SUSPENSION AND 

DEBARMENT

DOD Has Active 

Referral Processes, 

but Action Needed to 

Promote 

Transparency

Report to the Committee on Armed 

Services, U.S. Senate

September 2012

GAO-12-932

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-932, a report to the 

Committee on Armed Services, U.S. Senate 

September 2012

SUSPENSION AND DEBARMENT

DOD Has Active Referral Processes, but Action 

Needed to Promote Transparency

Why GAO Did This Study

DOD spends more than any other 

federal agency on contracts for goods 

and services and must be able to 

protect itself from irresponsible 

contractors. Once a case of 

misconduct—such as fraud—is 

identified, DOD can use suspensions 

and debarments to prevent 

irresponsible contractors from

receiving new contracts. As requested,

GAO determined (1) the extent to 

which DOD has processes for 

identifying and referring cases of 

contractor misconduct for possible 

suspension or debarment, and (2) how 

DOD makes suspension and 

debarment decisions once cases have 

been referred for potential action. 

GAO’s review focused on four DOD 

components—the Departments of the 

Air Force, Army, Navy (including the 

U.S. Marine Corps), and Defense 

Logistics Agency—which together took 

a total of 3,443 suspension and 

debarment actions during fiscal years 

2009 through 2011, accounting for 

nearly 100 percent of all such actions 

in DOD. GAO reviewed DOD and 

component regulations, procedures,

and policies; reviewed case files;

analyzed information from federal 

databases; and interviewed DOD and 

component officials. 

What GAO Recommends

GAO recommends that DOD ensure 

that DOD components are aware of 

and comply with the requirement to 

notify GSA when awarding contracts to 

suspended or debarred contractors 

based on compelling reason 

determinations. DOD concurred with 

this recommendation.

What GAO Found

The four Department of Defense (DOD) components GAO examined have active 

processes for referring identified cases of contractor misconduct for appropriate 

action, including suspension or debarment. The components identify numerous

cases of actual or alleged contractor misconduct each year from various internal 

and external sources. The figure below shows the process for identifying and 

referring cases to the suspension and debarment official for consideration.

Suspension and Debarment Identification and Referral Process

DOD received hundreds of leads on contractor misconduct from sources such as 

lawsuits against contractors or contractor disclosures in fiscal years 2009 through 

2011, although it is not possible to know the full extent of potential leads. Some 

cases are referred to suspension and debarment officials for their consideration 

or to other agencies for further action. GAO’s analysis of selected cases shows 

that DOD follows its procedures for identifying and referring cases involving 

contractor misconduct or poor performance for possible suspension and 

debarment. 

Once a case is referred, DOD generally makes suspension and debarment

decisions in accordance with the discretion provided by the Federal Acquisition 

Regulation (FAR). GAO found in reviewing 75 case files that DOD generally 

maintained adequate records, informed the contractor of the cause and rationale 

for its decisions, and provided notice of the action to the contractor as required 

by the FAR. Given the discretion provided by the FAR, suspension and 

debarment periods vary based on the circumstances of the case, as do the 

reasons for removing contractors from the suspension and debarment list. For 

example, the FAR provides that the period of debarment generally should not 

exceed 3 years, but notes that the debarment period must be for a period 

commensurate with the seriousness of the cause. GAO found that nearly half the 

contractors DOD debarred during fiscal years 2009 through 2011 had debarment

periods that exceeded 3 years. 

The FAR prohibits all agencies from doing business with suspended or debarred 

contractors unless there is a compelling reason for doing so. The four DOD 

components made 14 compelling reason determinations during fiscal years 2009 

through 2011. In none of these cases, however, did the components provide 

notice of their compelling reason determinations to the General Services 

Administration (GSA), as required by statute and regulation, until GAO raised this

as an issue. Component officials said they were uncertain why these 

determinations which can promote transparency to the public were not forwarded 

to GSA.

View GAO-12-932. For more information, 

contact William T. Woods at (202) 512-4841 or 

woodsw@gao.gov. 
Page i GAO-12-932 Suspension and Debarment

Letter 1 

Background 4

DOD Components Have Active Processes to Refer Identified Cases 

of Contractor Misconduct for Appropriate Action 6

DOD Follows the FAR in Taking Suspension and Debarment 

Actions, but Is Not Notifying GSA about Compelling Reason 

Determinations 11

Conclusion 18

Recommendation for Executive Action 18

Agency Comments 19

Appendix I Scope and Methodology 20

Appendix II DOD Components’ Suspension and Debarment Programs and Staff 26

Appendix III Comments from the Department of Defense 27

Appendix IV GAO Contact and Staff Acknowledgments 29

Tables

Table 1: DOD Components Suspension, Proposed Debarment, and 

Debarment Actions, Fiscal Years 2009 through 2011 3

Table 2: Selected Sources of Information Used to Identify 

Contractor Misconduct, Fiscal Years 2009 through 2011 8

Table 3: DOD Debarments Exceeding 3 Years, Fiscal Years 2009 

through 2011 14

Table 4: Administrative Agreements for DOD Components, Fiscal 

Years 2009 through 2011 16

Table 5: DOD Compelling Reason Determinations, Fiscal Years 

2009 through 2011 17

Table 6: The Four Components Actions Reported in EPLS and 

Firms (Contractors), Fiscal Years 2009 through 2011 21

Contents

Table 7: Description of the Population of Contractors with a 

Suspension, Proposed Debarment, and Debarment Issued 
Page ii GAO-12-932 Suspension and Debarment

by the Air Force, Army, DLA, and DON, Fiscal Years 2009 

through 2011 22

Table 8: Description of the Stratified Random Sample from the 

Population of Contractors With a Suspension, Proposed 

Debarment, or Debarment by the Air Force, Army, DLA, or 

Navy, Fiscal Years 2009 through 2011 23

Table 9: Description of the Random Sample of Contractors With 

Three or More Terminations for Default Issued by the Air 

Force, Army, Navy, or DLA, Fiscal Years 2006 through 

2011 24

Figures

Figure 1: Process for Identifying and Referring Potential 

Contractor Misconduct for Possible Suspension or 

Debarment 4

Figure 2: Evidence of Selected FAR Requirements in 75 Contractor

Case Files 12

Abbreviations

DCIO Defense Criminal Investigative Office

DCIS Defense Criminal Investigative Service

DLA Defense Logistics Agency

DOD Department of Defense

DODIG Department of Defense Inspector General

DUNS Data Universal Numbering System

EPLS Excluded Parties List System

FAR Federal Acquisition Regulation

FPDS-NG Federal Procurement Data System – Next Generation

GSA General Services Administration

SDO Suspension and Debarment Official

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

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necessary if you wish to reproduce this material separately.
Page 1 GAO-12-932 Suspension and Debarment

United States Government Accountability Office 

Washington, DC 20548

September 19, 2012

The Honorable Carl Levin

Chairman

The Honorable John McCain

Ranking Member

Committee on Armed Services

United States Senate

In fiscal year 2011, the Department of Defense (DOD) had the federal 

government’s largest procurement budget, totaling over $375 billion. The 

department’s ability to protect itself from irresponsible contractors is, 

therefore, essential. A 2011 DOD report identified contractors that had (1) 

been convicted, (2) entered into settlement agreements, or (3) had civil 

judgments rendered against them based on charges of fraud related to 

DOD contracts; some of these contractors subsequently had received 

contract funding from DOD. This finding raised questions about DOD’s 

efforts to address contractor misconduct. Suspensions and debarments 

are tools that DOD and other agencies can use to protect federal dollars 

from going to irresponsible contractors. A suspension is a temporary 

disqualification of a contractor from government contracting pending the 

completion of an investigation and any ensuing legal proceedings.1

You requested that we review the use of suspensions and debarments by 

DOD to protect the government from irresponsible contractors. 

