Suspension and Debarment

The June 26, 2012 decision in Agility Defense & Government Services, Inc. v. United States Department of Defense, No. 11-4111 (N.D. Ala. June 26, 2012) [pdf] reflects an important limitation on the government’s authority to suspend contractors simply because they are affiliated with companies accused of wrongdoing.

Agility Defense and Government Services, Inc. and Agility International, Inc. filed suit seeking to undo their suspensions after spending 31 months on the Excluded Parties List and being unable to convince the Defense Logistics Agency to lift the suspensions. DLA suspended the two companies not because they had engaged in wrongdoing, but because they were indirect affiliates of their ultimate parent company, Public Warehousing Company, K.S.C. The parent company was under indictment for defrauding the government of over $6 billion on food supply contracts in the Middle East. ADGSI and Agility had proposed a management buyout and other measures designed to remove PWC’s ability to control them and to assure their compliance with federal procurement laws. DLA nevertheless refused to lift the suspension.


Continue Reading Limits on the government’s long-term suspension of affiliates

The USPS Office of Inspector General (OIG) recently announced that it will be auditing the Postal Service’s Suspension and Debarment program. Debarments most frequently result from a criminal conviction of a company, or its employees. But a contractor can be debarred for any type of improper conduct that negatively reflects on its honesty, ethics, or competence. Resulting debarments have government-wide impact. The thrust of the audit appears to be whether USPS is debarring enough contractors. Read on for more details about OIG’s upcoming audit.
Continue Reading USPS OIG to evaluate Postal Service’s Debarment and Suspension program

Developments in the OFCCP’s investigation of compensation disparities at United Space Alliance, LLC are worthy of consideration. During a 2009 desk audit, OFCCP conducted a standard threshold test of United Space Alliance’s compensation data.  Although this audit uncovered no indicators of pay discrimination, OFCCP conducted additional tests of the data, commonly known as the “pattern analysis” and the “30 and 5 Refinement” tests. These tests revealed potential pay bias, and OFCCP requested more extensive compensation data to examine the question more closely. The case begins when United Space Alliance refused to comply with OFCCP’s request.
Continue Reading United Space Alliance’s temporary agreement with OFCCP

Once again a contractor covered by the Davis-Bacon Act has been penalized for not maintaining adequate payroll records. In Pythagoras General Contracting Corp. v. Dep’t of Labor, ARB Nos. 08-107 & 09-007, ALJ No. 2005-DBA-14 (Feb. 10, 2011) [pdf], the DOL’s Administrative Review Board upheld a determination to debar the contractor from getting any future federal contracts for up to three years and increasing the monetary penalty significantly.
Continue Reading Contractor debarred for inadequate payroll records