somewhere through doj you are doing your own fact base cases two questions for that one if you could elaborate more on the process that you do with that and the second one is what kind of due process protections do you have in place to protect your contractors to make sure that  as you are doing your own fact based research here that you dont also have a contractor out there that is getting stung inappropriately how do you balance the two of those mister shaw thank you first it is a matter of looking at the evidence and not just relying entirely upon the fact of an indictment or a conviction in the far it says an indictment or conviction is sufficient as a matter of law so a lot of agencies then use that as a security blanket mister lankford they are just exclusive to that you are going into the details mister shaw right so we look at the evidence and if the evidence meets the preponderance of the evidence standard of a debarment or adequate evidence standard of a suspension then we will do the action and probably half of our cases are that way maybe more than half i think that is a interagency agreements and things of that nature the way it works of course is that we simply will make a grant to a state that then awards contracts we keep a watch on those situations if there is still some reason to debar somebody that has been discovered this person has violated the clean water act you dont even know if they do federal contracts they just automatically go onto the exclusions list as well mister pelletier yes sir that is the mandate of the statute and the way it goes is that we are notified of a conviction under certain provisions with the clean water or clean air act then we must put them on the list if they meet the three criteria which is a fact were convicted and the limitation because the statutories under the clean air and clean water are limited debarments it is only if they are going to perform a contract at the violating facility and they own lease or control that facility to get off the list they must submit information to the  epa which we call a reinstatement request and then it is somewhat like a reverse debarment at that point then we hear the evidence and determine if they have they must i have to certify that they have in fact cured all the violations that put them on the list is obvious it has come up multiple times there have been some issues there in the process on it i am glad you are here glad to be able to go through the process the challenge of it is from your testimony two different times you said the words we intend to accomplish this and one other time you mentioned we are in discussion about this my only concern about that is i need to know when because obviously this has come up for a while this is a serious issue you all have been very active in pursuing fraud in other  areas to be able to get this into place so what i would like to request of hhs is that you get back to this committee when those things are going to be resolved when the final process is complete so we can have who the individuals are that have been reassigned to oversee that and what their basic process is these three factors that gao discussed earlier and the actual person that is overseeing that whether that is you or someone else so we will know who is the responsible party for that that would be very helpful it you would be able to get back to us so basically when this is going to get accomplish a quick search just a google search looking for fraud for instance in nih there are a couple hits that came up immediately department of justice press releases temple hills maryland man sentenced for bribing in purchasing offer not asking you to be aware of every single contract every single case but just in the quick search of possible contracts that may be out there are they getting on epls yet obviously they are still not so we have to move from intends to get it i would just ask you to be able to get that report to us as  you can so we can know this is covered you are very aware as everyone else is as well as fema and every other agency looking at it it helps the entire federal government avoid getting into a bad contracting situation when we know one entity has done a bad contract they have been  have convicted numerous individuals of false statements and fraud in connection with fema disaster relief assistance according to the fifth anniversary report of the attorney general one of the principal types of fraud on which the task force concentrated is government contract and procurement fraud can  so the information that is probably most relevant is just there is some positive momentum in fema around suspension and debarment they actually have five individuals dedicated to doing this now in this fiscal year itself there  following all the best practices as has been shared here and then to add on to what chairman lankford just mentioned we should be done and have this up and running in the next three months or so going back to the katrina days one of the nice things about putting this mister shaw we talked a little bit about legislative fixes and gao mentioned earlier it really feels like the legislation that is needed is already in place there is no additional legislation needed i would like to ask your opinion on that statement is there additional legislation that you would see or any of you and you can that would enter the penalties under that so that relates to debarment it gives greater visibility into other cases for debarment officials it is sort of an automatic referral process the second area that would stir up referrals from the contracting community particularly would be the use of proceeds from litigation that relates to procurement fraud if the proceeds or some portion of the proceeds could go to the program that is victimized by the fraud and not just to the u s treasury then the agencies would be able to fix the widget that was broken by the fraudulent contractor without taking it out of o and m funds and that would encourage the contracting smith company is convicted or there is a civil judgment for false claims act against a hypothetical smith company and for having damaged a program that kc ten air force program  that money millions of dollars often cases in that situation if the procurement money is closed which is always the case in these situations because it takes a long time to investigate these things so the bad guy is being ordered to refund the money but the money does not go to the program that is being victimized it doesnt go to tinker it doesnt go to oklahoma city air logistics center mister lankford i would think all of it needs to go to of foreign contracts are also getting engaged on the ground how are we handling the issues of debarment and suspensions in a contingency operation mister shaw there is a memorandum of understanding within the defense department where the army is the a number of debarments and suspensions from the theater but the great majority of them are army ones mister lankford okay we will try to follow up with that as well because that obviously is important to us in a lot that is