SUSPENSION AND 

DEBARMENT

Characteristics of Active 

Agency Programs and 

Governmentwide Oversight 

Efforts

Statement of John Neumann, Acting Director

Acquisition and Sourcing Management

Testimony 

Before the Committee on Oversight and 

Government Reform, House of 

Representatives

For Release on Delivery 

Expected at 9:30 a.m. EDT

Wednesday, June 12, 2013

GAO-13-707T

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-707T, a testimony 

before the Committee on Oversight and 

Government Reform, House of 

Representatives 

June 12, 2013 

SUSPENSION AND DEBARMENT

Characteristics of Active Agency Programs and 

Governmentwide Oversight Efforts

Why GAO Did This Study

Spending on contracted goods and 

services was more than $517 billion 

in 2012. To protect the government’s 

interests, federal agencies are 

required to award contracts only to 

responsible sources. One way to 

protect the government’s interest 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. A suspension is a 

temporary disqualification from 

government contracting, while a 

debarment is an exclusion for a 

specified period.

This testimony is based on reports 

GAO issued in August 2011 and 

September 2012 and addresses (1) 

characteristics of suspension and 

debarment programs at selected 

agencies and (2) governmentwide

efforts to oversee and coordinate the 

use of suspensions and debarments.

In 2011, GAO assessed suspension 

and debarment programs at 10 

agencies from among those having 

more than $1 billion in contract 

obligations in fiscal year 2009. In 

2012, GAO reviewed the extent to 

which DOD had processes for 

identifying and referring cases of 

contractor misconduct for possible 

suspension and debarment. 

GAO is not making any new 

recommendations, but made several 

recommendations in prior reports on 

this topic. Agencies agreed with 

those recommendations and several 

have taken steps to implement them.

What GAO Found

While each agency’s suspension and debarment program that GAO reviewed in 

2011 was unique, agencies with the most suspension and debarment activity 

shared certain characteristics. These included a dedicated suspension and 

debarment program and staff, detailed policies and procedures, and practices 

that encouraged an active referral process.

• Dedicated suspension and debarment program and staff

•

. Each of the 

four agencies with the most suspension and debarment activity had a

dedicated suspension and debarment program and staff, which 

according to agency officials, cannot be accomplished without the 

specific focus and commitment of an agency’s senior officials.

Detailed policies and procedures

•

. The four most active agencies also 

developed agency-specific guidance that goes well beyond the 

suspension and debarment guidance in the Federal Acquisition 

Regulation (FAR). For example, these agencies had guidance that 

included details on conducting investigatory research, coordinating with 

other organizations, and evaluating contractor misconduct. 

Practices that encourage an active referral process

GAO also consistently found these characteristics among the four Department of 

Defense (DOD) components that it examined in 2012. In contrast, agencies that 

GAO reviewed in 2011 that did not have these characteristics generally had few 

or no suspensions or debarments of federal contractors. GAO recommended that 

these agencies take steps to improve their suspension and debarment programs 

ensuring that they incorporate the characteristics identified as common among 

agencies with more active programs. Several agencies have taken actions to 

implement these recommendations.

. In addition, each of 

the four agencies engaged in practices that encourage an active referral 

process. For example, the General Services Administration (GSA) Office 

of Inspector General looked for and referred cases based on 

investigations and legal proceedings.

GAO also reported in 2011 that governmentwide efforts to oversee and 

coordinate the use of suspensions and debarments faced challenges.

Specifically, the Interagency Suspension and Debarment Committee (ISDC) 

relied on voluntary participation and not all agencies coordinated through the 

committee. To better coordinate and oversee suspensions and debarments, 

GAO recommended that the Office of Management and Budget’s (OMB) Office of 

Federal Procurement Policy (OFPP) 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. In response, OMB

directed the agencies to appoint a senior official responsible for the agency's 

suspension and debarment program and directed that this official ensure that the 

agency participates regularly on the ISDC. In its September 2012 annual report, 

ISDC noted improvements by most agencies to promote more active and 

View GAO effective suspension and debarment programs. -13-707T. For more information, 

contact John Neumann at (202) 512-4841 or 

neumannj@gao.gov. 
Page 1 GAO-13-707T

441 G St. N.W.

Washington, DC 20548

Chairman Issa, Ranking Member Cummings, and Members of the 

Committee:

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

suspensions and debarments. Spending on contracted goods and 

services was more than $517 billion in 2012. To protect the government’s 

interests, federal agencies are required to award contracts only to 

responsible sources—those that are determined to have a satisfactory 

record of integrity and business ethics, and are capable of performing 

required work. One way to protect the government’s interest 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.

