Suspension and Debarment: Some Agency Programs Need Greater Attention, and Governmentwide Oversight Could Be Improved
Published: 2011-08-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The federal government spent more than $535 billion on contracted goods and services in fiscal year 2010. One tool for ensuring that agencies are only awarding contracts to responsible sources is the use of suspensions and debarments--actions taken by agencies to exclude firms or individuals from receiving federal contracts or assistance based on various types of misconduct. This report analyzed (1) the nature and extent of governmentwide exclusions reported in the Excluded Parties List System (EPLS) maintained by the General Services Administration; (2) the relationship, if any, between practices at various 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. GAO reviewed EPLS data and suspension and debarment programs at 10 federal agencies, including those with relatively more suspensions and debarments and those with few or none to identify differences between the two groups.
section_title: What GAO Found
paragraphs: Suspensions and debarments made up about 16 percent of exclusions in EPLS for fiscal years 2006 through 2010. These are discretionary exclusions taken by agencies based on causes specified in regulations for acquisitions or grants and assistance, including fraud, bribery, or a history of failure to perform on government contracts. The remaining 84 percent were exclusions based on violations of statutes or other regulations, including health care fraud or illegal exports. In these cases, agencies are generally required to exclude the party from participating in specified government transactions or activities. More than half of the governmentwide suspensions and debarments were based on acquisition regulations. Several agencies did not report any such cases. The four agencies GAO reviewed with the most suspensions and debarments based on acquisition regulations shared certain characteristics that were not present at agencies with relatively few or no such cases. These agencies had staff dedicated to the suspension and debarment program, detailed implementing guidance, and practices that encourage an active referral process. The six agencies without such characteristics had virtually no suspensions or debarments, regardless of the dollar level of their contract obligations. For example, the Department of Health and Human Services, the civilian agency among those GAO reviewed with the highest amount of contract obligations, had no suspensions and debarments based on acquisition regulations. U.S. Immigration and Customs Enforcement had considerably less in contract obligations, but was one of the top four agencies of those GAO reviewed. The interagency committee responsible for governmentwide oversight and coordination of suspensions and debarments faces challenges as it relies on voluntary agency participation and only the limited resources of member agencies to fulfill its mission. For example, the committee took almost 2 years to submit a required annual report to Congress on agencies' suspension and debarment activities because agencies had been slow in providing needed information and it had limited resources to devote to the report.
section_title: What GAO Recommends
paragraphs: GAO recommends that the six agencies it examined that did not have the characteristics associated with active suspension and debarment programs incorporate those characteristics, and that the Office of Management and Budget (OMB) improve its governmentwide efforts and enhance governmentwide oversight. Five of the six agencies and OMB generally concurred with the recommendations. The Department of Justice believes its existing guidelines are sufficient, but GAO does not agree.

section_title: Letter
paragraphs: Federal government spending on contracted goods and services was  more than $535 billion in 2010. 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 protect the  government’s interests is through 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 exclusion pending the completion of an investigation or legal  proceeding, while a debarment is for a fixed term that depends on the  seriousness of the cause, but generally should not exceed 3 years. These  exclusions are reported in the Excluded Parties List System (EPLS),  maintained by the General Services Administration (GSA), along with  violations of certain statutes and regulations, such as health care fraud.
Given your interest in ensuring that the government only does business  with responsible contractors, we analyzed (1) the nature and extent of  governmentwide exclusions reported in EPLS; (2) the relationship, if any,  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. Based on  discussions with your staff, we particularly focused on agency practices  for suspensions and debarments under federal acquisition regulations.
To determine the nature and extent of governmentwide suspensions and  debarments, we analyzed data for fiscal years 2006 through 2010 from  EPLS. We analyzed the various codes used by agencies entering data  into EPLS that specify the cause of the action and the effect of the listing  to identify (1) suspension and debarment actions taken under the Federal  Acquisition Regulation (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. A case may include separate actions for an  individual, a business, and each affiliate, and it may entail dedication of  resources and the potential for separate representation by a party’s  counsel and separate resolution. Analysis of agency activity included all  agencies. 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. To  identify agency practices for suspension and debarment taken under the  FAR, we 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. To identify governmentwide efforts to oversee and  coordinate the suspension and debarment system, we met with officials  from the Office of Management and Budget (OMB), which through its  Office of Federal Procurement Policy 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.
