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Contractor debarment process plagued by delays, inconsistencies, IGs say

Sep. 16, 2010 - 06:00AM   |  
By SEAN REILLY   |   Comments
The suspension and debarment system is primarily a tool aimed at protecting taxpayer dollars from unscrupulous contractors and individuals, said Brian Miller, the General Services Administration's IG, seated at left. At right is Richard Skinner, inspector general for the Department of Homeland Security.
The suspension and debarment system is primarily a tool aimed at protecting taxpayer dollars from unscrupulous contractors and individuals, said Brian Miller, the General Services Administration's IG, seated at left. At right is Richard Skinner, inspector general for the Department of Homeland Security. (Chris Maddaloni / Staff file photo)

The government's system for suspending and debarring problem contractors is plagued by sluggish reporting, inconsistent standards and a reluctance to act, several department inspectors general said Wednesday.

Last year, for example, the Transportation Department's suspension and debarment program landed on a list of top management challenges, department IG Calvin Scovel III told an audience at an Association of Government Accountants conference on fraud and internal controls.

In recent years, Transportation officials have routinely exceeded the 45-day deadline for taking action after receiving notice of an indictment, conviction or other referral, Scovel said, citing an audit by his office released in January.

In the 10 months it took the Federal Highway Administration to decide one case, the state of Kentucky awarded $24 million in stimulus contracts to companies whose officials were associated with parties that were ultimately suspended, that audit found.

Transportation officials were also slow to report suspensions and debarments to the Excluded Parties List System, or EPLS, a governmentwide database maintained by the General Services Administration. The delays were caused by inconsistent use of indictment and conviction standards and because department lawyers unnecessarily looked for added evidence before reaching a decision, Scovel said.

Since the audit's release, Transportation officials have taken steps to address the problems, he said in an interview. "We've been generally pleased with the attention at the department level," but he added that his office has not yet scheduled a review to see what changes have followed.

The suspension and debarment system is primarily a tool aimed at protecting taxpayer dollars from unscrupulous contractors and individuals, said Brian Miller, the General Services Administration's IG. As of Sept. 10, some 75,000 parties were listed in the EPLS, he said. Companies on the list are unable to obtain federal business. Debarments, which may result from a criminal conviction or civil judgment, typically last three years, Miller said. Suspensions, a temporary step that may follow an indictment or other evidence of criminal activity, are aimed at keeping the contractor from getting any more federal work "until the matter is cleared up," Miller said.

Contracting officers also can use a new database, the Federal Awardee Performance and Integrity Information System, that compiles records of contractors' past performance, defaults and adverse administrative actions, Miller said.

Richard Skinner, Department of Homeland Security IG, cited "almost a complete turnaround" in his department's reluctance to take on contractors, following a March House Oversight and Government Reform Committee hearing at which he and several other IGs testified on the suspension and debarment system.

Although DHS officials had a "model program" on paper, Skinner said, they had not debarred or suspended any company in six years. Among the reasons cited for inaction, he said, were a concern about appearing too punitive and the potential impact on competition.

In the wake of the hearing and resulting media coverage, "we've had 11 debarments," he said, and 28 cases are under review for suspension. Skinner also faulted his own office for failing to follow up on its investigations with DHS officials.

"We in the [Office of Inspector General] had to do a better job of communicating the results of our work," he said.

Another stumbling block, Skinner said, is poorly written contracts that don't clearly define what companies are supposed to do. If the government is going to police contractors more aggressively, he said, "then we have a responsibility to ensure that the contractor understands what is expected of him."

Asked about contractors who reconstitute companies under new names to get around suspension or debarments, Skinner predicted that "those days are going to be over."

The Recovery, Accountability and Transparency Board, which oversees federal stimulus under the American Recovery and Reinvestment Act, has developed a system to track such trails, Skinner said, adding that he expects its use to endure long after the act's provisions expire.

"This is not something that's going to die."

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