Federal Register: August 31, 2005 (Volume 70, Number 168)

DOCID: FR Doc 05-16647

OFFICE OF MANAGEMENT AND BUDGET

Veterans Affairs Department

CFR Citation: 2 CFR Parts 180 and 215

NOTICE: Part II

DOCUMENT ACTION: Interim final guidance.

SUBJECT CATEGORY:

Guidance for Governmentwide Debarment and Suspension (Nonprocurement)

DATES: The effective date for this interim final guidance is September 30, 2005. To be considered in preparation of the final guidance, comments on the interim final guidance must be received by October 31, 2005.

DOCUMENT SUMMARY:

The Office of Management and Budget (OMB) is updating its guidance on nonprocurement debarment and suspension to conform to the common rule that 33 Federal agencies published on November 26, 2003. The agencies issued that common rule after resolving public comments received in response to a Notice of Proposed Rulemaking. In updating the guidance, the OMB is making two improvements to streamline the policy framework in this area.

First, we are issuing the guidance in a format that is suitable for Federal agency adoption. Agency adoption of the guidance will reduce the volume of Federal regulations on nonprocurement debarment and suspension, making it easier for the affected public to use, and easier and less expensive for the Federal Government to maintain.

Second, we are publishing the guidance in the recently established Title 2 of the Code of Federal Regulations (2 CFR). Locating it in 2 CFR will make it easier to find. Also, the OMB guidance will be co located in the same title of the CFR as Federal agencies' implementing regulations that adopt the guidance. That is, consistent with the framework put in place when OMB established Title 2, each Federal agency will issue its implementing regulation in its chapter in Subtitle B of 2 CFR. This notice also makes minor changes to the previously issued 2 CFR part 215, to conform that part with the guidance published today.

SUMMARY:

Executive Office of the President, Management and Budget Office,

SUPPLEMENTAL INFORMATION

Background. The guidance updated by this notice originated with Executive Order (E.O.) 12549, ``Debarment and Suspension.'' That Executive order, issued in 1986, gave government wide effect to each agency's nonprocurement debarment and suspension actions. Section 6 of the Executive order authorized OMB to issue guidance on nonprocurement debarment and suspension. Section 3 directed agencies to issue implementing regulations consistent with the guidance.

The guidance has been revised twice since OMB first issued it in 1987 [52 FR 20360]. In 1988, when the agencies finalized a common rule to implement OMB's 1987 guidance, OMB revised its
[[Page 51864]]
guidance [53 FR 19160] to conform with the agencies' rule. The second revision of the OMB guidance occurred in 1995 [60 FR 33036]. That revision conformed the guidance with the Federal agencies' update of the common rule to give reciprocal governmentwide effect to both procurement and nonprocurement debarment and suspension actions, an update which implemented E.O. 12689 and section 2455 of the Federal Acquisition Streamlining Act.

Today's notice conforms the guidance with the Federal agencies' November 26, 2003, update to the common rule [68 FR 66534], but does so in a way that will greatly improve the relationship between OMB's guidance and Federal agencies' implementing regulations. In the recent update, the Federal agencies recast the common rule in plain language and made other needed improvements. OMB did not issue a notice at that time to amend the guidance because we were considering two improvements to the approach we had used in the past.

Adoptable guidance. The first improvement to our past approach is to publish the full text of the OMB guidance in a form suitable for agency adoption. The 1988 and 1995 notices amended the guidance to conform with updates to the common rule but the guidance was not published anywhere in full text as an OMB issuance. Thus, the full text of policies and procedures on nonprocurement debarment and suspension had to appear in each of 33 Federal agencies' separate codifications of the common rule. Today's notice, by publishing the OMB guidance in a form that Federal agencies can adopt, eliminates the need for each agency to repeat the full text in its own implementing regulation.

This fundamentally different approach of adoptable guidance has three major advantages over the previous approach of having each agency codify the fulltext of a common rule. Specifically, the new approach will:

  • Make it easier for recipients of covered transactions or respondents in suspension or debarment actions to discern agencyto agency variations from the common rule language. When agencies published the common rule on nonprocurement debarment and suspension, each agency was allowed to have some agencyspecific additions or exceptions to the governmentwide language. Because each agency's variations are embedded in and integrated with the agency's publication of the fulltext of the rule, it is difficult for a recipient or respondent that does business with multiple Federal agencies to identify the agencytoagency variations in the language. To do so, it either must locate the original Federal Register notice in which the agencies published the common rule or carefully read and compare the agencies' separate codifications of the rule. With the new approach, however, each agency's implementation of the guidelines will be a brief rule that: (1) Adopts the guidance, giving it regulatory effect for that agency's activities; and (2) states any agencyspecific additions, clarifications, and exceptions to the governmentwide policies and procedures contained in the guidance.
  • Reduce the volume of Federal regulations in the CFR. The 33 individual agencies' separate codifications of the full text of the common rule currently require about 750 pages in each paper copy of each edition of the Code of Federal Regulations (i.e., about 750,000 pages for every 1,000 paper copies of the CFR that are produced). We estimate that the new approach will reduce this by about sixfold, which reduces both burdens on the public and costs of maintaining the regulations.
  • Streamline the process for updating the governmentwide requirements on nonprocurement debarment and suspension. The process for updating a common rule is exceedingly complex and time consuming. The 33 Federal agencies must process the same rulemaking document before it can be sent to the OMB and published in the Federal Register, which can create long delays in updating the rule. With the new approach, OMB will publish proposed changes to the guidance in the Federal Register, with an opportunity for the public to comment. Once agencies have issued their regulations adopting the guidance, the process for future updates will be complete when OMB issues the final guidance. Agencies will not need to amend their regulations adopting the guidance.

