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Highway Administration Suspension & Debarment Procedures & Implementation

The Federal Highway Administration (FHWA) is a Department of Transportation (DOT) agency responsible for providing highway transportation programs in collaboration with state and local governments and other public and private stakeholders. The FHWA is one of the prominent agencies through which an unprecedented $550 billion of federal investment in US infrastructure from 2022 until 2026 will be expended as part of the bipartisan Infrastructure Investment and Jobs Act. Naturally, during this unprecedented period of infrastructure investment in U.S. history, contractors working on FHWA contracts have a heightened interest in avoiding the agency's suspension and debarment process altogether. However, such contractors may nevertheless wish to understand the FHWA directive governing its suspension and debarment procedures in case they become subject to the process.

Suspensions and debarments are discretionary administrative agency actions that exclude firms with unsatisfactory integrity, or business ethics records from participating in federal contracts or programs. Suspensions are temporary disqualifications from government contracting that generally last no longer than a year. Meanwhile debarments are typically for a longer period of up to three years but may be extended depending upon any aggravating circumstances. Notably, if a contractor is suspended for a period before being debarred, the debarment period is assumed to begin retroactively from the date of initial suspension. Since suspension and debarment actions are administered on a government-wide basis, companies excluded by a federal agency are excluded from doing business with all federal agencies. The General Services Administration (GSA) maintains a list of these excluded companies, made available to the public through the System of Award Management (SAM). Federal contractors are required to certify their exclusion status and those of all lower-tier subcontractors.

FHWA Order 2000.2B outlines the procedures for implementing suspension and debarment actions against companies violating integrity and business ethics in FHWA procurements. For procurement-related suspension and debarment actions, the directive is governed by the Federal Acquisition Regulation (FAR) Subpart 9.4 and DOT Order 4200.5E applying to all FHWA offices with procurement authority. The FHWA suspension and debarment official (SDO) may suspend a contractor to protect immediate public interest if she determines that there is adequate evidence or an indictment to suggest that the contractor has committed a debarable offense listed in 2 CFR Part 180 or 48 CFR Subpart 4.9.

The suspension and debarment process begins with a referral from the Office of Inspector General (OIG) or an FHWA Division Office. The Office of Chief Counsel coordinates with the SDO to take final action on each such referral. The FHWA notifies the entity by certified mail to issue a suspension or debarment action. Contractors should be aware that each such notification package also contains a formal letter stating the basis of the action and outlining the entity’s rights to challenge the action. Depending on the specific circumstances, contractors subject to such actions may receive one of three suspension and debarment notices.

o Notice of Suspension: A notice of suspension may be issued when the SDO determines that an immediate exclusion is warranted based on adequate evidence for debarment. Additionally, for non-procurement suspensions, the SDO must determine that immediate action is necessary to protect the public interest.

o Notice of Proposed Debarment: A notice of debarment may be issued when the SDO determines that there is sufficient evidence to debar.

o Notice of Suspension and Proposed Debarment: Contractors may receive a notice of suspension and proposed debarment in cases where an indictment, conviction, civil judgment, or other such factual basis listed in 2 CFR Part 180 or 48 CFR Subpart 4.9 justify the debarment action and immediate action is necessary to protect the public interest.

The FHWA gives the respondents 30 days from the receipt of the certified letter to challenge the proposed suspension or debarment action. The SDO may extend this period to contest the action upon a written request of the respondent. In response to factual challenges, the FHWA SDO has the authority to change the length of the suspension or debarment action or end it altogether. Depending on the specific situation, if genuine disputes of material facts exist and such a determination is documented by the SDO, the respondent is given the opportunity to present their case before a DOT Administrative Law Judge that is independent of the SDO. Understanding the FHWA's suspension and debarment process is crucial for contractors navigating facing such issues during this period of significant federal infrastructure investment. While contractors strive to avoid such actions altogether, familiarizing themselves with the procedures, timeframes, and response rights ensures they can effectively contest a suspension or debarment if necessary.

This Federal Procurement Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.