaining six agencies we studied--HHS, FEMA, Commerce, Justice,
State, and Treasury--do not have the characteristics common to the
four agencies with the most suspension and debarment cases. Based on
our review of agency documents and interviews with agency officials,
none of these six agencies had dedicated suspension and debarment
staff, detailed policies and guidance other than those to implement
the FAR, or practices that encourage an active referral process. These
agencies have few or no suspensions or debarments of federal
contractors.
In addition, an agency's level of suspension and debarment activity
was not necessarily related to its contracting volume. For example,
FEMA and ICE, two components of DHS with separate suspension and
debarment programs, had similar percentages of federal contract
obligations for fiscal years 2006 through 2010--0.5 percent and 0.4
percent, respectively. ICE, however, represented 4.3 percent of the
procurement-related suspension and debarment cases across the
government, while FEMA had no suspensions or debarments. ICE practices
included the three program attributes that we identified at the
agencies with the most suspension and debarment cases. (See fig. 2.)
FEMA had none of them.
Officials at the agencies we reviewed that have few or no procurement-
related suspensions or debarments, acknowledged that their agencies
need to place greater emphasis on suspension and debarment as a tool
to ensure that the government only does business with responsible
contractors. Some of these agencies have already begun efforts to
develop more robust suspension and debarment programs. These ongoing
efforts include the following:
* An HHS OIG official told us that since more than 80 percent of HHS's
appropriations are for Medicare and Medicaid programs, their emphasis
and budget have been largely directed toward monitoring those
programs, including the Exclusions Program, which was designed to
combat health care fraud.[Footnote 31] The HHS suspension and
debarment official added that HHS now sees suspension and debarment as
an underutilized management tool, and the agency has made a commitment
to having a more active process, which so far includes training and
researching best practices. The official noted that the tools for
suspension and debarment are present and that the agency needs to
emphasize using them.
* FEMA officials have noted the need to improve their procurement-
related suspension and debarment program, and are working closely with
ICE to adopt some of the characteristics of agencies with more active
programs. At the same time, DHS has named a suspension and debarment
official within the Office of the Under Secretary for Management, who
has been tasked with developing a departmentwide suspension and
debarment policy and program.
* Treasury also has efforts under way to improve its procurement-
related suspension and debarment program. Treasury officials noted
that the Office of Inspector General is taking steps to promote the
use of suspensions and debarments. According to an OIG official, they
are improving training and education throughout the office by having
OIG attorneys attend suspension and debarment training sponsored by
CIGIE. In addition, investigators are beginning to receive training on
using suspension and debarment with ongoing legal cases or those cases
declined for prosecution by the U.S. Attorney that meet the criteria
for potential debarment.
* Commerce officials stated that the Suspension and Debarment Official
is working actively to build a robust suspension and debarment
program. The OIG expects to have a fully functioning suspension and
debarment program by the end of fiscal year 2011. The Office of
Counsel to the Inspector General has proposed to serve as liaison
between the OIG, other investigatory bodies within Commerce, and the
Suspension and Debarment Official. The official is collaborating with
the OIG and the Office of General Counsel to develop an acceptable
process and leverage available resources.
Governmentwide Efforts to Oversee Suspensions and Debarments Face
Challenges:
Governmentwide efforts to oversee and coordinate suspensions and
debarments have faced a number of challenges. OMB assigned
responsibility for governmentwide coordination to ISDC; however, ISDC
relies on agencies' voluntary participation in its processes and
member agencies' limited resources to fulfill its mission. Other
efforts are under way to coordinate suspension and debarment activity
across government, including the CIGIE Suspension and Debarment
Working Group's efforts to raise awareness by promoting the use of
suspension and debarment and GSA's ongoing efforts to simplify and
improve EPLS.
Interagency Committee Relies on Voluntary Agency Participation and
Limited Agency Resources to Oversee Suspension and Debarment Programs:
OMB, starting in 1986, assigned responsibility for governmentwide
suspension and debarment oversight and coordination to ISDC. More
recently, the Duncan Hunter National Defense Authorization Act for
Fiscal Year 2009[Footnote 32] strengthened the committee's role by
specifying functions ISDC was to perform, including:
* resolve lead agency responsibility and coordinate actions among
interested agencies with respect to suspension or debarment
proceedings,
* report to Congress annually on agency suspension and debarment
activities and accomplishments as well as agency participation in the
committee's work,
* recommend to OMB committee-approved changes to the government
suspension and debarment system and its rules, and:
* encourage and assist agencies in cooperating to achieve operational
efficiencies in the governmentwide suspension and debarment system.
When more than one agency has an interest in the debarment or
suspension of a contractor, the FAR requires ISDC to resolve the lead
agency issue and coordinate such resolution among all interested
agencies prior to the initiation of any suspension or debarment by any
agency.[Footnote 33] According to ISDC officials, ISDC relies on
voluntary agency participation in its informal coordination process,
which works well when used. However, not all agencies coordinate
through ISDC. Officials from ISDC cited as an example the Small
Business Administration's recent suspension of a major federal
contractor. Because the agency did not go through the ISDC
coordination process, other agencies were surprised by the suspension
and did not have an opportunity to offer their perspectives on this
action. ISDC has to rely on the individual agencies involved in a
potential suspension or debarment to resolve any coordination issues.
Likewise, in part because it could not compel agencies to respond to
its inquiries, ISDC took almost 2 years to submit its required annual
report to Congress on agencies' suspension and debarment activities.
According to ISDC representatives, only about half of the member
agencies responded to the initial request for information needed for
the report. These officials also noted that their limited resources to
devote to committee responsibilities further delayed the report.
Consequently, ISDC issued its first report on June 15, 2011, covering
both of the reports required for 2009 and 2010.[Footnote 34] The
report identifies several agencies that made progress in establishing
formal suspension and debarment programs. It does not make any
recommendations to improve the suspension and debarment system.
However, the report describes a survey ISDC conducted of its members
to create a baseline against which to measure agency progress--looking
at internal agency controls, training efforts, and use of tools in
addition to suspensions and debarments, such as show cause notices,
administrative agreements, and voluntary exclusions. Although ISDC did
not make recommendations in its report, its Acting Chair indicated
that the committee is currently assisting agencies in improving
suspension and debarment programs through the sharing of experience,
operating policies, practices and procedures, and "example action
documents" developed and used by active programs. OMB officials
acknowledged that while they are seeing progress in the attention
devoted by agencies to suspensions and debarments, agencies would
benefit from guidance on how to establish such programs and how to
work effectively with ISDC.
