OMB Orders Review of Suspension, Debarment Facing pressure from Congress, the Obama administration has ordered a review of how agencies use suspension and debarment to weed out unscrupulous contractors. But the administration opposes mandatory suspension or debarment when a company is convicted of a crime involving contract performance. Sen. Claire McCaskill, D-MO, said mandatory action is necessary because, in too many instances, “no one lifted a finger” to hold contractors accountable for fraud and abuse. “I think deterrence for other contractors is really important, and it allows leverage to get better behavior out of contractors,” she said at a Nov. 16 hearing of the Senate Homeland Security and Governmental Affairs Committee. Testifying at the hearing, Dan Gordon, outgoing head of the Office of Federal Procurement Policy, said the administration believes a mandatory trigger “seems to undercut the role of the suspension and debarment official to say we’re taking away your discretion.” He said the administration favors automatic suspension or debarment for a criminal conviction unless there are mitigating circumstances to justify leniency. The House-passed version of the 2012 Defense Appropriations bill includes a provision that would prohibit DOD from awarding a contract to a company that was convicted of a felony in the previous two years or from awarding a contract any company with unpaid federal taxes. Committee Chairman Joseph Lieberman, I-CT, convened the hearing after a number of reports showed many agencies seldom if ever use suspension and debarment. He cited these examples: Over a 10-year period, the Defense Department awarded $255 million to contractors who were convicted of criminal fraud; and almost $574 billion to contractors involved in civil fraud cases that resulted in a settlement or judgment against the contractor. The Department of Homeland Security’s inspector general found 23 cases last year where the department had canceled a contract because of poor performance, but made no move to suspend or debar the contractor. After Hurricane Katrina, the Justice Department set up a task force devoted to Katrina fraud, but FEMA, over at least a five-year period, never sent one name to the Excluded Parties List for suspension or debarment. A survey of employees in the offices of inspectors general found that nearly two-thirds of them said they never referred a contractor for suspension or debarment based on auditors’ findings of misconduct. Allison Lerner, inspector general of the National Science Foundation, said, “People don’t understand these tools.” She said IG auditors often believe suspension and debarment should be left up to criminal investigators and the courts. The Office of Management and Budget directed agencies to name a senior official to assess the agency’s suspension and debarment program, ensure that the Excluded Parties List System is checked before awarding a contract, and take corrective action if a contract is improperly awarded to a suspended or debarred company.