Federal Assistance Manual Chapter 1-500

CHAPTER 1-500 NON PROCUREMENT DEBARMENT AND SUSPENSION

• 1-500-00 Purpose
  
• 1-500-10 Background
  
• 1-500-20 Definitions
  
• 1-500-30 Policy and Applicability
  
• 1-500-40 Causes for Debarment and Suspension
  
• 1-500-50 Procedures

1-500-00 PURPOSE

This chapter outlines the DOI policies and OSM-specific procedures to implement the government-wide rule on nonprocurement debarment and suspension. Refer to 43 CFR 12.100 for detailed discussions and Departmental procedures.

1-500-10 BACKGROUND

1. On May 26,1988, the government-wide rule was published in the Federal Register (codified by DOI at 43 CFR 12.100). The rule defines the causes, effects, due process, and compliance tools for debarment and suspension actions.

2. In February 1995, the DOI issued a consolidated form, DI-2010, "Certifications Regarding Debarment Suspension and other Responsibility Matters, Drug-Free Workplace Requirements and Lobbying".

1-500-20 DEFINITIONS

Certain definitions are critical to the understanding of this chapter and, therefore, are provided below.

1. Debarment - The exclusion of a person from participating in covered transactions, generally for no more than three years, after proper notification, hearing and appeals procedures have been followed.

2. Lower-tier transaction - Transactions between a grantee and another person, organization or contractor, including: all subgrants and contracts that exceed $25,000. Contracts for less than $25,000 are considered lower-tier transactions when the person receiving the contract has a "critical influence on or substantive control" over the transaction, such as principal investigators and providers of audit services.

3. Person - Any individual, corporation, partnership, association, unit of government, or legal entity

4. Primary covered transaction - Any nonprocurement transaction between OSM and a person, regardless of type, including: direct grants and cooperative agreements.

5. Principal - Officers, directors, owners, partners and key employees who have primary management responsibility, critical influence or substantive control.

6. Suspension - The immediate exclusion of a person from participating in covered transactions for a temporary period pending completion of an investigation and other such legal or debarment proceedings as may ensue.

1-500-30 POLICY AND APPLICABILITY

1. Debarment and suspension are serious actions which shall be used only in the public interest and for the Federal Governments protection and not for purposes of punishment. OSM shall not award financial assistance to applicants that are debarred or suspended or otherwise excluded from or ineligible for financial assistance.

2. The nonprocurement debarment and suspension rule is applicable to all primary and lower tier transactions.

1-500-40 CAUSES FOR DEBARMENT AND SUSPENSION

1. The grounds for debarment and suspension focus on the commission of fraud or wrongdoing, whether against a Federal agency, State or individual. It is the act of wrongdoing, and not the program or victim, that is relevant. Further, mere technical cause for debarment does not require an agency to debar. Causes for debarment from a Federal nonprocurement program include:
   1. A conviction or civil judgment for fraud, criminal offenses, violation of antitrust statutes, embezzlement, theft, forgery, bribery, falsification of records, false claims, obstruction of justice or other offenses that indicate a lack of business integrity or honesty;

   2. A serious violation of public agreement that affects "the integrity of an agency program" such as a willful failure to perform, history of substantial non-compliance, and willful violation of statutory or regulatory provisions; and

   3. Knowingly doing business with an excluded person or failure to pay a substantial debt or a number of outstanding debts.

2. Additionally, adequate evidence to suspect the commission of an offense is sufficient grounds for initiating suspension action. Indictment is considered adequate evidence for purposes of suspension actions.

1-500-50 PROCEDURES

1. For Compliance
   1. Each recipient shall:
      1. As part of the original application for financial assistance, submit in its entirety form DI-2010, for it and its principals. Primary recipients shall sign Part A. NOTE: States do not have to certify themselves, but are required to certify their primary management officials.

      2. Decide the method and frequency by which it determines the eligibility of its principals.

      3. Require each participant in its lower-tier covered transactions to submit Part B of form DI-2010, for it and its principals as part of any proposal submitted in connection with such lower tier covered transactions. (Copies ofthese forms are not submitted to OSM, except as noted in d. below.)

      4. For those lower-tier participants identified in the original application, include the Dl-2010 form, as part of the original application package.

      5. Inform the appropriate RCC/FO official in writing if at any time the recipient learns that any of the certifications included in its original application package were erroneous when submitted or have become erroneous by reason of changed circumstances.

   2. OSM shall check the "Lists of Parties Excluded from Federal Procurement and Nonprocurement Programs" before the RCC/FO designate signs a grant or cooperative agreement, in order to determine whether a participant or principal is debarred, suspended, ineligible or voluntarily excluded. This information can be obtained electronically through GSA's web site Excluded Parties List System.

2. For Initiating Debarment/Suspension Action
   1. The RCC/FO shall investigate and document information concerning the existence of a cause for debarment. The information shall be forwarded to the RD.

   2. The RD shall review the information and, if determined appropriate, forward through AD-PS to DOI, Director, Office of Acquisition and Property Management for action.

   3. The DOI Debarring/Suspending Official shall process the debarment action using procedures outlined in 43 CFR 12.100, as appropriate.

FEDERAL ASSISTANCE MANUAL
January 2, 1998