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. There are various tools 

that protect the government’s interests, including civil and criminal 

penalties that may be imposed for contracting fraud and other violations. 

Suspensions and debarments are not a punishment, but instead are to 

ensure that agencies only award contracts to responsible contractors. 

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.

My testimony today is based on reports we issued in August 2011 and 

September 2012 and addresses (1) characteristics of suspension and 

debarment programs at selected agencies and (2) governmentwide 

efforts to oversee and coordinate the use of suspensions and 

debarments.

 
 

Page 2 GAO-13-707T

In 2011, we assessed suspension and debarment programs at 10 

agencies from among those having more than $1 billion in contract 

obligations in fiscal year 2009.1

• Defense Logistics Agency (DLA);

These agencies included:

• Department of Commerce (Commerce);

• Department of Health and Human Services (HHS);

• Department of Homeland Security’s (DHS) U.S. Immigration and 

 Customs Enforcement (ICE) and Federal Emergency Management 

 Agency (FEMA);

• Department of Justice (Justice);

• Department of the Navy (Navy);

• Department of State (State);

• Department of the Treasury (Treasury); and

• General Services Administration (GSA). 

In 2012, we reviewed the extent to which the Department of Defense 

(DOD) had processes for identifying and referring cases of contractor 

misconduct for possible suspension and debarment at the Departments of 

the Air Force, Army, and Navy, and DLA.2 The reports that this statement 

is based on include detailed information about our scope and 

methodology. Our work was performed in accordance with generally 

accepted government auditing standards.

 

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).

2 GAO, Suspension and Debarment: DOD Has Active Referral Processes, but Action 

Needed to Promote Transparency, GAO-12-932 (Washington, D.C.: Sept. 19, 2012).
 

Page 3 GAO-13-707T

While each agency suspension and debarment program we reviewed in 

2011 was unique, the four with the most suspension and debarment 

activity—DLA, Navy, GSA, and ICE—shared certain characteristics. 

These include:

• a dedicated suspension and debarment program and staff,

• detailed policies and procedures, and

• practices that encourage an active referral process.

Officials from these four agencies stated that having dedicated staff 

cannot be accomplished without the specific focus and commitment of an

agency’s senior officials. The existence of dedicated staff was evident at 

selected agencies in our 2011 governmentwide review. For example GSA 

had dedicated staff to refer suspension and debarment cases and 

coordinate with internal offices. In our review of DOD in 2012, each of the 

four DOD components we reviewed also had dedicated staff, including 

attorneys and support staff, to monitor and ensure the coordination of 

remedies for each significant investigation of contracting fraud.

Each of the four agencies with the most suspension and debarment activity 

in our 2011 review also developed agency-specific guidance that goes well 

beyond the suspension and debarment guidance in the FAR. For example, 

ICE’s suspension and debarment program procedures included detailed 

guidance on conducting online database research, coordinating with other 

DHS components, preparing for legal review, and tracking cases in their 

database. DOD components we reviewed in 2012 also had guidance on the 

process for evaluating contractor misconduct. 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.

The FAR directs agencies to refer 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. For example, in 2011 we noted that GSA’s Office of Inspector 

General looked for and referred cases based on investigations and legal 

Agencies with Greater 

Suspension and 

Debarment Activity 

Share Common 

Characteristics 

Missing at Agencies 

with Less Activity

Dedicated suspension and 

debarment program and 

staff. 

Detailed policies and 

procedures. 

Practices that encourage 

an active referral process. 
 

