Thursday, January 24, 2013

Prohibition on Contract Awards to Scofflaws

The Department of Defense issued a directive last Tuesday that prohibits the award of any contract, using funds made available by the 2013 Continuing Appropriations Resolution (Public Law 112-175) to companies that have unpaid Federal taxes and companies convicted of felony criminal violations within the preceding 24 month period.

Specifically, the prohibitions are worded as follows:


  • Has any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability, where the awarding agency is aware of the unpaid tax liability, unless the agency has considered suspension or debarment of the corporation and made a determination that this further action is not necessary to protect the interests of the Government, or
  • Was convicted of a felony criminal violation under any Federal law within the preceding 24 months, where the awarding agency is aware of the conviction, unless the agency has considered suspension or debarment of the corporation and made a determination that this further action is not necessary to protect the interest of the Government.


Its unlikely that an agency would be aware of these events in the regular course of business so there is the added provision that requires bidders to make affirmative responses to representations to the effect that these situations do not apply. Those representations are found in DFARS (the DoD FAR Supplement) 252.209-7996 and 2523209-7997.

Contracting officers are directed to consult with agency debarring and suspending officials if and when they receive affirmative responses from bidders. As a practical matter however, there doesn't seem to be any value in submitting a bid in the first place for contractors that admit to not paying taxes or have been convicted of a criminal violation; their offers will be tossed out of the competition anyway.

No comments:

Post a Comment