We conducted this performance audit from September 2010 to August  2011 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.
subsections: section_title: Background
paragraphs: Suspensions and debarments are tools that may be used at the discretion  of agencies to protect the government’s interest. The 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. The FAR specifies numerous causes for suspensions and  debarments, including fraud, theft, bribery, tax evasion, or lack of  business integrity. (See app. II for a list of potential causes listed in the  FAR.) The existence of one of these causes does not necessarily require  that the party be suspended or debarred; agencies are directed to  consider the seriousness of the act and any remedial measures or  mitigating factors. Agencies are to establish procedures for prompt  reporting, investigation, and referral to the agency suspension and  debarment official. A suspension or debarment action may also include  related business entities or individuals associated with the business.  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.
The NCR provides a suspension and debarment process, which is  parallel to the suspension and debarment process specified by the FAR,  for nonprocurement transactions, such as grants or other assistance.  The FAR and NCR provide for reciprocity—that is, a suspension or  debarment under either the FAR or the NCR is recognized under the  other, and a party precluded from participating in federal contracts is also  excluded from receiving grants, loans, and other assistance and vice  versa. Suspensions and debarments apply governmentwide—one  agency’s action precludes all executive agencies from doing business  with the excluded party.
Additionally, violations of certain statutes and regulations other than the  FAR and NCR also exclude a party from specified government  transactions. The prohibited behavior could involve, for example,  fraudulently receiving payments under federal health care programs or  violating export control regulations. These statute- and regulation-based  exclusions are often mandatory, while those taken under the FAR and  NCR are discretionary. Although the violations that led to the exclusions  may be unrelated to federal contracts, grants or assistance, they may  result in sanctions that exclude the party from some or all procurement or  federal financial and nonfinancial assistance and benefits as set out in the  statute or regulation.
OMB provides overall direction of governmentwide procurement policies,  including those on suspensions and debarments under the FAR, and has  the authority to issue guidelines for nonprocurement suspensions and  debarments. ISDC, established in 1986, monitors the governmentwide  system of suspension and debarment. The committee consists of  representatives from agencies designated by the Director of OMB. ISDC  provides support to help agencies implement their suspension and  debarment programs. It serves as a forum for agencies to share ideas  and assists in coordinating suspension and debarment actions among  agencies.
To facilitate the identification of parties that have been suspended or  debarred and are excluded from receiving federal contracts, certain  subcontracts, and certain federal financial and nonfinancial assistance  and benefits, GSA operates the web-based EPLS. The FAR requires  agencies to enter information about a firm or individual that has been  suspended, proposed for debarment, or debarred by the agency,  including the party’s name and address, the cause for the action, the  effect of the action, and the end date of the debarment action. Other  exclusions are also entered into EPLS, generally by the agency with  designated enforcement authority. Contracting officers are responsible  for checking EPLS to ensure that they do not award contracts to these  firms or individuals.
In 2005, we reported that federal agencies may not be consistently  identifying suspended or debarred contractors when awarding new  contracts. In 2009, we found that some contractors nevertheless  received federal funds during their period of ineligibility. We made  recommendations for improving EPLS to enhance agencies’ confidence  that they can readily identify these contractors, which GSA subsequently  addressed by making system modifications. More recently, several  agencies’ offices of inspector general (OIG) have reported on challenges  in their agencies’ suspension and debarment programs and made  recommendations to improve the programs, including developing  procedures for documenting decisions and metrics for timely processing  of suspension and debarment referrals. The Department of Defense  (DOD) OIG recently reported that the services and DLA had an effective  suspension and debarment process, but recommended that DOD develop  a working group to review and improve the process for referring poorly  performing contractors for potential suspensions or debarments, develop  a training program to inform contracting personnel of the suspension and  debarment program and the process for referring poorly performing  contractors, and conduct training for contracting personnel on checking  the EPLS before awarding contracts.
