“Debarment” is a formal action by the federal government that excludes a person or company from receiving government contracts or grants for a specified period. It is a more severe sanction than a “suspension” and can completely shut down a federal contractor’s business for a period of time.
Debarment proceedings are governed by the Federal Acquisition Regulation (“FAR”) which sets for the procedures the government must follow and the rights of the respondents (i.e. the persons or companies the government is seeking to debar from federal contracts).
FAR 9.406-2 sets forth some of the reasons the government may disbar a person or company from federal contracting. Some of the reasons include committing fraud in connection with federal contracts, violating antitrust laws in the submission of offers, serious breaches of government contracts, and other reasons.
The government is required to give you notice of a proposed disbarment and an opportunity to respond before taking any action. The government cannot debar you based on reasons that were not set forth in the notice of proposed debarment.
If you choose to contest the proposed disbarment, you can submit written materials to dispute the government’s allegations, or to otherwise demonstrate your fitness to obtain government contracts. You can also request a hearing before government lawyers and other officials to present evidence in argument in opposition to the proposed debarment.
Importantly, debarring officials have discretion over whether to impose a debarment decision even where grounds for debarment exist – FAR 9.406-2 begins as follows: “The suspending and debarring official may debar” (italics added). So, for example, if you have been convicted of a crime related to government contracting you may still be able to resist debarment if there is significant mitigation.
If, after the administrative hearing, the government nevertheless imposes a debarment against you, you have the right to challenge that action in a U.S. District Court. In such an action, you can challenge the adequacy of the procedures that led to your debarment, or argue that the government’s decision was arbitrary and capricious. For example, in a 2017 DC case called Friedler v. General Services Administration, the district court vacated a debarment because the GSA relied on reasons that it didn’t include in the notice of proposed debarment.
If you have further questions about resisting federal debarment actions, please contact one of our attorneys for a phone consultation.