Specifically, we determined (1) the extent to which DOD has processes 

for identifying and referring cases of contractor misconduct for possible 

suspension or debarment, and (2) how DOD components make 

suspension and debarment decisions once cases have been referred for 

potential action.

 A 

debarment is an exclusion of a contractor from government contracting 

for a specified period. These actions may be based on various types of 

misconduct.

To determine the extent to which DOD has processes for identifying and 

referring cases of contractor misconduct for possible suspension and 

 

1

Suspensions and debarments also exclude a contractor from government-approved 

subcontracting.

 
 

Page 2 GAO-12-932 Suspension and Debarment

debarment, we reviewed the Federal Acquisition Regulation (FAR), 

specifically Subpart 9.4 which details causes, period, scope, and 

procedures for suspension and debarment, as well as regulations, 

procedures, and policies on suspension and debarment for the 

Department of the Navy (DON) (including the U.S. Marine Corps), 

Departments of the Air Force, and Army, and the Defense Logistics 

Agency (DLA). These DOD components accounted for almost all DOD 

suspensions and debarments for fiscal years 2007 through 2011. We 

performed additional analysis to determine if DOD components consider 

suspension and debarment for contractors with a history of poor 

performance. Specifically, we identified contractors listed in Federal 

Procurement Data System—Next Generation (FPDS-NG) with three or 

more contracts terminated for an actual or anticipated failure to perform 

contractual obligations that involved at least one of the four DOD 

components listed above. To determine how DOD components make 

suspension and debarment decisions and gain insight into DOD’s 

processes, decision making, and adherence to regulations, we 

interviewed suspension and debarment, acquisition, and criminal 

investigative officials. We also analyzed data from FPDS-NG and the 

Excluded Parties List System (EPLS) regarding suspended and debarred 

contractors.2

We augmented this work with a detailed review of 75 case files we 

selected from the total universe of suspension, proposed debarment, and 

debarment actions for contractors during fiscal years 2009 through 2011 

reported by the four DOD components in EPLS. An action in EPLS may 

be related to numerous other EPLS actions. For example, multiple 

individuals may be associated with a debarred contractor or the 

contractor may be listed under different names—all of which are recorded 

as separate actions in EPLS. In addition, each listed contractor or 

individual can have a suspension, proposed debarment, or debarment, all 

of which are listed as separate actions. There were 3,443 such actions by 

all four DOD components during fiscal years 2009 through 2011, as 

shown in table 1.

 

2

EPLS is a publicly available electronic database containing the list of all parties 

suspended, proposed for debarment, debarred, declared ineligible, or excluded or 

disqualified by agencies. It was recently combined with other data systems and the 

suspension and debarment information can now be found in the System for Award 

Management.
 

Page 3 GAO-12-932 Suspension and Debarment

Table 1: DOD Components Suspension, Proposed Debarment, and Debarment 

Actions, Fiscal Years 2009 through 2011

Component

Total actions 

during this period

Total contractors with an initial 

action during this period

Department of the Air Force 800 197

Department of the Army 953 268

Defense Logistics Agency 1,168 341

Department of the Navy 522 109

Total 3,443 915

Source: GAO analysis of EPLS data.

For the purpose of this review, we identified contractors (listed as “firms” 

in EPLS) with an initial action during fiscal years 2009 through 2011. We 

combined the current and archived actions for contractors, and eliminated 

duplicates. We defined a contractor as an entity having a unique Data 

Universal Numbering System (DUNS) number or a debar identifier.3

We assessed the reliability of EPLS data by performing electronic testing, 

reviewing system documentation, and relying on a recent assessment of 

the reliability of EPLS data in a prior GAO engagement.

This 

resulted in a total of 915 contractors. From this total, we selected a 

stratified random sample of 75 contractors within the four DOD 

components for a detailed case file review. We obtained and examined 

case files for the 75 contractors to determine the source of the action, 

verify DOD’s compliance with federal and defense regulations, and 

analyze the reasoning for suspension or debarment periods. We also 

analyzed compelling reason determinations, which allow agencies to 

award a contract to a suspended or debarred contractor under special 

circumstances.

4

 

3

A DUNS number is a proprietary means of identifying business. The DUNS number is 

used as the federal government’s contractor identification code. A debar identifier is a 

unique identification number assigned to a contractor and action(s) entered into EPLS.

We determined 

that the data we used, from both EPLS and FPDS-NG, were sufficiently 

reliable for the purpose of this review.

4

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 4 GAO-12-932 Suspension and Debarment

We conducted this performance audit from September 2011 to 

September 2012 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives. For more 

information on our scope and methodology, see appendix I.

Under the FAR, a responsible prospective contractor is one that meets 

the standards set forth in section 9.104, which include adequate financial 

resources to perform the contract, a satisfactory performance record, and 

a satisfactory record of integrity and business ethics. Agencies have 

many different tools at their disposal to protect the government’s 

interests. For example, civil and criminal penalties may be imposed for 

contracting fraud and other violations. Suspension and debarment are not 

a punishment but instead support the policy that agencies shall only 

solicit offers from, award contracts to, and consent to subcontracts with 

responsible contractors. The decision to suspend or debar a contractor 

also represents a significant step in a process that identifies, refers, and 

takes action in some cases to ban contractors from receiving future 

government contracts.

Figure 1: Process for Identifying and Referring Potential Contractor Misconduct for 

Possible Suspension or Debarment

A suspension is a temporary disqualification of a contractor from 

government contracting. A proposed debarment occurs when a debarring 

official issues a notice of proposed debarment, and lasts until the 

Background
 

Page 5 GAO-12-932 Suspension and Debarment

debarring official makes the decision on whether or not to debar for a 

specified period. A debarment is an exclusion of a contractor from 

government contracting for a specified period after debarment 

procedures—which begin with a notice of proposed debarment—have 

been followed. Depending on the contractor and circumstances, a 

contractor could go through one or all of these stages. Suspension, 

proposed debarment, or debarment generally excludes a contractor from 

receiving new federal contracts or grants, or from working for another 

contractor when the government must consent to the subcontract. 

Alternatively, a contractor may enter into an administrative agreement 

with an agency instead of being suspended or debarred. Administrative 

agreements generally require that a contractor meets certain agencyimposed requirements in order to not be suspended or debarred and 

remain eligible for new contracts.

