United States Government Accountability Office

GAO Testimony 

Before the Committee on Homeland Security 

and Governmental Affairs, U.S. Senate

SUSPENSION AND 

DEBARMENT 

Some Agency Programs 

Need Greater Attention, and 

Governmentwide Oversight 

Could Be Improved 

Statement of William T. Woods, Director 

Acquisition and Sourcing Management 

For Release on Delivery 

Expected at 9:00 a.m. EST 

Wednesday, November 16, 2011 

GAO-12-245T 
 

Page 1 GAO-12-245T 

Mr. Chairman and Members of the Committee: 

I am pleased to be here to discuss the Federal government’s use of 

suspensions and debarments. In 2010, spending on contracted goods 

and services was more than $535 billion. To protect the government’s 

interests, federal agencies are required to award contracts only to 

responsible sources—those that are determined to be reliable, 

dependable, and capable of performing required work. One way to do so 

is through the use of suspensions and debarments, which are actions 

taken to exclude firms or individuals from receiving contracts or 

assistance based on various types of misconduct. The Federal 

Acquisition Regulation (FAR) prescribes overall policies and procedures 

governing the suspension and debarment of contractors by agencies and 

directs agencies to establish appropriate procedures to implement them. 

This flexibility enables each agency to establish a suspension and 

debarment program suitable to its mission and structure. 

Even though the FAR specifies numerous causes for suspensions and 

debarments, including fraud, theft, bribery, tax evasion, or lack of 

business integrity, the existence of one of these does not necessarily 

require that the party be suspended or debarred. Agencies are to 

establish procedures for prompt reporting, investigation, and referral to 

the agency suspension and debarment official. Parties that are 

suspended, proposed for debarment, or debarred are precluded from 

receiving new contracts, and agencies must not solicit offers from, award 

contracts to, or consent to subcontracts with these parties, unless an 

agency head determines that there is a compelling reason for such 

action. 

On October 6, 2011, we publicly released a report that addresses (1) the 

nature and extent of governmentwide exclusions reported in the Excluded 

Parties List System (EPLS) maintained by the General Services 

Administration (GSA); (2) the relationship between practices at selected 

agencies and the level of suspensions and debarments under federal 

acquisition regulations; and (3) governmentwide efforts to oversee and 

coordinate the use of suspensions and debarments across federal 
 

agencies.1 My statement will highlight the key findings and 

recommendations of our report. 

We analyzed data for fiscal years 2006 through 2010 for all agency 

actions reported in EPLS to identify (1) suspension and debarment 

actions taken under the FAR; (2) suspension and debarment actions 

taken under the Nonprocurement Common Rule (NCR), which covers 

grants and other assistance; and (3) other exclusions. To provide 

information on the level of agency activity, we aggregated related actions, 

such as those involving affiliates and related parties, to identify the 

number of cases. We used cases to provide a common comparison 

among the agencies, even though a case may include separate actions 

for an individual, a business, and each affiliate and entail dedication of 

resources and the potential for separate representation by a party’s 

counsel and separate resolution. We assessed the reliability of EPLS 

data by performing electronic testing, reviewing system documentation, 

and interviewing knowledgeable officials about data quality and reliability. 

We determined that the data were sufficiently reliable for the purpose of 

this review. 

We also reviewed a mix of 10 agencies from among all agencies having 

more than $1 billion in contract obligations in fiscal year 2009. These 

agencies included the Defense Logistics Agency (DLA), the Department 

of the Navy (Navy), GSA, and the Department of Homeland Security’s 

(DHS) U.S. Immigration and Customs Enforcement (ICE)—all of which 

had relatively more cases involving actions taken under the FAR than 

other agencies—as well as the Departments of Commerce (Commerce), 

Health and Human Services (HHS), Justice (Justice), State (State), and 

the Treasury (Treasury), and DHS’s Federal Emergency Management 

Agency (FEMA)—all of which had relatively few or no suspensions or 

debarments under the FAR. At these 10 agencies, we focused on certain 

attributes of the suspension and debarment process, including the 

organizational placement of the suspension and debarment official, 

staffing and training, guidance, and the referral process, including 

triggering events. 

 1

 GAO, Suspension and Debarment: Some Agency Programs Need Greater Attention, 

and Governmentwide Oversight Could Be Improved, GAO-11-739 (Washington, D.C.: 

Aug. 31, 2011). 