    Publication of the guidance in 2 CFR. The second improvement to our past approach is to locate the OMB guidance in Subtitle A of the new Title 2 of the CFR, ``Grants and Agreements,'' that OMB established on May 11, 2004 [69 FR 26276]. Publishing the guidance in the CFR makes it very accessible to the affected public and, when agencies issue their new regulations adopting the guidance, will colocate the OMB guidance in the same CFR title with the agency rules. We also will maintain a copy of the current guidance at the OMB Web site (http://www.whitehouse.gov/omb/circulars ), for the benefit of individuals who

    would prefer to access it there.

    Structure and content of the guidance. Our intent is to issue OMB guidance that is substantively unchanged from the common rule issued by the Federal agencies in November 2003. We modified some of the structure and language of the common rule, however, to create a part that reads properly as OMB guidance to agencies rather than an agency regulation.

    The most significant structural change is in Sections 180.05 to 180.45 of the document, which precede subpart A. The primary purpose of these sections is to provide OMB guidance to Federal agencies on how to use the guidance in the remainder of the part. Sections 180.20 through 180.35, for example, tell Federal agencies that they must issue regulations to implement the guidance, identify some required and some optional content for those regulations, and specify where and when the agencies must issue the regulations. Most of these early sections have no counterparts in the November 2003 common rule, since it was designed to be an agency rule rather than OMB guidance.

    Following section 180.45, in subparts A through I of the part, is the guidance that an agency would adopt to specify its policies and procedures for nonprocurement debarment and suspension. Several sections in subpart A of the guidance have different section numbers than their counterpart sections in the common rule. The changed section numbers are due to the inclusion of the OMB guidance in sections 180.05 through 180.45, which displaced and forced renumbering of sections .25 to .75 that preceded subpart A in the November 2003 common rule.

    The only other portion of the guidance where section numbers vary from the November 2003 common rule is subpart I, which contains definitions of terms. We replaced the defined term ``agency'' in the common rule with the term ``Federal agency'' in the OMB guidelines, which forced a reorganization of the definition sections in subpart I to keep the defined terms in alphabetical order.

    In one section of subpart A, we made a wording change to clarify the substance. Section .135 of the November 2003 common rule stated that an agency, given an appropriate cause for debarment, could take an action to exclude ``any person who has been involved, is currently involved, or may reasonably be expected to be involved in a covered transaction.'' The corresponding language in the OMB guidelines, which is in section 180.150,
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    is ``any person who has been, is, or may reasonably be expected to be a participant or principal in a covered transaction.'' The revised language is intended to be more precise than the somewhat vague wording of the common rule.

    One language change throughout the guidelines is use of the term ``Federal agency'' where agency responsibilities, authorities, and procedures are described. The common rule used the personal pronoun ``we,'' which was appropriate in an agency rule but not in OMB guidance.

    We also dropped the references in sections 180.530 and 180.945 of the guidance (which had the same section numbers in the common rule) to the paper version of the list of excluded parties maintained by the General Services Administration (GSA). Section .530 of the November 2003 common rule stated that Federal agencies anticipated that the paper version of the list would be discontinued. The paper version no longer is available, so we deleted the references to it.

    Other minor wording changes throughout subparts A through I are to make the document read properly as OMB guidance. We have posted a source and destination table at the OMB Web site that shows which section in the OMB guidance corresponds to each section in the common rule and summarizes the more significant changes, none of which we believe to be substantive change.

    Invitation to comment. Our intent is to preserve in the OMB guidance the substantive content of the November 2003 common rule. Given that the agencies published the final common rule after an opportunity for public comment, we are publishing these guidelines as interim final guidelines, rather than proposing the substance for comment again. For future updates to this guidance, we will propose substantive changes with an opportunity for public comment, in accordance with Sec. 180.40 of the guidance. In soliciting comments on the interim final guidance, we are not seeking to revisit substantive issues raised by those earlier comments and resolved by the agencies during preparation of their final rule. However, we invite comments on any unintended changes we have made in the guidance relative to the November 2003 common rule.

    Next steps. We will finalize the guidance after resolving any comments received on the interim final version published in this notice. Each Federal agency that is a signatory to the common rule on nonprocurement debarment and suspension will: (1) Establish its chapter in Subtitle B of 2 CFR, consistent with the structure established for that title; (2) issue in that chapter of 2 CFR its brief rule adopting the OMB guidance and stating any additions, clarifications, or exceptions to the policies and procedures contained in the guidance; and (3) remove the November 2003 common rule from its own CFR title. We expect to complete the process in calendar year 2006.