ISDC's coordination role concerning the governmentwide suspension and
debarment system also has faced other challenges. ISDC holds monthly
meetings for members as a forum to provide information and discuss
relevant issues, but according to ISDC representatives, agencies
without active suspension and debarment programs generally are not
represented at these meetings. In addition, ISDC officials noted that
the committee does not have dedicated staff and depends on limited
resources provided by member agencies, particularly the agencies of
the officials appointed as the Chair and Vice-Chair. According to the
Chair and Vice-Chair, they do committee work in addition to their
primary agency responsibilities, using their own agencies' resources.
Other Efforts Are Under Way to Improve Suspension and Debarment
Coordination:
Other efforts are under way across government to improve coordination
of suspension and debarment programs. CIGIE's Suspension and Debarment
Working Group--formed in the summer of 2010--promotes the use of
suspension and debarment as a tool to protect the government's
interest. This group includes representatives from the Recovery
Accountability and Transparency Board and the OIGs for nine federal
agencies. The CIGIE working group is taking steps to raise awareness,
including sponsoring training and advising the inspector general
community about other training opportunities. In October 2010, the
working group held an all-day suspension and debarment workshop that
generated great interest, with over 300 people attending.
Subsequently, the working group notified the suspension and debarment
community of the 3-day National Suspension and Debarment Training
Program hosted by the Federal Law Enforcement Training Center. Working
group representatives stated that the demand for the workshop made
clear that more training and outreach needs to be done, and the
working group is trying to determine ways to meet the need. In
addition, the working group informally surveyed the entire inspector
general community about suspension and debarment efforts to identify
good practices and is in the process of analyzing the responses.
GSA has begun an effort to improve EPLS by consolidating and
simplifying the codes agencies use to identify the basis and
consequences of exclusions, referred to as cause and treatment codes.
GSA included EPLS as part of an ongoing Integrated Acquisition
Environment initiative to consolidate various acquisition-related
systems under a single system for award management. As part of this
effort, GSA officials reviewed the configuration and function of EPLS
and concluded that the cause and treatment code structure represented
a major area of potential improvement primarily because there were too
many codes--some of which were duplicative or specific to one agency--
and the consequences of a listing is sometimes unclear. As a result,
agency officials could be confused when accessing EPLS to readily
determine the extent of exclusion. According to a GSA official, the
goal of the EPLS effort is to consolidate the codes into categories
that clearly define the effect of a listing.
Conclusions:
Suspensions and debarments can serve as powerful tools to help ensure
that the government protects its interests by awarding contracts and
grants only to responsible sources. The attention dedicated to these
tools varies across the agencies we reviewed. Some agencies could
benefit from adopting the practices we identified as common among
agencies that have more active suspension and debarment programs.
Because agency missions and organizational structures are unique, each
agency must determine for itself the extent to which it can benefit
from adopting these practices. However, one point is clear: agencies
that fail to devote sufficient attention to suspension and debarment
issues likely will continue to have limited levels of activity and
risk fostering a perception that they are not serious about holding
the entities they deal with accountable. Additionally, the suspension
and debarment process could be improved governmentwide by building
upon the existing framework to better coordinate and oversee
suspensions and debarments. As acknowledged by officials at the Office
of Federal Procurement Policy, which provides overall direction of
governmentwide procurement policies, agencies would benefit from
guidance on how to establish active suspension and debarment programs
and how to work more effectively with ISDC.
Recommendations for Executive Action:
We recommend that the Attorney General and the Secretaries of
Commerce, Health and Human Services, State, and the Treasury take
steps to improve their suspension and debarment programs by:
* assigning dedicated staff resources,
* developing detailed implementing guidance, and:
* promoting the use of a case referral process.
We also recommend that the Secretary of Homeland Security, as part of
ongoing efforts to establish a departmentwide program for suspensions
and debarments, take steps to ensure that FEMA incorporates the
characteristics we identified as common among agencies with more
active programs.
In addition, to improve suspension and debarment programs at all
agencies and enhance governmentwide oversight, we recommend that the
Administrator of the Office of Federal Procurement Policy issue
governmentwide guidance that (1) describes the elements of an active
suspension and debarment program, and (2) emphasizes the importance of
cooperating with ISDC in terms of:
* helping to resolve lead agency issues,
* providing required reporting information in a timely manner, and:
* designating existing resources as needed to enable the committee to
function effectively.
Agency Comments and Our Evaluation:
We provided a draft of this report to Commerce, DHS, DOD, GSA, HHS,
Justice, OMB, State, and Treasury. In written comments, DHS, State,
and Treasury concurred with the report's recommendations, while
Commerce, HHS, and Justice generally concurred. In e-mailed comments
from the agency liaison, OMB concurred with the report's
recommendations. In addition, DHS, DOD, GSA, and OMB provided
technical comments, which were incorporated as appropriate.
In commenting on the draft report, DHS stated that it is committed to
ensuring that its suspension and debarment program has the same
characteristics as those that we identified as common among agencies
with more active programs. State noted that it recognizes the
importance of maintaining strong suspension and debarment processes,
and plans to publish agency guidance on referring a contractor or
grantee for possible suspension or debarment. Treasury stated that it
plans to leverage the practices identified as in use by other agencies
to deploy more detailed implementing guidance and a better defined
case referral process. Commerce stated that it is already taking
action to implement the recommendations, and HHS stated that it will
work with its OIG to develop detailed implementing guidance, including
a case referral process. Justice noted the need for agencies to devote
sufficient attention to suspension and debarment and plans to have its
senior agency officials actively promote the suspension and debarment
case referral process.
Commerce, Justice, and Treasury raised concerns about assigning full-
time or additional staff to their suspension and debarment programs.
HHS stated it will utilize existing resources rather than assigning
dedicated staff resources. As we note in our report, agency missions
and organizational structures are unique, so each agency must
determine for itself the extent to which it can benefit from adopting
these practices, including determining the appropriate level of
resources. Given the current budget environment, our recommendation is
for agencies to assign dedicated staff resources, but we leave it to
the agencies to determine if additional full-time or part-time staff
are needed, or if existing resources can be used to carry out
suspension and debarment activities. Nevertheless, our findings show
that agencies that do not devote sufficient attention to this area
likely will continue to have few suspensions and debarments, which may
place the government at risk of doing business with irresponsible
contractors. We continue to believe that agencies need to assign
dedicated staff to have effective suspension and debarment programs.
