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Government Contracts Update

On January 25, 2018, the Department of Homeland Security's (DHS) Office of Inspector General (OIG) issued report no. OIG-18-41, "DHS Needs to Strengthen Its Suspension and Debarment Program" (Report). While many may feel that the review, findings, and recommendations of the DHS suspension and debarment program are of little or no consequence to them, there are some interesting takeaways that may provide some important signals to the government contracting community at large.

The Report – Its Findings and Recommendations

This Report stems from an October 2016 request by the ranking member of the House Committee on Homeland Security, Representative Bennie Thompson (D-MS), who requested the OIG review the suspension and debarment practices of DHS. As set out in the Report, the OIG found that:
  1. The DHS Suspension and Debarment Instruction is outdated and is missing needed information and guidance;
  2. DHS did not adequately document a majority (5 of 7) of administrative agreements approved between fiscal year 2012 and February of 2017;
  3. DHS did not have a centralized system to track suspension and debarment activities, which may have contributed to DHS's inaccurate FY2016 reporting of suspension and debarments;
  4. For an 8-month period, FEMA's suspension and debarment staff did not promptly update government-wide systems to reflect debarments and administrative agreements; and
  5. Staffing levels within DHS may be hindering efficient and effective handling of suspensions and debarments.

In response to these findings, the OIG made four recommendations:

  1. That DHS update its Suspension and Debarment Instruction to address the identified deficiencies, including adding procedures for documenting decisions to use an administrative agreement;
  2. That the Under Secretary of Management implement a centralized department-wide suspension and debarment tracking system to document justification for decisions, capture suspension and debarment activity, show compliance with policies and procedures, and enhance information sharing;
  3. That the Under Secretary of Management and heads of components with suspension and debarment staff implement performance measures in employee performance plans that require the timely upload of suspensions, debarments, and administrative agreements into federal databases, such as SAM and FAPIIS; and
  4. That the Under Secretary of Management examine suspension and debarment staffing levels to determine whether additional staff is needed to handle the workload.

Key Takeaways

As noted above, while the OIG's review, findings, and recommendations regarding the DHS suspension and debarment program may be of little interest to some, there are interesting takeaways that may provide insight into how OIGs are viewing suspension and debarment programs and activity.

  • Process Is Critical – First, the fact that DHS has an instruction guide is laudable and is likely to result in practices that are far better and more faithfully observed than those of most agencies that do not have any such guide. In fact, there has been significant discussion in the industry over the past several years that the Federal Acquisition Regulation and Common Rule (i.e., nonprocurement regulations at 2 C.F.R. Part 180) leaves much unaddressed and that additional information from agencies is critical. The OIG, however, is not giving DHS a pass for merely having an instruction guide, but rather is appropriately pushing the agency to make its instructions as useful and detailed as possible. This is certainly a very good development for contractors, since it is always better to have more information available on the agency's handling of suspension and debarment actions.
  • Documenting the Process – In addition to pushing DHS to improve its written instructions, the OIG is also identifying and recommending that the agency document its administrative agreements. By documenting these arrangements it provides public transparency regarding how such matters are handled and resolved, which may in turn give contractors a sense of the challenges and obligations that may ensue should they find their present responsibility questioned by DHS. Again, the more information available on a particular program, including its focus, concerns, etc., the better.
  • Agency Accountability – The OIG acknowledges and recommends several improvements to agency conduct, specifically as it relates to documenting its decisions, tracking such decisions, and recording them in federal databases. Again, the OIG found several instances where DHS did not meet its obligations, leading to recordkeeping and transparency failures. Without holding agencies accountable for their compliance with statutory and regulatory obligations, the entire suspension and debarment process fails to operate as intended.
  • Resource Issues – In addition to documenting processes, industry has also frequently discussed the lack of resources needed by federal agencies to truly meet their suspension and debarment obligations, including having the time and resources to work with contractors toward finding a positive resolution, as opposed to simply taking the path of least resistance, regardless of what is truly best for the federal government and taxpayers.

Thus, while the DHS OIG only reviewed DHS's suspension and debarment program, the findings of the OIG in this Report raise industry issues and may be a sign of things to come. Venable has long represented clients in this space, and, having developed a strong relationship with many federal agencies' suspension and debarment offices, we will remain focused on developments in this area and send out additional updates as appropriate.