    Conforming 2 CFR part 215 (OMB Circular A110). We also are making the following two changes to 2 CFR part 215, in order to conform the OMB guidance in that part with the guidance on nonprocurement debarment and suspension:

  • We dropped the reference in Sec. 215.13 to the common rule on nonprocurement debarment and suspension, in anticipation of agencies adoption of the guidance and removal of the common rule from their titles in the CFR.
  • We revised Paragraph 8 in Appendix A to 2 CFR part 215, to correct: (1) The name of the Excluded Parties List System; and (2) the threshold for coverage of procurement contracts awarded by recipients of Federal financial assistance awards.
    List of Subjects

    2 CFR Part 180

    Administrative practice and procedure, Grant programs, Loan programs, Reporting and recordkeeping requirements.

    2 CFR Part 215

    Accounting, Colleges and Universities, Grant programs, Hospitals, Nonprofit organizations, Reporting and recordkeeping requirements.

    Dated: August 8, 2005.
    Joshua B. Bolten,
    Director.
    Authority and Issuance
    For the reasons set forth above, the Office of Management and Budget amends 2 CFR, Subtitle A, as follows:
    Chapter IOffice of Management and Budget Governmentwide Guidance for Grants and Agreements
    1. A heading is added to chapter I to read as set forth above. 2. Part 180 is added to Chapter I, to read as follows:
    PART 180OMB GUIDELINES TO AGENCIES ON GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
    Sec.
    180.5 What does this part do?
    180.10 How is this part organized?
    180.15 To whom do these guidelines apply?
    180.20 What must a Federal agency do to implement these guidelines? 180.25 What must a Federal agency address in its implementation of these guidelines?
    180.30 Where does a Federal agency implement these guidelines? 180.35 By when must a Federal agency implement these guidelines? 180.40 How are these guidelines maintained?
    180.45 Do these guidelines cover persons who are disqualified, as well as those who are excluded from nonprocurement transactions? Subpart AGeneral
    180.100 How are subparts A through I organized?
    180.105 How is this part written?
    180.110 Do terms in this part have special meanings?
    180.115 What do subparts A through I of this part do?
    180.120 Do subparts A through I of this part apply to me?
    180.125 What is the purpose of the nonprocurement debarment and suspension system?
    180.130 How does an exclusion restrict a person's involvement in covered transactions?
    180.135 May a Federal agency grant an exception to let an excluded person participate in a covered transaction?
    180.140 Does an exclusion under the nonprocurement system affect a person's eligibility for Federal procurement contracts?
    180.145 Does an exclusion under the Federal procurement system affect a person's eligibility to participate in nonprocurement transactions?
    180.150 Against whom may a Federal agency take an exclusion action? 180.155 How do I know if a person is excluded?
    Subpart BCovered Transactions
    180.200 What is a covered transaction?
    180.205 Why is it important to know if a particular transaction is a covered transaction?
    180.210 Which nonprocurement transactions are covered transactions? 180.215 Which nonprocurement transactions are not covered
    transactions?
    180.220 Are any procurement contracts included as covered
    transactions?
    180.225 How do I know if a transaction in which I may participate is a covered transaction?
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    Subpart CResponsibilities of Participants Regarding Transactions Doing Business With Other Persons
    180.300 What must I do before I enter into a covered transaction with another person at the next lower tier?
    180.305 May I enter into a covered transaction with an excluded or disqualified person?
    180.310 What must I do if a Federal agency excludes a person with whom I am already doing business in a covered transaction?
    180.315 May I use the services of an excluded person as a principal under a covered transaction?
    180.320 Must I verify that principals of my covered transactions are eligible to participate?
    180.325 What happens if I do business with an excluded person in a covered transaction?
    180.330 What requirements must I pass down to persons at lower tiers with whom I intend to do business?
    Disclosing InformationPrimary Tier Participants
    180.335 What information must I provide before entering into a covered transaction with a Federal agency?
    180.340 If I disclose unfavorable information required under Sec. 180.335 will I be prevented from participating in the transaction? 180.345 What happens if I fail to disclose information required under Sec. 180.335?
    180.350 What must I do if I learn of information required under Sec. 180.335 after entering into a covered transaction with a Federal agency?
    Disclosing InformationLower Tier Participants
    180.355 What information must I provide to a higher tier participant before entering into a covered transaction with that participant? 180.360 What happens if I fail to disclose information required under Sec. 180.355?
    180.365 What must I do if I learn of information required under Sec. 180.355 after entering into a covered transaction with a higher tier participant?
    Subpart DResponsibilities of Federal Agency Officials Regarding Transactions
    180.400 May I enter into a transaction with an excluded or disqualified person?
    180.405 May I enter into a covered transaction with a participant if a principal of the transaction is excluded?
    180.410 May I approve a participant's use of the services of an excluded person?
    180.415 What must I do if a Federal agency excludes the participant or a principal after I enter into a covered transaction?
    180.420 May I approve a transaction with an excluded or disqualified person at a lower tier?
    180.425 When do I check to see if a person is excluded or
    disqualified?
    180.430 How do I check to see if a person is excluded or
    disqualified?
    180.435 What must I require of a primary tier participant?
    180.440 What action may I take if a primary tier participant knowingly does business with an excluded or disqualified person? 180.445 What action may I take if a primary tier participant fails to disclose the information required under Sec. 180.335?
    180.450 What may I do if a lower tier participant fails to disclose the information required under Sec. 180.355 to the next higher tier?
    Subpart EExcluded Parties List System
    180.500 What is the purpose of the Excluded Parties List System (EPLS)?
    180.505 Who uses the EPLS?
    180.510 Who maintains the EPLS?
    180.515 What specific information is in the EPLS?
    180.520 Who places the information into the EPLS?
    180.525 Whom do I ask if I have questions about a person in the EPLS?
    180.530 Where can I find the EPLS?
    Subpart FGeneral Principles Relating to Suspension and Debarment Actions
    180.600 How do suspension and debarment actions start?
    180.605 How does suspension differ from debarment?
    180.610 What procedures does a Federal agency use in suspension and debarment actions?
    180.615 How does a Federal agency notify a person of a suspension or debarment action?
    180.620 Do Federal agencies coordinate suspension and debarment actions?
    180.625 What is the scope of a suspension or debarment?
    180.630 May a Federal agency impute the conduct of one person to another?
    180.635 May a Federal agency settle a debarment or suspension action?
    180.640 May a settlement include a voluntary exclusion?
    180.645 Do other Federal agencies know if an agency agrees to a voluntary exclusion?
    Subpart GSuspension
    180.700 When may the suspending official issue a suspension? 180.705 What does the suspending official consider in issuing a suspension?
    180.710 When does a suspension take effect?
    180.715 What notice does the suspending official give me if I am suspended?
    180.720 How may I contest a suspension?
    180.725 How much time do I have to contest a suspension?
    180.730 What information must I provide to the suspending official if I contest the suspension?
    180.735 Under what conditions do I get an additional opportunity to challenge the facts on which the suspension is based?
    180.740 Are suspension proceedings formal?
    180.745 How is factfinding conducted?
    180.750 What does the suspending official consider in deciding whether to continue or terminate my suspension?
    180.755 When will I know whether the suspension is continued or terminated?
    180.760 How long may my suspension last?
    Subpart HDebarment
    180.800 What are the causes for debarment?
    180.805 What notice does the debarring official give me if I am proposed for debarment?
    180.810 When does a debarment take effect?
    180.815 How may I contest a proposed debarment?
    180.820 How much time do I have to contest a proposed debarment? 180.825 What information must I provide to the debarring official if I contest the proposed debarment?
    180.830 Under what conditions do I get an additional opportunity to challenge the facts on which the proposed debarment is based? 180.835 Are debarment proceedings formal?
    180.840 How is factfinding conducted?
    180.845 What does the debarring official consider in deciding whether to debar me?
    180.850 What is the standard of proof in a debarment action? 180.855 Who has the burden of proof in a debarment action?
    180.860 What factors may influence the debarring official's decision?
    180.865 How long may my debarment last?
    180.870 When do I know if the debarring official debars me? 180.875 May I ask the debarring official to reconsider a decision to debar me?
    180.880 What factors may influence the debarring official during reconsideration?
    180.885 May the debarring official extend a debarment?
    Subpart IDefinitions
    180.900 Adequate evidence.
    180.905 Affiliate.
    180.910 Agent or representative.
    180.915 Civil judgment.
    180.920 Conviction.
    180.925 Debarment.
    180.930 Debarring official.
    180.935 Disqualified.
    180.940 Excluded or exclusion.
    180.945 Excluded Parties List System (EPLS).
    180.950 Federal agency.
    180.955 Indictment.
    180.960 Ineligible or ineligibility.
    180.965 Legal proceedings.
    180.970 Nonprocurement transaction.
    180.975 Notice.
    180.980 Participant.
    180.985 Person.
    180.990 Preponderance of the evidence.
    180.995 Principal.
    180.1000 Respondent.
    180.1005 State.
    180.1010 Suspending official.
    180.1015 Suspension.
    180.1020 Voluntary exclusion or voluntarily excluded.