The FAR identifies specific causes for which a contractor may be 

suspended or debarred. These include fraud relating to obtaining, 

performing, or attempting to obtain a public contract or subcontract, 

violation of antitrust statutes relating to submission of offers, 

embezzlement, theft, forgery, bribery, falsification or destruction of 

records, federal tax delinquency, and many other reasons. Suspension 

and debarment have different standards of evidence necessary to support 

the official’s decision; for example, a conviction or civil judgment of certain 

offenses may lead to a debarment while an official can suspend a 

contractor upon adequate evidence of the same offenses. The FAR also 

permits an agency to suspend or debar individuals or companies that are 

affiliated with another individual or contractor that has been suspended or 

debarred. None of these causes provide for automatic suspension or 

debarment. Rather, the suspension and debarment official (SDO) within 

each agency has the authority to decide that it is in the government’s 

interests to suspend or debar a contractor on a case-by-case basis. The 

suspension or debarment covers the entire executive branch of the 

federal government. Individual agencies may still contract with a 

suspended or debarred contractor if they have documented in writing that 

a compelling reason to do so exists. In addition, DOD is required by law 

to submit notice of its compelling reason determinations to the General 

Services Administration (GSA), which maintains these notices for public 

inspection.

We and the DOD Inspector General (DODIG) have previously reported on 

DOD’s ability to protect the government’s interests through its suspension 

and debarment programs. Specifically, in August 2011 we reported on the 

suspension and debarment programs of ten federal agencies including 
 

Page 6 GAO-12-932 Suspension and Debarment

two DOD components, DLA and DON. We found these DOD components 

had active suspension and debarment programs and were among the 

four agencies governmentwide that had the most suspension and 

debarment cases.5 Also, in July 2011, the DODIG reported that the Army, 

DON, Air Force, and DLA had generally effective suspension and 

debarment processes and made recommendations on how to further 

strengthen them.6 DOD has since taken actions to address the DODIG 

recommendations, including updating its guidance to provide specific 

information on referrals of contract-related matters to the appropriate 

officials for further investigation and appropriate action.

All four DOD components we examined—the Air Force, Army, DLA, and 

DON—use multiple sources to identify numerous cases of actual or 

alleged contractor misconduct and follow their procedures to refer them 

for appropriate action, including possible suspension and debarment. 

Such cases are referred within DOD to SDOs and to other agencies, 

including the Department of Justice (Justice), for further action depending 

on the remedy or action being pursued. Our analysis of selected cases 

confirmed that DOD follows its procedures for identifying and referring 

cases involving contractor misconduct or poor performance.

DOD components have various sources for identifying contractor 

misconduct and investigate numerous leads each year that result in a 

variety of actions, including suspensions and debarments. Each DOD 

component is required to monitor from inception all significant 

investigations of fraud and corruption related to procurement activities 

affecting the component. Within the Air Force, the Deputy General 

Counsel for Contractor Responsibility is responsible for identifying and 

investigating contractor misconduct to determine the appropriate remedy 

or action. Within the Army this responsibility is centralized within the 

Procurement Fraud Branch of the Contract and Fiscal Law Division of the 

 

5

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).

6

Department of Defense Inspector General, Additional Actions Can Further Improve the 

DOD Suspension and Debarment Process, D-2011-083 (Arlington, Va.: July 14, 2011).

DOD Components 

Have Active 

Processes to Refer 

Identified Cases of 

Contractor 

Misconduct for 

Appropriate Action

DOD Identifies Contractor

Misconduct Using Various 

Sources
 

Page 7 GAO-12-932 Suspension and Debarment

Army Legal Services Agency. At DON, the responsibility is centralized 

under the Acquisition Integrity Office, a component of the DON Office of 

General Counsel. DLA has decentralized this responsibility among the 

local counsels at each buying activity who forward referrals to the office of 

DLA’s SDO for consideration. These organizations, which we refer to 

generally as acquisition integrity offices, are the focal points for 

coordinating the suspension and debarment process and are tasked with 

receiving and developing leads from many sources. These sources 

include

• Defense Criminal Investigative Organizations (DCIO);7

• DOD component contracting officers, program officials, and attorneys;

• Contractor or subcontractor mandatory disclosures;8

• Defense Contract Audit Agency;

• Defense Contract Management Agency; 

• Inspector General Offices, including Hotline tips;

• Whistleblowers and Qui Tam lawsuits;9

• Federal Bureau of Investigation referrals;

• Bid protest cases;

• Quality deficiency reports;

• Armed Services Board of Contract Appeals; and

• News articles.

For some of these sources of information, data were readily available 

showing the overall level of activity, which is shown in table 2 below. 

These and other sources generate leads that can be used to identify 

potential instances of contractor misconduct, although it is not possible to 

assess to what extent leads are being missed.

 

7

DCIOs include the U.S. Army Criminal Investigation Command, the Naval Criminal 

Investigative Service, the U.S. Air Force Office of Special Investigations, and the Defense 

Criminal Investigative Service (DCIS) which resides within DODIG and provides 

investigative capabilities to those DOD components that do not have their own DCIO.

8

Since 2008, it has been mandatory for all federal government contractors to report fraud 

and significant overpayments in connection with their government contracts to the federal 

government. Failure to do so is a cause for suspension or debarment.

9

Under the False Claim Act’s qui tam provisions, a person with evidence of fraud, also 

known as a relator, is authorized to file a case in federal court and sue, on behalf of the 

government, persons engaged in the fraud and to share in any money the government 

may recover. The Department of Justice has the responsibility to decide on behalf of the 

government whether to join the whistleblower in prosecuting these cases.
 

Page 8 GAO-12-932 Suspension and Debarment

Table 2: Selected Sources of Information Used to Identify Contractor Misconduct, 

Fiscal Years 2009 through 2011

Source of information 2009 2010 2011

Department of Justice qui tam lawsuits 52 56 46

Contractor self reporting 81 203 240

Hotline contacts 13,750 a 16,981 20,402

Source: GAO analysis and presentation of DODIG statistics.

a

Hotline numbers include all reported actions, not only those actions involving contractors. In addition 

to contractor misconduct, the Defense Hotline provides a vehicle for military service members, DOD 

civilians, contractor employees, and the public to report fraud, waste, mismanagement, abuse of 

authority, threats to homeland security and leaks of classified information. 

These leads can result in suspension and debarment cases. For 

example, when contractors are convicted of criminal violations, such as 

fraud related to government contracts, this provides a basis for 

debarment. A contractor may be suspended upon the determination that 

there is adequate evidence of such a violation. In cases not based on a 

conviction or civil judgment, for example, a contractor’s failure to make 

certain disclosures to the government, agencies can suspend a contractor 

upon adequate evidence or debar a contractor based upon a 

preponderance of evidence.

For the 2011 DOD report on contracting fraud, the DODIG reviewed the 

DCIOs’ methodology and processes used in accounting for and reporting 

actions associated with major procurement fraud investigations. The 

DODIG review found that the DCIOs have a reliable methodology and 

processes to report fraud cases.10

DOD’s guidance instructs components to develop procedures for the 

coordination of criminal, civil, contractual, and administrative remedies to 

address contractor fraud and corruption. This guidance outlines the roles 

of different components and investigative groups and how they are to 

coordinate their efforts. DOD components have developed these 

procedures and also have guidance on the process for evaluating 

contractor misconduct.

 

10Department of Defense, Report to Congress on Contracting Fraud, D-315854E 

(Arlington, Va.: October 2011). 

DOD Components Have 

Procedures and Practices 

to Refer Cases of 

Contractor Misconduct for 

Suspension and 

Debarment
 

Page 9 GAO-12-932 Suspension and Debarment

Under these procedures, DCIOs regularly coordinate their efforts and 

refer investigation information to Justice and to other DOD components. 

