dwt.com national 8(a) association conference june 2015 different viewpoints when a government...
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National 8(a) Association Conference June 2015
Different Viewpoints When a Government Contract Goes Wrong: Department of Justice, Private Practice Attorney, and a Suspension and Debarment Official
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Your Presenters: Kevin Feldis
Kevin Feldis
Kevin Feldis is the First Assistant United States Attorney and Chief of the Criminal Division of the United States Attorney's Office for the District of Alaska. He has been a federal prosecutor since 1999, and has handled hundreds of federal cases involving fraud, federal programs, corruption, violent crime, firearms and environmental crime.
Mr. Feldis graduated with honors from Yale University in 1990 and received his law degree from the University of Chicago Law School in 1994. Before joining the U.S. Attorney’s Office, he was a law clerk for a Federal District Court Judge in Illinois, and was in private practice at national law firms in both Washington DC and in Alaska. Beginning this fall, he will be an adjunct professor at the Seattle University School of Law, Anchorage campus.
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John Klein
John Klein, Associate General Counsel for procurement law United States SBAPrincipal Legal Advisor to senior Agency officials and their staffs with respect to the 8(a) Business Development program; the Agency’s Government Contracting programs, including the small business set-aside, subcontracting and Certificate of Competency programs; the HUBZone program; the Small Business Innovation Research program; the Size Standards program; the Service Disabled Veteran-Owned Small Business program; SBA’s internal contracting procedures; and Suspension and Debarment Official for SBA
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Christine Williams
Adjunct Professor of Law, Seattle University, Government Contracting, Satellite Program Adjunct Professor, Alaska Native Executive Leadership Program, Master’s Program, Government Contracting and the 8(a) ProgramPartner, Davis Wright Tremaine LLP
Christine concentrates on Government Contracting from counseling on qualifications and administration to disputes and crisis. She is often involved in sensitive internal investigations and frequently interacts with Government agencies when a company faces a tough situation. Christine is known for her deep experience with the SBA programs. Despite having a national practice, as a born and raised Alaskan, she understands the unique challenges that may be faced by Alaskan companies that they often encounter when it comes to Government Contracting on a national basis.
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Private Practioner Perspective: Who is Involved
Main Justice
AUSA
Investigative Agencies
Contracting Officer
Agency Resources / OIG
Contractor
Suspension and Debarment Official
Main Justice
AUSA
Investigative Agencies
SBA
Contracting Officer
Agency Resources / OIG
Contractor
Suspension and Debarment Official
Main Justice
AUSA
Investigative Agencies
DCAA
Contracting Officer
Agency Resources / OIG
Contractor
Suspension and
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Private Practioner Perspective: General Rules
Develop facts in a thorough and reliable way Promote credibility and avoid the appearance of conflicts Report findings clearly Use the findings to protect the business Do no harm
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Private Practioner Perspective: Initial Steps
Do not allow any misconduct to continue
Have a plan
Have a team: internal and external: points of contact
Who are the players: Government, agencies, media, GAO, Inspector Generals, DOJ
What has been done: Civil investigatory demand, internal complaint, subpoena, search warrant….
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Private Practioner Perspective: Data Collection
Quickly and quietly
No obstruction (do no harm)
Keep confidentiality
Word may spread be prepared
Assemble data and prepare for interviews
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Private Practioner Perspective: Interviews in General
Where is the harm coming from and who is likely the main cause, if any
Has it spread
Capacity to be surprised
Capacity to understand context and out of context statements, emails, etc.
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Private Practioner Perspective: Interviews
Be prepared
Two interviewer rule
Give Upjohn at all interviews
Document the interview, keep opinions out
Whether or not to record the interview
Be prepared for employee questions they always come
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Private Practioner Perspective:
Reports and how to do them
Corrective measures, if needed, in place/recommended
Decisions regarding the Government (if not already involved)
– Mandatory Disclosure
– Voluntary Disclosure
– Compliance with the law certifications
– 8(a) Good Character
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Suspension and Debarment Perspective: Types
Administrative
– Procurement (Federal Acquisition Regulation)
– Non-Procurement (Non-Procurement Common Rule)
– Government-wide effect (E.O. 12689)
Statutory
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Suspension and Debarment Perspective: FAR 9.4 Policy
Protect the U.S. Government
– Integrity of contracting process
– Quality goods and services
In the public interest
Not punishment
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Suspension and Debarment Perspective: Causes for Suspension FAR 9.407-2 Adequate Evidence of:
Fraud or crime in connection with a public contract
Antitrust violation relating to submission of offers
Embezzlement, bribery, false statements, tax offenses, etc.
Drug-Free Workplace violation
False “Made in America” inscription
Unfair trade practice
Delinquent taxes
Failure to disclose credible evidence of criminal or False Claims Act violation or overpayments
Any other offense affecting present responsibility
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Suspension and Debarment Perspective: Causes for Debarment FAR 9.406-2
Conviction or Civil Judgment
– Fraud or crime in connection with a public contract
– Antitrust violation relating to submission of offers
– Embezzlement, bribery, false statements, tax offenses, etc.