    Appendix to Part 180Covered Transactions

    Authority: Sec. 2455, Pub. L. 103355, 108 Stat. 3327; E.O. 12549, 3 CFR, 1986 Comp., p.189; E.O. 12689, 3 CFR, 1989 Comp., p. 235.
    [[Page 51867]]

    Sec. 180.5 What does this part do?

    This part provides Office of Management and Budget (OMB) guidance for Federal agencies on the governmentwide debarment and suspension system for nonprocurement programs and activities.
    Sec. 180.10 How is this part organized?

    This part is organized in two segments.
    (a) Sections 180.5 through 180.45 contain general policy direction for Federal agencies' use of the standards in subparts A through I of this part.
    (b) Subparts A through I of this part contain uniform
    governmentwide standards that Federal agencies are to use to specify (1) The types of transactions that are covered by the
    nonprocurement debarment and suspension system;
    (2) The effects of an exclusion under that nonprocurement system, including reciprocal effects with the governmentwide debarment and suspension system for procurement;
    (3) The criteria and minimum due process to be used in nonprocurement debarment and suspension actions; and
    (4) Related policies and procedures to ensure the effectiveness of those actions.

    Sec. 180.15 To whom does the guidance apply?

    The guidance provides OMB guidance only to Federal agencies. Publication of the guidance in the CFR does not change its natureit is guidance and not regulation. Federal agencies' implementation of the guidance governs the rights and responsibilities of other persons affected by the nonprocurement debarment and suspension system. Sec. 180.20 What must a Federal agency do to implement these guidelines?

