Keen observers of federal suspension and debarment practice have noticed a recent change at the Department of Labor (DOL):  After years of inactivity, DOL’s discretionary suspension and debarment program suddenly came to life in 2017 and has been issuing suspensions and debarments at a steady clip ever since. [1]  Now, according to a recent announcement, DOL is poised to turn up its suspension and debarment activity yet another notch.  Starting this month and continuing through April 2020, DOL will be instituting a pilot program aimed at promoting and expediting its suspension and debarment activity, with the stated goal of “reduc[ing] the processing time on discretionary suspension and debarment actions from months to days.” 

Overview

In a press release issued last week, DOL describes the new pilot program as the latest step in its effort to “ensure accountability and protect the federal government” from non-responsible contractors.  A key feature of the program is its emphasis on additional information sharing between DOL’s Office of Inspector General (“OIG”) and Office of the Assistant Secretary for Administration and Management (“OASAM”) in referrals for discretionary suspension and debarment action.  According to its press release, DOL expects that this increased coordination “will allow [suspension and debarment] decisions to be made faster than ever before.”

The pilot program is an extension of DOL’s recent push to enhance its discretionary suspension and debarment efforts, a trend that is clearly illustrated by the numbers.  From FY2010 to FY2016, DOL reported a total of just two suspensions and one debarment.  But in recent years, this number has spiked.  In FY2017 and FY2018, DOL reported 29 discretionary suspensions and 32 discretionary debarments.  And the trend continues.  DOL says that its OIG referred a “record number” of 156 individuals and entities for suspension or debarment in FY2018, and DOL already has issued 32 discretionary suspensions and five discretionary debarments in the first quarter of FY2019 alone.

Analysis & Observations

The practical details of the implementation and effect of DOL’s pilot program will become clearer in the coming months.  But for now, the announcement highlights certain initial considerations that warrant attention from both contractors doing business with DOL and the suspension and debarment community more broadly.

Promoting Efficiency While Preserving Opportunities for Engagement

A key objective of DOL’s pilot program is to reduce the processing time for discretionary suspensions and debarments to mere days.  The goal of increased information sharing and efficiency is an admirable one for all agencies, particularly if it reduces suspension or debarment actions (which are supposed to be based on present responsibility) that are premised upon stale conduct occurring years prior.  However, it is critical that this desire for efficiency does not deprive contractors of a meaningful opportunity to engage with SDOs concerning a present responsibility review.

Undoubtedly, DOL does not intend for its pilot program to have any effect on contractors’ constitutionally guaranteed due process rights, including sufficient notice and opportunity for meaningful comment, as codified in both the FAR (48 C.F.R. Subpart 9.4) and the nonprocurement common rule (2 C.F.R. Part 180).  But it also is important to ensure the quest for efficiency does not prevent the often productive pre-notice engagement between contractors and SDOs.  SDOs across the government are increasingly making use of pre-notice letters (e.g., show cause notices, requests for information, etc.), and many contractors reach out to SDOs as a proactive, cooperative measure even before the initiation of any suspension or debarment proceedings.  The resulting dialogue from this early engagement often can protect the government’s interests without eliminating a supplier or service provider from the pool of eligible contractors.  This process serves an important and useful purpose and hopefully will not be cast aside in the name of efficiency.

Using the Suspension and Debarment Remedy Judiciously

DOL’s recent and dramatic uptick in suspensions and debarments is generally consistent with increased focus on suspension and debarment as a government remedy over the past five or so years.  All taxpayers can appreciate the government’s watchful protection of the public fisc, and suspension and debarment are powerful tools that, when used appropriately, can effectively support this important responsibility.  In the case of DOL, the recent surge in suspension and debarment activity to “record numbers” appears to be the product of a genuine effort to fulfill the agency’s “commitment and duty to be a good steward of taxpayer resources.”

That said, agencies must also recognize that suspension and debarment are extraordinary remedies that must be used judiciously.  Indeed, the most recent annual report of the Interagency Suspension and Debarment Committee (ISDC) cautioned that suspension and debarment should be “used only as a last resort.”  The ISDC’s words serve as a reminder that while suspension and debarment statistics can be a useful metric for assessing the vitality of a given agency’s program, a focus on numbers should not be an end to itself.

 

[1] DOL also is vested with statutory authority to issue mandatory debarments, absent a waiver by the Secretary, for violations of the Davis-Bacon Act, Service Contract Act, and Walsh-Healy Act.  This statutory debarment authority is not the subject of the pilot program.