Contracting panel urges suspensions, debarments for misbehaving contractors

A commission reviewing government contracting in war zones is pushing for tougher punishments for contractors who misbehave while also pressuring government to follow through on suspending and debarring them.  

The Commission on Wartime Contracting in Iraq and Afghanistan wants to lower procedural barriers for the government to follow through on suspensions and debarments against companies, according to its report released Feb. 24. The commission also recommends that government officials be required to give a written rationale for why they did not pursue a proposed suspension or debarment.

Agencies have failed to wisely use available contract suspension and debarments tools, but they also have a limited jurisdiction over criminal behavior and restricted access to records to build a case against a wrongdoer. The result is “an environment where contractors misbehave with limited accountability,” the commission wrote.

The commission is assessing the culture of contracting in contingency operations and on the battlefield. The work is risky, which makes the contracting problematic, as oversight falls away with poor management.

“The challenge of fostering a culture of contractor accountability is especially difficult in war zones,” the report states.

One of the major problems in protecting the government’s resources is the impediments to suspending or debarring companies from work.

A suspension is a temporary halt of company work based on adequate evidence, pending the completion of an investigation, when officials determine immediate action is necessary. A debarment bans a company from getting contracts from agencies, based on agency officials’ ruling.

Agency officials told the commission that current procedures to carry out punishments are too complex. They then opt instead to work administratively to fix the problem. In some circumstances, regulations allow contractors suspected of infractions to request a hearing before an agency can move forward.

But the commission found that it’s extremely difficult to locate witnesses and have them appear at the hearing, not to mention the need for evidence to support a fact-based case. Meanwhile, according to the report, bad contractors roam free, without any incentive to improve their work ethic.

By working through administrative agreements with the Justice Department, companies can concur with statements of fact and admit to certain misconduct. However, the government often lets them make admissions of wrongdoing with the caveat that the admissions cannot be used in future proceedings that threaten suspensions or debarments.

The commission is calling on Congress to require that suspension and debarment officials document their reasons for not taking action against a contractor that has been officially recommended for punishment.

It also wants to make suspensions based on contract-related indictments mandatory for a set time. It doesn’t want the suspensions subject to discretion by the official who’s in charge of suspending and debarring companies.

The panel also wants to end administrative agreements.

To avoid hearings and witness testimony, the commission wants to exempt agencies from offering a chance for a hearing. The commission recommends that agencies should instead be able to make decisions based on the documentary record alone.

“When it comes to oversight of contingency contracting, we’ve been driving beyond the reach of our headlights," said Michael Thibault, the commission’s co-chairman and a former deputy director of the Defense Contract Audit Agency. "Reforms are badly needed."

Congress created the commission, which was modeled on the World War II-era Truman Committee, in 2008 to review contracting issues in war zones. It filed its first interim report to Congress in 2009 and has since submitted three special reports. Its final report to Congress is due in July.