section_title: Suspension and Debarment Cases Make Up a Small Percentage of All Exclusions in the Govermentwide Database
paragraphs: The governmentwide database on excluded parties includes suspension  or debarment actions taken under the FAR or regulations pertaining to  federal grants and other financial assistance, as well as exclusions  related to other laws and regulations. Over the past 5 fiscal years, about  16 percent of cases included in EPLS were suspensions or debarments,  while the remaining 84 percent of cases were other exclusions based on  violations of laws and regulations resulting from certain prohibited  conduct. (See fig. 1.) DOD accounted for most of the suspension and  debarment cases. Slightly more than half of the governmentwide  suspension and debarment cases involved actions taken under the FAR.  Several civilian departments and agencies had few or no such cases.
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.
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. As shown in table 1, HHS, Justice,  and Treasury recorded the most other exclusion type cases. These cases  were related to health care fraud, drug abuse, and drug-trafficking  violations.
As shown in table 2, the number of suspension and debarment cases  related to federal procurement varied widely among departments or  agencies over the last 5 fiscal years. DOD accounted for about two-thirds  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.
section_title: Agencies with Most Suspension and Debarment Cases Share Common Characteristics Missing at Agencies with Few Cases
paragraphs: Of the agencies we studied, those with the most procurement-related  suspension and debarment cases share common characteristics.  Agencies with few or no such suspensions or debarments for the same  period do not have these characteristics regardless of the agency’s  volume of contracting activity. Officials at most of these agencies  acknowledged that suspension and debarment is an underutilized tool at  their agencies.
subsections: section_title: Agencies with More Active Suspension and Debarment Programs Share Common Characteristics
paragraphs: 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.
One of the shared traits we identified among the four most active  agencies is a dedicated suspension and debarment program with full-time  staff (see table 3). 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.
Other reviews of agency suspension and debarment programs also have  recognized the importance of having dedicated suspension and  debarment staff. For example, responding to a February 2010 OIG  report, DHS reviewed its suspension and debarment practices and  concluded in October 2010 that it needed to establish and fully resource  the suspension and debarment function throughout the department.  Additionally, in October 2009, the U.S. Agency for International  Development’s Inspector General recommended that the agency consider  forming a dedicated division for suspension and debarment. In  response, the agency created and staffed the Compliance and Oversight  of Partner Performance Division, which is dedicated to business integrity  issues, including suspension and debarment. Furthermore, ISDC officials  stated that without dedicated staff, none of the other essential functions of  an agency suspension and debarment program can be carried out.  During a recent hearing of the Commission on Wartime Contracting in  Iraq and Afghanistan, it was noted by the Administrator for Federal  Procurement Policy that management and resources devoted to  suspension and debarment are inconsistent across agencies and more  could be done to protect the government and taxpayers from bad  contractors.
The agencies we reviewed with active suspension and debarment  programs each had detailed policies and procedures that supplement  FAR requirements. This generally included guidance on things such as  referrals, investigations, and legal review. Table 4 shows how each of the  top four agencies has developed agency-specific guidance that goes well  beyond the suspension and debarment guidance in the FAR.
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. For example, in  August 2010, the Department of Agriculture’s Inspector General reported  that developing suspension and debarment policies and procedures is  important to ensuring that regulations are consistently applied throughout  an agency.
Finally, each of the four agencies we studied with the most active  suspension and debarment programs engage in practices that encourage  an active referral process. 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. According to agency officials at these four  agencies, 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 (see table  5).