Justice also stated that its current regulations and guidelines,
coupled with its implementation of the recommendation to actively
promote the referral process, will provide sufficient guidance to
referring activities on the suspension and debarment policies and
procedures. The agencies we reviewed with active suspension and
debarment programs, however, each have detailed policies and
procedures that supplement FAR requirements. These policies and
procedures go well beyond the guidance in the FAR, are agency
specific, and generally include guidance on matters such as referrals,
investigations, deadlines, points of contact, and legal review.
Justice's current guidance does not adequately cover these matters. We
encourage Justice to supplement its existing regulations with agency-
specific guidance that would include information such as referral
requirements, time frames, and points of contacts.
Written comments from Commerce, HHS, DHS, Justice, State, and Treasury
are reprinted in appendixes III through VIII, respectively.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to interested
congressional committees; the Director of the Office of Management and
Budget; the Attorney General; the Secretaries of Commerce, Defense,
Health and Human Services, Homeland Security, State, and the Treasury;
and the Administrator of General Services. The report will also be
available at no charge on the GAO website at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-4841 or woodsw@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. GAO staff who made key contributions to
this report are listed in appendix IX.
Signed by:
William T. Woods, Director:
Acquisition and Sourcing Management:
[End of section]
Appendix I: Scope and Methodology:
To determine the nature and extent of governmentwide suspensions and
debarments, we analyzed data for fiscal years 2006 through 2010 from
the web-based Excluded Parties List System (EPLS) managed by the
General Services Administration. We analyzed the various codes
agencies use to enter exclusions in EPLS that specify the cause of the
action and effect of the listing to identify (1) suspension and
debarment actions against firms or individuals based on the Federal
Acquisition Regulation, (2) suspension and debarment actions based on
the Nonprocurment Common Rule covering grants and other assistance,
and (3) other exclusions.[Footnote 35] Reporting a case in EPLS can
result in numerous actions. For example, a case may include (1)
multiple individuals associated with an excluded firm, (2) several
business units or affiliates of the firm, and (3) listings under
different names of a firm or individual--all of which are recorded as
separate actions in EPLS. In addition, each listed firm or individual
can have multiple related actions, such as a suspension, proposed
debarment, and debarment, which are also listed as separate actions.
To provide information on the level of agency activity, we aggregated
related entities, such as business affiliates and associated parties,
and actions to identify the number of cases. We counted cases with
multiple actions in the fiscal year of the first exclusion action. We
counted cases in which a party was excluded by more than one agency
for the agency first taking the action.[Footnote 36] We used cases to
provide a common comparison among the agencies. A case may include
separate action for an individual, a business, and each affiliate and
may entail dedication of resources and the potential for separate
representation by a party's counsel and separate resolution. (See
table 6, which shows the number of actions entered in EPLS and the
corresponding number of cases during the same period.)
Table 6: Department or Agency Actions Reported in EPLS and Cases,
Fiscal Years 2006 through 2010:
Department/agency: Department of Agriculture;
Total EPLS actions: 235;
Total cases: 148.
Department/agency: Department of Commerce;
Total EPLS actions: 0;
Total cases: 0.
Department/agency: Department of Defense;
Total EPLS actions: 6,110;
Total cases: 1,616.
Department/agency: Department of Education;
Total EPLS actions: 180;
Total cases: 176.
Department/agency: Department of Energy;
Total EPLS actions: 212;
Total cases: 82.
Department/agency: Department of Health and Human Services;
Total EPLS actions: 15,424;
Total cases: 15,400.
Department/agency: Department of Homeland Security;
Total EPLS actions: 487;
Total cases: 408.
Department/agency: Department of Housing and Urban Development;
Total EPLS actions: 1,552;
Total cases: 1,141.
Department/agency: Department of Justice;
Total EPLS actions: 4,417;
Total cases: 4,412.
Department/agency: Department of Labor;
Total EPLS actions: 307;
Total cases: 167.
Department/agency: Department of State;
Total EPLS actions: 236;
Total cases: 189.
Department/agency: Department of the Interior;
Total EPLS actions: 153;
Total cases: 104.
Department/agency: Department of the Treasury;
Total EPLS actions: 4,987;
Total cases: 2,133.
Department/agency: Department of Transportation;
Total EPLS actions: 320;
Total cases: 204.
Department/agency: Department of Veterans Affairs;
Total EPLS actions: 17;
Total cases: 17.
Department/agency: Environmental Protection Agency;
Total EPLS actions: 887;
Total cases: 588.
Department/agency: General Services Administration;
Total EPLS actions: 1,161;
Total cases: 270.
Department/agency: National Aeronautics and Space Administration;
Total EPLS actions: 52;
Total cases: 42.
Department/agency: National Science Foundation;
Total EPLS actions: 41;
Total cases: 41.
Department/agency: Office of Personnel Management;
Total EPLS actions: 4,242;
Total cases: 1,503.
Department/agency: Social Security Administration;
Total EPLS actions: 2;
Total cases: 1.
Department/agency: U.S. Agency for International Development;
Total EPLS actions: 38;
Total cases: 37.
Department/agency: All other agencies;
Total EPLS actions: 617;
Total cases: 279.
Department/agency: Total;
Total EPLS actions: 41,677;
Total cases: 28,958.
Source: GAO analysis of EPLS data.
Notes: This table lists departments and agencies with over $2 billion
in contract obligations for fiscal years 2006 through 2010. "All other
agencies" include those agencies with less than $2 billion in contract
obligations. Cases include both suspension and debarment and other
exclusion cases.
[End of table]
We analyzed the activities of all agencies listed in EPLS. We assessed
the reliability of EPLS data by performing electronic testing,
reviewing system documentation, and interviewing knowledgeable
officials about data quality and reliability, and determined that the
data were sufficiently reliable for the purpose of this review.
To determine the relationship, if any, between selected agency
practices and the level of suspension and debarment activity, we
identified agencies with more than $1 billion in contract obligations
and their total number of procurement-related suspension and debarment
cases in fiscal year 2009.[Footnote 37] These agencies are listed in
table 7. We selected a mix of these agencies, including the Defense
Logistics Agency, the Department of the Navy, the General Services
Administration, and the Department of Homeland Security's (DHS) U.S.
Immigration and Customs Enforcement--all of which had relatively more
cases involving federal procurement than other agencies--and the
Departments of Commerce, Health and Human Services, Justice, State,
and the Treasury, and DHS's Federal Emergency Management Agency--all
of which had relatively few or no exclusions involving federal
procurements.[Footnote 38] We selected these agencies based on the
number of suspension and debarment cases and whether the agency had
recently been reviewed by its inspector general. The Inspectors
General for the Departments of Defense and Justice were reviewing the
agency suspension and debarment processes at the time of our review.