happening  tell me a little bit about the appeal process that you have going you discussed this in your testimony earlier about your appeal when someone has a protest they have been debarred you talked about the mini trial type of situation coming in on appeal has that been effective or is that so cumbersome  me say it this way we dont want anything to stand in the way of saying if there is a good process for suspension and debarment we dont want someone to say i dont want to go through that because it is so cumbersome and it is so bulky i would rather not even go through it than to actually do it so i am looking for how does that work  sir it is actually easy in this respect the appeal process that we have built in at the epa is that i make a final decision to debar somebody or a decision to maintain a suspension they have the right to appeal to the director of the division it is a very easy process they simply present whatever evidence they think why it should not be in place and then the director has the opportunity to remand the case to me or uphold  it if it is remanded to me then i can review what was why it was remanded and have a second opinion or dismiss it depending on what the circumstances are and then subsequently of course they have the right under the administrative procedures act to go to a district court but it does give  actually what is easy about it it gives the respondent rather than the choice of immediately incurring court costs and going and hiring attorneys and doing everything that is involved they can make an appeal within the system and they seriously including the way in which we select and evaluate our contractors prior to award and the way we administer those contracts during performance we have had contractor performance issues that we have used other tools and flexibilities on such a were delighted to see the recommendations around the three characteristics of the more active agencies and are taking those into consideration for developing our plans around improving policies and our referral practices and dedicating staff to the effort would it be fair for a layman to conclude that the priority within hhs is medicare ms gunderson it would be fair to conclude that the secretary has come strongly on on all areas of program integrity last five years nothing rose to this level would it make sense from your point of view from the agencys point of view to emulate the air force and have a full time officer with respect to this set of issues ms gunderson that is one of the models are looking at among all the others that are out across the federal agencies i do serve as the suspension and debarment official because i have oversight over the acquisition and grants policies and the operations of those functions so currently as it stands i think that mandatory debarments are a bad idea in the procurement area i am not familiar enough with the clean water act and all those that may work with regard to facilities but in the procurement area it takes away an important tool that we have to fight fraud and that tool is the leverage that we can use with this carrot and stick that i mentioned before about working with contractors that are trying to do it right and to changing their conduct and improving their processes so that they have risk management programs in place place and there is a lot of good i think we do in that area both when there is misconduct with such things as administrative agreements but also where there is no misconduct at all we meet regularly with all the major defense contractors to talk about their ethics programs even when they official each agency has its own particular interest and information or situation that each has to deal with allowing the suspension and debarment official to have that discretion as it deals with a contractor that may be versus someone that is bad someone that has defrauded the government somebody that has made a mistake somebody that doesnt realize how the federal process works but is quite willing to change and adjust we may have potentially a very good contractor very good grants person available to us we dont want to throw them out the window without a chance at getting back in the game so with the discretion that the suspension and debarment official has we can do things like enter administrative agreements which are basically commercial probation if you will we have a very strict set of requirements that they have to meet we monitor that they report back and a violation of an administrative agreement for example is another  and at the end of the process and it is usually three years we far more often than not end up with a better contractor or a better grants what we call a participant than we started off with and i think the best interest of the government has been pelletier it strikes me based on our analysis in terms of per billion dollars of contract dollars you have a much higher  if you are a member of congress listening to this you are thinking there seems to be a wide variety of judgment being exercised and that may be a good thing but it is hard to get our arms around in terms of predictability and accountability for the taxpayers we represent i just want to give you the opportunity to comment on your own observation of why this variability among agencies and why does epa apparently use this tool more frequently than some other agencies mister pelletier first of all sir i couldnt obviously comment on to the why other agencies are or are not doing something or how their programs work each one is unique but as i said in my statement epa is really the pioneer in this area we started in one thousand nine hundred and eighty one developing a program and over the years as anything else we developed an expertise in the area and perhaps and one of the things in teaching which we are very active in  the national suspension and debarment training program one of the feedbacks we get from people that are in the class is we didnt realize it was that easy to do so it may be that we have developed an expertise because of longevity that of all the difference in making sure you have an active program would you concur mister pelletier it has worked well for our agency we have a senior person and we have a dedicated person and it has proven to be very very effective  analysis it is interesting your mathematics is correct on the per dollar but i am wondering well first of all let me say i think that the number of debarments is a bad metric anyway for this whole program for this whole process but it is an easy one because the numbers are what the numbers are so it is important and everybody at the end of the year always compares numbers what you are doing proactively to prevent fraud and to encourage improvement in the culture of companies i think is much more important but having said that even looking at the numbers metrics i think the better way of looking at it would be not the number of debarments and suspensions per contract dollar but maybe the number per contract and i dont know how you would get at that number but a big difference in dod from epa and ice and other