    As required by Section 3 of E.O. 12549, each Federal agency with nonprocurement programs and activities covered by subparts A through I of the guidance must issue regulations consistent with those subparts. Sec. 180.25 What must a Federal agency address in its implementation of the guidance?

    Each Federal agency implementing regulation:
    (a) Must establish policies and procedures for that agency's nonprocurement debarment and suspension programs and activities that are consistent with the guidance. When adopted by a Federal agency, the provisions of the guidance has regulatory effect for that agency's programs and activities.
    (b) Must address some matters for which these guidelines give each Federal agency some discretion. Specifically, the regulation must (1) Identify either the Federal agency head or the title of the designated official who is authorized to grant exceptions under Sec. 180.135 to let an excluded person participate in a covered transaction. (2) State whether the agency includes as covered transactions an additional tier of contracts awarded under covered nonprocurement transactions, as permitted under Sec. 180.220(c).
    (3) Identify the method(s) an agency official may use, when entering into a covered transaction with a primary tier participant, to communicate to the participant the requirements described in Sec. 180.435. Examples of methods are an award term that requires compliance as a condition of the award; an assurance of compliance obtained at time of application; or a certification.
    (4) State whether the Federal agency's policy is to restrict participants' collection of certifications to verify that lowertier participants are not excluded or disqualified (see Sec. 180.300(b)). If it is the policy, the regulation needs to require agency officials, when entering into covered transactions with primary tier participants, to communicate that policy.
    (5) State whether the Federal agency specifies a particular method that participants must use to communicate compliance requirements to lowertier participants, as described in Sec. 180.330(a). If there is a specified method, the regulation needs to require agency officials, when entering into covered transactions with primary tier participants, to communicate that requirement.
    (c) May also, at the agency's option:
    (1) Identify any specific types of transactions that the Federal agency includes as ``nonprocurement transactions'' in addition to the examples provided in Sec. 180.970.
    (2) Identify any types of nonprocurement transactions that the Federal agency exempts from coverage under these guidelines, as authorized under Sec. 180.330(g)(2).
    (3) Identify specific examples of types of individuals who would be ``principals'' under the Federal agency's nonprocurement programs and transactions, in addition to the types of individuals described at Sec. 180.995.
    (4) Specify the Federal agency's procedures, if any, by which a respondent may appeal a suspension or debarment decision.
    (5) Identify by title the officials designated by the Federal agency head as debarring officials under Sec. 180.930 or suspending officials under Sec. 180.1010.
    (6) Include a subpart covering disqualifications, as authorized in Sec. 180.45.
    Sec. 180.30 Where does a Federal agency implement these guidelines?

    Each Federal agency that participates in the governmentwide nonprocurement debarment and suspension system must issue a regulation implementing these guidelines within its chapter in subtitle B of this title of the Code of Federal Regulations.
    Sec. 180.35 By when must a Federal agency implement these guidelines?

    Federal agencies must submit proposed regulations to the OMB for review within nine months of the issuance of these guidelines and issue final regulations within eighteen months of these guidelines. Sec. 180.40 How are these guidelines maintained?

    The Interagency Committee on Debarment and Suspension established by section 4 of E.O. 12549 recommends to the OMB any needed revisions to the guidelines in this part. The OMB publishes proposed changes to the guidelines in the Federal Register for public comment, considers comments with the help of the Interagency Committee on Debarment and Suspension, and issues the final guidelines.
    Sec. 180.45 Do these guidelines cover persons who are disqualified, as well as those who are excluded from nonprocurement transactions?

    A Federal agency may add a subpart covering disqualifications to its regulation implementing these guidelines, but the guidelines in subparts A through I of this part
    (a) Address disqualified persons only to
    (1) Provide for their inclusion in the EPLS; and
    (2) State responsibilities of Federal agencies and participants to check for disqualified persons before entering into covered transactions.
    (b) Do not specify the
    (1) Transactions for which a disqualified person is ineligible. Those transactions vary on a casebycase basis, because they depend on the language of the specific statute, Executive order or regulation that caused the disqualification;
    (2) Entities to which a disqualification applies; or
    (3) Process that a Federal agency uses to disqualify a person. Unlike exclusion under subparts A through I of this part,
    disqualification is frequently not a discretionary action that a Federal
    [[Page 51868]]
    agency takes, and may include special procedures.
    Subpart AGeneral
    Sec. 180.100 How are subparts A through I organized?
    (a) 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 Subparts A through I of this part. B........................................... the types of 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 Federal agency officials who are authorized to enter into covered transactions. E........................................... the responsibilities of Federal agencies for entering information into the EPLS 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. (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 A, B, C and I.
    nonprocurement transaction.
    (2) a respondent in a suspension A, B, F, G and I.
    action.
    (3) a respondent in a debarment A, B, F, H and I.
    action.
    (4) a suspending official.......... A, B, E, F, G and I.
    (5) a debarring official........... A, B, D, F, H and I.
    (6) an Federal agency official A, B, D, E and I.
    authorized to enter into a covered
    transaction.
    Sec. 180.105 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.
    (c) The ``Covered Transactions'' diagram in the appendix to this part shows the levels or ``tiers'' at which a Federal agency may enforce an exclusion.
    Sec. 180.110 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 Executive Order 12549 and Executive Order 12689 or under 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 a Federal 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.
    Sec. 180.115 What do Subparts A through I of this part do?