– False “Made in America” inscription
– Any other offense affecting present responsibility
Preponderance of Evidence
– Serious violation of Gov’t contract terms
– Drug Free workplace violation
– False “Made in America” inscription
– Unfair trade practice
– Delinquent taxes
– Failure to disclose credible evidence of criminal or FCA violation or overpayment
Any other offense affecting present responsibility
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Understand the SDO's responsibility
– Not to punish, but to protect the federal agency
– Assess the present responsibility of the named party
– Once the SDO has suspended a party or proposed a party for debarment, the practical burden to demonstrate responsibility shifts to the named party
Suspension and Debarment Official (SDO)
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Recognize the SDO's discretion
– Responsibility is a subjective assessment
– SDO final action is subject to review, but historically difficult to reverse
– SDO has authority to debar for extended periods – one Army debarment was for 14 years
Suspension and Debarment Official (SDO) (cont)
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Show Cause Letters / Requests for Information
Administrative Agreements
Narrow scope of the debarment
Expand scope of debarment
– Affiliates
– Imputation
– Joint Venture
Agency Options
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Suspension and debarment activity is monitored by Government fraud counsel
Early suspension and debarment can “enhance” parallel criminal and civil proceedings for Government or vice versa
Government does not have a policy of global settlements
Government Coordination of Remedies
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Debarment – FAR 9.406
Suspension – Uses the same factors as debarment
A contractor has to consider which mitigation factors it has satisfied or can satisfy prior to presentation of its position and then implement the mitigation factors, as appropriate in the individual case
FAR Mitigation Factors
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The existence/nonexistence of any single mitigating factor is not necessarily dispositive
Contractor must demonstrate to SDO's satisfaction that it is presently responsible and that suspension or debarment is unnecessary
FAR Mitigation Factors (cont)
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Special Considerations for the 8(a) Contractor
SBA 8(a) program has certain admission requirements
SBA regulations state that “good character” is required for admission into the program. Good character means: (1) no past / present criminal conduct; (2) no debarment or suspension; and (3) no violations of SBA rules
If statements on admission application are not true there are consequences
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SBA 8(a) Suspension:13 CFR 124.305
Following a notice of intent to terminate participation in the 8(a) program, the SBA may suspend a participant when the SBA determines that suspension is needed to protect the interests of the Federal Government– Clear lack of program eligibility
– Conduct indicating a lack of business integrity
• Biggie: false statements to the Federal Government
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SBA 8(a) Suspension:13 CFR 124.305 - Notice
A notice of suspension will provide the following information the basis of the suspension and that
Suspension is immediate and will continue pending: – completion of further investigation– a final program termination determination, – or some other specified period of time;
8(a) contracts, will not be made during the pendency of the suspension unless – it is determined by the head of the relevant procuring
agency or an authorized representative to be in the best interest of the Government to do so,
– and SBA adopts that determination;
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SBA 8(a) Suspension:13 CFR 124.305 - Notice
Company must complete previously awarded section 8(a) contracts
Suspension is effective throughout SBA A request for a hearing on the suspension will be
considered by an Administrative Law Judge at OHA, and granted or denied as a matter of discretion
The program term will resume only if the suspension is lifted or the firm is not terminated
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SBA 8(a) Suspension:13 CFR 124.305 - Appeal
A company can appeal a suspension decision
– the suspension remains in effect during appeal On appeal, the SBA has the burden of showing that
"adequate evidence" exists for the suspension "Adequate evidence"
– Information in the record before SBA
– Sufficient to support the belief that suspension is necessary
SBA need not demonstrate that an act or omission actually occurred
22527367
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SBA 8(a) Termination: 13 CFR 124.303
The SBA can terminate a company’s participation in the 8(a) program if the contractor or its principles is debarred or suspended under the FAR
The SBA may also terminate a company’s participation in the 8(a) program for other reasons, including conduct by the company, or a principal of the company, indicating a lack of business integrity
Such conduct may be demonstrated by information related to a criminal indictment or guilty plea, a criminal conviction, or a judgment or settlement in a civil case
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SBA 8(a) Termination: 13 CFR 124.303 - Examples
False information on 8(a) application
Failure by the company to maintain its eligibility for program participation
Failure by the company for any reason, to maintain ownership, full-time day-to-day management, and control by disadvantaged individuals-including death; [ownership/control]
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SBA 8(a) Termination: 13 CFR 124.303 - Examples
Debarment, suspension, voluntary exclusion, or ineligibility of the company or its principals
Conduct by the company, or any of its principals, indicating a lack of business integrity
Willful failure by the Participant to comply with applicable labor standards and obligations
Material breach of any terms and conditions of the 8(a) Program Participation Agreement
Willful violation by a company, or any of its principals, of any SBA regulation pertaining to material issues
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SBA Mitigating Factors
Likely a lot like the FAR provisions
Intent or mistake
What type
How far reaching