September 21, 2021

Volume XI, Number 264

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September 21, 2021

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September 20, 2021

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Suspension and Debarment: A New Government Approach

Contractors and government contracts attorneys are likely to see (if they haven’t already) a rise in the number of cases in which individuals, rather than corporate entities, are targeted by government officials for suspension and debarment.  This is significant because, under the FAR, the misconduct of an individual can be imputed to the contractor, causing the contractor to lose its ability to receive Federal contracts.

Attention to the misconduct of individuals was encouraged by a September 9, 2015 memorandum from Deputy Attorney General Sally Yates entitled “Individual Accountability for Corporate Wrongdoing.”  The memorandum instructs government officials “consistently” to “focus on individuals” throughout an investigation.  Ms. Yates followed up her memorandum with remarks prepared for a conference held November 16, 2015 in Washington, D.C., in which she stated that the memorandum ushers in “a new policy designed to ensure that individual accountability is at the heart of [the government’s] corporate enforcement strategy.”

FAR Subpart 9.4, relating to Debarment, Suspension, and Ineligibility, has long-held that the misconduct of an individual “may be imputed to the contractor when the conduct occurred in connection with the individual’s performance of duties for or on behalf of the contractor, or with the contractor’s knowledge, approval, or acquiescence.”  Government officials, however, generally focused on broader corporate misconduct in making suspension and debarment decisions rather than on the improper behavior of individuals.

The FAR provision quoted above applies broadly to “any officer, director, shareholder, partner, employee, or other individual associated with a contract.”  Thus, agencies investigating a contractor for potential suspension and debarment may examine the conduct of individuals at all levels of a company.  The recent government focus on individuals makes it all the more imperative that contractors maintain a rigorous compliance program and internal control system that allows the contractor quickly to recognize and address individual misconduct.

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume V, Number 328
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About this Author

Townsend Bourne, Government Affairs Attorney, Sheppard Mullin Law FIrm
Associate

Ms. Bourne's practice focuses on Government Contracts law and litigation. Her experience includes complex litigation in connection with the False Claims Act, bid protest actions both challenging and defending agency decisions on contract awards before the Government Accountability Office and Court of Federal Claims, claims litigation before the Armed Services Board of Contract Appeals and the Civilian Board of Contract Appeals, investigating and preparing contractor claims, and conducting internal investigations. 

Ms. Bourne advises clients on a...

202-469-4917
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