    Subparts A through I of this part provide for reciprocal exclusion of persons who have been excluded under the Federal Acquisition Regulation, and provide for the consolidated listing of all persons who are excluded, or disqualified by statute, executive order or other legal authority.
    Sec. 180.120 Do subparts A through I of this part apply to me?

    Portions of subparts A through I of this part (see table at Sec. 180.100(b)) apply to you if you are a
    (a) Person who has been, is, or may reasonably be expected to be, a participant or principal in a covered transaction;
    (b) Respondent (a person against whom a Federal agency has initiated a debarment or suspension action);
    (c) Federal agency debarring or suspending official; or (d) Federal agency official who is authorized to enter into covered transactions with nonFederal parties.
    Sec. 180.125 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 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.
    Sec. 180.130 How does an exclusion restrict a person's involvement in covered transactions?

    With the exceptions stated in Sec. Sec. 180.135, 315, and 420, a person who is excluded by any Federal agency may not:
    (a) Be a participant in a Federal agency transaction that is a covered transaction; or
    [[Page 51869]]
    (b) Act as a principal of a person participating in one of those covered transactions.
    Sec. 180.135 May a Federal agency grant an exception to let an excluded person participate in a covered transaction?
    (a) A Federal 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 Federal agency for an excluded person does not extend to the covered transactions of another Federal agency.
    Sec. 180.140 Does an exclusion under the nonprocurement system affect a person's eligibility for Federal procurement contracts?

    If any Federal agency excludes a person under Executive Order 12549 or Executive Order 12689, on or after August 25, 1995, the excluded person is also ineligible for Federal procurement transactions under the FAR. Therefore, an exclusion under this part has reciprocal effect in Federal procurement transactions.
    Sec. 180.145 Does an 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 Federal agencies' nonprocurement covered transactions. Therefore, an exclusion under the FAR has reciprocal effect in Federal nonprocurement transactions.
    Sec. 180.150 Against whom may a Federal agency take an exclusion action?

    Given a cause that justifies an exclusion under this part, a Federal agency may exclude any person who has been, is, or may reasonably be expected to be a participant or principal in a covered transaction.

    Sec. 180.155 How do I know if a person is excluded?

    Check the Governmentwide Excluded Parties List System (EPLS) to determine whether a person is excluded. The General Services Administration (GSA) maintains the EPLS 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 enters the information about the excluded person into the EPLS.
    Subpart BCovered Transactions

    Sec. 180.200 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.
    Sec. 180.205 Why is it important if a particular transaction is a covered transaction?

    The importance of whether a transaction is 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 Sec. 180.310 or Sec. 180.415; or (2) A Federal agency official obtains an exception from the agency head or designee to allow you to be involved in the transaction, as permitted under Sec. 180.135.
    Sec. 180.210 Which nonprocurement transactions are covered transactions?

    All nonprocurement transactions, as defined in Sec. 180.970, are covered transactions unless listed in the exemptions under Sec. 180.215.
    Sec. 180.215 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 a Federal agency needs to respond to a national or agencyrecognized emergency or disaster.
    (e) A permit, license, certificate or similar instrument issued as a means to regulate public health, safety or the environment, unless a Federal agency specifically designates it to be a covered transaction. (f) An incidental benefit that results from ordinary governmental operations.
    (g) Any other transaction if
    (1) The application of an exclusion to the transaction is prohibited by law; or
    (2) A Federal agency's regulation exempts it from coverage under this part.
    Sec. 180.220 Are any procurement contracts included as covered transactions?
    (a) Covered transactions under this part
    (1) Do not include any procurement contracts awarded directly by a Federal agency; but
    (2) Do include some procurement contracts awarded by nonFederal participants in nonprocurement covered transactions.
    (b) Specifically, a contract for goods or services is a covered transaction if any of the following applies:
    (1) The contract is awarded by a participant in a nonprocurement transaction that is covered under Sec. 180.210, and the amount of the contract is expected to equal or exceed $25,000.
    (2) The contract requires the consent of an official of a Federal agency. 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.
    (3) The contract is for Federallyrequired audit services. (c) A subcontract also is a covered transaction if,
    (1) It is awarded by a participant in a procurement transaction under a
    [[Page 51870]]
    nonprocurement transaction of a Federal agency that extends the coverage of paragraph (b)(1) of this section to any additional tier of contracts (see the diagram in the appendix to this part showing that optional lower tier coverage); and
    (2) The value of the subcontract exceeds or is expected to exceed $25,000.
    Sec. 180.225 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 Federal agency regulations governing the transaction, the appropriate Federal 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 CResponsibilities of Participants Regarding Transactions Doing Business With Other Persons
    Sec. 180.300 What must I do before I enter into a covered transaction with another person at the next lower tier?