We closely coordinated our reviews to minimize any duplication of
effort.
Table 7: Departments or Agencies with Contract Obligations Greater
Than $1 Billion, Fiscal Year 2009:
Agencies: Department of the Army;
Total contract obligations: $133.4 billion;
Percentage of total government obligations: 24.7%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 132.
Agencies: Department of the Navy;
Total contract obligations: $95.4 billion;
Percentage of total government obligations: 17.6%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 58.
Agencies: Department of the Air Force;
Total contract obligations: $67.8 billion;
Percentage of total government obligations: 12.5%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 127.
Agencies: Defense Logistics Agency;
Total contract obligations: $38.0 billion;
Percentage of total government obligations: 7.0%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 89.
Agencies: All other defense activities;
Total contract obligations: $38.9 billion;
Percentage of total government obligations: 7.2%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 1.
Agencies: Department of Energy;
Total contract obligations: $31.7 billion;
Percentage of total government obligations: 5.9%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 12.
Agencies: Department of Health and Human Services;
Total contract obligations: $20.2 billion;
Percentage of total government obligations: 3.7%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: General Services Administration;
Total contract obligations: $15.5 billion;
Percentage of total government obligations: 2.9%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 58.
Agencies: National Aeronautics and Space Administration;
Total contract obligations: $15.2 billion;
Percentage of total government obligations: 2.8%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 12.
Agencies: Department of Veterans Affairs;
Total contract obligations: $14.8 billion;
Percentage of total government obligations: 2.7%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: U.S. Immigration and Customs Enforcement;
Total contract obligations: $2.1 billion;
Percentage of total government obligations: 0.4%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 28.
Agencies: Federal Emergency Management Agency;
Total contract obligations: $1.7 billion;
Percentage of total government obligations: 0.3%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: All other Department of Homeland Security activities;
Total contract obligations: $10.4 billion;
Percentage of total government obligations: 1.9%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Department of Justice;
Total contract obligations: $7.5 billion;
Percentage of total government obligations: 1.4%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 4.
Agencies: Department of State;
Total contract obligations: $7.5 billion;
Percentage of total government obligations: 1.4%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 1.
Agencies: U.S. Agency for International Development;
Total contract obligations: $6.1 billion;
Percentage of total government obligations: 1.1%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Department of Transportation;
Total contract obligations: $5.5 billion;
Percentage of total government obligations: 1.0%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Department of Agriculture;
Total contract obligations: $5.4 billion;
Percentage of total government obligations: 1.0%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 1.
Agencies: Department of the Treasury;
Total contract obligations: $4.9 billion;
Percentage of total government obligations: 0.9%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Department of the Interior;
Total contract obligations: $4.3 billion;
Percentage of total government obligations: 0.8%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 32.
Agencies: Department of Commerce;
Total contract obligations: $3.2 billion;
Percentage of total government obligations: 0.6%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Department of Labor;
Total contract obligations: $2.0 billion;
Percentage of total government obligations: 0.4%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Environmental Protection Agency;
Total contract obligations: $1.8 billion;
Percentage of total government obligations: 0.3%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Department of Education;
Total contract obligations: $1.5 billion;
Percentage of total government obligations: 0.3%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Social Security Administration;
Total contract obligations: $1.3 billion;
Percentage of total government obligations: 0.2%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: Office of Personnel Management;
Total contract obligations: $1.2 billion;
Percentage of total government obligations: 0.2%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 0.
Agencies: All other agencies;
Total contract obligations: $3.5 billion;
Percentage of total government obligations: 0.6%;
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 69.
Agencies: Total;
Total contract obligations: $540.8 billion;
Percentage of total government obligations: 100%[A];
Total number of procurement-related suspension and debarment cases
(fiscal year 2009): 624.
Source: GAO analysis of Federal Procurement Data System-Next
Generation data and EPLS data.
[A] Percentages may not add to total because of rounding.
[End of table]
At the 10 selected agencies, we identified certain attributes of the
suspension and debarment process, including the organizational
placement of the suspension and debarment official, staffing and
training, formal or informal process, and the referral process,
including triggering events. We conducted a comparative analysis to
identify attributes that agencies with relatively more cases involving
federal procurements have in common that are not present at agencies
with few or no cases. To help identify attributes associated with a
more active suspension and debarment program, we reviewed agency
inspector general reports identifying needed improvements and met with
representatives of the Council of the Inspectors General on Integrity
and Efficiency's (CIGIE) Suspension and Debarment Working Group
[Footnote 39] and the Interagency Suspension and Debarment Committee.
To identify governmentwide efforts to oversee and coordinate the use
of suspension and debarment, we met with officials from the Office of
Management and Budget, which provides overall direction of
governmentwide procurement policies;[Footnote 40] the Interagency
Suspension and Debarment Committee; CIGIE's Suspension and Debarment
Working Group; and the General Services Administration, which manages
and maintains the governmentwide EPLS. We also met with or obtained
information from suspension and debarment and inspector general
officials at the 10 selected agencies.
We conducted this performance audit from September 2010 to August 2011
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Causes for Suspension or Debarment:
The Federal Acquisition Regulation (FAR) provides numerous potential
causes for debarment, which are based on criminal convictions, civil
judgments, or a preponderance of the evidence, as shown in table 8.
[Footnote 41] The existence of a cause for debarment does not require
that a firm or an individual be debarred. In determining whether it is
in the government's interest to debar the firm or an individual, the
agency suspension and debarment official should consider the
seriousness of the acts or omissions, any remedial measures, and
mitigating factors. This official may impose a suspension pending the
completion of an investigation or legal proceeding, when immediate
action is necessary to protect the government's interest. A suspension
may be based on adequate evidence[Footnote 42] of most of the causes
for debarment listed in table 8.[Footnote 43]
Table 8: Causes for Debarment Listed in FAR § 9.406-2:
A contractor may be debarred for a criminal conviction or a civil
judgment for:
a. Commission of fraud or criminal offense related to obtaining,
attempting to obtain, or performing a public contract or subcontract.
b. Violation of federal or state antitrust statutes relating to the
submission of offers.
c. Commission of embezzlement, theft, forgery, bribery, falsification
or destruction of records, making false statements, tax evasion,
violating federal criminal tax laws, or receiving stolen property.
d. Intentionally affixing a false "Made in America" label to a product
not made in the United States.
e. Commission of any other offense indicating a lack of business
integrity or business honesty that seriously and directly affects the
present responsibility of a government contractor or subcontractor.
