# Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)

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URL: https://www.frixlaw.com/law-library/documents/fr%3A02-1

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** January 23, 2002
- **Citation:** 67 FR 3266

## Text

OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 970
DEPARTMENT OF AGRICULTURE
7 CFR Parts 3017 and 3021
DEPARTMENT OF ENERGY
10 CFR Parts 606, 607, and 1036
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 145 and 147
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
14 CFR Parts 1265 and 1267
DEPARTMENT OF COMMERCE
15 CFR Parts 26 and 29
SOCIAL SECURITY ADMINISTRATION
20 CFR Parts 436 and 439
OFFICE OF NATIONAL DRUG CONTROL POLICY
21 CFR Parts 1404 and 1405
DEPARTMENT OF STATE
22 CFR Parts 137 and 139
AGENCY FOR INTERNATIONAL DEVELOPMENT
22 CFR Parts 208 and 210
PEACE CORPS
22 CFR Parts 310 and 312
INTER-AMERICAN FOUNDATION
22 CFR Parts 1006 and 1008
AFRICAN DEVELOPMENT FOUNDATION
22 CFR Parts 1508 and 1509
DEPARTMENT OF LABOR
29 CFR Parts 94 and 98
FEDERAL MEDIATION AND CONCILIATION SERVICE
29 CFR Parts 1471 and 1472
DEPARTMENT OF DEFENSE
32 CFR Parts 25 and 26
DEPARTMENT OF EDUCATION
34 CFR Parts 84, 85, 668 and 682
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
36 CFR Parts 1209 and 1212
DEPARTMENT OF VETERANS AFFAIRS
38 CFR Parts 44 and 48
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 32 and 36
GENERAL SERVICES ADMINISTRATION
41 CFR Parts 105-68 and 105-74
DEPARTMENT OF THE INTERIOR
43 CFR Parts 12, 42 and 43
FEDERAL EMERGENCY MANAGEMENT AGENCY
44 CFR Parts 17 and 21
DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Parts 76 and 82
NATIONAL SCIENCE FOUNDATION
45 CFR Parts 620 and 630
NATIONAL FOUNDATION ON THE ARTS AND THE HUMANITIES
National Endowment for the Arts
45 CFR Parts 1154 and 1155
National Endowment for the Humanities
45 CFR Parts 1169 and 1173
Institute of Museum and Library Services
45 CFR Parts 1185 and 1186
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
45 CFR Parts 2542 and 2545
DEPARTMENT OF TRANSPORTATION
49 CFR Parts 29 and 32
Governmentwide Debarment and Suspension (Nonprocurement) and Governmentwide Requirements for Drug-Free Workplace (Grants)

AGENCIES:

Office of Personnel Management; Department of Agriculture; Department of Energy; Small Business Administration; National Aeronautics and Space Administration; Department of Commerce; Social Security Administration; Office of National Drug Control Policy; Department of State; Agency for International Development; Peace Corps; Inter-American Foundation; African Development Foundation; Department of Labor; Federal Mediation and Conciliation Service; Department of Defense; Department of Education; National Archives and Records Administration; Department of Veterans Affairs; Environmental Protection Agency; General Services Administration; Department of the Interior; Federal Emergency Management Agency; Department of Health and Human Services; National Science Foundation; National Foundation on the Arts and the Humanities, National Endowment for the Arts, National Endowment for the Humanities, Institute of Museum and Library Services; Corporation for National and Community Service, and Department of Transportation.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

This document proposes substantive changes and amendments to the governmentwide nonprocurement common rule for debarment and suspension and the governmentwide rule implementing the Drug-Free Workplace Act of 1988. The most significant changes are—

First, this proposed common rule on debarment and suspension would limit the mandatory lower tier application of an exclusion to the first procurement level under a nonprocurement covered transaction. If an agency decides that its nonprocurement activities are sufficiently vulnerable to misconduct, poor performance or abuse at levels below the first procurement, the agency may add agency-specific language to the proposed common rule to prohibit lower-tier procurement transactions with excluded persons. Agencies that do not have sufficient vulnerability at lower levels to justify the devotion of resources to enforce exclusions at lower levels need not add language to the common rule.

Second, this proposed common rule on debarment and suspension would set the dollar threshold on prohibited lower-tier procurement transactions with excluded persons at $25,000. This should help clarify an ambiguity in the current common rule created when Congress, in enacting the Federal Acquisition Streamlining Act of 1994, elected to change the terminology in the direct Federal acquisition law from “small purchase threshold” to “simplified acquisition threshold” and increased the level from $25,000 to

$100,000. The ambiguity was created because the current common rule is linked to the small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g), but states the current level to be $25,000.

Third, both this proposed rule on debarment and suspension and the proposed rule on drug-free workplace requirements would eliminate the mandate for agencies and participants to obtain written certifications from awardees or persons with whom they propose to enter into covered transactions. The proposed rules will allow agencies and participants the flexibility to use other means if they so choose, such as award conditions or electronic access to the GSA List on the internet, to enforce compliance with the rules.

Fourth, the proposed rule on drug-free workplace requirements would be separated from this proposed rule on debarment and suspension. The drug-free workplace requirements currently are in subpart F of the Debarment and Suspension Nonprocurement Common Rule. Moving those requirements to a separate part will allow them to appear in a more appropriate location nearer other requirements used predominately by award officials.

Finally, this document is prepared in plain language text and format to make it easier to read and use.

Under the provisions of section 7(o) of the Department of Housing and Urban Development Act (42 U.S.C. 2535(o)), any Department of Housing and Urban Development (HUD) proposed or interim rule that is issued for public comment is subjec to pre-publication Congressional review for a period of 15 days. Therefore, HUD is not joining in today's publication but will propose the common amendments in a separate rulemaking.

DATES:

Comments must be received on or before March 25, 2002.

ADDRESSES:

Comments on these proposed rules should be addressed to: Robert F. Meunier, Office of Grants and Debarment (3901-R), Environmental Protection Agency, 1200 Pennsylvania Avenue NW., Washington, DC 20460. Comments may be submitted via e-mail (
meunier.robert@epa.gov
), but must be made in the text of the message and not as an attachment.

FOR FURTHER INFORMATION CONTACT:

Robert F. Meunier, Debarring Official, Environmental Protection Agency, by phone at (202) 564-5399 or by e-mail (
meunier.robert@epa.gov
). Information about the Interagency Committee on Debarment and Suspension can be found on their home page (
http://www.dot.gov/ost/m60/grant/net.htm
). A chart showing where each agency has codified the common rule may be obtained by accessing the Office of Management and Budget's home page (
http://www.whitehouse.gov/omb
), under the heading “Grants Management.”

SUPPLEMENTARY INFORMATION:

A. Background

Executive Order 12549, “Debarment and Suspension,” issued February 18, 1986 (3 CFR 1986 Comp., p. 189) authorized a governmentwide system for debarment and suspension under Federal nonprocurement activities. The Office of Management and Budget (OMB) published initial guidelines to all Executive branch agencies in 1986 and the agencies published a common rule on May 26, 1988 (53 FR 19160). The common rule provides uniform requirements for debarment and suspension by Executive branch agencies to protect assistance, loans, benefits and other nonprocurement activities from waste, fraud, abuse and poor performance, similar to the system used for Federal procurement activities under Subpart 9.4 of the Federal Acquisition Regulation (FAR).

On January 31, 1989, the agencies amended the common rule by adding a new subpart F to implement the Drug-Free Workplace Act of 1988. (
See
54 FR 4946.)

On August 16, 1989, Executive Order 12689, “Debarment and Suspension,” (3 CFR 1989 Comp., p. 235) directed agencies to reconcile technical differences existing between the procurement and nonprocurement debarment systems, and to give exclusions under either system reciprocal effect across procurement and nonprocurement activities. In 1994 Congress passed the Federal Acquisition Streamlining Act of 1994 (Public Law 103-355, 108 Stat. 3327) mandating reciprocity for exclusions issued under the procurement and nonprocurement debarment systems.

On April 12, 1999, OMB asked the Interagency Suspension and Debarment Committee (ISDC) to review the common rule and propose amendments that would: (a) resolve unnecessary technical differences between the procurement and nonprocurement systems; (b) revise the current rule in a plain language style and format; and (c) make other improvements to the common rule consistent with the purpose of the suspension and debarment system. The ISDC's proposed amendments form the basis of this Notice of Proposed Rulemaking.

Format of the Proposed Debarment and Suspension Common Rule

The proposed rule adopts a different approach to the structure and format of the common rule. It is formatted so that matters common to a particular class of readers, or to a particular subject, appear together. This allows readers easy access to information that may be of particular importance to them. The rule also contains tables and a chart to assist the reader in locating or clarifying information presented in the text of the rule.

The proposed rule uses fewer legal terms, and uses more commonly understood words along with shorter sentences. It also presents information in a question-and-answer format. Wherever possible, the rule uses the active voice.

Due to the new format of the proposed rule, requirements would appear in a different order than they do under the current common rule. The following table will assist you in locating and comparing the requirements under both rules.

Proposed nonprocurement debarment and suspension common rule sections
Current nonprocurement debarment and suspension common rule sections

_.25
none

_.50
none

_.75
none

Subpart A:

_.100
_.100

_.105
none

_.110
_.100, _.115

_.115
_.200

_.120
_.215

_.125
_.110(c)

_.130
_.110(c)

_.135
_.110(a)

_.140
_.210

_.145
_.105 (ineligible)

Subpart B:

_.200
_.110(a)

_.205
_.225

_.210
_.110(a)(1)

_.215
_.110(a)(2)

_.220
_.110(a)(1)(ii)

_.225
none

Subpart C:

_.300
_.220(b), _.225

_.305
_.220(b)

_.310
_.220

_.315
_.510

_.320
_.225

_.325
_.510

_.330
_.510, Appendix A

_.335
_.510, Appendix B

_.340
Appendix A, Appendix B

_.345
_.510(c)

_.350
_.510(c)

_.355
_.510, Appendix B

_.360
_.510(c)

Subpart D:

_.400
_.200, _.215

_.405
_.200(a)

_.410
_.200(b)

_.415
_.220

_.420
_.200(b)

_.425
_.505(d), (e)

_.430
_.505(d), (e)

_.435
_.115(a), _.510

_.440 [Reserved]

_.445
_.225(b)

_.450
_.510 Appendix A

_.455
_.510 Appendix B

Subpart E:

_.500
_.105, _.500

_.505
_.505, _.510

_.510
_.105, _.500

_.515
_.500

_.520
_.505

_.525
_.505(c)

_.530
none

Subpart F:

_.600
_.311, _.410(a)

_.605
_.300, _.400

_.610
_.310, _.410

_.615
_.312, _.411

_.620
_.115

_.625
_.325, _.420

_.630
_.325, _.420

_.635
_.315

_.640
_.315

_.645
_.315

Subpart G:

_.700
_.400(a) & (b)

_.705 (a)
_.400(c)

_.705 (b)
_.412(b)(1)(i) & _.413(a)

_.705 (c)
none

_.710
none

_.715
_.411

_.720
_.412(a)

_.725(a)
_.412(a)

_.725(b)
_.105, definition of Notice, second sentence; none

_.730
none

_.735
_.412(b), _.413(b), none

_.740(a)
_.410(b)

_.740(b)
_.412(b)

_.745
_.413(b)(1), _.412(b)(2)

_.750
_.413(b)

_.755
_.413(a) & (c)

_.760
_.415

Subpart H:

_.800
_.305

_.805
_.312

_.810
none

_.815
_.313(a)

_.820
_.313(a); _.105, definition of Notice, none

_.825
none

_.830
_.313(b), _.314(b), none

_.835
_.310

_.840
_.313(b)

_.845
none, _.314(a) & (b)(1)

_.850
_.314(c)(1)

_.855
_.314(c)(2), none

_.860
none, See 48 CFR 9.406-1(a)

_.865
_.320(a)

_.870
_.314(a) & (d)

_.875
_.320(c)

_.880
_.320(c)

_.885
_.320(b)

Subpart I_Definitions:

_.900-_.1020
_.105

Reconciliation of Technical Differences

The proposed rule incorporates some changes that are designed to bring the procurement and nonprocurement debarment rules into greater conformity with each other. However, the ISDC recommended against issuing a single consolidated rule, or adopting uniform application of the rule as impractical and confusing. This decision was based on the ISDC's view that the procurement and nonprocurement communities have sufficiently different relationships with participants, distinct methods to procure services or to provide benefits or support, varying options for dealing with waste, fraud, abuse, and poor performance, and very different types of exposure to risk.

