Par.

1. Purpose

2. Authority

3. Definitions

4. Background

5. Scope

6. Policy

7. Causes for Debarment

8. Suspension

9. Field Processing

10. Headquarters Processing

11. Implementation of Actions

1. PURPOSE. To prescribe policy and guidelines for processing suspension and debarment (S/D) actions against participants in Federal Highway Administration (FHWA) financial assistance (Federal-aid) programs.

2. AUTHORITY. 49 CFR Part 29.

3. DEFINITIONS. Pertinent definitions are set forth in 49 CFR § 29.105.

4. BACKGROUND. The S/D actions are discretionary administrativeactions taken to protect the Federal Government by excluding persons from participation in Federal programs. An S/D action ensures that the Federal Government does not conduct business with a person who has an unsatisfactory record of integrity and business ethics. The S/D actions are administered governmentwide; consequently, a person excluded by one Federal agency is excluded from doing business with any Federal agency.

5. SCOPE. This order applies to the FHWA field and Headquarters offices and covers all S/D actions within the meaning of 49 CFR § 29.110(a):

   These regulations apply to all persons who have participated, are currently participating, or may reasonably be expected to participate in transactions under Federal nonprocurement programs.

   Covered transactions include all primary transactions (i.e., prime contracts), regardless of size, and lower tier transactions (i.e., subcontractors, material suppliers, vendors, etc.) equal to or exceeding the small purchase threshold (currently $25,000). Lower tier transactions, regardless of size, under which a person has critical influence or substantive control over a prime contract are also covered.

6. POLICY. It is FHWA policy to consider action against a person whenever a cause within the meaning of 49 CFR Part 29 has occurred.

7. CAUSES FOR DEBARMENT. Causes for debarment action include (49 CFR § 29.305):

   1. Conviction of or civil judgment for:

      (1) commission of fraud or a criminal offense in connection with the obtainment, attempt to obtain, or performance of a public or private agreement or transaction;

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

      (3) commission of embezzlement, theft, forgery, or bribery; falsification or destruction of records; falsification of statements or claims; receipt of stolen property; obstruction of justice; or

      (4) commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a person.

   2. Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as:

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

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

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

   3. Any of the following causes:

      (1) procurement debarment by any Federal agency taken pursuant to 48 CFR Subpart 9.4;

      (2) knowingly doing business with a debarred, suspended, ineligible, or voluntarily excluded person, in any connection with a covered transaction, except as permitted in 49 CFR § 29.215 or § 29.220;

      (3) failure to pay a single substantial debt, or a number of outstanding debts (including disallowed costs and overpayments, but not including sums owedthe 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 49 CFR § 29.315 or of any settlement of a debarment or suspension action; or

      (5) violation of any requirement of 49 CFR 29 Subpart F, relating to providing a drug-free workplace, as set forth in 49 CFR § 29.615.

   4. Any other cause of so serious or compelling a nature that it affects the present responsibility of a person.

8. SUSPENSION. When circumstances warrant, suspension action will be taken to protect the Federal Government by excluding persons proposed for debarment from participation in the Federal assistance programs while the debarment action is processed.

   1. Causes for suspension action (49 CFR § 29.405) include adequate evidence:

      (1) that a cause for debarment under paragraph 7 may exist, or

      (2) to suspect the commission of an offense listed in paragraph 7a. An indictment for such offenses will constitute adequate evidence for purposes of suspension actions.

   2. The need to immediately exclude a person will be determined on a case-by-case basis. The FHWA will normally only take suspension action upon conviction, civil judgment, or entrance into a plea agreement or settlement agreement. However, suspension action will also be taken if it is determined that circumstances (i.e., evidence from a report from the Office of Inspector General or other sufficient investigation) indicate that continued involvement by a person will have a significant negativeimpact on the highway program (e.g., a risk to public safety).

9. FIELD PROCESSING. The regional administrator will ensure that the following steps are taken with regard to S/D actions:

   1. Information concerning the existence of a cause for debarment from any source will be promptly investigated and reported. Sources of information regarding potential S/D actions include:

      (1) Office of the Inspector General investigative reports,

      (2) Department of Justice/U.S. Attorney investigations,

      (3) Civil and/or criminal court actions, and

      (4) Media reports (newspaper, magazine, newsletter, etc.).

   2. The regional counsel will compile and submit information on all debarrable activities originating within the region. The regional counsel will obtain needed information in a timely manner. Every effort will be made to initiate S/D action within 6 months of the field's knowledge of existence of a cause.

   3. The regional and division offices will assist the regional counsel in identifying causes warranting S/D action and provide any information and documentation requested by regional counsel or Headquarters. Sufficient documentation should be included from which a determination can be made of the impact of the cause on the Federal-aid program. The information should include the extent of the subject person's participation in highway construction related activities, the extent that Federal-aid projects were impacted, and the likelihood of future impacts on the Federal-aid program by the subject person.

   4. If it is determined that the cause involves another Federal agency, the regional counsel will coordinate withthat agency. The regional counsel will consult with the Office of Chief Counsel, General Law Branch (HCC-32), prior to reaching a decision with the other agency as to which agency will take the lead on the S/D action. Likewise, if another Federal agency contacts a field office regarding an S/D action, the regional counsel should coordinate the response with HCC-32.

   5. The regional counsel will submit a complete S/D information package documenting the cause(s) for imposing the S/D action, to HCC-32. The regional counsel will gather enough evidence to recommend action, including debarment period, or non-action to the Debarring Official. In addition, the addresses of the subject(s) of the S/D action must be included in the package.