For example, the DODIG reported that during fiscal years 2009 through 

2011, DCIO investigations and subsequent referrals to Justice resulted in 

over 1,000 indictments and over 800 convictions. Within DOD 

components, DCIOs gather and share information on investigations with 

their respective acquisition integrity offices. Each of them maintains 

databases that track leads and contain detailed information on 

investigations. Such information is also tracked in a shared, integrated 

system that contains basic case information. DCIO officials also 

collaborate informally, via telephone or e-mail, if they need to share 

additional information. DOD officials stated that staff on a particular case 

may include DCIO investigators who specialize in procurement fraud. 

Within DLA, DCIS agents are embedded on the fraud team in each of the 

buying activities we examined. The DON also has a Naval Criminal 

Investigative Service agent embedded with the acquisition integrity office. 

In the other DOD components, DCIO agents are involved on an ad hoc 

basis and may be asked by the acquisition integrity offices to gather 

additional information on their behalf for specific cases.

Acquisition integrity offices in each component monitor and ensure the 

coordination of criminal, civil, administrative, and contractual remedies for 

each significant investigation of fraud or corruption related to contracting. 

They are also tasked with preparing training materials on fraud and 

corruption that are shared at procurement-related training events. These 

offices build cases in consultation with the SDOs for their consideration. 

(The SDOs are supported by full-time staff as shown in appendix II.) For 

example, the DON Acquisition Integrity Office monitors and ensures 

coordination of all acquisition integrity matters. DLA is structured slightly 

differently than the other three DOD components. The attorneys from 

DLA’s general counsel office work alongside contracting officers at each 

buying activity. According to DLA officials, this proximity lends itself to 

having informal discussions as issues come up on individual contracts or 

with contractors. The attorneys at each buying activity manage 

administrative remedies in consultation with contracting officers and 

involve SDOs while a case is being developed to help inform them of the 

facts. Officials stated that SDOs are knowledgeable of findings before a 

case file is referred to them for a decision and that a case handed to an 

SDO is rarely rejected since they have already been briefed and involved 

in its development.
 

Page 10 GAO-12-932 Suspension and Debarment

DOD follows its procedures for identifying and referring cases involving 

contractor misconduct or poor performance, based on our analysis of

• A random sample of 75 contractors suspended, proposed for 

debarment, or debarred during fiscal years 2009 through 2011;

• The 48 contractors identified in the 2011 DOD contracting fraud report 

as having received contract funding after criminal convictions, 

settlement agreements, or civil judgments; and

• A random sample of 62 contractors that had three or more contracts 

terminated for default.

DOD’s use of numerous sources was evident in our sample of 75 

contractors suspended, proposed for debarment, or debarred during fiscal 

years 2009 through 2011. For example, we found actions that were 

initiated by DCIOs, the Defense Contract Management Agency, 

contractors, or one of DLA’s Product Test Centers. Specifically, the 75 

actions included 26 that were identified from DCIOs and other 

investigations, 18 based on poor performance, 22 from indictments, and 9 

based on convictions. Also, the 75 cases we examined demonstrated 

ongoing referral of cases of contractor misconduct between the DCIOs, 

acquisition integrity offices, and the SDOs, and, where applicable, field 

activities, to determine the appropriate remedy, including suspension and 

debarment.

In the 2011 DOD contracting fraud report, DOD identified contractors 

convicted of fraudulent actions and those that entered into settlement 

agreements or had civil judgments rendered against them over a 10-year 

period. The report also provided the dollar amounts, if any, DOD 

obligated to these contractors subsequent to these actions. We found that 

DOD generally had reviewed these contractors for possible suspension 

and debarment or other action. Of the 148 cases listed in DOD’s report 

for 2008 through 2010, 48 contractors received contract funding after 

criminal convictions, settlement agreements, or civil judgments. All 48 

contractors had been reviewed by the acquisition integrity offices and 

were not in a suspended or debarred status when they received new 

contract funding. Specifically, in 

• Ten cases, contractors were initially suspended or debarred, but in

• Four cases, administrative agreements were implemented 

afterwards; and in

• Six cases, the contractor’s debarment periods ended prior to 

receiving contract funding;

• Eighteen cases, the government entered into settlement agreements 

to resolve allegations in lieu of suspension or debarment;

Analysis of Contractor 

Misconduct Cases Shows 

That DOD Follows Its 

Identification and Referral 

Processes
 

Page 11 GAO-12-932 Suspension and Debarment

• Five cases, the employees or subsidiaries were suspended or 

debarred but the companies were not; the companies were assessed 

civil penalties;

• Four cases, an agency other than DOD was responsible for taking the 

action; and in

• Eleven cases, DOD decided not to take action based on its 

investigation.

The FAR provides the SDO with discretion to debar a contractor for 

violating the terms of a government contract or subcontract, including 

cases where a contractor has had a history of poor performance on one 

or more contracts. One method DOD uses to identify such contractors is 

by examining terminations for default on government contracts. A 

termination for default is the exercise of the government’s right to 

completely or partially terminate a contract because of the contractor’s 

actual or anticipated failure to perform its contractual obligations. We 

found that in many cases, DOD components reviewed contractors that 

have had contracts terminated for default for possible suspension and 

debarment. During fiscal years 2006 through 2011, we found that 126 

contractors had three or more contracts terminated for default 

governmentwide. We randomly selected a total of 62 of these contractors 

from the four DOD components to determine if DOD had reviewed their 

performance to consider additional administrative action, as appropriate. 

According to DOD officials, 46 of the 62 contractors—74 percent—were 

reviewed or were undergoing review for possible suspension or 

debarment, with 13 already suspended or debarred. DOD officials stated 

that contracting officers should review contractors’ terminations for default 

for possible suspension or debarment. They noted that not all such 

terminations warrant further action by DOD.

Once a case of contractor misconduct is referred to the SDO, DOD 

components follow the FAR in taking action. SDOs make decisions on a 

case-by-case basis, in accordance with the discretion provided by the 

FAR. As such, suspension and debarment periods vary based on the 

circumstances of the case, as do the reasons for removing contractors 

from the EPLS. In addition, while DOD rarely uses compelling reason 

determinations to contract with suspended or debarred contractors, it has 

not been complying with legal requirements to share that information with 

GSA when it does so.

DOD Follows the FAR 

in Taking Suspension 

and Debarment 

Actions, but Is Not 

Notifying GSA about 

Compelling Reason 

Determinations
 

Page 12 GAO-12-932 Suspension and Debarment

The FAR allows DOD components to use their discretion in deciding 

whether to suspend or debar a contractor. SDO’s within each DOD 

component make case-by-case determinations based on criteria specified 

in the FAR. We found that DOD components generally follow FAR 

requirements in taking suspension and debarment actions. The 75 case 

files we reviewed provided insight into the reasoning, evidence, and the 

final determination or remedy involving each contractor, as shown in 

figure 2 below.

Figure 2: Evidence of Selected FAR Requirements in 75 Contractor Case Files

a

At the time of our review, final decisions were still pending in some cases. 