Page 2 GAO-12-245T 
 

In addition, we met with officials from the Office of Federal Procurement 

Policy which provides overall direction of governmentwide procurement 

policies, including suspensions and debarments under the FAR; officials 

at the Interagency Suspension and Debarment Committee (ISDC); the 

Council of the Inspectors General on Integrity and Efficiency’s (CIGIE) 

Suspension and Debarment Working Group; and GSA. We also met with 

or obtained information from suspension and debarment and inspector 

general officials at the 10 selected agencies. Our work was performed in 

accordance with generally accepted government auditing standards. 

For fiscal years 2006 through 2010, about 4,600 cases—about 16 percent 

of all cases in EPLS—involved suspension and debarment actions taken 

at the discretion of agencies against firms and individuals based on any of 

the numerous causes specified in either the FAR or NCR, such as fraud, 

theft, or bribery or history of failure to perform on government contracts or 

transactions. Such cases generally result in exclusion from all federal 

contracts, grants, and benefits. About 47 percent of suspension and 

debarment cases were based on the NCR, which covers federal grants 

and assistance, with the Department of Housing and Urban Development 

accounting for over half of these grant and assistance–related cases. The 

other 53 percent of suspension and debarment cases were based on 

causes specified in the FAR and related to federal procurements. 

Suspension and 

Debarment Cases 

Make Up a Small 

Percentage of All 

Exclusions in the 

Govermentwide 

Database 

During this same time period, about 84 percent—or about 24,000 of the 

approximately 29,000 total cases reported in EPLS—were other 

exclusions based on a determination that the parties had violated certain 

statutes or regulations. For example, prohibited conduct, such as health 

care fraud, export control violations, or drug trafficking, can result in an 

EPLS listing. In these types of cases, once an agency with the designated 

authority has determined that a party has engaged in a prohibited activity, 

such as fraudulently receiving payments under federal health care 

programs, or violating export control regulations, the law generally 

requires that the party be declared ineligible for specified government 

transactions or activities. Although most other exclusions are based on 

violations that are not related to federal procurements or grants, the party 

is excluded from some or all procurement and nonprocurement 

transactions as set out in the statute. HHS, Justice, and Treasury 

recorded the most other exclusion type cases. Figure 1 shows the basis 

of all EPLS cases for fiscal years 2006 through 2010. 

Page 3 GAO-12-245T 
 

Figure 1: Basis of EPLS Cases, Fiscal Years 2006 through 2010 

The number of suspension and debarment cases related to federal 

procurement varied widely among departments or agencies over the last 

5 fiscal years as shown in Appendix I. DOD accounted for about twothirds of all suspension and debarment cases related to federal 

procurements with almost 1,600 cases. Of all the agencies, almost 70 

percent had fewer than 20 suspension and debarment cases related to 

federal procurements. Six agencies—HHS, Commerce, and the 

Departments of Labor, Education, and Housing and Urban Development 

and the Office of Personnel Management—had no such cases over the 

last 5 fiscal years. 

Other

exclusions

Suspensions

and debarments

84% 16%

Source: GAO analysis of EPLS data.

Based on federal

grants and assistance

regulations

Based on federal

acquisition regulations

47% 53%

While each agency suspension and debarment program we reviewed is 

unique, the four with the most suspension and debarment cases for fiscal 

years 2006 through 2010—DLA, Navy, GSA, and ICE—share certain 

characteristics. These include a dedicated suspension and debarment 

program with full-time staff, detailed policies and procedures, and 

practices that encourage an active referral process, as shown in figure 2. 

Agencies with Most 

Suspension and 

Debarment Cases 

Share Common 

Characteristics 

Missing at Agencies 

with Few Cases 

Page 4 GAO-12-245T 
 

Figure 2: Analysis of Selected Agency Contract Obligations, Procurement-Related Suspension and Debarment Cases for 

Fiscal Years 2006 through 2010, and Program Characteristics 

Source: GAO analysis of Federal Procurement Data System-Next Generation, EPLS data, and agencies' procedures and guidance.

Dedicated suspension and debarment program with full-time staff

Detailed policies and procedures

Practices that encourage an active referral process

6.8%

17.4%

2.9%

0.4%

1.3%

0.9%

1.3%

3.2%

0.6%

0.5%

Department / agency

Defense Logistics Agency

Department of the Navy

General Services Administration

U.S. Immigration and Customs Enforcement

Department of Justice

Department of the Treasury

Department of State

Department of Health and Human Services

Department of Commerce

Federal Emergency Management Agency

15.8%

14.2%

11.1%

4.3%

0.3%

0.3%

0.2%

0%

0%

0%

Suspension and

debarment program

characteristics

Percentage of

procurement-related

suspension and debarment

cases governmentwide

Percentage of

total federal

contract obligations

Officials from the four agencies stated that having dedicated staff cannot 

be accomplished without the specific focus and commitment of an 

agency’s senior officials. ISDC officials also stated that without dedicated 

staff, none of the other essential functions of an agency suspension and 

debarment program can be carried out. 