A contractor may be debarred based upon a preponderance of the
evidence for:
f. Serious violation of terms for one or more government contracts or
subcontracts, such as willful failure to perform, history of failure
to perform, or history of unsatisfactory performance.
g. Certain violations of the Drug-Free Workplace Act.
h. Intentionally affixing a false "Made in America" label to a product
not made in the United States.
i. Commission of an unfair trade practice, including certain
violations of the Tariff Act of 1930 (19 U.S.C. 1337), certain
violations of the Export Administration Act or similar export
agreement, or knowingly making a false statement about a major element
in the foreign content certification of a supply item.
j. Delinquent payment on finally determined federal tax liability in
excess of $3,000.
k. Knowing failure by a principal to timely disclose to the
government, in connection with award, performance, or closeout of
contract or subcontract, credible evidence of violation of federal
criminal law involving fraud, conflict of interest, bribery, or
gratuity violations; violation of civil False Claims Act; or
significant overpayment(s) on the contract.
A contractor may also be debarred based upon:
l. A determination by the Secretary of Homeland Security or U.S.
Attorney General that the contractor is not in compliance with
Immigration and Nationality Act employment provisions.
m. Any other cause of so serious or compelling a nature that it
affects the present responsibility of the contractor or subcontractor.
Source: GAO analysis of the FAR.
[End of table]
[End of section]
Appendix III: Comments from the Department of Commerce:
United States Department of Commerce:
The Secretory of Commerce:
Washington, D.C. 20230:
July 21, 2011:
Mr. William T. Woods:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Woods:
Thank you for the opportunity to comment on the draft report from the
U.S. Government Accountability Office (GAO) entitled, Suspension and
Debarment: Some Agency Programs Need Greater Attention and
Governmentwide Oversight Could be Improved (GAO-11-739).
We generally concur with the report's findings and recommendations and
are already taking action to implement the recommendations associated
with developing detailed implementing guidance and promoting the use
of a case referral process. However, due to the size of our
organization and anticipated level of suspension and debarment
activity, we do not believe it would be cost effective relative to the
risk for the Department of Commerce to assign dedicated full time
staff resources to the suspension and debarment program. We have
created a Suspension and Debarment Coordinator function as an
additional duty that will be the administrative point of contact to
insure the processes and procedures are followed and referrals are
processed in a timely manner. We believe this will meet the intent of
the recommendation without additional resource requirements.
If you have questions regarding this response, please contact Barry E.
Berkowitz in the Office of Acquisition Management at (202) 482-4248.
Sincerely,
Signed by:
Gary Locke:
[End of section]
Appendix IV: Comments from the Department of Health and Human Services:
Department of Health & Human Services:
Office of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
July 21, 2011:
William T. Woods:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Mr. Woods:
Attached are comments on the U.S. Government Accountability Office's
(GAO) draft report entitled, "Suspension And Debarment: Some Agency
Programs Need Greater Attention and Governmentwide Oversight Could Be
Improved" (GAO 11-739).
The Department appreciates the opportunity to review this report prior
to publication.
Sincerely,
Signed by:
Jim R. Esquea:
Assistant Secretary for Legislation:
Attachment:
[End of letter]
General Comments Of The Department Of Health And Human Services (HHS)
On The Government Accountability Office'S (GAO) Draft Report Entitled.
"Suspension And Debarment: Some Agency Programs Need Greater Attention
And Governmentwide Oversight Could Be Improved" (GAO-11-739):
The Department appreciates the opportunity to review and comment on
this draft report.
GAO Recommendation:
We recommend that the Secretary of Health and Human Services take
steps to improve its suspension and debarment programs by:
* assigning dedicated staff resources;
* developing detailed implementing guidance, and;
* promoting the use of a case referral process.
HHS Response:
The Department has reviewed the findings and recommendations made by
GAO. The Department's Office of Grants and Acquisition Policy and
Accountability, which is led by HUTS' Suspending and Debarring
Official, will work with HHS' Office of Inspector General to develop
detailed implementing guidance, including a case referral process. The
Department will utilize existing resources to support these and other
assigned duties rather than assigning dedicated staff resources.
[End of section]
Appendix V: Comments from the Department of Homeland Security:
U.S. Department of Homeland Security:
Washington, DC 20528:
July 19, 2011:
William T. Woods:
Director, Acquisition and Sourcing Management:
441 G Street, NW:
U.S. Government Accountability Office:
Washington, DC 20548:
Re: Draft Report GA0-11-739 "Suspension And Debarment: Some Agency
Programs Need Greater Attention and Government-wide Oversight Could Be
Improved"
Dear Mr. Woods:
Thank you for the opportunity to review and provide comments on this
draft report. The U.S. Department of Homeland Security (DHS)
appreciates the U.S. Government Accountability Office's (GAO's) work
in planning and conducting its review and issuing this report.
The Department is pleased to note GAO's positive recognition that the
U.S. Immigration and Customs Enforcement (ICE) Suspension and
Debarment office has many of the attributes found in successful
Suspension and Department Programs. In the brief period since the
office was established, DHS has been impressed with ICE's Suspension
and Debarment accomplishments and intends to build on those successes
as DHS establishes a single department-wide Suspension and Debarment
program.
The draft report contained one recommendation directed at DHS, with
which DHS concurs. Specifically, GAO recommended that the Secretary of
Homeland Security, as part of ongoing efforts to establish a
Department-wide program for suspensions and debarments, take steps to:
Recommendation 1: Ensure that the Federal Emergency Management Agency
(FEMA) incorporates the characteristics we identified as common among
agencies with more active programs.
Response: Concur. As acknowledged in GAO's report, DHS is in the
process of developing a Department-wide suspension and debarment
policy and program. DHS is committed to ensuring this program has the
same characteristics as the successful programs GAO reviewed. FEMA's
current suspension and debarment process will be transitioned to DHS's
new suspension and debarment program. The new program will have a
dedicated trained workforce that coordinates with contracting
officers, grant officers, the DHS Office of the Inspector General
(OIG), and other DHS investigative units. It will also have formal
policies and procedures published and available for all DHS employees.
The newly developed office and processes will make coordination
quicker and easier to ensure more effective coordination of cases for
potential suspension or debarment action, as appropriate. In this way,
DHS's new program will implement all the characteristics GAO
identified as present in robust suspension and debarment programs.
Again, thank you for the opportunity to review and comment on this
draft report. Technical comments were previously provided under
separate cover. We look forward to working with you on future Homeland
Security issues.
