The Department of State has the general authority to debar or suspend grant awardees from participating in federal grant programs and other nonprocurement transactions. Grounds for debarment of a federal grantee include criminal or civil convictions for various crimes, including fraud, embezzlement, theft, bribery, tax evasion, misuse of grant funds and false claims, among others, as well as other causes indicating a person or business is not “presently responsible” as a federal grantee.
Debarment and suspension have serious consequences, such as exclusion from future government grants, contracts, and federal assistance and loans. For a company or individual whose primary business involves working with the government, a proposed suspension or debarment can have devastating consequences.
In recent years, the government generally, and the Department of State, in particular, has taken an increasingly aggressive approach in debarring or suspending companies and individuals suspected of grant irregularities irrespective of whether there has been a conviction of any wrongdoing. In many cases, mere suspicion of misconduct is enough to trigger a show cause letter or an actual proposed suspension or debarment. When a grant awardee faces the possibility of suspension or debarment, the government has every advantage, and it is critical to retain experienced counsel in this specialized area of the law to increase the chances of prevailing. Suspension and debarment proceedings require fast and decisive defense action in order to have any reasonable chance of defeating them.
When presented for consideration to a debarring official, the official must consider any information and argument presented in opposition to the proposed debarment. The proceedings are to include fact-finding if (1) the person presents a genuine dispute over facts material to the proposed debarment; (2) the debarment is not based upon a conviction or civil judgment; and (3) the person’s opposition does not contain merely general denials of the Notice of Proposed Debarment or solely raise issues that are immaterial to the debarment decision. When the proceedings include fact-finding, the person/company proposed for suspension or debarment may present witnesses and other evidence and confront any witnesses presented.
It is important to have seasoned counsel who knows how to present not only a thorough factual case to oppose the government’s evidence of wrongdoing but also to present mitigation evidence because even where wrongdoing is proved, the government has the discretion not to suspend or debar. Experienced counsel can play a pivotal role in negotiating a favorable outcome in these situations through the presentation of an effective mitigation case.
If the agency meets its burden to prove wrongdoing by a preponderance of the evidence, the person/company then should attempt to demonstrate to the satisfaction of the debarring official that he/she is presently responsible and that debarment is not necessary. Mitigating and aggravating factors that affect the issue of present responsibility are numerous. Seasoned counsel can help greatly with the effective presentation of a mitigation case, that if done correctly, can ultimately result in saving a business or a persons’ career from ruin. The presentation of a good mitigation case is often overlooked, yet it is an absolutely critical part of the process.