Each of the top four agencies has also developed agency-specific 

guidance that goes well beyond the suspension and debarment guidance 

in the FAR. This generally included guidance on things such as referrals, 

investigations, and legal review. Several of the reports we reviewed by 

inspectors general and others regarding agency suspension and 

debarment programs cited the importance of agency-specific, detailed 

policies and procedures to an active agency suspension and debarment 

program. 

In addition, each of the four agencies engages in practices that 

encourage an active referral process. The FAR directs agencies to refer 

Page 5 GAO-12-245T 
 

appropriate matters to their suspension and debarment officials for 

consideration, and it allows agencies to develop ways to accomplish this 

task that suit their missions and structures. According to agency officials 

when senior agency officials communicate the importance of suspension 

and debarment through their actions, speeches, and directives, they help 

to promote a culture of acquisition integrity where suspension and 

debarment is understood and utilized by staff. 

The remaining six agencies we studied—HHS, FEMA, Commerce, 

Justice, State, and Treasury—do not have the characteristics common to 

the four agencies with the most suspension and debarment cases. Based 

on our review of agency documents and interviews with agency officials, 

none of these six agencies had dedicated suspension and debarment 

staff, detailed policies and guidance other than those to implement the 

FAR, or practices that encourage an active referral process. These 

agencies have few or no suspensions or debarments of federal 

contractors. 

ISDC, established in 1986, monitors the governmentwide system of 

suspension and debarment. More recently, the Duncan Hunter National 

Defense Authorization Act for Fiscal Year 20092 strengthened the 

committee’s role by specifying functions ISDC was to perform. 

When more than one agency has an interest in the debarment or 

suspension of a contractor, the FAR requires ISDC to resolve the lead 

agency issue and coordinate such resolution among all interested 

agencies prior to the initiation of any suspension or debarment by any 

agency. According to ISDC officials, ISDC relies on voluntary agency 

participation in its informal coordination process, which works well when 

used. However, not all agencies coordinate through ISDC. 

Governmentwide 

Efforts to Oversee 

Suspensions and 

Debarments Face 

Challenges 

Likewise, in part because it could not compel agencies to respond to its 

inquiries, ISDC took almost 2 years to submit its required annual report to 

Congress on agencies’ suspension and debarment activities. According 

to ISDC representatives, only about half of the member agencies 

responded to the initial request for information needed for the report. 

These officials also noted that their limited resources to devote to 

 2

Pub. L. No. 110-417, § 873 (2008). 

Page 6 GAO-12-245T 
 

committee responsibilities further delayed the report. Consequently, ISDC 

issued its first report on June 15, 2011, covering both of the reports 

required for 2009 and 2010.3

ISDC’s coordination role concerning the governmentwide suspension and 

debarment system also has faced other challenges. ISDC holds monthly 

meetings for members as a forum to provide information and discuss 

relevant issues, but according to ISDC representatives, agencies without 

active suspension and debarment programs generally are not 

represented at these meetings. In addition, ISDC officials noted that the 

committee does not have dedicated staff and depends on limited 

resources provided by member agencies, particularly the agencies of the 

officials appointed as the Chair and Vice-Chair. According to the Chair 

and Vice-Chair, they do committee work in addition to their primary 

agency responsibilities, using their own agencies’ resources. 

Other efforts are under way across government to improve coordination 

of suspension and debarment programs. CIGIE’s Suspension and 

Debarment Working Group—formed in the summer of 2010—promotes 

the use of suspension and debarment as a tool to protect the 

government’s interest. The CIGIE working group is taking steps to raise 

awareness, including sponsoring training and advising the inspector 

general community about other training opportunities. GSA has begun an 

effort to improve EPLS by consolidating and simplifying the codes 

agencies use to identify the basis and consequences of exclusions, 

referred to as cause and treatment codes. According to a GSA official, the 

goal of the EPLS effort is to consolidate the codes into categories that 

clearly define the effect of a listing. 

