Federal agencies have closely guarded their authority to suspend and debar contractors that they determine are not “presently responsible.” Beyond the procedural safeguards set forth in FAR Subpart 9.4, the only practical limit on agency discretion in making suspension and debarment determinations can be found in the Interagency Committee on Debarment and Suspension, which provides a method for determining which agency should take the lead in a particular suspension or debarment matter.

This system may be headed for a fundamental change. Representative Darrell Issa, Chair of the House Oversight and Government Reform Committee, has circulated draft legislation entitled the “Stop Unworthy Spending Act”—the “SUSPEND Act [pdf].” As written, the SUSPEND Act would terminate the authority of all civilian agencies to make their own suspension and debarment determinations.  Instead, this authority would be consolidated into a single entity—the Board of Civilian Suspension and Debarment—which would reside in the General Services Administration.

Under the draft legislation, the Office of Management and Budget would issue guidance as to the membership and organization of the Board; procedures for transparent handling of cases; procedures to strengthen timely referrals by the agencies; procedures to ensure consistent suspension and debarment standards and procedures; and procedures to strengthen suspension and debarment by identifying contractors and grantees that “repeatedly fail to perform.” The draft legislation would charge the Comptroller General of the United States with the responsibility to review and assess the effectiveness of the Board in meeting the requirements of the Act.

In addition to centralizing suspension and debarment decisions, the SUSPEND Act would broaden the grounds on which a suspension or debarment decision could be based. Current regulations allow suspension or debarment when there is a “willful failure to perform.” As written, the SUSPEND Act would allow suspension or debarment when there is a “repeated failure to perform.”

The draft legislation also appears intended to limit government discretion in the suspension and debarment process and to ensure that more contractors are excluded from government contracting. It is consistent with other recent efforts to make the suspension and debarment process more rigid by making suspension or debarment automatic in certain situations. In February 2011, for example, the Commission on Wartime Contracting in Iraq and Afghanistan recommended the automatic mandatory suspension of any contractor indicted for fraud. Later in 2011, the Homeland Security and Governmental Affairs Committee advanced the idea of mandatory suspension for an indicted contractor.  Contractors should certainly expect that Congress will continue to press for expanding the use of suspension and debarment and limiting the discretion available to agency suspension and debarment officials.