Air Force General Counsel Blog The chief legal officer and chief ethics official of the Department of the Air Force

3Jul/130

A Full Throated Defense of the Structure of the Suspension and Debarment System

The views expressed herein do not necessarily reflect those of the Air Force or the Department of Defense.

When was the last time you heard about important business decisions being made by panels of Chief Executive Officers working together on an issue? What about successes brought on by co-General Managers of major league sports teams? How about any sustained praise in organizational behavior journals for the ability of groups to arrive at decisions more quickly and effectively than an individual? A basic Internet search for the term “co-CEO” shows repeat analysis of failures of the arrangements. I am a life-long Orioles fan, but the Flanagan/Beattie co-GM model from 2002 to 2005 just did not work. And organizational behavior articles spend endless pages focused on ways to minimize process losses/speed decision making. And yet, all the recent critiques of the suspension and debarment system aim to turn the government’s ability to make fundamental business decisions into a group-think exercise. And they want the group of “deciders” to be the last step along a process akin to the steps taken in legal proceedings. While it is unlikely that there would be an “A-12 case” of debarment, timelines in these proceedings is likely to be measured in years rather than days.

And some of the more recent critiques launch without a single example or a bit of evidence of what is broken about the process. For example, a June 2013 Bloomberg BNA Federal Contracts Report article by Steven Gordon and Richard Duvall, entitled “It’s Time to Rethink the Suspension and Debarment Process,” calls for numerous reforms of the system – reforms that largely echo the recent SUSPEND Act discussion draft put forth in the House – without offering a single horror story (much less example of any kind) that they are reacting to. Why reform a business process, make it slower, more cumbersome, and more judicial, without any evidence of need? Why take away the ability of the government to make nimble business decisions without a reason? This makes even less sense when placed in context. The government already offers due process to address and contest suspension and debarment decisions. On the other hand, a commercial entity is free to make business decisions as it wishes without any due process at all – they simply do not contract with recidivist poor performers, or companies with poor business ethics. If someone fails miserably and repeatedly in a commercial relationship, they are out. In the Government, they are already offered caution letters, cure notices, repeated warnings and opportunities to adjust, and then a notice of exclusion and a chance to contest it. If Messrs. Gordon and Duvall have their way, they would also have potentially years of litigation to try to avoid getting cut off – all the while forcing the government to continue to contract with these businesses. Again, this argument does not make sense. It is supported only by buzzwords such as “procedural fairness” and “uniform,” which are meaningless without context. There has to be something there. In a related topic, the boards of contract appeals (BCA) three-judge decision making process has been identified as a potentially desirable model for suspension and debarment. The proponents of such an approach overlook the fact that the BCAs are structured to adjudicate liability in a process that often takes years. The BCA’s are not structured to make swift business decisions. The distinction is critical given the often immediate need to protect the government’s interests in suspension and debarment matters.

But even many of the so-called horror stories actually support the structure of the system. Perhaps we should examine a recent Air Force case involving Mr. Christopher Alf and his company National Air Cargo. A few years ago, Mr. Alf sued the Air Force in federal district court after his debarment, and the court issued a preliminary injunction precluding the Air Force from enforcing the debarment. Recognizing the court found that the Air Force overreached, rather than litigate the case (Government briefs had not yet been filed and the decision would later be vacated), the Air Force Suspending and Debarring Official entered into an Administrative Agreement terminating the debarments immediately and permanently. And during the pendency of that Agreement, National Air Cargo became an example for other companies with its innovative preferred supplier program as a mechanism to promote ethical business operations in its supply base. In short, the system increased the level of ethical business operations in an entire supply chain.

As an aside, this Air Force example may not have been possible had a panel of debarment decision makers been in place. During his 16-year tenure, the prior Debarring Official, Steven Shaw, wrote and testified repeatedly how the Department of Defense Inspector General in the late 1980s issued a report that called the Air Force’s decision-making panel approach to debarment ineffective. In response to the Inspector General’s report, the Air Force restructured its program to include a full-time, senior civilian as the Debarring Official who is empowered to “do the right thing.” That means, on a case-by-case basis, weighing the facts and doing the right thing to protect the government’s business interests – including terminating actions rather than issuing debarments. In the thousands of suspension and debarment cases since, the system worked to exclude non-responsible contractors and to fix the very few instances where the Debarring Official overreached.

Does this full-throated defense of the system mean every debarment is perfect? Absolutely not. Do agencies need to step up and empower their Suspending and Debarring Officials with full-time, dedicated staff? Definitely. Is independence from the acquisition and Inspector General chains important to effective actions? Sure. But these can be addressed in ways other than tearing down the system that enables agencies to make their own business decisions in a nimble and targeted manner. Instead, agencies might consider adopting a fully integrated, enterprise-wide procurement fraud remedies approach that learns of misconduct early, assesses the appropriate remedies (to include suspension and debarment when appropriate) and engages in a robust dialogue with the contractors. Shifting this assessment earlier opens up nearly limitless options to remedy incidences of procurement fraud. Alternatively, waiting until after a conviction or a full (often multi-year) investigation concludes leaves relatively few options and leads to perhaps an over-reliance on suspension and debarment as the only remedies left after the appropriations cycle ends and criminal or civil is no longer interested. Moreover, it does nothing to protect the government’s interest in most cases until long after the misconduct.

We in the Air Force believe that suspension and debarment is an effective remedy for misconduct, but it is just one of many possible remedies. We are concerned that efforts to “reform” the system might make it harder to do the right thing by being creative and, in many cases, avoiding suspension or debarment altogether. Perhaps we might focus on better training and equipping the Debarring Officials we have rather than empaneling a group of outsiders to reform a system that – at its core – has all the ability it needs to make creative business decisions.

Link to the FCPA Blog post: here.

David Robbins
Assistant Deputy General Counsel (Contractor Responsibility)