Sincerely,
Signed by:
Jim H. Crumpacker:
Director:
Departmental GAO/OIG Liaison Office:
[End of section]
Appendix VI: Comments from the Department of Justice:
U.S. Department of Justice:
Washington, D.C. 20530:
July 20, 2010:
William T. Woods:
Director, Acquisition and Sourcing:
United States Government Accountability Office:
Washington, DC 20548:
Dear Mr. Woods:
The Department of Justice (Department) has reviewed the Government
Accountability Office's (GAO's) draft report "Suspension and
Debarment: Some Agency Programs Need Greater Attention and
Governmentwide Oversight Could be Improved," GA0-11-739 (Report). The
Department concurs with much of the Report's findings and conclusions,
and in particular with the Report's emphasis on the need for agencies
to devote sufficient attention to suspension and debarment in order to
ensure that agencies conduct business with responsible parties only. The
Department's comments on the Report's recommendations follow.
Recommendations. The Report recommends that the Attorney General and
the Secretaries of Commerce, Health and Human Services, State, and the
Treasury take steps to improve their suspension and debarment programs
by (1) promoting the use of the case referral process; (2) assigning a
dedicated suspension and debarment program with full-time staff; and
(3) developing additional detailed policies and procedures to
supplement the guidance contained in the Federal Acquisition
Regulation (FAR). The Report also recommends that the Director of the
Office of Management and Budget (OMB) direct the Administrator of the
Office of Federal Procurement Policy (OFPP) to issue govemmentwide
guidance (4) describing the elements of an active suspension and
debarment program and (5) emphasizing the importance of cooperating
with the Interagency Suspension and Debarment Committee (ISDC).
The Department's Response: As an initial matter, the Department notes
that the Report's recommendations are based on a review of the "shared
traits" of the four agencies with the greatest number of suspension
and debarment cases for fiscal years 2006-2010, as identified in the
General Service Administration's (GSA's) Excluded Parties List System
(EPLS).[Footnote 1] The Report does not address in detail the policies
and practices of the other federal agencies, including the Department.
Additionally, the Report does not consider certain factors that may
impact the number of suspension and debarment cases, including, for
example, the total number of contractors and grantees conducting
business with an agency, or the types of products or services being
acquired by an agency. Importantly, the Report acknowledges that,
because agency missions and organizational structures are unique, each
agency must determine for itself the extent to which it can benefit
from adopting the characteristics of these four agencies.
Promoting the Case Referral Process. The Department agrees with the
Report's recommendation that senior agency officials actively promote
and encourage the suspension and debarment case referral process, and
it intends to implement this recommendation. The Department intends to
issue memoranda to all component heads, emphasizing suspension and
debarment as an important tool to protect the Government. The
memoranda also will remind all potential referring components,
including contracting, grant-making, investigating, and litigating
activities, of the Department's procedures when a cause for suspension
or debarment arises. The Department believes that implementation of
this recommendation should significantly improve its suspension and
debarment program.
Assigning Dedicated Full-time Staff. The Department does not believe
that assigning dedicated full-time staff to its suspension and
debarment program is necessary or practical at this time.
First, the Department appreciates the importance of conducting
business with responsible parties and the important role of suspension
and debarment. Second, given the current fiscal environment, including
a hiring freeze, it is impractical to hire new staff at this time.
Third, given budget constraints, the Department anticipates that the
amount of obligations for both contracts and grants likely will be
reduced in the near term, thereby reducing the overall number of
contractors and grantees conducting business with the Department,
which in turn likely will curtail the overall level of suspension and
debarment activity. Finally, the Department believes that implementing
the Report's recommendation to actively promote the case referral
process, in combination with existing policy and procedures, will
demonstrate both within and outside the Department that the Department
is serious about holding entities with which it does business
accountable.
Additional Policies & Procedures. The Department relies upon a number
of guidelines in its suspension and debarment program, including the
FAR, the Justice Acquisition Regulation (JAR), the OMB Guidelines to
Agencies on Governmentwide Debarment and Suspension (Non-procurement),
and the Justice Non-procurement Debarment and Suspension Regulations.
The U.S. Attorneys' Manual (USAM) also contains guidance regarding the
coordination of criminal, civil, and administrative actions, including
emphasizing the need for timely and effective communication with
suspension and debarment authorities. The JAR specifically outlines the
Department's internal process when a possible cause for suspension or
debarment is shown, including directing the contracting activity to
seek review by the activity's legal counsel and Procurement Chief.
Indeed, it is the Department's experience that when a possible cause
for suspension or debarment surfaces, the contracting or grant-making
activity typically contacts its legal counsel early in the process. If
the contracting or grant-making activity decides that additional fact-
finding is required, the matter is then referred to the Department's
Office of the Inspector General (OIG), which investigates and, after
consultation with the referring activity, refers the matter directly
to the Department's suspension and debarment official. The Department
believes that the current regulations and guidelines, coupled with the
Department's implementation of the Report's recommendation to actively
promote the referral process, will provide sufficient guidance to
referring activities of the Department's suspension and debarment
policies and procedures without unnecessary duplication.
OFPP Guidance and Cooperation with the ISDC. The Department concurs
with the Report's recommendations directed to the OMB, including
encouraging agencies to cooperate with the ISDC (and two Department
employees currently participate in the activities of the ISDC).
The Department appreciates the opportunity to comment on the GAO's
draft report. Should you have any questions regarding this topic,
including the Department's comments, please do not hesitate to contact
Richard Theis, Department of Justice, Audit Liaison, on (202) 514-0469.
Sincerely,
Signed by:
Lee J. Lofthus:
Assistant Attorney General for Administration:
Footnote:
[1] While the total number of suspension and debarment cases
identified in the Report for the Department during this time period
appears accurate, the division between procurement and non-procurement
cases appears to be inaccurate, likely the result of EPLS coding
errors. The Department understands that GSA is considering changes to
the EPLS.
[End of section]
Appendix VII: Comments from the Department of State:
United States Department of State:
Chief Financial Officer:
Washington, D.C. 20520:
July 22, 2011:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "Suspension
And Debarment: Some Agency Programs Need Greater Attention and
Governmentwide Oversight Could be Improved," GAO Job Code 120934.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Daniel Walt, Procurement Analyst, Bureau of Administration, Office of
the Procurement Executive at (703) 516-1696.