10. HEADQUARTERS PROCESSING

    1. HCC-32 will assess the submitted package, prepare a memorandum of review, and forward the S/D package, with recommended action, to the Office of Engineering, Construction and Maintenance Division, Contract Administration Branch (HNG-22).

    2. HNG-22 will review the package to determine the impact of the proposed S/D action on the Federal-aid program. The S/D package, along with a recommended action, will be forwarded to the Debarring Official, the Associate Administrator for Program Development (HPD-1).

    3. The FHWA will notify the person of the S/D action by certified mail. The notice will be accompanied by a formal letter setting forth the basis for the S/D action and the person's rights under 49 CFR Part 29. Suspensions are effective upon signature of the notice and letter(s) by the Debarring Official. Dependent on the circumstances, one of the following notices of S/D action will be issued:

       (1) A Notice of Suspension and Proposed Debarment will be issued when a conviction or civil judgment listed in paragraph 7a is the cause for the debarment action.

       (2) A Notice of Suspension will be issued whenimmediate exclusion is warranted based on adequate evidence of a debarment cause listed in paragraph 7a (e.g., the alleged acts indicate a reckless disregard for the structural integrity of a highway, bridge, appurtenance, etc.).

       (3) A Notice of Proposed Debarment will be issued when a debarment cause listed in paragraph 7a, or adequate evidence thereof, is not the cause for the debarment action.

    4. The respondent (the subject of the S/D action) will be given 30 days from receipt of the certified letter to contest the action. The respondent may appeal the action in person, in writing, or through legal counsel to the Debarring Official. Requests to extend the 30-day period will be reviewed on a case-by-case basis.

    5. The respondent may appeal either the substance of the action or the length of the proposed debarment, or both. The Debarring Official may reverse the S/D decision or reduce the debarment period based upon the existence of any of the conditions set forth in 49 CFR § 29.320.

       (1) If the action is not based on a conviction or civil judgment and the respondent's appeal raises a genuine dispute over facts, the respondent will be given the opportunity to appear with counsel to present witnesses, submit evidence, and confront any agency witnesses. (However, the FHWA customarily gives respondents the opportunity to meet informally with the Debarring Official even when the action was predicated on conviction or civil judgment.)

       (2) The Debarring Official will issue a final decision on the S/D action within 45 days after completion of the respondent's appeal and the resolution of any disputed facts. The respondent will be sent a letter, via certified mail, stating the action taken. Either a Notice of Debarment or a Notice of Reinstatement will be issued to document the final action.

       (3) The Debarring Official may refer controversialproceedings, for which a settlement on an S/D action cannot be reached, to the Secretary of Transportation's Board of Contract Appeals (S-20).

    6. If the respondent does not contest a proposed debarment within the 30-day period, the FHWA will issue a Notice of Debarment for the period proposed in the notice.

    7. Length of S/D actions:

       (1) Suspension. Suspension actions are taken for a temporary period, pending the completion of the debarment process. Generally, suspensions will not exceed 12 months. If a legal or administrative proceeding is not initiated within 12 months of the effective date of the suspension, then the suspension will be terminated, unless an Assistant Attorney General or a United States Attorney requests an extension in writing, in which case it may be extended for an additional 6 months. In no event will a suspension be extended beyond 18 months, unless a legal proceeding is initiated which precludes lifting of the suspension.

       (2) Debarment. Generally, debarment periods are limited to 3 years; however, if circumstances warrant, a longer debarment period may be imposed. The proposed debarment period, typically 3 years, may be reduced by the Debarring Official commensurate with the seriousness of the cause and any mitigating evidence presented. If preceded by suspension, the debarment period will be measured, retroactively, from the effective date of the suspension.

11. IMPLEMENTATION OF S/D ACTIONS

    1. The General Services Administration (GSA) is required to compile, maintain, and distribute a governmentwide list of excluded parties. This publication is entitled, "Lists of Parties Excluded from Federal Procurement and Nonprocurement Programs" (GSA List). Input to the GSA List is received from all Federal Government departments and agencies.

       (1) The GSA List is published monthly. Copies are distributed to all FHWA regional and division offices. Due to printing and mailing time, the information in the GSA List is approximately 6 weeks old by the time that it is distributed. However, the GSA List includes information on how to obtain up-to-date S/D information and information on how to access the computer system.

       (2) In order to ensure that FHWA S/D actions are administered in a timely manner, the field offices will be notified of FHWA S/D actions, via E-Mail, within a few working days of their occurrence. In addition, HNG-22 maintains a list of persons suspended, debarred, and reinstated by the FHWA. This list of FHWA S/D actions will be E-Mailed to the field offices during the first week of each month. It is emphasized that the FHWA list only includes actions taken by the FHWA and is not intended to be used in lieu of the GSA List.

    2. Participant Certification. All participants in the Federal-aid program are required to provide a certification of their current status regarding S/D actions, ineligibility, voluntary exclusion, and convictions and/or civil judgments (49 CFR § 29.510).

       (1) The State highway agencies (SHA's) are required to annually certify as to the current eligibility status of their principals. The certification is to be submitted with the State's annual Section 105 Program of Projects.

       (2) Prime contract bidders and consultants are required to certify as to their own current eligibility status, as well as that of their principals, as a part of each Federal-aid highway contract bid proposal and consultant agreement.

       (3) All lower tier covered transaction participants are also required to certify as to the current eligibility status of the company and its principals.

    3. Prior to the award of all consultant and construction contracts and the approval of lower tier covered transactions, the FHWA division office will check the GSA

       List to determine if the prospective participant is excluded from nonprocurement programs. For projects on which a SHA has opted to forego FHWA oversight, the responsibility to check the GSA List is assumed by the State.

/s/
Rodney E. Slater
Federal Highway Administrator