The ISDC therefore focused its attention on ensuring that both the procurement and nonprocurement rules contained the same level of substantive due process in: (a) Applying the same minimum criteria to suspend or propose debarment; (b) notifying respondents of actions; (c) making a record to support a decision; (d) providing for fact-finding; (e) addressing mitigating and other factors; (f) applying evidentiary standards; and (g) issuing decisions.

Section _.220 of the proposed rule would bring the common rule into closer conformity with the FAR by limiting the mandatory down-tier application of an exclusion under the common rule to the first procurement level. Unless Federal consent is required at a lower level, if an agency wishes to apply an exclusion at levels lower than the first procurement level (
e.g.
, to subcontractors or suppliers), the agency must specifically include that option in its published version of the common rule. The ISDC recommended this change because it recognizes that some agencies' nonprocurement transactions are highly vulnerable to the impact of misconduct and poor performance at levels below the first procurement, while other agencies' transactions are not. This approach allows those Federal agencies with vulnerability at lower tiers to prohibit those transactions, while providing flexibility to those agencies whose programs' exposure does not merit the additional administrative burden of enforcing exclusions at lower tiers.

In addition, the threshold level for application of an exclusion for all procurement-type transactions under a nonprocurement transaction would be set at $25,000. This corrects confusion created when the term “small purchase threshold,” formerly found at 10 U.S.C. 2304(g) and 41 U.S.C. 403(11) (set at $25,000), was changed under the Federal Acquisition Streamlining Act of 1994 to “simplified acquisition threshold” and set at $100,000. Because the current common rule uses the “small purchase threshold,” as the point beneath which an exclusion does not apply, it has caused confusion as to whether the exclusion level is $25,000 or $100,000. The procurement debarment system has already made regulatory changes to subpart 9.4 of the FAR to keep its exclusion level at $25,000.

In addition to “suspension” and “debarment,” the common rule recognizes a status called “voluntary exclusion.” Subpart 9.4 of the FAR makes no reference to such a status. The status of voluntary exclusion is a remnant from older rules and practices in the nonprocurement community that pre-date the Governmentwide suspension and debarment system. It was once used because respondents found the “voluntary” nature of the prohibition to be more acceptable. It was, in fact, a special term used for those who accepted ineligibility pursuant to an administrative agreement. The ISDC found that there are benefits to the nonprocurement community in retaining the ability of Federal agencies to accept voluntary exclusion agreements in place of debarment or suspension. However, with the creation of the Governmentwide system, voluntary exclusion agreements that offer protection only to the agency initiating action in the matter, are inconsistent with the purposes of the Governmentwide system. Accordingly, under the proposed rule agencies may still negotiate voluntary exclusion agreements; however, those exclusions must apply equally to all Federal agencies.

Section _.860 of the proposed rule is new to the common rule. This section identifies factors that a debarring official may regard as mitigating or aggravating factors. It includes factors that currently appear under § 9.406-1(a) of the FAR. These factors currently offer useful guidance to the Government and contractors with respect to matters the

debarring official should consider in making a debarment decision.

Enhancements to the Proposed Debarment and Suspension Common Rule

This proposed rule would make several modifications to the existing common rule to enhance the effectiveness of, cure some gaps in, or clarify requirements and processes under the existing rule. None of these changes are intended to alter the fundamental principles inherent to debarment and suspension actions. All information related to the purposes and procedures applicable to the current rule as reflected in its preambles at 53 FR 19160-19171 (May 26, 1988), and 60 FR 33036-33040 (June 26, 1995), shall continue to apply under this proposed and/or any final rule unless otherwise stated, or inconsistent with these provisions. Therefore, notwithstanding the technical existence of any cause for debarment, affiliation, imputable conduct, or other actionable condition, debarment or suspension may not be used to punish. Nor may it be used to coerce a respondent into accepting criminal, civil or administrative sanctions. An agency may address its legitimate suspension and debarment concerns before, after or in conjunction with sanctions, so long as suspension or debarment is otherwise appropriate to protect the Federal Government. In all cases, suspending and debarring officials must use business judgment and discretion in electing to use the suspension and debarment authority under this rule to protect government activities from potential waste, fraud, abuse, poor performance and non-compliance with applicable laws, regulations or conditions related to nonprocurement transactions. Where an agency has the authority to act under either the procurement or nonprocurement rule, it may act under either rule to avoid confusion or duplication.

The proposed rule would move definitions from Subpart A of the current rule to Subpart I. Under the proposed rule, a new term is used to refer to ineligibility that arises from sources other than discretionary actions taken under either the common rule or subpart 9.4 of the FAR. This type of ineligibility may arise by operation of a statute, executive order, or other directive and may not be subject to the discretion of the agency suspending or debarring official. In addition, it may have special attributes that are inconsistent with the discretionary actions initiated under the common rule or the FAR. For example, persons convicted under the Clean Air Act or Clean Water Act are automatically ineligible for procurement and nonprocurement participation at the violating facility which gave rise to the conviction until the EPA Debarring Official certifies that the conditions giving rise to the conviction have been corrected. The proposed rule refers to these and other special forms of ineligibility as “disqualifications.” Disqualifications must be listed on the General Services Administration (GSA),
List of Parties Excluded or Disqualified from Federal Procurement and Nonprocurement Programs
(List), but are not subject to the uniform procedural requirements of this rule. (Note that agencies with special provisions related to disqualification may, at their option, include those requirements in subpart J or other subparts appended to this rule as a convenience to the agency or the public.) For discretionary actions that result in ineligibility under the uniform suspension and debarment procedures covered by the common rule and the FAR, this proposed rule uses the term “exclusion.” Therefore, an ineligibility may result from either a disqualification or an exclusion.

The proposed rule adds a new definition for “agent or representative” as is used under the FAR and clarifies the definition of “participant.” It also proposes a more useful definition of the types of activities that are encompassed within the term “principal.”

The term “voluntary exclusion” is narrowed under this proposed rule to conform to the principles of governmentwide protection and give it the same scope of coverage as other exclusions.

One significant change to the definitions under the proposed common rule relates to the term “conviction.” Previously, the common rule defined conviction as a judgment that had to be “entered” by the court before it was recognized as constituting a ground for suspension or debarment. In recent years, courts have used many vehicles to conclude criminal matters short of “entry” of a judgment of conviction, such as probation before judgment, pre-trial diversion, and simply withholding final judgment upon satisfaction of certain conditions in lieu of incarceration or payment of a fine. Currently, the withholding of entry of the judgment in a criminal matter often means that a respondent remains under a temporary suspension until criminal proceedings are concluded. This does not benefit either the government or the respondent because the government is unable to conclude the matter by final decision or with a compliance agreement with any certainty that a baseline for risk assessment can be finally established. From a business point of view, the withholding of an “entry” of judgment under these conditions should not preclude Federal agencies from taking appropriate action to protect the government. It makes no sense for an agency to have to prove the underlying misconduct or conditions all over again, merely because the court decided not to “enter” its judgment. Under the proposed rule, the suspending or debarring official would be able to consider criminal matters resolved by means short of dismissal as final so that appropriate administrative action can be taken, or a remedial plan of compliance concluded. This change would benefit both the government and a respondent.

The proposed rule would significantly clarify confusion under the existing rule as to who may be suspended or debarred and the impact of that decision on a suspended or debarred person. An agency may exclude any “person” as defined in the rule that may be reasonably expected to participate in a “covered transaction” (
see
§ _.135).

Even if a person is excluded, agencies could still award a covered transaction to that person when it is in the best interest of the government to do so. The proposed rule sets forth more clearly the two situations that allow an otherwise excluded person to participate in a nonprocurement transaction. The first is when an agency grants an exception to the excluded person to participate in a covered transaction (
see
§ _.120). Exceptions are transaction-specific decisions that the designated agency official must justify in writing. The second situation that allows an excluded person to participate in a transaction is when an agency is entering into an exempt transaction (
see
§ _.215). Exempt transactions have special status and are not regarded as covered transactions. Exempt transactions may or may not be transaction-specific, and do not require the written justification of a designated agency official before entering into them. Each agency is responsible for clarifying the applicability or non-applicability of an exemption to any of its transactions in its agency-specific rule.

Proposed § _.215 contains a new exemption that has been added at paragraph (e). This exemption is proposed because most often the transactions listed within this paragraph are regulatory vehicles that should not be automatically precluded to an otherwise excluded person. In cases

where an agency uses a “permit,” “license” or other similar transaction to approve or authorize government-regulated activity, but desires to subject issuance of the transaction to the GSA List, it must do so in its regulations or other guidance.

Sections _.615, _.715 and _.805 of the proposed rule would amend the notice provisions of the existing rule. The proposed rule would authorize an agency to use facsimile and e-mail to notify a respondent of debarment or suspension actions affecting that person. The proposed modification to the existing rule would recognize the advances made in communications technology since the original rule was published and would provide a better system for confirming receipt of notices that were sent.

The current common rule identifies the two conclusions that a suspending official must make before imposing a suspension. While the current rule provides some guidance as to how a suspending official may conclude that “adequate evidence” of a cause for action may exist, it is silent as to how the official may conclude that “immediate action” is necessary to protect the public interest. The proposed rule would add information at § _.705(c) that reflects the court's decision in
Coleman American Moving Services, Inc.
v.
Weinberger,
716 F. Supp. 1405 (M. D. Ala. 1989), that a suspending official need not make a separate and specific finding as to immediate need, but may reach that conclusion from inferences reasonably drawn from the facts and circumstances present.

Also, § _.735 of the proposed rule would authorize the suspending official to preclude fact-finding where a State attorney general's office, State or local prosecutor advises that conducting fact-finding would prejudice substantial interests of the State or local government in pending or contemplated legal proceedings based upon the same facts as the suspension. This language is necessary to close a gap in the current rule that allows a Federal agency to suspend on the basis of a Federal, State or local indictment, but only addresses denial of fact-finding in the context of advice received from Federal officials. In suspension and debarment matters, there is no distinction made between indictments issued at the Federal, state or local level. All indictments for alleged misconduct relevant to nonprocurement and procurement risks provide a basis for Federal concern. Therefore, where the prospect of an administrative fact-finding proceeding could prejudice the outcome of a matter at the state or local level, the suspending official must have the same authority to deny fact-finding to protect those proceedings as for matters based upon actions initiated at the Federal level. Accordingly, §§ _.735 and _.760 of the proposed rule would reflect equality of treatment to be given to our respective levels of government in suspension matters.

Proposed §§ _.730 and _.825 would identify information that a respondent must provide the suspending or debarring official when contesting a suspension or proposed debarment. This information is relevant to the official's decision and is frequently requested during the presentation of matters in opposition. By highlighting this requirement in the rule, a respondent can be prepared in advance to address the issue at the time of the respondent's initial written submission, or during the oral presentation if one is made. These sections of the proposed rule also clarify that a general denial of allegations contained in the notice of action is insufficient to establish a genuine dispute over a material fact. A suspending or debarring official can only determine if a respondent is entitled to a fact-finding proceeding if the respondent's submission in opposition contains enough specific information to identify the issue in question and establish a basis for dispute.

