OMB urges agencies to crack down on contractors

The Office of Management and Budget wants agencies to get more aggressive with contractors by using their suspension and debarment powers more frequently.

“For too long, too many federal agencies failed to adequately use the suspension and debarment tools that are placed at their disposal,” Jack Lew, OMB director, wrote in a memo released Nov. 15. Too many agencies have failed to devote enough resources for the most basic of programs required to suspend or debar irresponsible contractors or grantees, he wrote.


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In the memo, Lew ordered agencies to put more resources into their suspension and debarment programs. Agencies should appoint a senior official to head up the program, if there isn’t one already, he said. The appointee has to evaluate the program for adequate training resources and consider whether the program deserves a full-time staff. The appointee should also ensure the program stays in good working condition with its policies and knowledgeable staff.

The official in charge also needs to keep the agency participating in the Interagency Suspension and Debarment Committee.

While resources haven’t been dedicated to suspension and debarment work, agencies have not contributed to the committee either. It has been left with no dedicated staff or budget, causing it to struggle to provide governmentwide oversight and coordination, the committee wrote in a recent letter to Sen. Joe Lieberman (I-Conn.), chairman of the Homeland Security and Governmental Affairs Committee.

By increasing participation with the committee, it “can more effectively serve as a support structure for helping agencies, including smaller independent agencies, build and maintain their suspension and debarment programs,” Lew wrote in his memo. To assist agencies, the committee will help with develop training and share the best practices.

Lew also told agencies to review their internal policies to use the suspension and debarment authority. Acquisition officials should regularly check relevant databases, such as the Excluded Parties List System, before awarding a contract and work fast if they mistakenly award a contract to a suspended or even a debarred company.

Lieberman’s committee is holding a hearing Nov. 16 that will ask why negligent and fraudulent contractors aren’t being punished with these powers at agencies' fingertips. His committee will examine whether federal suspension and disbarment regulations are sufficient for the government to deny irresponsible contractors future awards.

In his memo, Lew cited an October Government Accountability Office report that found only four of the 10 agencies GAO reviewed are active in issuing suspensions and debarments.

The Interagency Suspension and Debarment Committee confirmed GAO’s assessment in its letter. The committee said agencies view the authority as extra duty. The result has been unnecessary delays in processing cases. Agency officials have also hampered their ability to identify problems and correct them because of a lack of central monitoring and oversight.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Sun, Nov 20, 2011 Jane California

I totally agree with the comments from AL, JD and especially Butch that it seems like the Government exempts itself from accountability.

Two points, one for the debarred list and another for GAO.

First, having a debarred list of companies and/or individuals not conducting business in ethical or in a legal manner is the responsibility of the Government. However, as Butch mentioned, “at what point does a federal agency and their procurement office become accountable…” To resolve this issue, OMB has the responsibility to also have an anonymous “whistle blower” program for contractors to report violations and keep a list of contracting officers, contract specialists, and program offices not following procurement rules, and, then, debar these individuals from working in that capacity or separate them from Government employment.

This reminds me of a recent event on the news that our elected representatives are engaging in insider trading without consequences. If a citizen of the US does that we would be held accountable and sent to jail. To mitigate this problem, a proposal has been made to prohibit any representatives from engaging in insider trading if they are involved in a committee receiving any advanced information on the market.

So if the Government want to put contractors on a debar list, we should expect a debar list for Government personnel and representatives to demonstrate equal treatment under the law, a level playing field, and a process for checks and balances. This would make anybody tempted to act in unethical or illegal ways to think twice. This would be a better method of preventive action.

Second, I can personally vouch for Butch’s comments about GAO. Butch is absolutely correct that GAO cannot hold an Agency accountable, request documentation, or enforce corrective actions. For bid protests, GAO is like a “lion without teeth” and entirely ineffective. Why spent millions of dollars to staff this section of GAO dealing with bid protests that does not even have the authority and jurisdiction to enforce a corrective action on an Agency? My suggestion would be to let the commercial courts deal with bid protests, as long as the contract does not deal with National security. The commercial courts already have a mechanism for discovery, and have the authority to issue judgment AND enforcement. Plus, it would not cost any additional tax dollars to fund. The resources are already there.

Fri, Nov 18, 2011

I'm on a program where the SI was chosend in spite of the fact that they were then in litigation with another agency over a similar failed program and yet the Gov awarded that same SI this program. And the net is the result has been exactly the same another failure and a lost billion dollars. And I'm pretty sure the Gov will still not go after this contractor the way they should. Someone should not only be debarred but be going to jail. I also agree that it's very much the agency doing the work that makes the mistakes.

Wed, Nov 16, 2011 JD

What Al said.. Stupid is as stupid does. Government contracts are spec'ed by the less knowledgeable drone workers.. My time in local Govt witnessed many disasters.. Someone needs to get a clue..

Wed, Nov 16, 2011 Butch Maryland

I find it ironic that the OMB urges agencies to crack down on contractors for running "afoul" of the procurement rules when the OMB should be cracking down on Agency's procurement offices that running "afoul" of the procurement rules themselves. At what point does a federal agency and their procurement office become accountable for running "afoul" of the procurement rules, because the Government Accountability Office (GAO) certainly does not have the power to do this. The Government Accountability Office (GAO) does not have any power to make a corrupt agency that blatantly violates FAR, commits fraud, abuses the power of their office, accountable for any of their actions. It is a conflict of interest having a federal government watch dog agency, the GAO make the decisions on these bid protests. For example the GAO cannot and will not make an Agency provide all documentation in regards to a bid protest. As a result the GAO will refuse to sustain a bid protest on meritorious arguments based on lack of evidence. If a bid protest is sustained most likely it is due to timeliness. When a protester does have their argument sustained all the GAO can do is recommend corrective a action to be performed by an Agency. The GAO has no jurisdiction over an Agency in which to make sure that these corrective actions are performed correctly or for that matter, performed at all. This is a far cry from the GAO mission statement, which says, “The GAO is to ensue the accountability of the federal government for the benefit of the American people.” In the end it is the contractors that are to be held accountable for running "afoul" of the procurement rules but never the federal government or their procurement offices.

Wed, Nov 16, 2011 Al Minneapolis, MN

I can tell you why the agencies haven't used more of their suspension and debarment tools... it's because the gov POC on the program either doesn't have a clue about the program or how it is supposed to run or what they are trying to accomplish. I was taught in Sunday school that if I live in a glass house I shouldn't throw stones. I suggest Jack Lew removes his steady gaze from his computer screen and glances out one of the many windows that make up his glass house.

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