December 17, 2018

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Federal Contracting and Debarment: When Desperate Situations Call for Immediate and Targeted Response with a Team Approach

When a client’s federal litigation, regulatory, or contracting situation calls for an immediate and targeted response, bigger is not always better.  Sometimes a smaller Washington, D.C.-based law firm can build a nimble team, tailored to a client’s needs, that can solve a client’s litigation or regulatory problem in a way that would be difficult for a major law firm to pull off.

In federal contracting, the stakes don’t get much higher than in a suspension or debarment action. It usually begins when a federal contractor receives a notice advising that a federal agency has taken the “lead agency” role in “protecting the government’s interests” vis-a-vis the targeted firm.

This letter signals the start of what for many firms is an existential crisis: The contractor, now considered an “Excluded Party,” cannot receive new contract awards, task orders, or option work on federal contracts and subcontracts; it will also usually be precluded from new work on state and local government contracts. While traditionally the government only initiated such actions following a criminal conviction, recent events suggest that agencies are adopting a more aggressive approach.  Debarment actions arise more and more commonly out of suspicion or indictment, rather than any final adjudication or conviction.  The common thread is the government’s belief that the contractor engaged in illegal or improper activity in relation to a federal procurement. 

The client company must decide how it will address any substantiated underlying issues within its organization at the same time as it seeks swift reprieve from the “economic death sentence” of suspension or debarment.  Oh, and by the way:  the contractor has 30 days in which to make its case to the lead agency’s “debarring official,” the person whom the lead agency has vested with the tremendous discretion and authority to decide the client’s fate, and who is charged with protecting the government’s interests against contractors deemed not “presently responsible.” If the proposed action becomes final, with suspensions generally lasting up to 18 months, and debarments lasting up to three years, the client may not survive. 

A firm in this situation needs a rapid and tailored response from its lawyers, led by a firm that understands how this client works, and that views this client’s matter as the most important.  Nothing should distract from the goal of demonstrating to the lead agency that the client is presently responsible and can be permitted to continue to do business with the federal government.  Any presentation to the government must address the client’s organization, the precise situation at hand and all relevant information specific to the client, and must express all of this in terms that will resonate with the federal audience. To this end, the team must include consultants, advisers and attorneys who are intimately familiar with the lead federal agency and who understand how it reaches its decisions.

It’s very rare that one law firm, whether large or small, has all the right talent already inside it. If you are in the Washington, D.C., area, with its vast pool of former federal officials and retired federal employees, your task is easier – but there are former feds all over the United States who can help.

Government contracting PuzzleThis means that a firm that has developed and battle-tested a strategy for dealing with federal contractors faced with federal suspension and debarment actions can take advantage of substantial institutional knowledge of federal contracting and can swiftly put at its disposal the experience and expertise of subject-matter experts, who are themselves usually small-firm or solo practitioners.  Essentially, it is assembling a SWAT team of hand-picked, proven practitioners chosen for the specific matter at hand, each of whom plays a carefully defined role.

One example is a smaller firm that engaged a former DoD debarring official, a former NASA ethics attorney, and former USAID attorneys to participate in proceedings and crafted settlement agreements with those very government agencies – not to mention a transportation law expert with knowledge of an arcane and overlooked regulatory area.  In most cases, the subject-matter experts were small-firm or solo practitioners who entered private practice after earning exceptional credentials and recognition among their peers in the federal government. 

A best practice, to follow, is to deploy the diverse experience and abilities of the team across a single, unified platform.  The lead federal agency sets the agenda and the timetable for the proceeding and may require that the team adjust course to provide additional information or demonstrate an ability to comply with agency requirements over time. 

This is particularly so when a resolution is conditioned on the client’s implementation of a new, or improved, compliance program that communicates in clear terms the company’s policies, procedures, and actions within a process to help prevent and detect violations of laws and regulations.  This goes beyond establishing a corporate code of conduct.  It usually involves providing Initial Live Ethics Training to provide the client’s personnel with a solid working knowledge of what is required and what is expected of the client company and its employees, The company also needs to develop tools to spot potential problems, to report concerns and to provide leadership with an operational program that applies the code to the specific risks of an organization and integrates measures to address those risks.

A flexible team structure facilitates the design and delivery of a customized compliance program, tailored to address the client’s current operations and assure compliance with current obligations. Another key aspect is the delivery of training modules that avoid “cookie-cutter” homogenized training across identified classes of employees. This approach will allow for appropriate adjustment in the number of sessions, the timing of sessions, and the level of detail in any given session, and can be structured to integrate and deliver sessions by other presenters on topics that are outside the scope of federal acquisition compliance training but are nevertheless relevant to overall compliance culture and operations.

At every stage of this type of “bet-your-company” case, when facing off with federal officials who have the ability to hand your client a “death sentence,” it makes sense to develop temporary alliances with top subject-matter and agency experts in order to help your company get through the crisis.

© Copyright 2018 O’Riordan Bethel Law Firm


About this Author

Carol L. O’Riordan, Government contracts, construction contracts, litigation attorney, O’Riordan Bethel Law Firm
Managing Partner

Carol L. O’Riordan is the founder and managing partner of the O’Riordan Bethel Law Firm in Washington, D.C. She has more than 25 years of experience in the fields of government contracts (federal, state and municipal), construction contracts and litigation, financing transactions, and complex litigation.

Ms. O’Riordan has represented clients nationwide in commercial construction and government contract-related matters, including issues that range from bid protests through claims preparation, pricing, negotiations and litigation. She has...