 3

Interagency Suspension and Debarment Committee, Report on Federal Agency 

Suspension and Debarment Activities (Washington, D.C.: June 15, 2011). 

Page 7 GAO-12-245T 
 

Suspensions and debarments can serve as powerful tools to help ensure 

that the government protects its interests by awarding contracts and 

grants only to responsible sources. Some agencies could benefit from 

adopting the practices we identified as common among agencies that 

have more active suspension and debarment programs. Because agency 

missions and organizational structures are unique, each agency must 

determine for itself the extent to which it can benefit from adopting these 

practices. However, one point is clear: agencies that fail to devote 

sufficient attention to suspension and debarment issues likely will 

continue to have limited levels of activity and risk fostering a perception 

that they are not serious about holding the entities they deal with 

accountable. Additionally, the suspension and debarment process could 

be improved governmentwide by building upon the existing framework to 

better coordinate and oversee suspensions and debarments. As 

acknowledged by officials at the Office of Federal Procurement Policy, 

agencies would benefit from guidance on how to establish active 

suspension and debarment programs and how to work more effectively 

with ISDC. 

GAO Recommends 

that Agencies Take 

Actions to Improve 

Suspension and 

Debarment Programs 

and Government 

Oversight 

In summary, we recommend that several agencies take steps to improve 

their suspension and debarment programs ensuring that they incorporate 

the characteristics we identified as common among agencies with more 

active programs, including 

 assigning dedicated staff resources, 

 developing detailed implementing guidance, and 

 promoting the use of a case referral process. 

We also recommend that the Administrator of the Office of Federal 

Procurement Policy issue governmentwide guidance to ensure that 

agencies are aware of the elements of an active suspension and 

debarment program and the importance of cooperating with ISDC. 

Overall, the agencies concurred or generally concurred with our 

recommendations. In its comments, Justice stated that its existing 

guidelines are sufficient, but we do not agree. Several other agencies 

noted that they are taking actions to incorporate the characteristics we 

identified as common among agencies with more active programs. 

Mr. Chairman and Members of the Committee, this concludes my 

statement. I would be pleased to respond to any questions that you or 

other members of the Committee may have. 

Page 8 GAO-12-245T 
 

For questions about this statement, please contact William Woods at 

(202) 512-4841 or woodsw@gao.gov. In addition, contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this report. Individuals who made key contributions to this 

testimony are Assistant Director John Neumann and Russ Reiter. 

Contacts and 

Acknowledgments 

Page 9 GAO-12-245T 
Appendix I 

Page 10 GAO-12-245T 

Appendix I 

Table 1: EPLS Suspension and Debarment Cases by Agency and Contract Obligations, Fiscal Years 2006 through 2010 

Suspension and debarment 

cases related tob

Department/agencya Contract obligations 

(in billions of dollars)

Federal

 procurement

Grants and 

other assistance 

Total 

suspension and 

debarment 

cases

Department of Defense $1,776.20 1,592 24 1,616

Department of Energy 129.70 82 0 82

Department of Health and Human 

Services 80.15 0 29 29

General Services Administration 73.44 269 0 269

National Aeronautics and Space 

Administration 72.56 41 1 42

Department of Homeland Security 70.79 116 8 124

Department of Veterans Affairs 69.00 4 11 15

Department of State 33.20 6 1 7

Department of Justice 31.97 8 3 11

Department of Agriculture 25.55 3 105 108

U.S. Agency for International 

Development 24.36 18 18 36

Department of the Treasury 23.67 8 1 9

Department of Transportation 23.41 11 193 204

Department of the Interior 23.04 94 10 104

Department of Commerce 14.10 0 0 0

Department of Labor 9.76 0 0 0

Environmental Protection Agency 7.81 1 332 333

Department of Education 7.59 0 163 163

Department of Housing and Urban 

Development 5.38 0 1,141 1,141

Social Security Administration 5.30 1 0 1

Office of Personnel Management 4.89 0 0 0

National Science Foundation 2.08 40 1 41

All other agencies 9.83 124 136 260

Total 2,418 2,177 4,595

Source: GAO analysis of Federal Procurement Data System–Next Generation and EPLS data. 

a

This table list departments and agencies with over $2 billion in contract obligations for fiscal years 

2006 through 2010. “All other agencies” includes those agencies with less than $2 billion in contract 

obligations. 

b

Agencies may suspend or debar federal contractors utilizing the NCR, and such suspensions and 

debarments would be listed in EPLS as cases related to grants and other assistance. 

(121031)
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