Section _.515(b) of the proposed rule includes additional information to be contained on the GSA List or within its database. Under the current rule, other than the name and address of an excluded person, there is currently insufficient information on the List or in the GSA database that can be used to confirm the identity of a listed person under a commonly used name. Confirmation requires contact with the designated Federal official by telephone or other means, a search of records if available, and confirmation in accordance with that agency's Routine Use Notice. The proposed rule would permit the database for the electronic version of the GSA List to include a field for Taxpayer Identification Numbers (TINs) and Social Security Numbers (SSNs) if legally appropriate. The List and current database contains names of individuals, business entities and organizations that can be the same or confusingly similar. The current commercial world uses TINs and SSNs widely and freely to confirm identities for all kinds of transactions.

The proposed rule would position GSA to compile that information in the event the law should allow public access to it. Otherwise, the current system will remain commercially inefficient. We specifically invite comment on the proposed inclusion of this provision in the common rule.

The proposed rule would also eliminate a requirement under the current rule that the exclusions be enforced through a chain of paper certifications submitted to an agency or between participants under a covered transaction. Certification as a means of enforcement has proven to be administratively awkward and impossible for some transactions that do not even involve an “award.” Advancements in technology allow anyone with access to a personal computer to receive up-to-date information about a person's eligibility by accessing the GSA list on line. This makes the certification process largely obsolete. The proposed rule would allow agencies to employ any method of enforcement of the GSA List that is administratively and commercially feasible. This change is consistent with Congress' intent under the Federal Acquisition Reform Act of 1994 (Public Law 104-208), to eliminate unnecessary certifications.

Proposed Separate Part To Implement the Drug-Free Workplace Act

Finally, this document proposes to establish a separate part for the drug-free workplace requirements that are in subpart F of the existing rule. The only requirement of the Drug Free Workplace Act of 1988 that relates to suspension and debarment is incorporated into the causes for debarment. The remaining provisions of subpart F are used predominantly by recipients of Federal assistance awards and by Federal officials who make and administer those awards, which distinguishes them from the common rule that is used mainly by Federal suspension and debarment officials and respondents. Moving the requirements of the current subpart F into a part separate from the common rule allows each Federal agency to place it in an appropriate location within the Code of Federal Regulations where it may be more easily used by recipients and Federal awarding and administering officials.

The proposed separate part to incorporate the provisions of Subpart F, like the proposed update to the debarment and suspension common rule, is reformatted and rewritten in plain language. Due to the proposed reformatting, requirements would appear in a different order than they do in the current Subpart F. The following table will assist you in locating and comparing the requirements under both rules.

Proposed drug-free workplace common rule sections
Current drug-free workplace common rule sections

.100
.600(a)

.105(a)(1)
.610(a)

.105(a)(2)
none

.105(b)
none

.110
.610(b)

.115
.600(b)

.200
.630(a)(1)

.200(a)
certification alt I. A. (g)

.200(b)
certification alt I. B.

.205(a)
certification alt I. A. (a)

.205(b)
certification alt I. A. (a)

.205(c)
certification alt I. A. (d)

.210
certification alt I. A. (c)

.215
certification alt I. A. (b)

.220
.630 (e)

.225(a)
.635 (a)(1)

.225(a)
certification alt I. A. (e)

.225(b)
.635(a)(2)

.225(b)
certification alt I. A. (f)

.230(a)
appendix C. 5

.230(b)
Appendix C. 6

.230(c)
Appendix C. 7

.300
.630(a)(1)

.300
certification alt II.

.300(b)
.635(b)

.400(a)
none

.400(b)
none

.500
.615(b)

.505
.615(c)

.510
.620(a)

.510

.515
.625

.605
.605(b)(7)

.610
.605(b)(1)

.615
.605(b)(2)

.620
none

.625
.605(b)(3)

.630
D&S common rule

.635
.605(b)(4)

.640
.605(b)(5)

.645
.605(b)(6)

.650
none

.655
.605(b)(9)

.660
.605(b)(8)

.665
.605(b)(10)

.670
D&S common rule

.600(a)(1)

.600(a)(2)

.610(c)

.615(a)

D&S common rule
.620(b)

.630(a)(2)

.630(b)

.630(c)

.630(d)

Appendix C. 1

Appendix C. 3

Appendix C. 4

Appendix C. 8

The proposed separate part would make one substantive change to the current subpart F. The proposed substantive change would require Federal agencies to obtain recipients' assurances of compliance with drug-free workplace requirements and not require them to obtain certifications from recipients. This substantive change implements section 809 of the National Defense Authorization Act for Fiscal Year 1998 (Public Law 105-85, 111 Stat. 1838-1839) that amended the Drug-Free Workplace Act of 1988. The body of the proposed separate part therefore includes the substantive requirements for recipients that now are in the text of the drug-free workplace certification in appendix C to the common rule.

The proposed separate part also would make some definitional changes to the current subpart F. First, it includes a definition of “debarment,” since it no longer would be a subpart within the common rule that relies on the definitions in that part. Second, the proposed separate part uses the term “award,” rather than the term “grant,” to include the grants, cooperative agreements, and other assistance instruments covered by the drug-free workplace requirements. The term “grant” then is proposed to be redefined to bring it into conformance with the use of that term established by the Federal Grant and Cooperative Agreement Act (currently at 31 U.S.C. chapter 63). Doing so should help avoid confusion about the applicability of the drug-free workplace requirements to assistance instruments other than grants. To accommodate the change to the term “award,” the proposed separate part includes a definition for the term “cooperative agreement” and uses the term “recipient,” rather than “grantee.”

Impact Analysis—Executive Order 12866

This is not a significant regulatory action under section 3(f)(4) of Executive Order 12866, “Regulatory Planning and Review.”

B. Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 605(b)) requires that, for each rule with a “significant economic impact on a substantial number of small entities,” an analysis must be prepared describing the rule's impact on small entities and identifying any significant alternatives to the rule that would minimize the economic impact on small entities.

The participating agencies certify that this proposed rule, if published as a final rule, would not have a significant impact on a substantial number of small entities. This proposed rule addresses Federal agency procedures for suspension and debarment. It clarifies current requirements under the Nonprocurement Common Rule for Debarment and Suspension by reorganizing information and presenting that information in a plain language, question-and-answer format.

C. Unfunded Mandates Act of 1995

The Unfunded Mandates Act of 1995 (Public Law 104-4) requires agencies to prepare several analytic statements before proposing any rule that may result in an annual expenditures of $100 million by State, local, Indian Tribal governments or the private sector. Since this proposed rule, if published as a final rule, would not result in expenditures of this magnitude, the participating agencies certify that such statements are not necessary.

D. Paperwork Reduction Act

The participating agencies certify that this proposed rule, if published as a final rule, would not impose additional reporting or record-keeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).

E. Small Business Regulatory Enforcement Fairness Act of 1996

This rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, (5 U.S.C. 804). This proposed rule, if published as a final rule, would not: Result in an annual effect on the economy of $100 million or more; result in an increase in cost or prices; or have significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets.

F. Executive Order 13132: Federalism

This proposed rule, if published as a final rule, would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the

distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, the participating agencies have determined that this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

Text of the Proposed Common Rules

The text of the proposed common rules appear below:

1. [Part/Subpart] _ is revised to read as follows:

[PART/SUBPART] _ GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)

Sec.
_.25
How is this part organized?
_.50
How is this part written?
_.75
Do terms in this part have special meanings?

Subpart A—General

_.100
What does this part do?
_.105
Does this part apply to me?
_.110
What is the purpose of the nonprocurement debarment and suspension system?
_.115
How does an exclusion restrict a person's involvement in covered transactions?
_.120
May we grant an exception to let an excluded person participate in a covered transaction?
_.125
Does an exclusion under the nonprocurement system affect a person's eligibility to participate in Federal procurement contracts?
_.130
Does an exclusion under the Federal procurement system affect a person's eligibility to participate in nonprocurement transactions?
_.135
May the [Agency noun] exclude a person who is not currently participating in a nonprocurement transaction?
_.140
How do I know if a person is excluded?
_.145
Does this part cover persons who are disqualified as well as those who are excluded from nonprocurement transactions?

Subpart B—Covered Transactions

_.200
What is a covered transaction?
_.205
Why is it important to know if a particular transaction is a covered transaction?
_.210
Which nonprocurement transactions are covered transactions?
_.215
Which nonprocurement transactions are not covered transactions?
_.220
Are any procurement contracts included as covered transactions?
_.225
How do I know if a transaction in which I may participate is a covered transaction?

Subpart C—Responsibilities of Participants Regarding Transactions Doing Business With Other Persons

_.300
May I enter into a covered transaction with an excluded or disqualified person?
_.305
What must I do if a Federal agency excludes a person with whom I am already doing business in a covered transaction?
_.310
May I use the services of an excluded person under a covered transaction?
_.315
Must I verify that principals of my covered transactions are eligible to participate?
_.320
What happens if I do business with an excluded person in a covered transaction?
_.325
What requirements must I pass down to persons at lower tiers with whom I intend to do business?
Disclosing Information—Primary Tier Participants

_.330
What information must I provide before entering into a covered transaction with the [Agency noun]?
_.335
If I disclose unfavorable information required under § _.330 will I be prevented from entering into the transaction?
_.340
What happens if I fail to disclose the information required under § _.330?
_.345
What must I do if I learn of the information required under § _.330 after entering into a covered transaction with the [Agency noun]?
Disclosing Information—Lower Tier Participants

_.350
What information must I provide to a higher tier participant before entering into a covered transaction with that participant?
_.355
What happens if I fail to disclose the information required under § _.350?
_.360
What must I do if I learn of information required under § _.350 after entering into a covered transaction with a higher tier participant?

Subpart D—Responsibilities of [Agency adjective] Officials Regarding Transactions

_.400
May I enter into a transaction with an excluded or disqualified person?
_.405
May I enter into a covered transaction with a participant if a principal of the transaction is excluded?
_.410
May I approve a participant's use of the services of an excluded person?
_.415
What must I do if a Federal agency excludes the participant or a principal after I enter into a covered transaction?
_.420
May I approve a transaction with an excluded or disqualified person at a lower tier?
_.425
When do I check to see if a person is excluded or disqualified?
_.430
How do I check to see if a person is excluded or disqualified?
_.435
What must I require of a primary tier participant?
_.440
[Reserved]
_.445
What action may I take if a primary tier participant knowingly does business with an excluded or disqualified person?
_.450
What action may I take if a primary tier participant fails to disclose the information required under § _.330?
_.455
What may I do if a lower tier participant fails to disclose the information required under § _.350 to the next higher tier?

Subpart E—Governmentwide List of Parties Excluded or Disqualified From Federal Procurement and Nonprocurement Programs

_.500
What is the purpose of the List?
_.505
Who uses the List?
_.510
Who maintains the List?
_.515
What specific information is on the List?
_.520
Who gives the GSA the information that it puts on the List?
_.525
Whom do I ask if I have questions about a person on the List?
_.530
Where can I get the List?

Subpart F—General Principles Relating to Suspension and Debarment Actions

_.600
How do suspension and debarment actions start?
_.605
How does suspension differ from debarment?
_.610
What procedures does the [Agency noun] use in suspension and debarment actions?
_.615
How does the [Agency noun] notify a person of suspension and debarment actions?
_.620
Do Federal agencies coordinate suspension and debarment actions?
_.625
What is the scope of a suspension or debarment action?
_.630
May the [Agency noun] impute the conduct of one person to another?
_.635
May the [Agency noun] settle a debarment or suspension action?
_.640
May a settlement include a voluntary exclusion?
—.645
Do other Federal agencies know if the [Agency noun] agrees to a voluntary exclusion?