Government officials made similar observations about what actions  agencies need to take to improve how they use suspension and  debarment. For example, in February 2011, the Administrator for Federal  Procurement Policy within OMB outlined progress among federal  agencies’ suspension and debarment programs and highlighted those  same characteristics we identified at the agencies we studied with the  most suspension and debarment activity. The Administrator  acknowledged that there is much room for improvement among agency  suspension and debarment programs and noted that more agencies are  establishing formal suspension and debarment programs, dedicating  greater staff resources to handling referrals and managing cases,  strengthening policies, providing training, and taking action to root out  illegal behavior and irresponsible actors. In addition, the DHS Inspector  General, a member of the National Procurement Fraud Task Force,  testified before Congress that the task force formed a Suspension and  Debarment Committee, which concluded that several elements were  necessary for an effective suspension and debarment program. Similar to  our observations, he noted the need for a dedicated person or group  responsible for identifying potential suspension and debarment cases and  effective coordination with the agency’s OIG. He also noted the need for  protocols that identify the officials responsible for compiling suspension  and debarment referral packages, as well as for legal support to pursue  suspension or debarment actions against contractors.
section_title: Agencies with Few or No Procurement-Related Suspension and Debarment Cases Lacked the Traits Common among Agencies with More Active Programs
paragraphs: 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.
In addition, an agency’s level of suspension and debarment activity was  not necessarily related to its contracting volume. For example, FEMA and  ICE, two components of DHS with separate suspension and debarment  programs, had similar percentages of federal contract obligations for  fiscal years 2006 through 2010—0.5 percent and 0.4 percent,  respectively. ICE, however, represented 4.3 percent of the procurement- related suspension and debarment cases across the government, while  FEMA had no suspensions or debarments. ICE practices included the  three program attributes that we identified at the agencies with the most  suspension and debarment cases. (See fig. 2.) FEMA had none of them.
Officials at the agencies we reviewed that have few or no procurement- related suspensions or debarments, acknowledged that their agencies  need to place greater emphasis on suspension and debarment as a tool  to ensure that the government only does business with responsible  contractors. Some of these agencies have already begun efforts to  develop more robust suspension and debarment programs. These  ongoing efforts include the following:    An HHS OIG official told us that since more than 80 percent of HHS’s  appropriations are for Medicare and Medicaid programs, their  emphasis and budget have been largely directed toward monitoring  those programs, including the Exclusions Program, which was  designed to combat health care fraud. The HHS suspension and  debarment official added that HHS now sees suspension and  debarment as an underutilized management tool, and the agency has  made a commitment to having a more active process, which so far  includes training and researching best practices. The official noted that  the tools for suspension and debarment are present and that the  agency needs to emphasize using them.   FEMA officials have noted the need to improve their procurement- related suspension and debarment program, and are working closely  with ICE to adopt some of the characteristics of agencies with more  active programs. At the same time, DHS has named a suspension and  debarment official within the Office of the Under Secretary for  Management, who has been tasked with developing a departmentwide  suspension and debarment policy and program.   Treasury also has efforts under way to improve its procurement- related suspension and debarment program. Treasury officials noted  that the Office of Inspector General is taking steps to promote the use  of suspensions and debarments. According to an OIG official, they are  improving training and education throughout the office by having OIG  attorneys attend suspension and debarment training sponsored by  CIGIE. In addition, investigators are beginning to receive training on  using suspension and debarment with ongoing legal cases or those  cases declined for prosecution by the U.S. Attorney that meet the  criteria for potential debarment.   Commerce officials stated that the Suspension and Debarment Official  is working actively to build a robust suspension and debarment  program. The OIG expects to have a fully functioning suspension and  debarment program by the end of fiscal year 2011. The Office of  Counsel to the Inspector General has proposed to serve as liaison  between the OIG, other investigatory bodies within Commerce, and  the Suspension and Debarment Official. The official is collaborating  with the OIG and the Office of General Counsel to develop an  acceptable process and leverage available resources.