Companies are informed of suspension or debarment actions when they 

receive a notice that informs them that the SDO is either suspending 

them or proposing them for debarment. The notice sent to a contractor 

being suspended or proposed for debarment immediately renders the 

contractor ineligible for contracting and lays out the rationale and facts for 

why the SDO has made this determination. The notice provides the 

contractor 30 days to provide information and argument in opposition to 

the SDO decision. If a contractor responds to the initial letter and submits 

additional evidence to oppose the suspension or proposed debarment, 

the SDO weighs the additional information provided by the contractor 

against the evidence already available to determine: (1) whether the 

suspension should remain in place, or be modified or terminated; (2) 

whether the proposed debarment should be finalized, modified, or 

terminated; or (3) if another tool could be utilized to resolve the 

suspension or debarment proceeding, such as an administrative 

agreement. In some cases, even after a decision has been finalized, a 

contractor may request a reconsideration of the period or extent of 

DOD Suspension and 

Debarment Decisions 

Made in Accordance with 

the FAR
 

Page 13 GAO-12-932 Suspension and Debarment

debarment by presenting information such as new evidence or the 

reversal of a conviction.

We found that required notices were in all 75 case files. This 

demonstrated that DOD components had provided the contractors with 

information on the suspension and debarment process and the 

appropriate FAR citation to the cause for which they were being 

suspended or debarred. In addition, DOD provided contractors with the 

opportunity to submit information in opposition to the suspension or 

debarment. Other information in the case files included indictments and 

convictions, law enforcement evidence, email evidence, reports 

demonstrating contractor ownership, and final decision memoranda by 

the SDO, where applicable. The case files generally matched dates that 

were listed in the EPLS system.

The FAR requires that the period of suspension should be temporary 

pending the completion of an investigation and any ensuing legal 

proceedings and generally not exceed 12 months unless legal proceeding 

are initiated. If legal proceedings are not initiated, an Assistant Attorney 

General at Justice may request an extension of up to 6 months or the 

agency shall terminate the suspension. If legal proceedings have been 

initiated within 18 months, the suspension may continue. Of the 915 DOD 

suspensions, proposed debarments, and debarments from fiscal years 

2009 through 2011, there were 410 contractors that had been suspended 

or were currently suspended at the time of our review. Of these 

contractors, 180 had suspension periods ranging from 12 to 36 months 

with 138 greater than 18 months. We did not determine if legal 

proceedings had been initiated for all 180 contractors. However, our 

sample of 75 contractors included 18 contractors that had suspension 

periods longer than 12 months and all these had been indicted or were 

affiliated with a contractor that have been indicted. For example, 9 

contractors had been suspended because of their affiliation with a 

contractor that had been indicted and because of pending legal 

proceedings, the suspension periods had exceeded 24 months.

The FAR also provides that a debarment period should be commensurate 

with the seriousness of the cause and generally should not exceed 3 

years, but provides the SDO with discretion to extend that period if it is 

necessary to protect the government’s interest. Of the 915 DOD 

suspensions, proposed debarments, and debarments from fiscal years 

2009 through 2011, 426 were debarments. Of these, 211 (almost 50 

percent) were for a period of more than 3 years. Given the unique nature 

Suspension and 

Debarment Periods Vary 

Based on Specific Case 

Circumstances
 

Page 14 GAO-12-932 Suspension and Debarment

of each case, the reasons among the different components varied. Table 

3 shows the percentage of debarments that exceeded 3 years and the 

circumstances cited by the SDO in selected cases to justify a longer 

period. In general, however, officials told us that it is a common practice 

in the case of criminal convictions to add 3 years to the sentence an 

individual receives. Thus, a criminal sentence of 4 years would result in a 

7-year debarment. One SDO explained that the intent is to give 

contractors a period of time to re-establish present responsibility through 

training and experience after their incarceration period has ended. FAR 

and DOD guidance do not specifically identify this or any other factors in 

determining when to extend the debarment period beyond 3 years outside 

of the discretion the SDO has to protect the government’s interest.

Table 3: DOD Debarments Exceeding 3 Years, Fiscal Years 2009 through 2011

Component

Percentage of 

debarments 

exceeding 3 years

Selected cases exceeding 3 years in our sample, their length, and the reason(s) cited 

for a longer debarment period 

Department of Air 

Force 

61 6-year debarment: The owner of a company was initially suspended based on an indictment 

for 39 counts of making false statements, perjury to a grand jury, destruction of evidence and 

conflicts of interest. The conviction of the owner and the egregious nature of the conduct led 

the suspension and debarment official (SDO) to the conclusion that a longer period of 

debarment was necessary for this company and the owner. 

Department of the 

Army 

59 15-year debarment: A company failed to perform on one contract and the contract was 

terminated for cause. The owner of the company harassed and threatened physical harm 

against Army personnel and property and was debarred because of misconduct of a serious 

and compelling nature. The company was then debarred for the same period.

9-year debarment: The company was debarred because of its business relations with an 

Army contracting official who was convicted of fraud and sentenced to 41 months 

confinement. The SDO concluded in the final debarment decision that given the experience 

the individual had as a contracting official in the government, it was reasonable to expect the 

individual to conduct business with the government again and necessary to protect the 

government for a longer period in order to allow the individual the opportunity to demonstrate 

they were once again responsible.

Defense Logistics 

Agency

35 10-year debarment: The SDO became aware of seriously improper misconduct with the 

company at the time that it had been proposed for debarment for a failure to perform on one 

or more contracts. The additional misconduct involved unauthorized product substitution on 

critical parts of helicopters that the SDO found so serious as to justify a longer debarment 

period for this contractor as well as additional contractors and individuals who were involved.

10-year debarment: An individual who was already debarred was using another company to 

try to continue to do business with the government during the debarment period. The 

company that was being used was debarred along with the individual as a result of trying to 

subvert the original debarment.
 

Page 15 GAO-12-932 Suspension and Debarment

Component

Percentage of 

debarments 

exceeding 3 years

Selected cases exceeding 3 years in our sample, their length, and the reason(s) cited 

for a longer debarment period 

Department of the 

Navy 

63 12-year debarment: An owner of a company was convicted of fraud and sentenced to 63 

months in prison, 2 years probation, and fines. As a subcontractor on a government contract 

this company was involved in attempted fraud by failing to meet requirements on Navy 

aircraft and helicopter inspections and repairs. The SDO noted their egregious, unsafe, 

selfish, and dishonest actions that indicated a lack of business integrity that was so serious 

to the safety of personnel and the integrity of the government procurement process that a 

longer debarment was warranted.

8-year debarment: The owner and his company were suspended and then debarred. The 

owner, while suspended for an indictment involving fraud and identify theft, tried to obtain 

additional government contracts. After charges were dropped, the SDO terminated the initial 

suspension. However, because of the misrepresentation to contracting officials about the 

company’s suspended status, the SDO proposed the owner and the company for debarment. 

The SDO decided that a longer debarment period was necessary to protect the government 

from doing business with this company for its unethical and dishonest practices.

Source: GAO analysis of EPLS data and DOD suspension and debarment case files.

Note: The debarment period represents the entire exclusion period, including time the contractor may 

have spent in a period of suspension and/or proposed debarment, where applicable. 

Terminating suspensions and debarments allows contractors to be 

removed from EPLS and become eligible for federal contracting again. 

There are various ways a termination can occur.

