Each year, the Interagency Suspension and Debarment Committee (ISDC) reports to Congress on the status of the Federal suspension and debarment system.  With its mission of assisting agencies to build and maintain efficient and effective suspension and debarment activities, the ISDC is uniquely situated to provide comments and insight on the status of suspension and debarment practices generally. 

In its Fiscal Year 2015 report, the ISDC commented on an interesting trend in agency suspension and debarment proceedings.  Fiscal years 2010 through 2014 saw a steady trend of increased suspension and debarment activity—with actual suspensions and debarments increasing from 1,585 in FY 2010 to 2,938 in FY 2014.  The ISDC observed that “Data for FY 2015 . . . shows a plateauing of the number of suspension and debarment actions,” with suspensions and debarments remaining relatively static at 2,791.

The ISDC report describes two possible reasons for the slowdown in growth of suspension and debarment activity.  First, the report expressly suggests that the plateau “may, at least in part, be indicative of programs becoming established throughout the Executive Branch and transitioning from start up into effective programs.”  This is almost certainly correct.  In 2011, the Government Accountability Office (GAO) made recommendations on how six agencies with few or no procurement-related suspension and debarment activities could improve their programs.  In a May 2014 follow-up report, the GAO described how these agencies—which included the Departments of Commerce, Health and Human Services, Justice, State, Treasury, and the Federal Emergency Management Agency—had collectively increased their total number of suspension and debarment actions from 19 (in 2009) to 271 (in 2013) by addressing staffing shortages, establishing formal policies, and actively encouraging referrals.  Thus, it follows that the establishment and maturation of suspension and debarment programs which did not previously exist would generate a plateau of activity following an initial period of substantial growth.

A second possible cause of plateauing suspension and debarment activity is increased agency use of alternatives to suspension and debarment.  The ISDC emphasized its continued work to highlight “the full spectrum of tools available to an agency’s suspension and debarment program, ranging from pre-notice engagement, use of administrative agreements, and impositions of exclusions.”  These efforts appear to have generated results, as “agencies reported a nearly 30 percent increase from FY 2014 to FY 2015 in the use of show cause or other pre-notice investigative letters,” as well as a 25 percent increase in the use of administrative agreements over the same period.

While the flattening trend of suspension and debarment activity is illuminating by itself, the corresponding increase in agency use of suspension and debarment alternatives highlights avenues by which some contractors might be able to engage government agencies to avoid complete exclusion from government contract markets.  According to the ISDC, there were “over 50 instances during the reporting period where federal contractors or recipients proactively reached out to agency suspension and debarment offices to discuss potential issues, rather than waiting for the agency to take action.”  As the ISDC report suggests agencies are more open to utilizing suspension and debarment alternatives, contractors might consider proactive agency engagement as a strategy for addressing potential suspension and debarment issues.

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Photo of Sandy Hoe Sandy Hoe

Sandy Hoe has practiced government contracts law for more than 45 years.  His expertise includes issues of contract formation, negotiation of subcontracts, bid protests, the structuring of complex private financing of government contracts, preparation of complex claims, and the resolution of post-award contract…

Sandy Hoe has practiced government contracts law for more than 45 years.  His expertise includes issues of contract formation, negotiation of subcontracts, bid protests, the structuring of complex private financing of government contracts, preparation of complex claims, and the resolution of post-award contract disputes through litigation or alternative dispute resolution.  His clients include major companies in the defense, telecommunications, information technology, financial, construction, and health care industries.

For several years, Sandy also practiced telecommunications regulatory law, appearing before numerous state public utility commissions in hearings to open the local exchange markets for new entrants under the Telecommunications Act of 1996.

For many years, he has been active in the Public Contract Law Section of the American Bar Association, where he was an author of the section’s original publication of “Subcontract Terms and Conditions.”  From 1999 to 2011, Sandy co-chaired the Section’s committee on Privatization, Outsourcing and Financing Transactions and from 2005 to 2008 served on the Section Council.  Prior to his service in the ABA, for six years he was on the Steering Committee of the Section on Government Contracts and Litigation of the District of Columbia Bar, including three years as co-chair.

Photo of Peter B. Hutt II Peter B. Hutt II

Peter Hutt represents government contractors in False Claims Act and fraud matters, and accounting, cost, and pricing disputes and counseling matters.

Peter is a leading False Claims Act lawyer in the government contracts arena. He has represented contractors for 35 years in matters

Peter Hutt represents government contractors in False Claims Act and fraud matters, and accounting, cost, and pricing disputes and counseling matters.

Peter is a leading False Claims Act lawyer in the government contracts arena. He has represented contractors for 35 years in matters alleging cybersecurity noncompliance; cost mischarging; CAS violations; quality assurance deficiencies; substandard products and services; defective pricing; health care fraud; price reduction issues; inadequate subcontractor oversight; and reverse false claims. He has testified before Congress concerning the False Claims Act, and is a thought leader in the field. Peter also conducts internal investigations and advises clients on whether and how to make disclosures of potential wrongdoing.

Peter also represents contractors and grantees in accounting, cost, and pricing matters, and other contract and grant matters. He has addressed issues concerning pensions and post-retirement benefits; TINA and defective pricing; alleged CAS violations; cost accounting practice changes; alleged charging of unallowable and expressly unallowable costs; terminations; contract financing; price reduction clause issues; subcontracting and supply chain compliance; specialty metals compliance; and small business and DBE compliance. He has litigated cost, accounting, and contract breach matters in the Court of Federal Claims and the ASBCA.

Peter is recognized for his work both in False Claims Act and government contract disputes by Chambers USA, which notes that “He is absolutely outstanding. He is thoughtful and client-focused.” Chambers also notes that “Peter’s judgment and problem solving ability is unique. He is a very good False Claims Act lawyer.”