section_title: Governmentwide Efforts to Oversee Suspensions and Debarments Face Challenges
paragraphs: Governmentwide efforts to oversee and coordinate suspensions and  debarments have faced a number of challenges. OMB assigned  responsibility for governmentwide coordination to ISDC; however, ISDC  relies on agencies’ voluntary participation in its processes and member  agencies’ limited resources to fulfill its mission. Other efforts are under  way to coordinate suspension and debarment activity across government,  including the CIGIE Suspension and Debarment Working Group’s efforts  to raise awareness by promoting the use of suspension and debarment  and GSA’s ongoing efforts to simplify and improve EPLS.
subsections: section_title: Interagency Committee Relies on Voluntary Agency Participation and Limited Agency Resources to Oversee Suspension and Debarment Programs
paragraphs: OMB, starting in 1986, assigned responsibility for governmentwide  suspension and debarment oversight and coordination to ISDC. More  recently, the Duncan Hunter National Defense Authorization Act for Fiscal  Year 2009 strengthened the committee’s role by specifying functions  ISDC was to perform, including  resolve lead agency responsibility and coordinate actions among  interested agencies with respect to suspension or debarment  proceedings, report to Congress annually on agency suspension and debarment  activities and accomplishments as well as agency participation in the  committee’s work, recommend to OMB committee-approved changes to the government  suspension and debarment system and its rules, and   encourage and assist agencies in cooperating to achieve operational  efficiencies in the governmentwide suspension and debarment  system.
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. Officials from  ISDC cited as an example the Small Business Administration’s recent  suspension of a major federal contractor. Because the agency did not go  through the ISDC coordination process, other agencies were surprised by  the suspension and did not have an opportunity to offer their perspectives  on this action. ISDC has to rely on the individual agencies involved in a  potential suspension or debarment to resolve any coordination issues.
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  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. The report identifies several agencies that  made progress in establishing formal suspension and debarment  programs. It does not make any recommendations to improve the  suspension and debarment system. However, the report describes a  survey ISDC conducted of its members to create a baseline against which  to measure agency progress—looking at internal agency controls, training  efforts, and use of tools in addition to suspensions and debarments, such  as show cause notices, administrative agreements, and voluntary  exclusions. Although ISDC did not make recommendations in its report,  its Acting Chair indicated that the committee is currently assisting  agencies in improving suspension and debarment programs through the  sharing of experience, operating policies, practices and procedures, and  “example action documents” developed and used by active programs.  OMB officials acknowledged that while they are seeing progress in the  attention devoted by agencies to suspensions and debarments, agencies  would benefit from guidance on how to establish such programs and how  to work effectively with ISDC.
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.
section_title: Other Efforts Are Under Way to Improve Suspension and Debarment Coordination
paragraphs: 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. This group includes representatives from the  Recovery Accountability and Transparency Board and the OIGs for nine  federal agencies. The CIGIE working group is taking steps to raise  awareness, including sponsoring training and advising the inspector  general community about other training opportunities. In October 2010,  the working group held an all-day suspension and debarment workshop  that generated great interest, with over 300 people attending.  Subsequently, the working group notified the suspension and debarment  community of the 3-day National Suspension and Debarment Training  Program hosted by the Federal Law Enforcement Training Center.  Working group representatives stated that the demand for the workshop  made clear that more training and outreach needs to be done, and the  working group is trying to determine ways to meet the need. In addition,  the working group informally surveyed the entire inspector general  community about suspension and debarment efforts to identify good  practices and is in the process of analyzing the responses.
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.  GSA included EPLS as part of an ongoing Integrated Acquisition  Environment initiative to consolidate various acquisition-related systems  under a single system for award management. As part of this effort, GSA  officials reviewed the configuration and function of EPLS and concluded  that the cause and treatment code structure represented a major area of  potential improvement primarily because there were too many codes— some of which were duplicative or specific to one agency—and the  consequences of a listing is sometimes unclear. As a result, agency  officials could be confused when accessing EPLS to readily determine the  extent of exclusion. 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.
section_title: Conclusions
paragraphs: 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. The attention dedicated to these tools  varies across the agencies we reviewed. 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,  which provides overall direction of governmentwide procurement policies,  agencies would benefit from guidance on how to establish active  suspension and debarment programs and how to work more effectively  with ISDC.
section_title: Recommendations for Executive Action
paragraphs: We recommend that the Attorney General and the Secretaries of  Commerce, Health and Human Services, State, and the Treasury take  steps to improve their suspension and debarment programs by    assigning dedicated staff resources,    developing detailed implementing guidance, and    promoting the use of a case referral process.