The FAR provides the SDO broad discretion to reduce the length of or 

terminate a suspension or debarment upon the contractor’s request when 

supported by documentation for reasons such as newly discovered 

evidence. Removal from EPLS can result from the suspension and 

debarment procedures described in the FAR that allow contractors 30 

days to submit information or argument in opposition. At the conclusion of 

these procedures, the SDO may remove the contractor from EPLS. Our 

sample of 75 contractors included 31 contractors that submitted evidence 

in opposition and of these, 12 had their suspension or proposed 

debarment terminated. For example, the SDO terminated a proposed 

debarment when the contractor provided evidence that it was not affiliated 

with a company that had been debarred. In another example, the SDO 

and integrity office had numerous meetings with the contractor and its 

counsel that eventually led to a termination of the debarment. 

Additionally, our sample of 75 contractors also included 4 other instances 

in which the SDO terminated the suspension for the following reasons: (1) 

the indictment was dismissed, (2) change in ownership and management, 

(3) the SDO believed that future misconduct was unlikely, or (4) the SDO 

terminated the suspension because the lack of an indictment.

Reasons and Processes 

Vary for Removing 

Contractors from 

Suspension and 

Debarment List
 

Page 16 GAO-12-932 Suspension and Debarment

A contractor may also be allowed to enter into an administrative 

agreement with the government to resolve a suspension or debarment 

proceeding. Such agreements were used in a total of 30 cases during 

fiscal years 2009 through 2011. (See table 4 below.)

Table 4: Administrative Agreements for DOD Components, Fiscal Years 2009 

through 2011

Component FY 2009 FY 2010 FY 2011

Department of the Air Force 1 9 2 

Department of the Army 2 6 3 

Department of the Navy 6 1 0 

Defense Logistics Agency 0 0 0 

Total 9 16 5 

Source: GAO analysis of DOD data.

Note: FY = fiscal year. 

These agreements are usually approved after the contractor has already 

been suspended or proposed for debarment. Once the agreement is 

signed, the suspension or proposed debarment is terminated and the 

contractor is removed from EPLS. But the contractor must comply with 

the agreement, which may require using an ethics program, hotline, or 

independent monitors. Of the 30 administrative agreements used by DOD 

over the last 3 years, Air Force and Army had the most, with 12 and 11 

respectively. DLA officials told us that administrative agreements are not 

often used because many of DLA’s contractors are small businesses and 

it is difficult to get a contractor to show that it can improve its ethics 

programs if the owner is closely tied to the company and is the one 

involved in the wrongdoing. Air Force officials stated that they view 

administrative agreements as an effective tool to get the contractor to 

improve its practices and have successfully used them in lieu of 

debarment, even for some small businesses.

Among DOD’s 30 administrative agreements, 12 were with small 

businesses. The majority of agreements contained certain requirements 

contractors must comply with to be removed from EPLS and were for a 

length of 3 years. For example, an Army administrative agreement 

required a contractor to submit a report on a quarterly basis on the 

contractor’s implementation of the Integrity and Values Program laid out 

in the agreement. Also, some required that management of the 

contractors be changed. Most of the administrative agreements required 

the contractors to adopt, implement, and maintain a self-governance 
 

Page 17 GAO-12-932 Suspension and Debarment

program that included a business ethics and compliance program that 

applied to all employees. A majority of the contractors who entered into 

administrative agreements were originally suspended or proposed for 

debarment.

In debarment cases, a contractor’s removal from EPLS is automatic when 

the fixed debarment period ends. The contractor is not required to show 

that changes have been made to ensure that the reason(s) that the 

contractor was debarred would not be repeated.

Contractors that are suspended, proposed for debarment, or debarred are 

excluded from receiving new contracts, and agencies may not solicit 

offers from, award contracts to, or consent to subcontracts with these 

contractors, unless the agency designee determines on a contract-bycontract basis that there is a compelling reason for such action. The 

authority to grant compelling reason determinations varies in DOD 

components. While the FAR provides the agency head with the authority, 

in most cases it allows for the responsibility to be delegated. For example, 

in the Air Force, the Assistant Secretary of the Air Force for 

Acquisition/Contracting makes this determination, but in the Army, the 

SDO has the authority. DOD components made 14 compelling reason 

determinations during fiscal years 2009 through 2011. (See table 5.)

Table 5: DOD Compelling Reason Determinations, Fiscal Years 2009 through 2011

Components Office delegated approval authority

Number of compelling 

reason determinations

Department of the 

Air Force

Assistant Secretary of the Air Force for 

Acquisition/Contracting

0 

Department of the 

Army 

Suspension and Debarment Official 7 

Defense Logistics 

Agency

Special Assistant for Contracting Integrity 

(Suspension and Debarment Official)a

7 

Department of the 

Navy

Assistant Secretary for the Navy 

Research, Development & Acquisition

0 

Source: DOD and GAO presentation.

a

DLA officials stated that the Director of DLA retains the authority to approve compelling reason 

determinations. 

One example of a compelling reason determination involved a debarred 

subcontractor that provided 75 percent of specific material to the Army, 

including water purification equipment, air conditioning materials, 

DOD Has Not Complied 

with Requirement to 

Submit Compelling Reason 

Determinations to GSA
 

Page 18 GAO-12-932 Suspension and Debarment

electrical materials and repair items, and generators in Iraq and 

Afghanistan. Based upon the immediate operational need for the 

materials, insufficient time to mobilize another subcontractor to supply the 

items and the impact on the life, safety, and security of personnel, the 

SDO granted the request and made a compelling reason determination.

The DOD Authorization Act of 1982 requires that any compelling reason 

determination by DOD be justified in writing, and notice of the 

determination be submitted to GSA, to be kept on file for public 

inspection.11 However, according to GSA officials, DOD had not 

submitted any notices of these determinations. DOD officials stated that 

they were uncertain why these determinations had not been forwarded to 

GSA. Based on our recent inquiry, DOD officials stated that they are now 

forwarding these determinations to GSA and provided us with supporting 

documentation.

In accordance with policies and procedures, DOD components are 

actively pursuing leads of contractor misconduct from numerous sources, 

collaborating across the agency and within each component, and 

generally adhering to the FAR in carrying out their responsibilities. While 

suspension and debarment decisions vary among the cases, these are 

made within the discretion provided by the FAR. Our review of sample 

cases identified sufficient documentation to demonstrate general 

compliance with its processes. But DOD has not been complying with a 

requirement to provide written notice to GSA when it decides there is a 

compelling reason to award a contract to a suspended or debarred entity. 

The availability of the notification of compelling reason determinations is 

important for transparency to the public not only on the quantity of these 

determinations but also to demonstrate that compelling reason 

determinations are carefully considered and used only when necessary.

We recommend that the Secretary of Defense direct the Under Secretary 

of Defense for Acquisition, Technology, and Logistics to ensure that each 

DOD component is aware of and complies with the requirement to notify 

the GSA of determinations that a compelling reason exists to do business 

with a suspended or debarred contractor.

 

11Pub. L. No. 97-86, § 914 (1981) (codified as amended at 10 U.S.C. § 2393).

Conclusion

Recommendation for 

Executive Action
 

Page 19 GAO-12-932 Suspension and Debarment

We provided a draft of this report to DOD. DOD provided written 

comments, which are reproduced in appendix III. DOD also provided 

technical comments, which we incorporated as appropriate. In its written 

comments, DOD stated that it concurred with our recommendation and 

stated it will prepare a memorandum to its acquisition community 

referencing appropriate agency guidance. 