Sincerely,
Signed by:
James L. Millette:
cc: GAO ” William T. Woods:
A ” William A. Moser:
State/OIG ” Evelyn Klemstine:
[End of letter]
Department of State Comments on GAO Draft Report:
Suspension And Debarment: Some Agency Programs Need Greater Attention,
and Government-wide Oversight Could Be Improved (GA0-11-739, GAO Code
120934):
Thank you for the opportunity to comment on your draft report
entitled, Suspension and Debarment: Some Agency Programs Need Greater
Attention, and Governmentwide Oversight Could be Improved. The
Department of State recognizes the importance of maintaining strong
suspension and debarment processes to maintain the integrity of our
supply chain and help keep non- and poor performers from continuing to
receive government contracts and grants.
GAO recommends the Secretary of State take the following steps to
improve our suspension and debarment programs. We agree with all of
these recommendations and provide the following additional responses:
1. Assign dedicated staff resources. We will review current staffing
levels and pursue any needed staffing level changes in light of
current departmental priorities.
2. Develop detailed implementing guidance. We will draft guidance that
will provide more detailed information to Contracting Officers and
others regarding the debarment and suspension process.
3. Promote the use of a case referral process. We will publish
guidance to our acquisition community (both domestic and overseas)
regarding when and how to refer a contractor or grantee for possible
suspension or debarment.
[End of section]
Appendix VIII: Comments from the Department of the Treasury:
Department Of The Treasury:
Washington, D.C. 20220:
July 20, 2011:
William T. Woods:
Director, Acquisition and Sourcing Management:
Government Accountability Office:
441 G Street NW:
Washington, DC 20548:
Re: GAO Draft Report GA0-11-739:
Dear Mr. Woods:
I have reviewed the draft report entitled Suspension and Debarment:
Some Agency Programs Need Greater Attention and Governmentwide
Oversight Could be Improved (GAO-11-739) and I am pleased to offer
comments on behalf of the Treasury Department.
We agree with GAO's recommendations, and plan to leverage to the
extent possible the practices identified in the report in use by other
agencies to deploy more detailed implementing guidance and a better
defined case referral process. We will also leverage Departmental and
other available federal resources to promote the responsible use of
suspension and debarment tools.
With regard to GAO's recommendation on dedicated resources, Treasury
has a total of eight staff to cover all the legislated requirements
for use of procurement authority, including suspension and debarment.
Due to budget forecasts, however, there appears to be little
probability of obtaining additional resources. We will, however,
examine existing resources to ensure they are being used to maximum
efficiency for suspension and debarment activities.
The Treasury Department appreciates the opportunity to review and
respond to the draft report. Please contact me on 202-622-1039, or
Thomas.Sharpe@do.treas.gov) if you have any questions in this matter.
Sincerely,
Signed by:
Thomas A. Sharpe, Jr.
Senior Procurement Executive:
Department of the Treasury:
cc: Mike Lewis, Sr. Advisor to the ASM & CFO:
[End of section]
Appendix IX: GAO Contact and Staff Acknowledgments:
GAO Contact:
William T. Woods, (202) 512-4841 or woodsw@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, John Neumann, Assistant
Director; Noah Bleicher; Morgan DelaneyRamaker; Angela Pleasants; Russ
Reiter; Raffaele (Ralph) Roffo; Roxanna Sun; and Bradley Terry made
key contributions to this report.
[End of section]
Footnotes:
[1] EPLS is an electronic database containing the list of all parties
suspended, proposed for debarment, debarred, declared ineligible, or
excluded or disqualified by agencies. It is available for agency and
public access at [hyperlink, http://www.epls.gov].
[2] For purposes of this report, "other exclusions" are based on
violations of certain statutes or regulations other than the FAR or
are required under executive orders. These are also known as
declarations of ineligibility. These exclusions can relate to such
matters as health care fraud, export control violations, or drug
trafficking, which may render a party ineligible for specified
government transactions or activities. These violations may be
unrelated to federal contracts, grants, or assistance but may include
sanctions that preclude the party from some or all procurement and
nonprocurement transactions as set out in the statute or regulation.
[3] EPLS provides reports showing the number of agency actions, but
multiple actions may be recorded for the same case because agencies
may exclude multiple individuals associated with a firm or list the
firm under different firm names and include affiliates. In addition, a
listed firm or individual may have multiple related actions, such as
suspension, proposed debarment, or debarment, which are reported as
separate actions in EPLS.
[4] Fiscal year 2009 was the most current full year of data available
at the beginning of our review.
[5] We included two components for the Department of Defense and DHS
because each had its own suspension and debarment official as well as
its own guidance and procedures.
[6] The ISDC was established as the Interagency Committee on Debarment
and Suspension by Executive Order 12549 on February 18, 1986.
[7] The Inspector General Reform Act of 2008, Pub. L. No. 110-409,
established CIGIE as an independent entity within the executive branch
to address integrity, economy, and effectiveness issues that transcend
individual government agencies and increase the professionalism and
effectiveness of personnel by developing policies, standards, and
approaches to aid in establishing a well-trained, highly skilled
workforce in the offices of the inspectors general. The Suspension and
Debarment Working Group was formed in summer 2010 as part of the CIGIE
Investigations Committee to raise the overall profile and expand the
use of suspension and debarment.
[8] FAR §§ 9.406-2 and 9.407-2.
[9] The debarring official issues a notice of proposed debarment to
advise a party that a debarment is being considered and to provide the
contractor an opportunity to respond. A proposed debarment has the
same effect as a suspension and is listed in EPLS.
[10] The NCR was adopted under the rule-making authority of the
respective agencies after OMB issued guidelines, as provided for in
Exec. Order No. 12549 (1986), OMB Guidelines to Agencies on
Governmentwide Debarment and Suspension (Nonprocurement), found at 2
C.F.R. Part 180.
[11] Examples of nonprocurement transactions are grants, cooperative
agreements, scholarships, fellowships, contracts of assistance, loans,
loan guarantees, subsidies, insurance, payments for specified use, and
donation agreements.
[12] 51 Fed. Reg. 6370 (Feb. 21, 1986).
[13] Standing members include each of the 24 agencies covered by the
Chief Financial Officers Act. Nine independent agencies and government
corporations also participate.
[14] FAR § 9.404.
[15] Some agencies with regulatory authority, including HHS, Justice,
and Treasury, maintain their own ineligibility listings that are
electronically transmitted into EPLS.
[16] GAO, Federal Procurement: Additional Data Reporting Could Improve
the Suspension and Debarment Process, [hyperlink,
http://www.gao.gov/products/GAO-05-479] (Washington, D.C.: July 29,
2005).