Subpart G—Suspension

_.700
When may the suspending official issue a suspension?
_.705
What does the suspending official consider in issuing a suspension?
_.710
When does a suspension take effect?
_.715
What notice does the suspending official give me if I am suspended?
_.720
How may I contest a suspension?
_.725
How much time do I have to contest a suspension?
_.730
What information must I provide to the suspending official if I contest a suspension?
_.735
Under what conditions do I get an additional opportunity to challenge the facts on which the suspension is based?
_.740
Are suspension proceedings formal?
_.745
Is a record made of fact-finding proceedings?
_.750
What does the suspending official consider in deciding whether to continue or terminate my suspension?
_.755
When will I know whether the suspension is continued or terminated?
_.760
How long may my suspension last?

Subpart H—Debarment

_.800
What are the causes for debarment?
_.805
What notice does the debarring official give me if I am proposed for debarment?
_.810
When does a debarment take effect?
_.815
How may I contest a proposed debarment?
_.820
How much time do I have to contest a proposed debarment?
_.825
What information must I provide to the debarring official if I contest a proposed debarment?
_.830
Under what conditions do I get an additional opportunity to challenge the facts on which a proposed debarment is based?
_.835
Are debarment proceedings formal?
_.840
Is a record made of fact-finding proceedings?
_.845
What does the debarring official consider in deciding whether to debar me?
_.850
What is the standard of proof in a debarment action?
_.855
Who has the burden of proof in a debarment action?
_.860
What factors may influence the debarring official's decision?
_.865
How long may my debarment last?
_.870
When do I know if the debarring official debars me?
_.875
May I ask the debarring official to reconsider a decision to debar me?
_.880
What factors may influence the debarring official during reconsideration?
_.885
May the debarring official extend a debarment?

Subpart I—Definitions

_.900
Adequate evidence.
_.905
Affiliate.
_.910
Agency.
_.915
Agent or representative.
_.920
Civil judgment.
_.925
Conviction.
_.930
Debarment.
_.935
Debarring official.
_.940
Disqualified.
_.945
Excluded or exclusion.
_.950
Indictment.
_.955
Ineligible or ineligibility.
_.960
Legal proceedings.
_.965
List of Parties Excluded or Disqualified From Federal Procurement and Nonprocurement Programs.
_.970
Nonprocurement transaction.
_.975
Notice.
_.980
Participant.
_.985
Person.
_.990
Preponderance of the evidence.
_.995
Principal.
_1000
Respondent.
_.1005
State.
_.1010
Suspending official.
_.1015
Suspension.
_.1020
Voluntary exclusion or voluntarily excluded.

Subpart J—[Reserved]

Appendix to Part _Covered Transactions

Authority:

Sec. 2455, Pub. L. 103-355, 108 Stat. 3327; E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O. 12689, 3 CFR, 1989 Comp., p .235.

§ _.25
How is this part organized?
(a) This part is subdivided into ten subparts. Each subpart contains information related to a broad topic or specific audience with special responsibilities, as shown in the following table:

In subpart ...
You will find provisions related to ...

A
general information about this rule.

B
the types of [Agency adjective] transactions that are covered by the Governmentwide nonprocurement suspension and debarment system.

C
the responsibilities of persons who participate in covered transactions.

D
the responsibilities of [Agency adjective] officials who are authorized to enter into covered transactions.

E

the responsibilities of Federal agencies for the
List of Parties Excluded or Disqualified From Federal Procurement and Nonprocurement Programs
(Published by the General Services Administration).

F
the general principles governing suspension, debarment, voluntary exclusion and settlement.

G
suspension actions.

H
debarment actions.

I
definitions of terms used in this part.

J
[Reserved]

(b) The following table shows which subparts may be of special interest to you, depending on who you are:

If you are ...
see subpart(s) ...

(1) a participant or principal in a nonprocurement transaction
A, B, C and I.

(2) a respondent in a suspension action
A, B, F, G and I.

(3) a respondent in a debarment action
A, B, F, H and I.

(4) a suspending official
A, B, E, F, G and I.

(5) a debarring official
A, B, D, F, H and I.

(6) a(n) [Agency adjective] official authorized to enter into a covered transaction
A, B, D, E and I.

(7) Reserved
J.

§ _.50
How is this part written?
(a) This part uses a “plain language” format to make it easier for the general public and business community to use. The section headings and text, often in the form of questions and answers, must be read together.

(b) Pronouns used within this part, such as “I” and “you,” change from subpart to subpart depending on the audience being addressed. The pronoun “we” always is the [Agency noun].

(c) The “Covered Transactions” chart in the appendix to this part shows the levels or “tiers” at which the [Agency noun] enforces an exclusion under this part.

§ _.75
Do terms in this part have special meanings?
This part uses terms throughout the text that have special meaning. Those terms are defined in Subpart I of this part. For example, three important terms are—

(a)
Exclusion
or
excluded,
which refers only to discretionary actions taken by a suspending or debarring official under this part or the Federal Acquisition Regulation (48 CFR part 9, subpart 9.4);

(b)
Disqualification
or
disqualified,
which refers to prohibitions under specific statutes, executive orders (other than Executive Order 12549 and Executive Order 12689), or other authorities. Disqualifications frequently are not subject to the discretion of an agency official, may have a different scope than exclusions, or have special conditions that apply to the disqualification; and

(c)
Ineligibility
or
ineligible,
which generally refers to a person who is either excluded or disqualified.

Subpart A—General

§ _.100
What does this part do?

This part adopts a governmentwide system of debarment and suspension for [Agency adjective] nonprocurement activities. It also provides for reciprocal exclusion of persons who have been excluded under the Federal Acquisition Regulation, and provides for the consolidated listing of all persons who are excluded, or disqualified by statute, executive order, or other legal authority.

This part satisfies the requirements in section 3 of Executive Order 12549, “Debarment and Suspension” (3 CFR 1986 Comp., p. 189), Executive Order 12689, “Debarment and Suspension” ( 3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Public Law 103-355, 108 Stat. 3327).

§ _.105
Does this part apply to me?
Portions of this part (see table at § _.25(b)) apply to you if you are a(n):

(a) Participant or principal in a covered transaction;

(b) Respondent (a person against whom the [Agency noun] has initiated a debarment or suspension action);

(c) [Agency adjective] debarring or suspending official; or

(d) [Agency adjective] official who is authorized to enter into covered transactions with non-Federal parties.

§ _.110
What is the purpose of the nonprocurement debarment and suspension system?
(a) To protect the public interest, the Federal Government ensures the integrity of Federal programs by conducting business only with responsible persons.

(b) A Federal agency uses the nonprocurement debarment and suspension system to exclude persons from Federal programs persons who are not presently responsible.

(c) An exclusion is a serious action that a Federal agency may take only to protect the public interest. A Federal agency may not exclude a person or commodity for the purposes of punishment.

§ _.115
How does an exclusion restrict a person's involvement in covered transactions?
With the exceptions stated in §§ _.120, _.315, and _.420, a person who is excluded by the [Agency noun] or any other Federal agency may not:

(a) Be a participant in a(n) [Agency adjective] transaction that is a covered transaction under Subpart B of this part;

(b) Be a participant in a transaction of any other Federal agency that is a covered transaction under that agency's regulation for debarment and suspension; or

(c) Act as a principal of a person participating in one of those covered transactions.

§ _.120
May we grant an exception to let an excluded person participate in a covered transaction?
(a) The [Agency head or designee] may grant an exception permitting an excluded person to participate in a particular covered transaction. If the [Agency head or designee] grants an exception, the exception must be in writing and state the reason(s) for deviating from the governmentwide policy in Executive Order 12549.

(b) An exception granted by one agency for an excluded person does not extend to the covered transactions of another agency.

§ _.125
Does an exclusion under the nonprocurement system affect a person's eligibility for Federal procurement contracts?
If any Federal agency excludes a person under its nonprocurement common rule on or after August 25, 1995, the excluded person is also ineligible to participate in Federal procurement transactions under the FAR. Therefore, an exclusion under this part has reciprocal effect in Federal procurement transactions.

§ _.130
Does exclusion under the Federal procurement system affect a person's eligibility to participate in nonprocurement transactions?
If any Federal agency excludes a person under the FAR on or after August 25, 1995, the excluded person is also ineligible to participate in nonprocurement covered transactions under this part. Therefore, an exclusion under the FAR has reciprocal effect in Federal nonprocurement transactions.

§ _.135 May the
[Agency noun] exclude a person who is not currently participating in a nonprocurement transaction?
Given a cause that justifies an exclusion under this part, we may exclude any person who has participated, is currently participating, or may reasonably be expected to participate in a covered transaction.

§ _.140
How do I know if a person is excluded?

Check the Governmentwide
List of Parties Excluded or Disqualified from Federal Procurement and Nonprocurement Programs (List)
to determine whether a person is excluded. The General Services Administration (GSA) maintains the
List
and makes it available, as detailed in Subpart E of this part. When a Federal agency takes an action to exclude a person under the nonprocurement or procurement debarment and suspension system, the agency sends information about the excluded person to the GSA for inclusion on the
List.

§ _.145
Does this part address persons who are disqualified, as well as those who are excluded from nonprocurement transactions?
Except if provided for in Subpart J of this part, this part—

(a) Addresses disqualified persons only to—

(1) Provide for their inclusion on the
List
; and

(2) State responsibilities of Federal agencies and participants to check for disqualified persons before entering into covered transactions.

(b) Does not specify the—

(1) [Agency adjective] transactions for which a disqualified person is ineligible. Those transactions vary on a case-by-case basis, because they depend on the language of the specific statute, Executive order, or regulation that caused the disqualification;

(2) Entities to which the disqualification applies; or

(3) Process that the agency uses to disqualify a person. Unlike exclusion, disqualification is frequently not a discretionary action that a Federal agency takes.

Subpart B—Covered Transactions

§ _.200
What is a covered transaction?
A covered transaction is a nonprocurement or procurement transaction that is subject to the prohibitions of this part. It may be a transaction at—

(a) The primary tier, between a Federal agency and a person (see appendix to this part); or

(b) A lower tier, between a participant in a covered transaction and another person.

§ _.205
Why is it important if a particular transaction is a covered transaction?
The importance of a covered transaction depends upon who you are.

(a) As a participant in the transaction, you have the responsibilities laid out in Subpart C of this part. Those include responsibilities to the person or Federal agency at the next higher tier from whom you received the transaction, if any. They also include responsibilities if you subsequently enter into other covered transactions with persons at the next lower tier.

(b) As a Federal official who enters into a primary tier transaction, you have the responsibilities laid out in subpart D of this part.

(c) As an excluded person, you may not be a participant or principal in the transaction unless—

(1) The person who entered into the transaction with you allows you to continue your involvement in a transaction that predates your exclusion, as permitted under § _.305 or § _.415; or

(2) A(n) [Agency adjective] official obtains an exception from the [Agency head or designee] to allow you to be

involved in the transaction, as permitted under § _.120.

§ _.210
Which nonprocurement transactions are covered transactions?
All nonprocurement transactions, as defined in § _.970, are covered transactions unless listed in § _.215. (See appendix to this part.)

§ _.215
Which nonprocurement transactions are not covered transactions?
The following types of nonprocurement transactions are not covered transactions:

(a) A direct award to—

(1) A foreign government or foreign governmental entity;

(2) A public international organization;

(3) An entity owned (in whole or in part) or controlled by a foreign government; or

(4) Any other entity consisting wholly or partially of one or more foreign governments or foreign governmental entities.

(b) A benefit to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted). For example, if a person receives social security benefits under the Supplemental Security Income provisions of the Social Security Act, 42 U.S.C. 1301
et seq.
, those benefits are not covered transactions and, therefore, are not affected if the person is excluded.