We are sending copies of this report to the Secretary of Defense, the 

Under Secretary of Defense for Acquisition, Technology, and Logistics, 

the Administrator of General Services, the Director of the Office of 

Management and Budget, and other interested parties. This report will 

also be available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-4841 or woodsw@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

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

report are listed in appendix IV.

William T. Woods, Director

Acquisition and Sourcing Management

Agency Comments
Appendix I: Scope and Methodology

Page 20 GAO-12-932 Suspension and Debarment

To determine the extent the Department of Defense (DOD) has 

processes for identifying and referring cases of possible suspension and 

debarment and how DOD components make suspension and debarment 

decisions, we reviewed the Federal Acquisition Regulation (FAR), as well 

as regulations, procedures, processes, and policies as they pertain to 

suspension and debarment for the Department of the Navy (DON) 

(including the U.S. Marine Corps), Departments of the Air Force, and 

Army, and the Defense Logistics Agency (DLA). These components 

account for 4,876 of 4,884 (99.8 percent) of DOD suspensions and 

debarments for fiscal years 2007 through 2011. We also interviewed the 

Suspension and Debarment Official, acquisition officials, and Defense 

Criminal Investigative Organization officials in each component.

We also analyzed data for fiscal years 2009 through 2011 from the 

Excluded Parties List System (EPLS) regarding suspended and debarred 

contractors.1 We identified the total universe of suspension, proposed 

debarment, and debarment actions for fiscal years 2009 through 2011 by 

the four DOD components by downloading the EPLS data from EPLS 

public website. EPLS actions may be related to numerous actions.2

 

1

EPLS is a publicly available electronic database containing the list of all parties 

suspended, proposed for debarment, debarred, declared ineligible, or excluded or 

disqualified by agencies. It was recently combined with other data systems and the 

suspension and debarment information can now be found in the System for Award 

Management.

For 

example, multiple individuals may be associated with an excluded firm 

and firms and individuals may be listed under different names—all of 

which are recorded as separate actions in EPLS. In addition, each listed 

firm or individual can have a suspension, proposed debarment, and 

debarment, which are also listed as separate actions. For the purpose of 

this review, we identified firms with an initial action for fiscal years 2009 

through 2011. We combined the current and archived exclusions for 

firms, eliminated duplicates from each file, and counted only the first 

action. We defined contractors as having a unique Data Universal 

2

EPLS entries are classified as (1) Individual—A person; (2) Firm (contractor)—A 

company or organization; (3) Entity—A person, organization, or thing capable of bearing 

legal rights and responsibilities; and (4) Vessel—A mode of transportation capable of 

transport by water.

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 21 GAO-12-932 Suspension and Debarment

Numbering System (DUNS) number or a debar identifier.3

Table 6: The Four Components Actions Reported in EPLS and Firms (Contractors), 

Fiscal Years 2009 through 2011

This resulted in 

915 contractors. (See table 6, which shows the number of actions entered 

in EPLS and corresponding number of contractors during the same 

period.)

Component

Total EPLS actions 

during this period

Total Firms (contractors) 

with an initial action during 

this period

Department of the Air Force 800 197

Department of the Army 953 268

Defense Logistics Agency 1,168 341

Department of the Navy 522 109

Total 3,443 915

Source: GAO analysis of EPLS data.

For the purpose of selecting a sample of suspension, proposed 

debarment, and debarment actions and to ensure that our sample 

included actions from each component which also included a mix of 

contractors having different exclusion lengths, we stratified the population 

of contractors into 16 categories. These categories included the DOD 

component that issued the exclusion, the length of the contractor’s 

suspension and proposed debarments, and the length of the contractor’s 

total exclusion period.4

 

3

A DUNS number is a proprietary means of identifying business entities The DUNS 

number is used as the federal government’s contractor identification code. A debar 

identifier is a unique identification number assigned to a contractor and actions(s) entered 

into EPLS.

The population is described in table 7 below.

4

We classified contractors with indefinite suspension/proposed debarment length into the 

more than 1 year category. We classified contractors with indefinite exclusion periods into 

the more than 3 years category. We classified contractors who were not suspended or 

proposed for debarment prior to debarment (69 contractors) in the 1 year or less category.
Appendix I: Scope and Methodology

Page 22 GAO-12-932 Suspension and Debarment

Table 7: Description of the Population of Contractors with a Suspension, Proposed Debarment, and Debarment Issued by the 

Air Force, Army, DLA, and DON, Fiscal Years 2009 through 2011

Suspension / 

proposed 

debarment length Total length

Department of 

the Air Force

Department of 

the Army

Defense Logistics 

Agency

Department of 

the Navy Total

1 year or less 3 years or 

less

91 112 166 44 413

More than 3 

years

17 47 60 23 147

More than 1 year 3 years or 

less

13 5 4 25 47

More than 3 

years

76 104 111 17 308

Total 197 268 341 109 915

Source: GAO analysis of EPLS data.

For further analysis we selected a stratified random sample of 75 

contractors. In selecting our sample, we chose the sample size in each of 

the 16 strata using a three step process:

1. We first identified the minimum sample size in each stratum needed for 

a nongeneralizable sample of contractors.5

• A minimum of 10 contractors from each DOD component

We used the following criteria 

to determine the minimum sample size for each category:

• A minimum of 5 contractors within each DOD component with 

exclusion length of 3 years or less.

• A minimum of 5 contractors within each DOD component with 

exclusion length of more than 3 years.

• A minimum of 6 contractors within each DOD component with a 

suspension/ proposed debarment period of more than 1 year.

2. We then calculated the sample size necessary for a control test so that 

an upper bound of the 95 percent confidence interval would not exceed 5 

percent if the controls were effective for all selected contractors (0 

percent error rate) and proportionally allocated the sample size to the 16 

category.

 

5

We originally planned to conduct a detailed review of a nongeneralizable subsample of 

40 contractors, but instead conducted the detailed analysis on all 75 selected contractors.
Appendix I: Scope and Methodology

Page 23 GAO-12-932 Suspension and Debarment

3. To determine the final sample size, we chose the larger of the two 

sample sizes for each stratum. The resulting sample size was 75 

contractors. The sample design is given in table 8 below.

Table 8: Description of the Stratified Random Sample from the Population of Contractors With a Suspension, Proposed 

Debarment, or Debarment by the Air Force, Army, DLA, or Navy, Fiscal Years 2009 through 2011

Debarment length sample size

Component Suspension / proposed debarment length

Less than or equal 

to 3 years

More than 3 

years Total

Department of the Air Force Less than or equal to 1 year 6 2 8 

More than 1 year 3 5 8

Department of the Army Less than or equal to 1 year 8 4 12

More than 1 year 3 7 10

Defense Logistics Agency Less than or equal to 1 year 11 4 15

More than 1 year 3 8 11

Department of the Navy Less than or equal to 1 year 3 2 5 

More than 1 year 3 3 6

Total 40 35 75

Source: GAO analysis of EPLS data.

We assessed the reliability of EPLS data by performing electronic testing, 

reviewing system documentation, and relying on a recent assessment of 

the reliability of EPLS data in a prior GAO engagement. We determined 

that the data were sufficiently reliable for the purpose of this review.

