Suspension and Debarment: Some Agency Programs Need Greater Attention, and Governmentwide Oversight Could Be Improved
Released: 2011-10-06T00:00:00

Letter

Background

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.

Suspension and Debarment Cases Make Up a Small Percentage of All Exclusions in the Govermentwide Database

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.

Agencies with Most Suspension and Debarment Cases Share Common Characteristics Missing at Agencies with Few Cases

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.

Agencies with More Active Suspension and Debarment Programs Share Common Characteristics

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.

Agencies with Few or No Procurement-Related Suspension and Debarment Cases Lacked the Traits Common among Agencies with More Active Programs

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.

Governmentwide Efforts to Oversee Suspensions and Debarments Face Challenges

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.

Interagency Committee Relies on Voluntary Agency Participation and Limited Agency Resources to Oversee Suspension and Debarment Programs

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.

Other Efforts Are Under Way to Improve Suspension and Debarment Coordination

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.

Conclusions

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.

Recommendations for Executive Action

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.

Agency Comments and Our Evaluation

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.

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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.

Appendix I: Scope and Methodology

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.

Appendix II: Causes for Suspension or Debarment

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.

Appendix III: Comments from the Department of Commerce

Appendix IV: Comments from the Department of Health and Human Services

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.

Appendix V: Comments from the Department of Homeland Security

Appendix VI: Comments from the Department of Justice

Appendix VII: Comments from the Department of State

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.

Appendix VIII: Comments from the Department of the Treasury

Appendix IX: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

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.