[17] GAO, Excluded Parties List System: Suspended and Debarred
Businesses and Individuals Improperly Receive Federal Funds,
[hyperlink, http://www.gao.gov/products/GAO-09-174] (Washington, D.C.:
Feb. 25, 2009).
[18] Department of Defense Office of Inspector General, Additional
Actions Can Further Improve the DOD Suspension and Debarment Process,
D-2011-083 (Arlington, Va.: July 14, 2011).
[19] A case in EPLS results in multiple actions when agencies exclude
multiple individuals associated with a firm, list the firm under
different names, or include affiliates. In addition, a listed firm or
individual may have multiple related actions, such as suspension,
proposed debarment, or debarment, which are reported as separate
actions in EPLS. Therefore, to provide information on the level of
agency activity, we aggregated related entities, such as business
affiliates and associated parties, and actions to identify the number
of cases. See app. I for further information on how we aggregated the
actions.
[20] For example, violations of the Iran Sanctions Act result in
exclusion from all government contracts, while violations of the Clean
Air Act and Clean Water Act only preclude contracts at the violating
facility. Violations of the Anti-Drug Abuse Act may result in
exclusion from some or all government contracts and benefits based on
the discretion of the sentencing judge.
[21] Some agencies may suspend or debar federal contractors utilizing
the NCR, and such suspensions and debarments would be listed in EPLS
as cases related to grants and other assistance.
[22] Figure 2 shows for each of the 10 agencies we studied the
percentage of federal contract dollars obligated and the percentage of
total government procurement-related suspension and debarment cases
for fiscal years 2006 through 2010, and the extent to which certain
characteristics were found among the selected agencies.
[23] Department of Homeland Security, Office of Inspector General,
DHS' Use of Suspension and Debarment Actions for Poorly Performing
Contractors, OIG-10-50 (Washington, D.C.: Feb. 2, 2010).
[24] Department of Homeland Security, Assessment of Suspension &
Debarment at DHS (Washington, D.C.: May 28, 2010). In November 2010,
DHS accepted the recommendations of this review and approved the
implementation of a suspension and debarment official position within
the Office of the Under Secretary for Management, tasked with
developing a departmentwide suspension and debarment policy and
program. The report concluded that ICE's suspension and debarment
program--established in May 2008--was robust and sufficiently distinct
in its enforcement of the Immigration and Nationality Act, and that it
should remain a separate entity.
[25] U.S. Agency for International Development, Office of Inspector
General, Audit of USAID's Process for Suspension and Debarment
(Washington, D.C.: Oct. 1, 2009).
[26] Commission on Wartime Contracting in Iraq and Afghanistan,
Ensuring Contractor Accountability: Past Performance and Suspensions
and Debarments (Washington, D.C.: Feb. 28, 2011).
[27] The Commission on Wartime Contracting in Iraq and Afghanistan, an
independent, bipartisan legislative commission, was established by
Congress to study wartime contracting in Iraq and Afghanistan. Created
in Section 841 of the National Defense Authorization Act for Fiscal
Year 2008, this eight-member commission is mandated by Congress to
study federal agency contracting for the reconstruction, logistical
support of coalition forces, and the performance of security functions
in Iraq and Afghanistan.
[28] Department of Agriculture, Office of Inspector General,
Effectiveness and Enforcement of Suspension and Debarment Regulations
in the U.S. Department of Agriculture, 50601-14-AT (Washington, D.C.:
Aug. 16, 2010).
[29] Office of Management and Budget, Office of Federal Procurement
Policy, Statement of the Honorable Daniel I. Gordon, Administrator for
Federal Procurement Policy, Office of Management and Budget, Before
the Commission on Wartime Contracting (Washington, D.C.: Feb. 28,
2011).
[30] Department of Homeland Security, Office of Inspector General,
Statement of Richard L. Skinner, Inspector General, U.S. Department of
Homeland Security, Before the Committee on Oversight and Government
Reform, U.S. House of Representatives (Washington, D.C.: Mar. 18,
2010).
[31] Monitoring the Medicaid and Medicare programs includes HHS OIG's
administration of the Exclusions Program, a program designed to combat
health care fraud by preventing certain individuals and businesses
from participating in federally funded health care programs and other
government procurement and nonprocurement transactions, based on
convictions for program-related fraud and patient abuse, licensing
board actions, and default on Health Education Assistance Loans.
[32] Pub. L. No. 110-417, § 873 (2008).
[33] FAR § 9.402 (d).
[34] Interagency Suspension and Debarment Committee, Report on Federal
Agency Suspension and Debarment Activities (Washington, D.C.: June 15,
2011).
[35] For purposes of this report, "other exclusions" are based on
violations of certain statutes or regulations other than the Federal
Acquisition Regulation or are required under executive orders. These
are also known as declarations of ineligibility. These exclusions can
relate to such matters as health care fraud, export control
violations, or drug trafficking, which may render a party ineligible
for specified government transactions or activities. These violations
may be unrelated to federal contracts, grants, or assistance but may
include sanctions that preclude the party from some or all procurement
and nonprocurement transactions as set out in the statute or
regulation.
[36] For example, both the Department of Health and Human Services and
the Office of Personnel Management exclude some health care
professionals.
[37] Fiscal year 2009 was the most recent full year of contract
obligations data available at the beginning of our review.
[38] We included two components for the Department of Defense and DHS
because each had its own suspension and debarment official as well as
its own guidance and procedures.
[39] The Inspector General Reform Act of 2008, Pub. L. No. 110-409,
established CIGIE as an independent entity within the executive branch
to address integrity, economy, and effectiveness issues that transcend
individual government agencies and to increase the professionalism and
effectiveness of personnel by developing policies, standards, and
approaches to aid in establishing a well-trained, highly skilled
workforce in the offices of the inspectors general. The Suspension and
Debarment Working Group was formed in summer 2010 as part of the CIGIE
Investigations Committee to raise the overall profile and expand the
use of suspension and debarment.
[40] The Office of Federal Procurement Policy in the Office of
Management and Budget provides overall direction of governmentwide
procurement polices, including procurement suspension and debarment.
41 U.S.C. § 1101.
[41] FAR § 9.406-2.
[42] In assessing the adequacy of the evidence, agencies should
consider how much information is available, how credible it is given
the circumstances, whether important allegations are corroborated, and
what inferences can reasonably be drawn as a result. Indictment for
any of the causes specified in FAR § 9.407-2 (a) constitutes adequate
evidence for suspension.
[43] Letters f. and l. in table 8 are not included in the causes for
suspension listed at FAR § 9.407-2.
[End of section]
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