On February 18, 1986, President Ronald Reagan signed Executive Order 12549, "Debarment and Suspension." This executive order was intended to "curb fraud, waste, and abuse in Federal programs, increase agency accountability, and ensure consistency among agency regulations concerning debarment and suspension of participants in Federal programs." It specifically covered such federal activities as "grants, cooperative agreements, contracts of assistance, loans, and loan guarantees," but did not include federal procurement programs. The order directed the Office of Management and Budget (OMB) to issue guidelines for its implementation, including which agencies were covered and the "government-wide criteria [for debarment and suspension] and government-wide minimum due process procedures." It further directed executive departments and agencies to issue regulations consistent with OMB's guidelines. Thus, the OMB guidelines are applicable to individual grantees through each agency's regulations that incorporate the government-wide guidelines. OMB first issued guidelines in 1987. Executive departments and agencies adopted a government-wide common rule in 1988 that was consistent with the guidelines and revised the rule in 2003. OMB revised this rule again in 2006 and placed it in the Code of Federal Regulations as guidance. Most agencies already have adopted this rule into their own regulations along with any additions or exceptions that specifically apply to the individual agency. OMB's government-wide guidance for debarment and suspension in federal grant programs is found at 2 C.F.R. Part 180. Federal agencies use this guidance to promulgate their own regulations for debarment and suspension, and a grantee must look at the individual agency's regulations for the specific rules that affect grants with that agency. Although OMB's guidelines are not considered mandatory, it is useful to look at them for a general understanding of the common rules pertaining to debarment and suspension in federal grant programs. The debarment and suspension provisions found in the OMB guidelines apply to a "[p]erson who has been, is, or may reasonably be expected to be, a participant or principal in a covered transaction," as well as "a person against whom a Federal agency has initiated a debarment or suspension action." A "person" is defined as "any individual, corporation, partnership, association, unit of government, or legal entity, however organized." The provisions also apply to agency officials who have authority to enter into "covered transactions" and who have authority to debar or suspend grantees. Under the guidelines, "covered transactions" include nonprocurement transactions, which are defined as "any transaction, regardless of type (except procurement contracts)," such as grants and cooperative agreements. A few nonprocurement transactions are not considered "covered transactions" for the purposes of the debarment and suspension rules. These transactions include direct awards to foreign entities or public international organizations, individual benefits that are personal entitlements (such as social security benefits under the Supplemental Security Income provisions of the Social Security Act), federal employment, those related to national or agency-recognized emergencies, permits for regulating "public health, safety or the environment" unless specifically designated otherwise, incidental benefits from "ordinary government operations," and transactions that are exempted from coverage by law. "Covered transactions" also include "some procurement contracts awarded by non-Federal participants in nonprocurement covered transactions," such as a contract or subcontract for goods and services for at least $25,000 or a contract requiring the consent of a federal agency official, regardless of amount. However, "procurement contracts awarded directly by a Federal agency" are not covered. The guidelines distinguish between two types of covered transactions: "primary tier" and "lower tier." A "primary tier covered transaction" is one "between a Federal agency and a person," and a "lower tier covered transaction" is one "between a participant in a covered transaction and another person," including subgrants and contracts under grants. Agencies may debar a person for the following reasons: "Conviction of or civil judgment for" any of the following activities: 1) Commission of fraud or another criminal offense related to "obtaining, attempting to obtain, or performing a public or private agreement or transaction;" 2) Violation of antitrust statutes (both federal or state); 3) Commission of "embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice;" or 4) Commission of other offenses "indicating a lack of business integrity or business honesty that seriously and directly affects ... [the person's] present responsibilities;" "Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program;" "A nonprocurement debarment by any Federal agency taken before October 1, 1988;" "[A] procurement debarment by any Federal agency taken pursuant to 48 C.F.R. part 9, subpart 9.4, before August 25, 1995;" "Knowingly doing business with an ineligible person," unless that person has been granted an exception under the guidelines; Failure to pay a debt or debts to any agency (not including payments owed under the Internal Revenue Code), as long as the debtor has not contested the debt(s) or has exhausted all remedies for contesting the debt(s); "Violation of a material provision of a voluntary exclusion agreement ... or of any settlement of a debarment or suspension action;" Violations of the Drug-Free Workplace Act of 1988; or "Any other cause of so serious or compelling a nature that it affects ... [the person's] present responsibility." An agency official must make two determinations in order to suspend a person. First, the official must determine that one of the following exists: "[A]n indictment for, or other adequate evidence to suspect, an offense" for which a conviction or civil judgment would result in debarment (as listed in 2 C.F.R. § 180.800(a) and described above); or "[A]dequate evidence to suspect any other cause for debarment" (as listed in 2 C.F.R. §§ 180.800(b)-(d) and described above). After making this determination, the official may suspend the person only when he or she further determines that "[i]mmediate action is necessary to protect the public interest." The OMB guidelines outline the specific procedures for a debarment or suspension action. Generally, an action begins when an agency receives information about a cause for debarment or suspension. The agency investigates the information, and the agency's debarment or suspension official ultimately decides whether a person should be debarred or suspended. Written notification of the action is sent by mail, fax, or e-mail to one of the following: the person, the person's legal counsel, the person's agent for service of process, or any of the person's "partners, officers, directors, owners, or joint venturers." If a person is subject to multiple debarment or suspension proceedings, the agencies can coordinate their debarment or suspension actions and designate a lead agency for making the decision. A debarment action is initiated when a debarring official sends a written Notice of Proposed Debarment to the person that the official has proposed to debar. This notice advises the person that the official is considering debarment, states the reasons for proposing debarment "in terms sufficient to put ... [the person] on notice of the conduct or transactions upon which the proposed debarment is based," and the cause or causes in 2 C.F.R. § 180.800 upon which the official relied. Also, this notice informs the person of the federal government's procedures for debarment and any additional debarment procedures of the agency. Finally, the notice states the "governmentwide effect of a debarment from procurement and nonprocurement programs and activities." A person must have "an opportunity to contest the proposed debarment" before the debarring official issues a decision. If the person wishes to contest, he or she must, within 30 days of receiving the Notice of Proposed Debarment, "either send, or make arrangements to appear and present, the relevant information and argument to the debarring official." The person also must submit the following information: "[s]pecific facts that contradict the statements contained in the Notice of Proposed Debarment," including any information about the mitigating and aggravating factors considered by the debarring official; "[a]ll existing, proposed, or prior exclusions under regulations implementing Executive Order 12549 and all similar actions taken by Federal, State, or local agencies, including administrative agreements that affect only those agencies;" "[a]ll criminal and civil proceedings not included in the Notice of Proposed Debarment that grew out of facts relevant to the cause(s) stated in the notices;" and the person's affiliates. A failure to truthfully disclose this information may result in "further criminal, civil or administrative action" against the person. Debarment proceedings are not subject to formal rules of evidence or procedure. The proceedings may include fact-finding only if (1) the person presents a "genuine dispute over facts material to the proposed debarment;" (2) the debarment is not "based upon a conviction or civil judgment;" and (3) the person's opposition does not contain merely general denials of the Notice of Proposed Debarment or solely raise issues that are immaterial to the debarment decision. The federal agency has the burden of proof to show that a cause for debarment exists, which must be established by a preponderance of the evidence. If the basis for a proposed debarment is a conviction or civil judgment, then the agency has met its burden.