We also recommend that the Secretary of Homeland Security, as part of  ongoing efforts to establish a departmentwide program for suspensions  and debarments, take steps to ensure that FEMA incorporates the  characteristics we identified as common among agencies with more  active programs.
In addition, to improve suspension and debarment programs at all  agencies and enhance governmentwide oversight, we recommend that  the Administrator of the Office of Federal Procurement Policy issue  governmentwide guidance that (1) describes the elements of an active  suspension and debarment program, and (2) emphasizes the importance  of cooperating with ISDC in terms of    helping to resolve lead agency issues,    providing required reporting information in a timely manner, and    designating existing resources as needed to enable the committee  to function effectively.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to Commerce, DHS, DOD, GSA, HHS,  Justice, OMB, State, and Treasury. In written comments, DHS, State, and  Treasury concurred with the report’s recommendations, while Commerce,  HHS, and Justice generally concurred. In e-mailed comments from the  agency liaison, OMB concurred with the report’s recommendations. In  addition, DHS, DOD, GSA, and OMB provided technical comments,  which were incorporated as appropriate.
In commenting on the draft report, DHS stated that it is committed to  ensuring that its suspension and debarment program has the same  characteristics as those that we identified as common among agencies  with more active programs. State noted that it recognizes the importance  of maintaining strong suspension and debarment processes, and plans to  publish agency guidance on referring a contractor or grantee for possible  suspension or debarment. Treasury stated that it plans to leverage the  practices identified as in use by other agencies to deploy more detailed  implementing guidance and a better defined case referral process.  Commerce stated that it is already taking action to implement the  recommendations, and HHS stated that it will work with its OIG to develop  detailed implementing guidance, including a case referral process. Justice  noted the need for agencies to devote sufficient attention to suspension  and debarment and plans to have its senior agency officials actively  promote the suspension and debarment case referral process.
Commerce, Justice, and Treasury raised concerns about assigning full- time or additional staff to their suspension and debarment programs. HHS  stated it will utilize existing resources rather than assigning dedicated  staff resources. As we note in our report, agency missions and  organizational structures are unique, so each agency must determine for  itself the extent to which it can benefit from adopting these practices,  including determining the appropriate level of resources. Given the  current budget environment, our recommendation is for agencies to  assign dedicated staff resources, but we leave it to the agencies to  determine if additional full-time or part-time staff are needed, or if existing  resources can be used to carry out suspension and debarment activities.  Nevertheless, our findings show that agencies that do not devote  sufficient attention to this area likely will continue to have few  suspensions and debarments, which may place the government at risk of  doing business with irresponsible contractors. We continue to believe that  agencies need to assign dedicated staff to have effective suspension and  debarment programs.
Justice also stated that its current regulations and guidelines, coupled  with its implementation of the recommendation to actively promote the  referral process, will provide sufficient guidance to referring activities on  the suspension and debarment policies and procedures. The agencies we  reviewed with active suspension and debarment programs, however,  each have detailed policies and procedures that supplement FAR  requirements. These policies and procedures go well beyond the  guidance in the FAR, are agency specific, and generally include guidance  on matters such as referrals, investigations, deadlines, points of contact,  and legal review. Justice’s current guidance does not adequately cover  these matters. We encourage Justice to supplement its existing  regulations with agency-specific guidance that would include information  such as referral requirements, time frames, and points of contacts.