(c) Federal employment.

(d) A transaction that the [Agency noun] needs to respond to a national or agency-recognized emergency or disaster.

(e) A permit, license, certificate, or similar instrument issued as a means to regulate public health, safety, or the environment, unless the [Agency noun] specifically designates it to be a covered transaction.

(f) An incidental benefit that results from ordinary governmental operations.

(g) Any other transaction if the application of an exclusion to the transaction is prohibited by law.

§ _.220
Are any procurement contracts included as covered transactions?
Covered transactions under this part do not include any procurement contracts awarded directly by a Federal agency (those transactions are covered under the Federal Acquisition Regulation), but they do include some procurement contracts awarded by non-Federal participants in nonprocurement covered transactions (see appendix to this part). Specifically, a contract for goods or services is a covered transaction if any of the following applies:

(a) The contract is awarded by a participant in a nonprocurement transaction that is covered under § _.210, and the amount of the contract is expected to equal or exceed $25,000.

(b) The contract requires the consent of a(n) [Agency adjective] official. In that case, the contract, regardless of the amount, always is a covered transaction, and it does not matter who awarded it. For example, it could be a subcontract awarded by a contractor at a tier below a nonprocurement transaction, as shown in the appendix to this part.

(c) The contract is for federally-required audit services.

§ _.225
How do I know if a transaction in which I may participate is a covered transaction?
As a participant in a transaction, you will know that it is a covered transaction because the agency regulations governing the transaction, the appropriate agency official, or participant at the next higher tier who enters into the transaction with you, will tell you that you must comply with applicable portions of this part.

Subpart C—Responsibilities of Participants Regarding Transactions

Doing Business With Other Persons

§ _.300
May I enter into a covered transaction with an excluded or disqualified person?
(a) You as a participant may not enter into a covered transaction with an excluded person, unless the [Agency noun] grants an exception under § _.120.

(b) You may not enter into any transaction with a person who is disqualified from that transaction, unless you have obtained an exception under the disqualifying statute, Executive order, or regulation.

§ _.305
What must I do if a Federal agency excludes a person with whom I am already doing business in a covered transaction?
(a) You as a participant may continue covered transactions with an excluded person if the transactions were in existence when the agency excluded the person. However, you are not required to continue the transactions, and you may consider termination. You should make a decision about whether to terminate and the type of termination action, if any, only after a thorough review to ensure that the action is proper and appropriate.

(b) You may not renew or extend covered transactions (other than no-cost time extensions) with any excluded person, unless the [Agency noun] grants an exception under § _.120.

§ _.310
May I use the services of an excluded person under a covered transaction?
(a) You as a participant may continue to use the services of an excluded person as a principal under a covered transaction if you were using the services of that person in the transaction before the person was excluded. However, you are not required to continue using that person's services as a principal.

(b) You may not begin to use the services of an excluded person as a principal under a covered transaction unless the [Agency noun] grants an exception under § _.120.

§ _.315
Must I verify that principals of my covered transactions are eligible to participate?
Yes, you as a participant are responsible for determining whether any principal of your covered transactions is excluded or disqualified from participating in the transaction.

You may decide the method and frequency by which you do so. You may, but you are not required to, check the governmentwide
List.

§ _.320
What happens if I do business with an excluded person in a covered transaction?
If as a participant you knowingly do business with an excluded person, we may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend you, or take other remedies as appropriate.

§ _.325
What requirements must I pass down to persons at lower tiers with whom I intend to do business?
Before entering into a covered transaction with a participant at the next lower tier, you must require that participant to:

(a) Comply with this subpart as a condition of participation in the transaction. You may do so using any method(s), unless § _.430 requires you to use specific methods.

(b) Pass the requirement to comply with this subpart to each person with whom the participant enters into a covered transaction at the next lower tier.

Disclosing Information—Primary Tier Participants

§ _.330
What information must I provide before entering into a covered transaction with the [Agency noun]?

Before you enter into a covered transaction at the primary tier, you as the participant must notify the [Agency

adjective] office that is entering into the transaction with you, if you know that you or any of the principals for that covered transaction:

(a) Are presently excluded or disqualified;

(b) Have been convicted within the preceding three years of any of the offenses listed in § _.800(a) or had a civil judgment rendered against you for one of those offenses within that time period;

(c) Are presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, state or local) with commission of any of the offenses listed in § _.800(a); or

(d) Have had one or more public transactions (Federal, state, or local) terminated within the preceding three years for cause or default.

§ _.335
If I disclose unfavorable information required under § _.330, will I be prevented from participating in the transaction?
As a primary tier participant, your disclosure of unfavorable information about yourself or a principal under § _.330 will not necessarily cause us to deny your participation in the covered transaction. We will consider the information when we determine whether to enter into the covered transaction. We also will consider any additional information or explanation that you elect to submit with the disclosed information.

§ _.340
What happens if I fail to disclose information required under § _.330?
If we later determine that you failed to disclose information under § _.330 that you knew at the time you entered into the covered transaction, we may

(a) Terminate the transaction for material failure to comply with the terms and conditions of the transaction; or

(b) Pursue any other available remedies, including suspension and debarment.

§ _.345
What must I do if I learn of information required under § _.330 after entering into a covered transaction with the [Agency noun]?
At any time after you enter into a covered transaction, you must give immediate written notice to the [Agency adjective] office with which you entered into the transaction if you learn either that—

(a) You failed to disclose information earlier, as required by § _.330; or

(b) Due to changed circumstances, you or any of the principals for the transaction now meet any of the criteria in § _.330.

Disclosing Information—Lower Tier Participants

§ _.350
What information must I provide to a higher tier participant before entering into a covered transaction with that participant?
Before you enter into a covered transaction with a person at the next higher tier, you as a lower tier participant must notify that person if you know that you or any of the principals are presently excluded or disqualified.

§ _.355
What happens if I fail to disclose information required under § _.350?
If we later determine that you failed to tell the person at the higher tier that you were excluded or disqualified at the time you entered into the covered transaction with that person, we may pursue any available remedies, including suspension and debarment.

§ _.360
What must I do if I learn of information required under § _.350 after entering into a covered transaction with a higher tier participant?
At any time after you enter into a lower tier covered transaction with a person at a higher tier, you must provide immediate written notice to that person if you learn either that—

(a) You failed to disclose information earlier, as required by § _.350; or

(b) Due to changed circumstances, you or any of the principals for the transaction now meet any of the criteria in § _.350.

Subpart D—Responsibilities of [Agency adjective] Officials Regarding Transactions

§ _.400
May I enter into a transaction with an excluded or disqualified person?
(a) You as an agency official may not enter into a covered transaction with an excluded person unless you obtain an exception under § _.120.

(b) You may not enter into any transaction with a person who is disqualified from that transaction, unless you obtain a waiver or exception under the statute, Executive order, or regulation that is the basis for the person's disqualification.

§ _.405
May I enter into a covered transaction with a participant if a principal of the transaction is excluded?
As an agency official, you may not enter into a covered transaction with a participant if you know that a principal of the transaction is excluded, unless you obtain an exception under § _.120.

§ _.410
May I approve a participant's use of the services of an excluded person?
After entering into a covered transaction with a participant, you as an agency official may not approve a participant's use of an excluded person as a principal under that transaction, unless you obtain an exception under § _.120.

§ _.415
What must I do if a Federal agency excludes the participant or a principal after I enter into a covered transaction?
(a) You as an agency official may continue covered transactions with an excluded person, or under which an excluded person is a principal, if the transactions were in existence when the person was excluded. You are not required to continue the transactions, however, and you may consider termination. You should make a decision about whether to terminate and the type of termination action, if any, only after a thorough review to ensure that the action is proper.

(b) You may not renew or extend covered transactions (other than no-cost time extensions) with any excluded person, or under which an excluded person is a principal, unless you obtain an exception under § _.120.

§ _.420
May I approve a transaction with an excluded or disqualified person at a lower tier?
If a transaction at a lower tier is subject to your approval, you as an agency official may not approve—

(a) A covered transaction with a person who is currently excluded, unless you obtain an exception under § _.120; or

(b) A transaction with a person who is disqualified from that transaction, unless you obtain a waiver or exception under the statute, Executive order, or regulation that is the basis for the person's disqualification.

§ _.425
When do I check to see if a person is excluded or disqualified?
As an agency official, you must check to see if a person is excluded or disqualified before you—

(a) Enter into a primary tier covered transaction;

(b) Approve a principal in a primary tier covered transaction;

(c) Approve a lower tier participant if agency approval of the lower tier participant is required; or

(d) Approve a principal in connection with a lower tier transaction if agency approval of the principal is required.

§ _.430
How do I check to see if a person is excluded or disqualified?
You check to see if a person is excluded or disqualified in two ways:

(a) You as an agency official must check the governmentwide List when you take any action listed in § _.425.

(b) You must review information that a participant gives you, as required by § _.330, about its status or the status of the principals of a transaction.

§ _.435
What must I require of a primary tier participant?
You as an agency official must require each participant in a primary tier covered transaction to—

(a) Comply with subpart C of this part as a condition of participation in the transaction; and

(b) Communicate the requirement to comply with Subpart C of this part to persons at the next lower tier with whom the primary tier participant enters into covered transactions.

§ _.440
[Reserved]

§ _.445
What action may I take if a primary tier participant knowingly does business with an excluded or disqualified person?
If a participant knowingly does business with an excluded or disqualified person, you as an agency official may refer the matter for suspension and debarment consideration.

You may also disallow costs, annul or terminate the transaction, issue a stop work order, or take any other appropriate remedy.

§ _.450
What action may I take if a primary tier participant fails to disclose the information required under § _.330?
If you as an agency official determine that a participant failed to disclose information, as required by § _.330, at the time it entered into a covered transaction with you, you may—

(a) Terminate the transaction for material failure to comply with the terms and conditions of the transaction; or

(b) Pursue any other available remedies, including suspension and debarment.

§ _.455
What may I do if a lower tier participant fails to disclose the information required under § _.350 to the next higher tier?
If you as an agency official determine that a lower tier participant failed to disclose information, as required by § _.350, at the time it entered into a covered transaction with a participant at the next higher tier, you may pursue any remedies available to you, including the initiation of a suspension or debarment action.

Subpart E—Governmentwide List of Parties Excluded or Disqualified From Federal Procurement and Nonprocurement Programs

§ _.500
What is the purpose of the List?

The
List
is a widely available source of the most current information about persons who are excluded or disqualified from covered transactions.

§ _.505
Who uses the List?

(a) Federal agency officials use the
List
to determine whether to enter into a transaction with a person, as required under § _.410.

(b) Participants also may, but are not required to, use the
List
to determine if—

(1) Principals of their transactions are excluded or disqualified, as required under § _.315; or

(2) Persons with whom they are entering into covered transactions at the next lower tier are excluded or disqualified.

(c) The
List
is available to the general public.

§ _.510
Who maintains the List?

In accordance with the OMB guidelines, the General Services Administration (GSA) compiles, maintains and distributes the
List.

§ _.515
What specific information is on the List?

(a) At a minimum, the
List
indicates—

(1) The full name (where available) and address of each excluded and disqualified person, in alphabetical order, with cross references if more than one name is involved in a single action;

(2) The type of action;

(3) The cause for the action;

(4) The scope of the action;

(5) Any termination date for the action;

(6) The agency and name and telephone number of the agency point of contact for the action; and

(7) The Contractor and Government Establishment (CAGE) code or other similar code approved by the GSA, of the excluded or disqualified person, if available.

(b)(1) The database for the electronic version of the
List
includes a field for the Taxpayer Identification Number (TIN) (the social security number (SSN) for an individual) of an excluded or disqualified person.