    When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you intend to do business is not excluded or disqualified. You do this by: (a) Checking the EPLS; or
    (b) Collecting a certification from that person if allowed by the Federal agency responsible for the transaction; or
    (c) Adding a clause or condition to the covered transaction with that person.
    Sec. 180.305 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 Federal agency responsible for the transaction grants an exception under Sec. 180.135.
    (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.
    Sec. 180.310 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 nocost time extensions) with any excluded person, unless the Federal agency responsible for the transaction grants an exception under Sec. 180.135.
    Sec. 180.315 May I use the services of an excluded person as a principal 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. You should make a decision about whether to discontinue that person's services only after a thorough review to ensure that the action is proper and appropriate. (b) You may not begin to use the services of an excluded person as a principal under a covered transaction unless the Federal agency responsible for the transaction grants an exception under Sec. 180.135.
    Sec. 180.320 Must I verify that principals of my covered transactions are eligible to participate?

    Yes, you as a participant are responsible for determining whether any of your principals 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 EPLS.
    Sec. 180.325 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, the Federal agency responsible for your transaction may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend you, or take other remedies as appropriate. Sec. 180.330 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 the regulation of the Federal agency responsible for the transaction 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 InformationPrimary Tier Participants
    Sec. 180.335 What information must I provide before entering into a covered transaction with a Federal agency?

    Before you enter into a covered transaction at the primary tier, you as the participant must notify the Federal agency 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 Sec. 180.800(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 Sec. 180.800(a); or (d) Have had one or more public transactions (Federal, State, or local) terminated within the preceding three years for cause or default.
    Sec. 180.340 If I disclose unfavorable information required under Sec. 180.335, 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 Sec. 180.335 will not necessarily cause a Federal agency to deny your participation in the covered transaction. The agency will consider the information when it determines whether to enter into the covered transaction. The agency will also consider any additional information or explanation that you elect to submit with the disclosed information.
    Sec. 180.345 What happens if I fail to disclose information required under Sec. 180.335?

    If a Federal agency later determines that you failed to disclose information under Sec. 180.335 that you knew at the time you entered into the covered transaction, the agency 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.
    [[Page 51871]]
    Sec. 180.350 What must I do if I learn of information required under Sec. 180.335 after entering into a covered transaction with a Federal agency?

    At any time after you enter into a covered transaction, you must give immediate written notice to the Federal agency office with which you entered into the transaction if you learn either that
    (a) You failed to disclose information earlier, as required by Sec. 180.335; or
    (b) Due to changed circumstances, you or any of the principals for the transaction now meet any of the criteria in Sec. 180.335. Disclosing InformationLower Tier Participants
    Sec. 180.355 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.
    Sec. 180.360 What happens if I fail to disclose information required under Sec. 180.355?

    If a Federal agency later determines 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, the agency may pursue any available remedies, including suspension and debarment.
    Sec. 180.365 What must I do if I learn of information required under Sec. 180.355 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 Sec. 180.355; or
    (b) Due to changed circumstances, you or any of the principals for the transaction now meet any of the criteria in Sec. 180.355. Subpart DResponsibilities of Federal Agency Officials Regarding Transactions
    Sec. 180.400 May I enter into a transaction with an excluded or disqualified person?
    (a) You as a Federal agency official may not enter into a covered transaction with an excluded person unless you obtain an exception under Sec. 180.135.
    (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.
    Sec. 180.405 May I enter into a covered transaction with a participant if a principal of the transaction is excluded?

    As a Federal 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 Sec. 180.135.
    Sec. 180.410 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 a Federal 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 Sec. 180.135.
    Sec. 180.415 What must I do if a Federal agency excludes the participant or a principal after I enter into a covered transaction? (a) You as a Federal 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 nocost time extensions) with any excluded person, or under which an excluded person is a principal, unless you obtain an exception under Sec. 180.135.
    Sec. 180.420 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 a Federal agency official may not approve
    (a) A covered transaction with a person who is currently excluded, unless you obtain an exception under Sec. 180.135; 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.
    Sec. 180.425 When do I check to see if a person is excluded or disqualified?

    As a Federal 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 your agency's approval of the lower tier participant is required; or
    (d) Approve a principal in connection with a lower tier transaction if your agency's approval of the principal is required.
    Sec. 180.430 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 a Federal agency official must check the EPLS when you take any action listed in Sec. 180.425.
    (b) You must review information that a participant gives you, as required by Sec. 180.335, about its status or the status of the principals of a transaction.
    Sec. 180.435 What must I require of a primary tier participant?

    You as a Federal 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.
    Sec. 180.440 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 a Federal 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.
    Sec. 180.445 What action may I take if a primary tier participant fails to disclose the information required under Sec. 180.335?

    If you as a Federal agency official determine that a participant failed to disclose information, as required by Sec. 180.335, 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
    [[Page 51872]]
    (b) Pursue any other available remedies, including suspension and debarment.
    Sec. 180.450 What action may I take if a lower tier participant fails to disclose the information required under Sec. 180.355 to the next higher tier?

    If you as a Federal agency official determine that a lower tier participant failed to disclose information, as required by Sec. 180.355, 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 EExcluded Parties List System
    Sec. 180.500 What is the purpose of the Excluded Parties List System (EPLS)?

