Jan 2012 , Vol. VI, No.1

Are Your Proposed Subcontractors on the Excluded Parties List?

Prior articles have dealt with the necessity of Government Contractors to conduct themselves with the highest degree of integrity and honesty.   When a contractor fails to so conduct itself, it runs the very real risk of being suspended or debarred from Government Contracting.  Prior articles have dealt with the necessity of developing and maintaining a Code of Business Ethics to guard against suspension or debarment.

When a contractor is suspended or debarred from Government Contracting, it is placed on the Excluded Parties List System (“EPLS”).   The EPLS is maintained by the General Services Administration (GSA) and lists the names and addresses of all contractors debarred, suspended, proposed for debarment or otherwise declared ineligible for Government Contracting.  Any contractor listed on the EPLS is prohibited from receiving a direct Government Contract.  In addition to being unable to receive direct government contracts, there are limitations on subcontracting to companies on the EPLS.

There is a FAR clause that limits the ability of prime government contractors to contract with companies on the EPLS.  The clause FAR 52.209-6 is entitled “Protecting the Government’s Interests When Subcontracting with Contractors Debarred, suspended or Proposed for Debarments.” 

It is required to be included in all Government Contracts that exceed $30,000.  It provides that a prime Government Contractor shall not enter into any subcontract in excess of $30,000 with a subcontractor on the EPLS.

There is also a recent FAR amendment that requires that prime contractors ensure that proposed subcontractors at all tiers are not on the EPLS.
Failure to complete thorough vetting of all proposed subcontractors to make sure they are not debarred, suspended, or proposed for suspension or debarment and to provide notice where appropriate to the Contracting Officer, could result in a violations of the False Statements Act subjecting the contractor to civil and criminal liability, as well as suspension and debarment.

Accordingly, all contractors and subcontractors should ensure that their internal controls and their subcontracting procedures include reviewing the EPLS and requiring their subcontractors at all tiers to affirmatively declare that they are not on the EPLS.

Authored by attorney William Dozier, these articles are meant to bring awareness to these topics and are not intended to be used as legal advice.
For more information, contact Mike at 757-446-8626 or Bill Franczek at 757-446-8600.
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