(2) GSA discloses the SSN of an individual to verify the identity of an individual, only if permitted under the Privacy Act of 1974 and, if appropriate, the Computer Matching and Privacy Protection Act of 1988, as codified in 5 U.S.C. 552a.

§ _.520
Who gives the GSA the information that it puts on the List?
Federal officials who take actions to exclude persons under this part or officials who are responsible for identifying disqualified persons must provide current information about those persons to the GSA. They must give the GSA—

(a) Information required by § _.515(a);

(b) The Taxpayer Identification Number (TIN) of the excluded or disqualified person, including the social security number (SSN) for an individual, if the number is available and may be disclosed under law;

(c) Information about an excluded or disqualified person within five working days, unless the GSA agrees to an alternative schedule, after—

(1) Taking an exclusion action;

(2) Modifying or rescinding an exclusion action;

(3) Finding that a person is disqualified; or

(4) Finding that there has been a change in the status of a person who is listed as disqualified.

§ _.525
Whom do I ask if I have questions about a specific person on the List?

If you have questions about a listed person, ask the Federal agency that took the action placing the person's name on the
List.

§ _.530
Where can I get the List?

You can get the information contained on the
List
in two ways.

(a) You may subscribe to a printed version which you may obtain by purchasing a yearly subscription. A Federal agency may subscribe through its printing and distribution office. The public may obtain a subscription from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402, or by calling the Government Printing Office Inquiry and Order Desk at (202) 783-3238.

(b) You may access the
List
through the Internet, currently at http://epls.arnet.gov.

Subpart F—General Principles Relating to Suspension and Debarment Actions

§ _.600
How do suspension and debarment actions start?
When we receive information from any source concerning a cause for suspension or debarment, we will promptly report and investigate it. We refer the question of whether to suspend or debar you to our suspending or debarring official for consideration, if appropriate.

§ _.605
How does suspension differ from debarment?
Suspension differs from debarment in that:

A suspending official . . .
A debarring official . . .

(a) Imposes suspension as a temporary status of ineligibility for procurement and nonprocurement transactions, pending completion of an investigation or legal proceedings
Imposes debarment for a specified period as a final determination that a person is not presently responsible.

(b) Must—

(1) Have
adequate evidence
that there may be a cause for debarment of an individual or business; and

(2) Conclude that there is an
immediate need
to take action to protect the Federal interest

Must conclude, based on a
preponderance of the evidence,
that the individual or business has engaged in conduct that warrants debarment.

(c) Usually imposes the suspension
first,
and promptly notifies the suspended person, giving the person an opportunity to contest the suspension and have it lifted

Imposes debarment
after
giving the respondent notice of the action and an opportunity to contest the proposed debarment.

§ _.610 What procedures does the
[Agency noun] use in suspension and debarment actions?
In deciding whether to suspend or debar you, we handle the actions as informally as practicable, consistent with principles of fundamental fairness.

(a) For suspension actions, we use the procedures in this subpart and Subpart G of this part.

(b) For debarment actions, we use the procedures in this subpart and Subpart H of this part.

§ _.615
How does the [Agency noun] notify a person of suspension and debarment actions?
The suspending or debarring official sends a written notice to you, your identified counsel, your agent for service of process, or any of your partners, officers, directors, owners, or joint venturers to the last known street address, facsimile number, or e-mail address. The notice is effective if sent to any of these persons.

§ _.620
Do Federal agencies coordinate suspension and debarment actions?
Yes, when more than one Federal agency has an interest in a suspension or debarment, the agencies may consider designating one agency as the lead agency for making the decision. Agencies are encouraged to establish methods and procedures for coordinating their suspension and debarment actions.

§ ._625
What is the scope of a suspension or debarment?
If you are suspended or debarred, the suspension or debarment is effective as follows:

(a) Your suspension or debarment constitutes suspension or debarment of all of your divisions and other organizational elements from all covered transactions, unless the suspension or debarment decision is limited—

(1) By its terms to one or more specifically identified individuals, divisions, or other organizational elements; or

(2) To specific types of transactions.

(b) Any affiliate of a participant may be included in a suspension or debarment action if the suspending or debarring official—

(1) Officially names the affiliate in the notice; and

(2) Gives the affiliate an opportunity to contest the action.

§ _.630
May the [Agency noun] impute conduct of one person to another?
For purposes of determining the scope of your suspension or debarment, we may impute conduct as follows:

(a)
Conduct imputed to participant.
We may impute the fraudulent, criminal, or other seriously improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with a participant to the participant when the conduct occurred in connection with the individual's performance of duties for or on behalf of the participant, or with the participant's knowledge, approval or acquiescence. The participant's acceptance of the benefits derived from the conduct is evidence of knowledge, approval or acquiescence.

(b)
Conduct imputed to individuals associated with participant.
We may impute the fraudulent, criminal, or other seriously improper conduct of a participant to any officer, director, shareholder, partner, employee, or other individual associated with the participant who participated in, knew of or had reason to know of the participant's conduct.

(c)
Conduct of one participant imputed to other participants in a joint venture.
We may impute the fraudulent, criminal, or other seriously improper conduct of one participant in a joint venture, grant pursuant to a joint application, or similar arrangement to other participants if the conduct occurred for or on behalf of the joint venture, grant pursuant to a joint application or similar arrangement, or with the knowledge, approval, or acquiescence of those participants. Acceptance of the benefits derived from the conduct is evidence of knowledge, approval, or acquiescence.

Settlement and Voluntary Exclusion

§ _.635
May the [Agency noun] settle a debarment or suspension action?
Yes, we may settle a debarment or suspension action at any time if it is in the best interests of the Federal Government.

§ _.640
May a settlement include a voluntary exclusion?
Yes, if we enter into a settlement with you in which you agree to be excluded, it is called a voluntary exclusion and has governmentwide effect.

§ _.645
Do other Federal agencies know if the [Agency noun] agrees to a voluntary exclusion?
(a) Yes, we send information regarding a voluntary exclusion to the General

Services Administration for entry into the
List.

(b) Also, any agency or person may contact us to find out the details of a voluntary exclusion.

Subpart G—Suspension

§ _.700
When may the suspending official issue a suspension?
Suspension is a serious action. Using the procedures of this subpart and Subpart F of this part, the suspending official may impose suspension only when that official determines that—

(a) There exists adequate evidence to suspect that a cause for debarment under § _.800 may exist; and

(b) Immediate action is necessary to protect the public interest.

§ _.705
What does the suspending official consider in issuing a suspension?
(a) In determining the adequacy of the evidence to support the suspension, the suspending official considers how much information is available, how credible it is given the circumstances, whether or not important allegations are corroborated, and what inferences can reasonably be drawn as a result. During this assessment, the suspending official may examine the basic documents, including grants, cooperative agreements, loan authorizations, contracts, and other relevant documents.

(b) An indictment, conviction, civil judgment, or other official findings by Federal, State, or local bodies that determine factual and/or legal matters, constitutes adequate evidence for purposes of suspension actions.

(c) In deciding whether immediate action is needed to protect the public interest, the suspending official has wide discretion. For example, the suspending official may infer the necessity for immediate action to protect the public interest either from the nature of the circumstances giving rise to a cause for suspension or from potential business relationships or involvement with a program of the Federal Government.

§ _.710
When does a suspension take effect?
A suspension is effective when the suspending official signs the decision to suspend.

§ _.715
What notice does the suspending official give me if I am suspended?
After deciding to suspend you, the suspending official promptly sends you a Notice of Suspension advising you—

(a) That you have been suspended;

(b) That your suspension is based on—

(1) An indictment;

(2) A conviction;

(3) Other adequate evidence that you have committed irregularities which seriously reflect on the propriety of further Federal Government dealings with you; or

(4) Conduct of another person that has been imputed to you, or your affiliation with a suspended or debarred person;

(c) Of any other irregularities in terms sufficient to put you on notice without disclosing the Federal Government's evidence;

(d) Of the cause(s) upon which we relied under § _.700 for imposing suspension;

(e) That your suspension is for a temporary period pending the completion of an investigation or resulting legal or debarment proceedings;

(f) Of the applicable provisions of this subpart, Subpart F of this part, and any other [Agency adjective] procedures governing suspension decision making; and

(g) Of the governmentwide effect of your suspension from procurement and nonprocurement programs and activities.

§ _.720
How may I contest a suspension?
If you as a respondent wish to contest a suspension, you or your representative must provide the suspending official with information in opposition to the suspension.

You may do this orally or in writing, but any information provided orally that you consider important must also be submitted in writing for the official record.

§ _.725
How much time do I have to contest a suspension?
(a) As a respondent you or your representative must either send, or make arrangements to appear and present, the information and argument to the suspending official within 30 days after you receive the Notice of Suspension.

(b) We consider the notice to be received by you—

(1) When delivered, if we mail the notice to the last known street address, or five days after we send it if the letter is undeliverable;

(2) When sent, if we send the notice by facsimile or five days after we send it if the facsimile is undeliverable; or

(3) When delivered, if we send the notice by e-mail or five days after we send it if the e-mail is undeliverable.

§ _.730
What information must I provide to the suspending official if I contest the suspension?
(a) In addition to any information and argument in opposition, as a respondent your submission to the suspending official must identify—

(1) Specific facts that contradict the statements contained in the Notice of Suspension. A general denial is insufficient to raise a genuine dispute over facts material to the suspension;

(2) All 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;

(3) All criminal and civil proceedings not included in the Notice of Suspension that grew out of facts relevant to the cause(s) stated in the notice; and

(4) All of your affiliates.

(b) If you fail to disclose this information, or provide false information, the [Agency noun] may seek further criminal, civil or administrative action against you, as appropriate.

§ _.735
Under what conditions do I get an additional opportunity to challenge the facts on which the suspension is based?
(a) You as a respondent will not have an additional opportunity to challenge the facts if the suspending official determines that—

(1) Your suspension is based upon an indictment, conviction, civil judgment, or other finding by a Federal, State, or local body for which an opportunity to contest the facts was provided;

(2) Your presentation in opposition contains only general denials to information contained in the Notice of Suspension;

(3) The issues raised in your presentation in opposition to the suspension are not factual in nature, or are not material to the suspending official's initial decision to suspend, or the official's decision whether to continue the suspension; or

(4) On the basis of advice from the Department of Justice, an office of the United States Attorney, a State attorney general's office, or a State or local prosecutor's office, that substantial interests of the government in pending or contemplated legal proceedings based on the same facts as the suspension would be prejudiced by conducting fact-finding.

(b) You will have an opportunity to challenge the facts if the suspending official determines that—

(1) The conditions in paragraph (a) of this section do not exist; and

(2) Your presentation in opposition raises a genuine dispute over facts material to the suspension.

(c) If you have an opportunity to challenge disputed material facts under this section, the suspending official or designee must conduct additional proceedings to resolve those facts.

§ _.740
Are suspension proceedings formal?

(a) Suspension proceedings are conducted in a fair and informal manner. The suspending official may use flexible procedures to allow you to present matters in opposition. In so doing, the suspending official is not required to follow formal rules of evidence or procedure in creating an official record upon which the official will base a final suspension decision.

(b) You as a respondent or your representative must submit any documentary evidence you want the suspending official to consider. In addition, you may present witnesses and confront any person the agency presents as a witness against you.

§ _.745
Is a record made of fact-finding proceedings?
(a) Where fact-finding is conducted, the fact-finder must prepare written findings of fact for the record.

(b) A transcribed record of fact-finding proceedings must be made, unless you as a respondent and the [Agency noun] agree to waive it in advance. If you want a copy of the transcribed record, you may purchase it.

§ _.750
What does the suspending official consider in deciding whether to continue or terminate my suspension?
(a) The suspending official bases the decision on all information contained in the official record. The record includes—

(1) All information in support of the suspending official's initial decision to suspend you;

(2) Any further information and argument presented in support of, or opposition to, the suspension; and

(3) Any transcribed record of fact-finding proceedings.