From the Federal Procurement Data System—Next Generation we

identified contractors with three or more terminations for default with one 

of the four DOD components to determine if these contractors were 

considered for possible suspension or debarment. We selected a 

stratified random sample of 68 contractors. The sample design is given in 

table 9 below. We placed these 68 contractors into three strata and first 

selected all contractors that were issued a termination for default by the 

Air Force or had been suspended or debarred with certainty. We 

expected that the proportion of contractors that were reviewed for 

suspension and debarment as a result of a termination for default will be 

100 percent for the first group and 0 percent for the other two groups. We 

calculated the sample size in group 3 so that the 95 percent confidence 

interval would not exceed 10 percent if none of the selected contractors 

had been reviewed for suspension and debarment as a result of a 

termination for default. In addition, the sample size in the third group 

would allow for overall estimates (all three groups combined) with a 
Appendix I: Scope and Methodology

Page 24 GAO-12-932 Suspension and Debarment

margin of error less than plus or minus 10 percentage points, if the 

expected results are close to the observed results of the sample. Since a 

selected contractor may have one or more terminations for default from 

multiple DOD components (Air Force, Army, DON, or DLA), we collected 

information from each component that issued the contractor a termination 

for default.

Table 9: Description of the Random Sample of Contractors With Three or More 

Terminations for Default Issued by the Air Force, Army, Navy, or DLA, Fiscal Years 

2006 through 2011

Strata description

Population 

size

Sample 

size

1. Contractors with at least one termination for default 

issued by the Department of the Air Force

28 28

2. Contractors suspended or debarred without a 

Department of Air Force termination

10 10

3. Contractors with terminations for default issued by the 

Departments of the Army, and the Navy, and the Defense 

Logistics Agency that did not have a termination of default 

issued by the Department of the Air Force

88 30

Total 126 68

Source: GAO analysis of Federal Procurement Data System—Next Generation data.

a

a

Total sample size is 62, due to miscoding, omission, and no information. 

We also analyzed the four components administrative agreements, as 

well as their compelling reason determinations that allow agencies to 

award a contract to a suspended or debarred contractor for the period of 

fiscal years 2009 through 2011.

We also reviewed the following regulations and guidance:

• FAR Subpart 9.4—Debarment, Suspension, and Ineligibility.

• Department of Defense Federal Acquisition Regulation Supplement 

Subpart 209.4—Debarment, Suspension, and Ineligibility.

• Army Federal Acquisition Regulation Supplement Subpart 5109.4—

Debarment, Suspension, and Ineligibility.

• Air Force Federal Acquisition Regulation Supplement Subpart 

5309.4—Debarment, Suspension, and Ineligibility.

• Defense Logistics Acquisition Directive Subpart 9.4—Debarment, 

Suspension, and Ineligibility.

• Navy Marine Corps Acquisition Regulation Supplement Subpart 

5209.4—Debarment, Suspension, and Ineligibility.
Appendix I: Scope and Methodology

Page 25 GAO-12-932 Suspension and Debarment

• Air Force Instruction 51-1101 addresses overall responsibility for 

managing the Air Force Procurement Fraud Remedies Program.

• Army Regulation 27-40 Chapter 8 addresses remedies in 

procurement fraud and corruption. The policies, procedures, and 

responsibilities for reporting and resolving allegations of procurement 

fraud or irregularities within the Army. It implements DOD Directive 

7050.5.

• Secretary of the Navy Instruction 5430.92B is the DON policy, to set 

forth responsibilities of DON officials, personnel and the Acquisition 

Integrity Office including management, direction and coordination of 

responsibilities of auditing, inspection, and investigative components.

• DLA’s Business Integrity Program Handbook provides guidance and 

reference material for DLA’s Office of General Counsel attorneys in 

ensuring that DLA deals only with responsible contractors. This 

handbook also provides Primary Level Field Activities with advice in 

ensuring overall business integrity within the procurement process, 

both inside and outside government.

• DOD Report to Congress on Contracting Fraud, October 2011.

• Department of Defense Inspector General report issued July 14, 

2011, titled “Additional Actions Can Further Improve the DOD 

Suspension and Debarment Process.” 

We conducted this performance audit from September 2011 to 

September 2012 in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We 

believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objectives.
Appendix II: DOD Components’ Suspension 

and Debarment Programs and Staff

Page 26 GAO-12-932 Suspension and Debarment

Source: Department of Defense component data.

a

Appendix II: DOD Components’ Suspension 

and Debarment Programs and Staff

Within the DON, all the acquisition fraud attorneys are centralized within the Acquisition Integrity 

Office, whereas the other components have fraud attorneys located in the field working with 

investigators. 

DOD component Description Staff 

Department of the 

Air Force 

The Air Force’s suspension and debarment program is co-located with the Department’s 

Procurement Fraud Remedies program in the office of the Deputy General Counsel. All 

attorneys are cross-trained in suspension, debarment, procurement fraud remedies, and 

ethics. One full-time lawyer focuses primarily on suspensions and debarments and one 

focuses primarily on coordinating all procurement fraud remedies (criminal, civil, 

administrative, and contractual). The office is run by a full-time suspension and 

debarment official (SDO).

Full-time: 2 attorneys.

3 staff support 

(interns, 1 dualhatted as paralegal)

Department of the 

Army 

The Army’s suspension and debarment program is located in the Procurement Fraud 

Branch, which falls within the U.S. Army Legal Services Agency and is part of the Army’s 

fraud prevention/contracting integrity program. There are three SDOs in the Army, one 

for Army-wide cases based in Arlington, Virginia and 2 for overseas installations (Korea 

and Germany). Staff responsibilities include processing referrals from DOD and Army 

offices of Inspector General, the Army’s field activity offices, Justice, and law 

enforcement organizations, as well as assisting in coordination of remedies with Justice 

and coordinating lead agency determinations with other federal agencies. 

Full-time: 5 attorneys,

1 paralegal

Defense Logistics 

Agency (DLA)

DLA’s suspension and debarment program is administered by DLA’s Office of General 

Counsel. This activity is part of the agency’s larger business integrity program. 

Suspension and debarment staff responsibilities include processing referrals from the 

agency’s primary field activity offices, working with law enforcement, Assistant United 

States Attorneys, and Justice, and coordinating lead agency determinations with other 

federal agencies. 

Full-time: 3 attorneys

Part-time: 1 paralegal

Department of the 

Navy (DON) 

The DON’s suspension and debarment program is part of the Acquisition Integrity Office 

within the Office of General Counsel. This office carries out the DON’s suspension and 

debarment activities as part of a larger fraud prevention program. The staff from this 

office is responsible to develop and process suspension and debarment cases, working 

with Justice regarding qui tams and criminal actions, ensuring coordination of all potential 

procurement fraud remedies (criminal, civil, administrative, and contractual), and 

providing annual training on procurement fraud issues.

Full-time: 14 

attorneys,

3 staff support

a
Appendix III: Comments from the Department 

of Defense

Page 27 GAO-12-932 Suspension and Debarment

Appendix III: Comments from the 

Department of Defense
Appendix III: Comments from the Department 

of Defense

Page 28 GAO-12-932 Suspension and Debarment

Now on p. 18.
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 29 GAO-12-932 Suspension and Debarment

William T. Woods, (202) 512-4841 or woodsw@gao.gov

In addition to the contact named above, John Neumann, Assistant 

Director; James Ashley; Patrick Breiding; Richard Brown; Russ Reiter; 

Roxanna Sun; Robert Swierczek; Keo Vongvanith; and Alyssa Weir made 

key contributions to this report.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(121018)
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