Page 4 GAO-13-707T

proceedings. Also, ICE uses a case management system that allowed for 

tracking and followup on all referrals for consideration of suspension and 

debarment. This was also evident in 2012, when we found that all four 

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

had active processes to refer identified cases of contractor misconduct for 

appropriate action. Specifically, they used multiple sources to identify 

numerous cases of actual or alleged contractor misconduct and followed 

their procedures to refer them for appropriate action, including possible 

suspension and debarment. 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 reviewed in 2011—HHS, FEMA, 

Commerce, Justice, State, and Treasury—did not have these three 

characteristics and had few or no suspensions or debarments of federal 

contractors. 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 encouraged an active 

referral process. We recommended that these agencies take steps to 

improve their suspension and debarment programs ensuring that they 

incorporate the common characteristics we identified among agencies 

with more active programs, including assigning dedicated staff resources, 

developing detailed implementing guidance, and promoting the use of a 

case referral process. Most of these agencies have taken actions to 

implement these recommendations. For example:

• HHS created the Office of Recipient Integrity Coordination that reports 

to the Suspension and Debarment Official and dedicated three full-time 

staff positions to this office. HHS has also developed detailed policies 

and procedures. To promote case referrals, the revised policies and 

practices will be reinforced through communication and training.

• DHS recently completed the transition to a department-wide 

suspension and debarment policy and program and designated a 

suspension and debarment official to establish, maintain, supervise, 

and exercise oversight of the suspension and debarment program.

• At Justice, the Senior Procurement Executive in a memorandum to its 

Procurement Chiefs emphasized suspension and debarment as a 

powerful administrative tool and summarized the law and the 
 

Page 5 GAO-13-707T

department’s procedures that govern suspensions and debarments. In 

addition, the department aligned all of its suspension and debarment 

activities under one division.

• State issued detailed policies and procedures for suspending or 

debarring contractors in its Debarment and Suspension Program 

Handbook. This handbook also describes the department’s process 

for referring contractor misconduct or poor performance for 

consideration by the suspension and debarment official.

The Interagency Suspension and Debarment Committee (ISDC), 

established in 1986, monitors and coordinates the governmentwide 

system of suspension and debarment. The committee consists of 

representatives from agencies designated by the Director of the Office of 

Management and Budget (OMB).3

Since our 2011 report, the ISDC has taken actions to improve 

coordination and emphasize suspension and debarment 

governmentwide. For example, the ISDC has acted as a clearinghouse to 

provide training expertise; provided agencies with a sample practice 

manual and action documents, fact-finding procedures, and a case law 

compendium; and established a standing subcommittee dedicated to 

training. In addition, the ISDC established a subcommittee to review 

opportunities to improve practices and processes for coordinating 

suspension and debarment actions among agencies. In its September 

2012 annual report, the ISDC noted improvements by most agencies to 

promote more active and effective suspension and debarment programs. 

ISDC provides support to help 

agencies implement their suspension and debarment programs and 

serves as a forum for agencies to coordinate suspension and debarment 

actions. In 2011, we found that governmentwide efforts to oversee and 

coordinate suspensions and debarments faced a number of challenges. 

For example, according to ISDC officials, ISDC relied on voluntary 

agency participation in its informal coordination process, which worked 

well when used. However, we found that not all agencies coordinated 

through ISDC, and agencies without active suspension and debarment 

programs generally were not represented at monthly coordination 

meetings.

 

3 Standing members include each of the 24 agencies covered by the Chief Financial 

Officers Act. Nine independent agencies and government corporations also participate. 

Governmentwide 

Efforts to Coordinate 

and Oversee 

Suspensions and 

Debarments 
 

Page 6 GAO-13-707T

These included formally establishing suspension and debarment 

programs, dedicating staff resources, and simplifying processes for 

making referrals.

In 2011, we also noted that the suspension and debarment process could 

be improved governmentwide by building upon the existing framework to 

better coordinate and oversee suspensions and debarments. We 

recommended that the OMB’s Office of Federal Procurement Policy 

(OFPP) 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. In response, in November 

2011, the OMB directed the departments and agencies that are subject to 

the Chief Financial Officers Act to appoint a senior official who shall be 

responsible for, among other things, assessing the agency’s suspension 

and debarment program, including the adequacy of available training and 

resources. OMB also directed that this official ensure that the agency 

participates regularly on the ISDC.

Chairman Issa, Ranking Member Cummings, 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.

For questions about this statement, please contact John Neumann at 

(202) 512-4841 or NeumannJ@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 Russ Reiter, Bradley Terry, and Mary Quinlan.

Contacts and 

Acknowledgments 

(121157)
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