(b) The suspending official may refer disputed material facts to another official for findings of fact. The suspending official may reject any resulting findings, in whole or in part, only after specifically determining them to be arbitrary, capricious, or clearly erroneous.

§ _.755
When will I know whether the suspension is continued or terminated?
(a) Where no additional fact-finding is conducted, the suspending official must make the decision whether to continue, modify, or terminate your suspension within 45 days of closing the official record. The official may extend that period for good cause. If fact-finding is conducted, the suspending official must make the final decision as promptly as possible after the record is closed.

(b) In any event, the suspending official must prepare a written final decision and notify you of the decision and the reasons for it. (
See
§ _.615.)

§ _.760
How long may my suspension last?
(a) If legal or debarment proceedings are initiated at the time of, or during your suspension, the suspension may continue until the conclusion of those proceedings. However, if proceedings are not initiated, a suspension may not exceed 12 months.

(b) The suspending official may extend the 12 month limit under paragraph (a) of this section for an additional 6 months if an office of a U.S. Assistant Attorney General, U.S. Attorney, or other responsible prosecuting official requests an extension in writing. In no event may a suspension exceed 18 months without initiating proceedings under paragraph (a) of this section.

(c) The suspending official must notify the appropriate officials under paragraph

(b) of this section of an impending termination of a suspension at least 30 days before the 12 month period expires to allow the officials an opportunity to request an extension.

Subpart H—Debarment

§ _.800
What are the causes for debarment?
We may debar a person for—

(a) Conviction of or civil judgment for—

(1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction;

(2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging;

(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 any other offense indicating a lack of business integrity or business honesty that seriously and directly affects your present responsibility;

(b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as—

(1) A willful failure to perform in accordance with the terms of one or more public agreements or transactions;

(2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or

(3) A willful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction;

(c) Any of the following causes:

(1) A nonprocurement debarment by any Federal agency taken before October 1, 1988, or a procurement debarment by any Federal agency taken pursuant to 48 CFR part 9, subpart 9.4, before August 25, 1995;

(2) Knowingly doing business with an ineligible person, except as permitted under § _.120 or § _.305;

(3) Failure to pay a single substantial debt, or a number of outstanding debts (including disallowed costs and overpayments, but not including sums owed the Federal Government under the Internal Revenue Code) owed to any Federal agency or instrumentality, provided the debt is uncontested by the debtor or, if contested, provided that the debtor's legal and administrative remedies have been exhausted;

(4) Violation of a material provision of a voluntary exclusion agreement entered into under § _.640 or of any settlement of a debarment or suspension action; or

(5) Violation of the provisions of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701); or

(d) Any other cause of so serious or compelling a nature that it affects your present responsibility.

§ _.805
What notice does the debarring official give me if I am proposed for debarment?
After consideration of the causes in § _.800 of this subpart, if the debarring official proposes to debar you, the official sends you a Notice of Proposed Debarment, pursuant to § _.615, advising you—

(a) That the debarring official is considering debarring you;

(b) Of the reasons for proposing to debar you in terms sufficient to put you on notice of the conduct or transactions upon which the proposed debarment is based;

(c) Of the cause(s) under § _.800 upon which the debarring official relied for proposing your debarment;

(d) Of the applicable provisions of this subpart, Subpart F of this part, and any other [Agency adjective] procedures governing debarment; and

(e) Of the governmentwide effect of a debarment from procurement and nonprocurement programs and activities.

§ _.810
When does a debarment take effect?
Unlike suspension, a debarment is not effective until the debarring official issues a decision. The debarring official does not issue a decision until the respondent has had an opportunity to contest the proposed debarment.

§ _.815
How may I contest a proposed debarment?

If you as a respondent wish to contest a proposed debarment, you or your representative must provide the debarring official with information in opposition to the proposed debarment. You may do this orally or in writing, but

any information provided orally that you consider important must also be submitted in writing for the official record.

§ _.820
How much time do I have to contest a proposed debarment?
(a) As a respondent you or your representative must either send, or make arrangements to appear and present, the information and argument to the debarring official within 30 days after you receive the Notice of Proposed Debarment.

(b) We consider the Notice of Proposed Debarment to be received by you—

(1) When delivered, if we mail the notice to the last known street address, or five days after we send it if the letter is undeliverable;

(2) When sent, if we send the notice by facsimile or five days after we send it if the facsimile is undeliverable; or

(3) When delivered, if we send the notice by e-mail or five days after we send it if the e-mail is undeliverable.

§ _.825
What information must I provide to the debarring official if I contest a proposed debarment?
(a) In addition to any information and argument in opposition, as a respondent your submission to the debarring official must identify—

(1) Specific facts that contradict the statements contained in the Notice of Proposed Debarment. Include any information about any of the factors listed in § _.860. A general denial is insufficient to raise a genuine dispute over facts material to the debarment;

(2) All 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;

(3) All 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 notice; and

(4) All of your affiliates.

(b) If you fail to disclose this information, or provide false information, the [Agency noun] may seek further criminal, civil or administrative action against you, as appropriate.

§ _.830
Under what conditions do I get an additional opportunity to challenge the facts on which a proposed debarment is based?
(a) You as a respondent will not have an additional opportunity to challenge the facts if the debarring official determines that—

(1) Your debarment is based upon a conviction or civil judgment;

(2) Your presentation in opposition contains only general denials to information contained in the Notice of Proposed Debarment; or

(3) The issues raised in your presentation in opposition to the proposed debarment are not factual in nature, or are not material to the debarring official's decision whether to debar.

(b) You will have an additional opportunity to challenge the facts if the debarring official determines that—

(1) The conditions in paragraph (a) of this section do not exist; and

(2) Your presentation in opposition raises a genuine dispute over facts material to the proposed debarment.

(c) If you have an opportunity to challenge disputed material facts under this section, the debarring official or designee must conduct additional proceedings to resolve those facts.

§ _.835
Are debarment proceedings formal?
(a) Debarment proceedings are conducted in a fair and informal manner. The debarring official may use flexible procedures to allow you as a respondent to present matters in opposition. In so doing, the debarring official is not required to follow formal rules of evidence or procedure in creating an official record upon which the official will base the decision whether to debar.

(b) You or your representative must submit any documentary evidence you want the debarring official to consider. In addition, you may present witnesses and confront any person the agency presents as a witness against you.

§ _.840
Is a record made of fact-finding proceedings?
(a) Where fact-finding is conducted, the fact-finder must prepare written findings of fact for the record.

(b) A transcribed record of fact-finding proceedings must be made, unless you as a respondent and the [Agency noun] agree to waive it in advance. If you want a copy of the transcribed record, you may purchase it.

§ _.845
What does the debarring official consider in deciding whether to debar me?
(a) The debarring official may debar you for any of the causes in § _.800. However, the official need not debar you even if a cause for debarment exists. The official may consider the seriousness of your acts or omissions and the mitigating or aggravating factors set forth at § _.860.

(b) The debarring official bases the decision on all information contained in the official record. The record includes—

(1) All information in support of the debarring official's proposed debarment;

(2) Any further information and argument presented in support of, or in opposition to, the proposed debarment; and

(3) Any transcribed record of fact-finding proceedings.

(c) The debarring official may refer disputed material facts to another official for findings of fact. The debarring official may reject any resultant findings, in whole or in part, only after specifically determining them to be arbitrary, capricious, or clearly erroneous.

§ _.850
What is the standard of proof in a debarment action?
(a) In any debarment action, we must establish the cause for debarment by a preponderance of the evidence.

(b) If the proposed debarment is based upon a conviction or civil judgment, the standard of proof is met.

§ _.855
Who has the burden of proof in a debarment action?
(a) We have the burden to prove that a cause for debarment exists.

(b) Once a cause for debarment is established, you as a respondent have the burden of demonstrating to the satisfaction of the debarring official that you are presently responsible and that debarment is not necessary.

§ _.860
What factors may influence the debarring official's decision?
This section lists the mitigating and aggravating factors that the debarring official may consider in determining whether to debar you and the length of your debarment period. The debarring official may consider other factors if appropriate in light of the circumstances of a particular case. The existence or nonexistence of any factor, such as one of those set forth in this section, is not necessarily determinative of your present responsibility. In making a debarment decision, the debarring official may consider the following factors:

(a) The actual or potential harm or impact that results or may result from the wrongdoing.

(b) The frequency of incidents and/or duration of the wrongdoing.

(c) Whether there is a pattern or prior history of wrongdoing. For example, if you have been found by another Federal agency or a State agency to have engaged in wrongdoing similar to that found in the debarment action, the existence of this fact may be used by the debarring official in determining that

you have a pattern or prior history of wrongdoing.

(d) Whether you are or have been excluded or disqualified by an agency of the Federal Government or have not been allowed to participate in State or local contracts or assistance agreements on a basis of conduct similar to one or more of the causes for debarment specified in this part.

(e) Whether you have entered into an administrative agreement with a Federal agency or a State or local government that is not governmentwide but is based on conduct similar to one or more of the causes for debarment specified in this part.

(f) Whether and to what extent you planned, initiated, or carried out the wrongdoing.

(g) Whether you have accepted responsibility for the wrongdoing and recognize the seriousness of the misconduct that led to the cause for debarment.

(h) Whether you have paid or agreed to pay all criminal, civil and administrative liabilities for the improper activity, including any investigative or administrative costs incurred by the government, and have made or agreed to make full restitution.

(i) Whether you have cooperated fully with the government agencies during the investigation and any court or administrative action. In determining the extent of cooperation, the debarring official may consider when the cooperation began and whether you disclosed all pertinent information known to you.

(j) Whether the wrongdoing was pervasive within your organization.

(k) The kind of positions held by the individuals involved in the wrongdoing.

(l) Whether your organization took appropriate corrective action or remedial measures, such as establishing ethics training and implementing programs to prevent recurrence.

(m) Whether your principals tolerated the offense.

(n) Whether you brought the activity cited as a basis for the debarment to the attention of the appropriate government agency in a timely manner.

(o) Whether you have fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the debarring official.

(p) Whether you had effective standards of conduct and internal control systems in place at the time the questioned conduct occurred.

(q) Whether you have taken appropriate disciplinary action against the individuals responsible for the activity which constitutes the cause for debarment.

(r) Whether you have had adequate time to eliminate the circumstances within your organization that led to the cause for the debarment.

(s) Other factors that are appropriate to the circumstances of a particular case.

§ _.865
How long may my debarment last?
(a) If the debarring official decides to debar you, your period of debarment will be based on the seriousness of the cause(s) upon which your debarment is based. Generally, debarment should not exceed three years. However, if circumstances warrant, the debarring official may impose a longer period of debarment.

(b) In determining the period of debarment, the debarring official may consider the factors in § _.860. If a suspension has preceded your debarment, the debarring official must consider the time you were suspended.

(c) If the debarment is for a violation of the provisions of the Drug-Free

Workplace Act of 1988, your period of debarment may not exceed five years.

§ _.870
When do I know if the debarring official debars me?
(a) Where no additional fact-finding is conducted, the debarring official must make the decision whether to debar you within 45 days of closing the official record. The debarring official may extend that period for good cause. If fact-finding is conducted, the debarring official must make the final decision as promptly as possible after the record is closed.

(b) The debarring official sends you written notice, pursuant to § _.615 that the official decided, either—

(1) Not to debar you; or

(2) To debar you. In this event, the notice:

(i) Refers to the Notice of Proposed Debarment;

(ii) Specifies the reasons for your debarment;

(iii) States the period of your debarment, including the effective dates; and

(iv) Advises you that your debarment is effective for covered transactions and contracts that are subject to the Federal Acquisition Regulation (48 CFR chapter 1), throughout the executive branch of the Federal Government unless an agency head or an authorized designee grants an exception.

