The 2014 numbers are in – and they confirm that Federal marketplace remains volatile for government contractors.

According to the Interagency Suspension and Debarment Committee (ISDC), Federal agencies saw an uptick of about 14% in suspension and debarment proceedings.  Such exclusion proceedings remain among the chief tactics for combating alleged instances of fraud and misconduct in government contracting.  Overall, the ISDC reports that debarment actions rose from 1,696 in 2013 to 1,929 debarment actions in 2014.

Debarment proceedings are a tool in the tool belt of every Agency, but there remains significant variation in how they are enforced government-wide.  For 2014, the Department of the Army, Department of Homeland Security, and Department of Housing and Urban Development ranked among the most active – which is probably an unsurprising result given their level of procurement activities generally.

Of course, the continued rise of suspensions and debarments also coincides with the pervasive increase in Civil False Claims Act claims.

Gone are the days when a contractor could avoid trouble by simply not committing fraud.  Today, even unintentional or careless mistakes are viewed with suspicion by Federal agencies.

How should contractors deal with this hypersensitive environment?  The best and most practical answer is to incorporate a robust business ethics and compliance program.  At its best, the program will create a culture of compliance and prevent problems before they happen.  At the worst, the program will help deal with the consequences of a mistake before a government investigator gets involved.


How would your business deal with an IG investigation?  Would your employees be able to identify their designated compliance officer?