Written comments from Commerce, HHS, DHS, Justice, State, and  Treasury are reprinted in appendixes III through VIII, respectively.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to interested congressional  committees; the Director of the Office of Management and Budget; the  Attorney General; the Secretaries of Commerce, Defense, Health and  Human Services, Homeland Security, State, and the Treasury; and the  Administrator of General Services. The 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 IX.
section_title: Appendix I: Scope and Methodology
paragraphs: To determine the nature and extent of governmentwide suspensions and  debarments, we analyzed data for fiscal years 2006 through 2010 from  the web-based Excluded Parties List System (EPLS) managed by the  General Services Administration. We analyzed the various codes  agencies use to enter exclusions in EPLS that specify the cause of the  action and effect of the listing to identify (1) suspension and debarment  actions against firms or individuals based on the Federal Acquisition  Regulation, (2) suspension and debarment actions based on the  Nonprocurment Common Rule covering grants and other assistance, and  (3) other exclusions. Reporting a case in EPLS can result in numerous  actions. For example, a case may include (1) multiple individuals  associated with an excluded firm, (2) several business units or affiliates of  the firm, and (3) listings under different names of a firm or individual—all  of which are recorded as separate actions in EPLS. In addition, each  listed firm or individual can have multiple related actions, such as a  suspension, proposed debarment, and debarment, which are also listed  as separate actions. To provide information on the level of agency  activity, we aggregated related entities, such as business affiliates and  associated parties, and actions to identify the number of cases. We  counted cases with multiple actions in the fiscal year of the first exclusion  action. We counted cases in which a party was excluded by more than  one agency for the agency first taking the action. We used cases to  provide a common comparison among the agencies. A case may include  separate action for an individual, a business, and each affiliate and may  entail dedication of resources and the potential for separate  representation by a party’s counsel and separate resolution. (See table 6,  which shows the number of actions entered in EPLS and the  corresponding number of cases during the same period.)
We analyzed the activities of all agencies listed in EPLS. We assessed  the reliability of EPLS data by performing electronic testing, reviewing  system documentation, and interviewing knowledgeable officials about  data quality and reliability, and determined that the data were sufficiently  reliable for the purpose of this review.
To determine the relationship, if any, between selected agency practices  and the level of suspension and debarment activity, we identified  agencies with more than $1 billion in contract obligations and their total  number of procurement-related suspension and debarment cases in fiscal  year 2009. These agencies are listed in table 7. We selected a mix of  these agencies, including the Defense Logistics Agency, the Department  of the Navy, the General Services Administration, and the Department of  Homeland Security’s (DHS) U.S. Immigration and Customs  Enforcement—all of which had relatively more cases involving federal  procurement than other agencies—and the Departments of Commerce,  Health and Human Services, Justice, State, and the Treasury, and DHS’s  Federal Emergency Management Agency—all of which had relatively few  or no exclusions involving federal procurements. We selected these  agencies based on the number of suspension and debarment cases and  whether the agency had recently been reviewed by its inspector general.  The Inspectors General for the Departments of Defense and Justice were  reviewing the agency suspension and debarment processes at the time of  our review. We closely coordinated our reviews to minimize any  duplication of effort.
At the 10 selected agencies, we identified certain attributes of the  suspension and debarment process, including the organizational  placement of the suspension and debarment official, staffing and training,  formal or informal process, and the referral process, including triggering  events. We conducted a comparative analysis to identify attributes that  agencies with relatively more cases involving federal procurements have  in common that are not present at agencies with few or no cases. To help  identify attributes associated with a more active suspension and  debarment program, we reviewed agency inspector general reports  identifying needed improvements and met with representatives of the  Council of the Inspectors General on Integrity and Efficiency’s (CIGIE)  Suspension and Debarment Working Group and the Interagency  Suspension and Debarment Committee.
To identify governmentwide efforts to oversee and coordinate the use of  suspension and debarment, we met with officials from the Office of  Management and Budget, which provides overall direction of  governmentwide procurement policies; the Interagency Suspension and  Debarment Committee; CIGIE’s Suspension and Debarment Working  Group; and the General Services Administration, which manages and  maintains the governmentwide EPLS. We also met with or obtained  information from suspension and debarment and inspector general  officials at the 10 selected agencies.