    The EPLS is a widely available source of the most current information about persons who are excluded or disqualified from covered transactions.
    Sec. 180.505 Who uses the EPLS?
    (a) Federal agency officials use the EPLS to determine whether to enter into a transaction with a person, as required under Sec. 180.430.
    (b) Participants also may, but are not required to, use the EPLS to determine if
    (1) Principals of their transactions are excluded or disqualified, as required under Sec. 180.320; or
    (2) Persons with whom they are entering into covered transactions at the next lower tier are excluded or disqualified.
    (c) The EPLS is available to the general public.

    Sec. 180.510 Who maintains the EPLS?

    The General Services Administration (GSA) maintains the EPLS. When a Federal agency takes an action to exclude a person under the nonprocurement or procurement debarment and suspension system, the agency enters the information about the excluded person into the EPLS. Sec. 180.515 What specific information is in the EPLS?
    (a) At a minimum, the EPLS 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 Federal agency and name and telephone number of the agency point of contact for the action; and
    (7) The Dun and Bradstreet Number (DUNS), or other similar code approved by the GSA, of the excluded or disqualified person, if available.
    (b)(1) The database for the EPLS includes a field for the Taxpayer Identification Number (TIN) (the social security number (SSN) for an individual) of an excluded or disqualified person.
    (2) Agencies disclose 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. 552(a).

    Sec. 180.520 Who places the information into the EPLS?

    Federal agency officials who take actions to exclude persons under this part or officials who are responsible for identifying disqualified persons must enter the following information about those persons into the EPLS:
    (a) Information required by Sec. 180.515(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, generally within five working days, 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.
    Sec. 180.525 Whom do I ask if I have questions about a person in the EPLS?

    If you have questions about a listed person in the EPLS, ask the point of contact for the Federal agency that placed the person's name into the EPLS. You may find the agency point of contact from the EPLS. Sec. 180.530 Where can I find the EPLS?

    You may access the EPLS through the Internet, currently at http://www.epls.gov. Subpart FGeneral Principles Relating to Suspension and Debarment Actions
    Sec. 180.600 How do suspension and debarment actions start?

    When Federal agency officials receive information from any source concerning a cause for suspension or debarment, they will promptly report it and the agency will investigate. The officials refer the question of whether to suspend or debar you to their suspending or debarring official for consideration, if appropriate.
    Sec. 180.605 How does suspension differ from debarment?

    Suspension differs from debarment in that
    A suspending official . . . A debarring official . . . (a) Imposes suspension as a temporary Imposes debarment for a status of in eligibility for specified period as a final procurement and nonprocurement determination that a person is transactions, pending completion of an not presently responsible. investigation or legal proceedings.
    (b) Must
    (1) Have adequate evidence that
    there may be a cause for debarment
    of a person; and
    (2) Conclude that immediate action Must conclude, based on a is necessary to protect the preponderance of the evidence, Federal interest that the person has engaged in conduct that warrants debarment.
    (c) Usually imposes the suspension Imposes debarment after giving first, and then promptly notifies the the respondent notice of the suspended person, giving the person an action and an opportunity to opportunity to contest the suspension contest the proposed and have it lifted. debarment.
    [[Page 51873]]
    Sec. 180.610 What procedures does a Federal agency use in suspension and debarment actions?

    In deciding whether to suspend or debar you, a Federal agency handles the actions as informally as practicable, consistent with principles of fundamental fairness.
    (a) For suspension actions, a Federal agency uses the procedures in this subpart and Subpart G of this part.
    (b) For debarment actions, a Federal agency uses the procedures in this subpart and Subpart H of this part.
    Sec. 180.615 How does a Federal agency notify a person of a suspension or debarment action?
    (a) The suspending or debarring official sends a written notice to the last known street address, facsimile number, or email address of (1) You or your identified counsel; or
    (2) Your agent for service of process, or any of your partners, officers, directors, owners, or joint venturers.
    (b) The notice is effective if sent to any of these persons. Sec. 180.620 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.
    Sec. 180.625 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. Sec. 180.630 May a Federal agency impute the conduct of one person to another?

    For purposes of actions taken under this part, a Federal agency may impute conduct as follows:
    (a) Conduct imputed from an individual to an organization. A Federal agency may impute the fraudulent, criminal, or other improper conduct of any officer, director, shareholder, partner, employee, or other individual associated with an organization, to that organization when the improper conduct occurred in connection with the individual's performance of duties for or on behalf of that organization, or with the organization's knowledge, approval or acquiescence. The organization's acceptance of the benefits derived from the conduct is evidence of knowledge, approval or acquiescence.
    (b) Conduct imputed from an organization to an individual, or between individuals. A Federal agency may impute the fraudulent, criminal, or other improper conduct of any organization to an individual, or from one individual to another individual, if the individual to whom the improper conduct is imputed either participated in, had knowledge of, or reason to know of the improper conduct. (c) Conduct imputed from one organization to another organization. A Federal agency may impute the fraudulent, criminal, or other improper conduct of one organization to another organization when the improper conduct occurred in connection with a partnership, joint venture, joint application, association or similar arrangement, or when the organization to whom the improper conduct is imputed has the power to direct, manage, control or influence the activities of the orga

    FOR FURTHER INFORMATION CONTACT

    Elizabeth Phillips, Office of Federal Financial Management, Office of Management and Budget, telephone (202) 3953053 (direct) or (202) 3953993 (main office) and email:
    ephillip@omb.eop.gov    .

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