§ _.875
May I ask the debarring official to reconsider a decision to debar me?
Yes, as a debarred person you may ask the debarring official to reconsider the debarment decision or to reduce the time period or scope of the debarment. However, you must put your request in writing and support it with documentation.

§ _.880
What factors may influence the debarring official during reconsideration?
The debarring official may reduce or terminate your debarment based on—

(a) Newly discovered material evidence;

(b) A reversal of the conviction or civil judgment upon which your debarment was based;

(c) A
bona fide
change in ownership or management;

(d) Elimination of other causes for which the debarment was imposed; or

(e) Other reasons the debarring official finds appropriate.

§ _.885
May the debarring official extend a debarment period?
(a) Yes, the debarring official may extend a debarment for an additional period, if that official determines that an extension is necessary to protect the public interest.

(b) However, the debarring official may not extend a debarment solely on the basis of the facts and circumstances upon which the initial debarment action was based.

(c) If the debarring official decides that a debarment for an additional period is necessary, the debarring official must follow the applicable procedures in this subpart, and Subpart F of this part, to extend the debarment.

Subpart I—Definitions

§ _.900
Adequate evidence.
Adequate evidence means information sufficient to support the reasonable belief that a particular act or omission has occurred.

§ _.905
Affiliate.

Persons are
affiliates
of each other if, directly or indirectly, either one controls or has the power to control the other or a third person controls or has the power to control both. The ways we use to determine control include, but are not limited to—

(a) Interlocking management or ownership;

(b) Identity of interests among family members;

(c) Shared facilities and equipment;

(d) Common use of employees; or

(e) A business entity which has been organized following the exclusion of a person which has the same or similar management, ownership, or principal employees as the excluded person.

§ _.910
Agency.

Agency
means any United States executive department, military

department, defense agency, or any other agency of the executive branch. The independent regulatory agencies are not considered “agencies” for purposes of this part.

§ _.915
Agent or representative.

Agent
or
representative
means any person who acts on behalf of, or who is authorized to commit a participant in a covered transaction.

§ _.920
Civil judgment.

Civil judgment
means the disposition of a civil action by any court of competent jurisdiction, whether by verdict, decision, settlement, stipulation, other disposition which creates a civil liability for the complained of wrongful acts, or a final determination of liability under the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-3812).

§ _.925
Conviction.

Conviction
means a judgment or any other determination of guilt of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or plea, including a plea of nolo contendere, or any other resolution, including probation before judgment and deferred prosecution.

§ _.930
Debarment.

Debarment
means an action taken by a debarring official under Subpart H of this part to exclude a person from participating in covered transactions and transactions covered under the Federal Acquisition Regulation (48 CFR chapter 1). A person so excluded is debarred.

§ _.935
Debarring official.

(a)
Debarring official
means an agency official who is authorized to impose debarment. A debarring official is either—

(1) The agency head; or

(2) An official designated by the agency head.

(b) [Reserved]

§ _.940
Disqualified.

Disqualified
means that a person is prohibited from participating in specified Federal procurement or nonprocurement transactions as required under a statute, Executive order (other than Executive Orders 12549 and 12689) or other authority. Examples of disqualifications include persons prohibited under—

(a) The Davis-Bacon Act (40 U.S.C. 276(a));

(b) The equal employment opportunity acts and Executive orders; or

(c) The Clean Air Act (42 U.S.C. 7606), Clean Water Act (33 U.S.C. 1368) and Executive Order 11738 (3 CFR, 1973 Comp., p. 799).

§ _.945
Excluded or exclusion.

Excluded
or
exclusion
means—

(a) That a person or commodity is prohibited from being a participant in covered transactions, whether the person has been suspended; debarred; proposed for debarment under 48 CFR part 9, subpart 9.4; voluntarily excluded; or

(b) The act of excluding a person.

§ _.950
Indictment.

Indictment
means an indictment for a criminal offense. A presentment, information, or other filing by a competent authority charging a criminal offense shall be given the same effect as an indictment.

§ _.955
Ineligible or ineligibility.

Ineligible
or
ineligibility
means that a person or commodity is prohibited from covered transactions because of an exclusion or disqualification.

§ _.960
Legal proceedings.

Legal proceedings
means any criminal proceeding or any civil judicial proceeding, including a proceeding under the Program Fraud Civil Remedies Act (31 U.S.C. 3801-3812), to which the Federal Government or a State or local government or quasi-governmental authority is a party. The term also includes appeals from those proceedings.

§ _.965
List of Parties Excluded or Disqualified from Federal Procurement and Nonprocurement Programs.

List of Parties Excluded or Disqualified from Federal Procurement and Nonprocurement Programs (List)
means the list compiled, maintained, and distributed by the General Services Administration (GSA) containing the names and other information about persons who are ineligible.

§ _.970
Nonprocurement transaction.

(a)
Nonprocurement transaction
means any transaction, regardless of type (except procurement contracts), including, but not limited to the following:

(1) Grants.

(2) Cooperative agreements.

(3) Scholarships.

(4) Fellowships.

(5) Contracts of assistance.

(6) Loans.

(7) Loan guarantees.

(8) Subsidies.

(9) Insurances.

(10) Payments for specified uses.

(11) Donation agreements.

(b) A nonprocurement transaction at any tier does not require the transfer of Federal funds.

§ _.975
Notice.

Notice
means a written communication served in person, sent by certified mail or its equivalent, or sent electronically by e-mail or facsimile. (See § _.615.)

§ _.980
Participant.

Participant
means any person who submits a proposal for or who enters into a covered transaction, including an agent or representative of a participant.

§ _.985
Person.

Person
means any individual, corporation, partnership, association, unit of government, or legal entity, however organized.

§ _.990
Preponderance of the evidence.

Preponderance of the evidence
means proof by information that, compared with information opposing it, leads to the conclusion that the fact at issue is more probably true than not.

§ _.995
Principal.

Principal
means—

(a) An officer, director, owner, partner, principal investigator, or other person within a participant with management or supervisory responsibilities related to a covered transaction; or

(b) A consultant or other person, whether or not employed by the participant or paid with Federal funds, who—

(1) Is in a position to handle Federal funds;

(2) Is in a position to influence or control the use of those funds; or,

(3) Occupies a technical or professional position capable of influencing the development or outcome of an activity that affects a covered transaction.

§ _.1000
Respondent.

Respondent
means a person against whom an agency has initiated a debarment or suspension action.

§ _.1005
State.

(a)
State
means—

(1) Any of the States of the United States;

(2) The District of Columbia;

(3) The Commonwealth of Puerto Rico;

(4) Any territory or possession of the United States; or

(5) Any agency or instrumentality of a
State.

(b) For purposes of this part,
State
does not include institutions of higher

education, hospitals, or units of local government.

§ _.1010
Suspending official.

(a)
Suspending official
means an agency official who is authorized to impose suspension. The suspending official is either:

(1) The agency head; or

(2) An official designated by the agency head.

(b) [Reserved]

§ _.1015
Suspension.

Suspension
is an action taken by a suspending official under subpart G of this part that immediately prohibits a person from participating in covered transactions and transactions covered under the Federal Acquisition Regulation (48 CFR chapter 1) for a temporary period, pending completion of an agency investigation and any judicial or administrative proceedings that may ensue. A person so excluded is suspended.

§ _.1020
Voluntary exclusion or voluntarily excluded.

(a)
Voluntary exclusion
means a person's agreement to be excluded under the terms of a settlement between the person and one or more agencies. Voluntary exclusion must have governmentwide effect.

(b)
Voluntarily excluded
means the status of a person who has agreed to a voluntary exclusion.

BILLING CODES 6325-01-P et al.

EP23JA02.000

BILLING CODES 6325-01-C et al.

2. [Part/Subpart] _ is added to read as follows:

[Part/Subpart] _—Governmentwide Requirements for Drug-Free Workplace (Financial Assistance)

Subpart A—Purpose and Coverage

Sec.
_.100
What does this part do?
_.105
Does this part apply to me?
_.110
Are any of my Federal assistance awards exempt from this part?
_.115
Does this part affect the Federal contracts that I receive?

Subpart B—Requirements for Recipients Other Than Individuals

_.200
What must I do to comply with this part?
_.205
What must I include in my drug-free workplace statement?
_.210
To whom must I distribute my drug-free workplace statement?
_.215
What must I include in my drug-free awareness program?
_.220
By when must I publish my drug-free workplace statement and establish my drug-free awareness program?
_.225
What actions must I take concerning employees who are convicted of drug violations in the workplace?
_.230
How and when must I identify workplaces?

Subpart C—Requirements for Recipients Who Are Individuals

_.300
What must I do to comply with this part if I am an individual recipient?
_.301
[Reserved]

Subpart D—Responsibilities of [Agency adjective] Awarding Officials

_.400
What are my responsibilities as a(n) [Agency adjective] awarding official?

Subpart E—Violations of this Part and Consequences

_.500
How are violations of this part determined for recipients other than individuals?
_.505
How are violations of this part determined for recipients who are individuals?
_.510
What actions will the Federal Government take against a recipient determined to have violated this part?
_.515
Are there any exceptions to those actions?

Subpart F—Definitions

_.605
Award.
_.610
Controlled substance.
_.615
Conviction.
_.620
Cooperative agreement.
_.625
Criminal drug statute.
_.630
Debarment.
_.635
Drug-free workplace.
_.640
Employee.
_.645
Federal agency or agency.
_.650
Grant.
_.655
Individual.
_.660
Recipient.
_.665
State.
_.670
Suspension

Subpart A—Purpose and Coverage

§ _.100
What does this part do?

This part carries out the portion of the Drug-Free Workplace Act of 1988 (41 U.S.C. 701
et seq.
, as amended) that applies to grants. It also applies the provisions of the Act to cooperative agreements and other financial assistance awards, as a matter of Federal Government policy.

§ _.105
Does this part apply to me?
(a) Portions of this part apply to you if you are either

(1) A recipient of an assistance award from the [Agency noun]; or

(2) A(n) [Agency adjective] awarding official. (
See
definitions of
award
and
recipient
in §§ _.605 and _.660, respectively.)

(b) The following table shows the subparts that apply to you:

If you are ...
see subparts ...

(1) a recipient who is
not
an individual

A, B and E.

(2) a recipient who is an individual
A, C and E.

(3) a(n) [Agency adjective] awarding official
A, D and E.

§ _.110
Are any of my Federal assistance awards exempt from this part?
This part does not apply to any award that the [Agency head or designee] determines that the application of this part would be inconsistent with the international obligations of the United States or the laws or regulations of a foreign government.

§ _.115
Does this part affect the Federal contracts that I receive?
It will affect future contract awards indirectly if you are debarred or suspended for a violation of the requirements of this part, as described in § _.510(c). However, this part does not apply directly to procurement contracts. The portion of the Drug-Free Workplace Act of 1988 that applies to Federal procurement contracts is carried out through the Federal Acquisition Regulation in chapter 1 of Title 48 of the Code of Federal Regulations (the drug-free workplace coverage currently is in 48 CFR part 23, subpart 23.5).

Subpart B—Requirements for Recipients Other Than Individuals

§ _.200
What must I do to comply with this part?
There are two general requirements if you are a recipient other than an individual.

(a) First, you must make a good faith effort, on a continuing basis, to maintain a drug-free workplace. You must agree to do so as a condition for receiving any award covered by this part. The specific measures that you must take in this regard are described in more detail is subsequent sections of this subpart. Briefly, those measures are to—

(1) Publish a drug-free workplace statement and establish a drug-free awareness program for your employees (see §§ _.205 through _.220); and

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A02-1. Public record. Not legal advice.