We conducted this performance audit from September 2010 to August  2011 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.
section_title: Appendix II: Causes for Suspension or Debarment
paragraphs: The Federal Acquisition Regulation (FAR) provides numerous potential  causes for debarment, which are based on criminal convictions, civil  judgments, or a preponderance of the evidence, as shown in table 8. The  existence of a cause for debarment does not require that a firm or an  individual be debarred. In determining whether it is in the government’s  interest to debar the firm or an individual, the agency suspension and  debarment official should consider the seriousness of the acts or  omissions, any remedial measures, and mitigating factors. This official  may impose a suspension pending the completion of an investigation or  legal proceeding, when immediate action is necessary to protect the  government’s interest. A suspension may be based on adequate  evidence of most of the causes for debarment listed in table 8.
section_title: Appendix III: Comments from the Department of Commerce
section_title: Appendix IV: Comments from the Department of Health and Human Services
paragraphs: Appendix IV: Comments from the Department  of Health and Human Services  GENERAL COMMENTS OF THE DEPARTMENT OF HEALTH AND HUMAN  SERVICES (HHS) ON THE GOVERNMENT ACCOUNTABILITY OFFICE’S  (GAO) DRAFT REPORT ENTITLED, “SUSPENSION AND DEBARMENT:  SOME AGENCY PROGRAMS NEED GREATER ATTENTION AND  GOVERNMENTWIDE OVERSIGHT COULD BE IMPROVED” (GAO-11-739)
The Department appreciates the opportunity to review and comment on this draft report.
GAO Recommendation We recommend that the Secretary of Health and Human Services take steps to improve  its suspension and debarment programs by:  assigning dedicated staff resources  developing detailed implementing guidance, and  promoting the use of a case referral process  HHS Response The Department has reviewed the findings and recommendations made by GAO.  The  Department’s Office of Grants and Acquisition Policy and Accountability, which is led  by HHS’ Suspending and Debarring Official, will work with HHS’ Office of Inspector  General to develop detailed implementing guidance, including a case referral process. The Department will utilize existing resources to support these and other assigned duties  rather than assigning dedicated staff resources.
section_title: Appendix V: Comments from the Department of Homeland Security
section_title: Appendix VI: Comments from the Department of Justice
section_title: Appendix VII: Comments from the Department of State
paragraphs: Department of State Comments on GAO Draft Report  Some Agency Programs Need Greater Attention, and  Governmentwide Oversight Could Be Improved  (GAO-11-739, GAO Code 120934)
Thank you for the opportunity to comment on your draft report entitled,  Suspension and Debarment: Some Agency Programs Need Greater Attention, and  Governmentwide Oversight Could be Improved.  The Department of State  recognizes the importance of maintaining strong suspension and debarment  processes to maintain the integrity of our supply chain and help keep non- and poor  performers from continuing to receive government contracts and grants.
GAO recommends the Secretary of State take the following steps to improve our  suspension and debarment programs.  We agree with all of these recommendations  and provide the following additional responses:  1.   Assign dedicated staff resources.  We will review current staffing  levels and pursue any needed staffing level changes in light of current  departmental priorities.    2.  Develop detailed implementing guidance.  We will draft guidance that  will provide more detailed information to Contracting Officers and others  regarding the debarment and suspension process.    3.  Promote the use of a case referral process.  We will publish guidance  to our acquisition community (both domestic and overseas) regarding  when and how to refer a contractor or grantee for possible suspension or  debarment.
section_title: Appendix VIII: Comments from the Department of the Treasury
section_title: Appendix IX: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, John Neumann, Assistant  Director; Noah Bleicher; Morgan DelaneyRamaker; Angela Pleasants;  Russ Reiter; Raffaele (Ralph) Roffo; Roxanna Sun; and Bradley Terry  made key contributions to this report.