dwt.com National 8(a) Association Conference June 2015 Different Viewpoints When a Government Contract Goes Wrong: Department of Justice, Private Practice Attorney, and a Suspension and Debarment Official

dwt.com Your Presenters: Kevin Feldis  Kevin Feldis  Kevin Feldis is the First Assistant United States Attorney and Chief of the Criminal Division of the United States Attorney's Office for the District of Alaska. He has been a federal prosecutor since 1999, and has handled hundreds of federal cases involving fraud, federal programs, corruption, violent crime, firearms and environmental crime.  Mr. Feldis graduated with honors from Yale University in 1990 and received his law degree from the University of Chicago Law School in Before joining the U.S. Attorney’s Office, he was a law clerk for a Federal District Court Judge in Illinois, and was in private practice at national law firms in both Washington DC and in Alaska. Beginning this fall, he will be an adjunct professor at the Seattle University School of Law, Anchorage campus.

dwt.com John Klein  J ohn Klein, Associate General Counsel for procurement law United States SBA Principal Legal Advisor to senior Agency officials and their staffs with respect to the 8(a) Business Development program; the Agency’s Government Contracting programs, including the small business set-aside, subcontracting and Certificate of Competency programs; the HUBZone program; the Small Business Innovation Research program; the Size Standards program; the Service Disabled Veteran-Owned Small Business program; SBA’s internal contracting procedures; and Suspension and Debarment Official for SBA

dwt.com Christine Williams Adjunct Professor of Law, Seattle University, Government Contracting, Satellite Program Adjunct Professor, Alaska Native Executive Leadership Program, Master’s Program, Government Contracting and the 8(a) Program Partner, Davis Wright Tremaine LLP Christine concentrates on Government Contracting from counseling on qualifications and administration to disputes and crisis. She is often involved in sensitive internal investigations and frequently interacts with Government agencies when a company faces a tough situation. Christine is known for her deep experience with the SBA programs. Despite having a national practice, as a born and raised Alaskan, she understands the unique challenges that may be faced by Alaskan companies that they often encounter when it comes to Government Contracting on a national basis.

dwt.com Private Practioner Perspective: Who is Involved Main Justice AUSA Investigative Agencies Contracting Officer Agency Resources/ OIG Contractor Suspension and Debarment Official Main Justice AUSA Investigative Agencies SBA Contracting Officer Agency Resources/ OIG Contractor Suspension and Debarment Official Main Justice AUSA Investigative Agencies DCAA Contracting Officer Agency Resources/ OIG Contractor Suspension and

dwt.com Private Practioner Perspective: General Rules  Develop facts in a thorough and reliable way  Promote credibility and avoid the appearance of conflicts  Report findings clearly  Use the findings to protect the business  Do no harm

dwt.com Private Practioner Perspective: Initial Steps  Do not allow any misconduct to continue  Have a plan  Have a team: internal and external: points of contact  Who are the players: Government, agencies, media, GAO, Inspector Generals, DOJ  What has been done: Civil investigatory demand, internal complaint, subpoena, search warrant….

dwt.com Private Practioner Perspective: Data Collection  Quickly and quietly  No obstruction (do no harm)  Keep confidentiality  Word may spread be prepared  Assemble data and prepare for interviews

dwt.com Private Practioner Perspective: Interviews in General  Where is the harm coming from and who is likely the main cause, if any  Has it spread  Capacity to be surprised  Capacity to understand context and out of context statements, s, etc.

dwt.com Private Practioner Perspective: Interviews  Be prepared  Two interviewer rule  Give Upjohn at all interviews  Document the interview, keep opinions out  Whether or not to record the interview  Be prepared for employee questions they always come

dwt.com Private Practioner Perspective:  Reports and how to do them  Corrective measures, if needed, in place/recommended  Decisions regarding the Government (if not already involved) – Mandatory Disclosure – Voluntary Disclosure – Compliance with the law certifications – 8(a) Good Character

dwt.com Suspension and Debarment Perspective: Types  Administrative – Procurement (Federal Acquisition Regulation) – Non-Procurement (Non-Procurement Common Rule) – Government-wide effect (E.O )  Statutory

dwt.com Suspension and Debarment Perspective: FAR 9.4 Policy  Protect the U.S. Government – Integrity of contracting process – Quality goods and services  In the public interest  Not punishment

dwt.com Suspension and Debarment Perspective: Causes for Suspension FAR Adequate Evidence of:  Fraud or crime in connection with a public contract  Antitrust violation relating to submission of offers  Embezzlement, bribery, false statements, tax offenses, etc.  Drug-Free Workplace violation  False “Made in America” inscription  Unfair trade practice  Delinquent taxes  Failure to disclose credible evidence of criminal or False Claims Act violation or overpayments  Any other offense affecting present responsibility

dwt.com Suspension and Debarment Perspective: Causes for Debarment FAR  Conviction or Civil Judgment – Fraud or crime in connection with a public contract – Antitrust violation relating to submission of offers – Embezzlement, bribery, false statements, tax offenses, etc. – False “Made in America” inscription – Any other offense affecting present responsibility  Preponderance of Evidence – Serious violation of Gov’t contract terms – Drug Free workplace violation – False “Made in America” inscription – Unfair trade practice – Delinquent taxes – Failure to disclose credible evidence of criminal or FCA violation or overpayment  Any other offense affecting present responsibility

dwt.com  Understand the SDO's responsibility – Not to punish, but to protect the federal agency – Assess the present responsibility of the named party – Once the SDO has suspended a party or proposed a party for debarment, the practical burden to demonstrate responsibility shifts to the named party Suspension and Debarment Official (SDO)

dwt.com  Recognize the SDO's discretion – Responsibility is a subjective assessment – SDO final action is subject to review, but historically difficult to reverse – SDO has authority to debar for extended periods – one Army debarment was for 14 years Suspension and Debarment Official (SDO) (cont)

dwt.com  Show Cause Letters / Requests for Information  Administrative Agreements  Narrow scope of the debarment  Expand scope of debarment – Affiliates – Imputation – Joint Venture Agency Options

dwt.com  Suspension and debarment activity is monitored by Government fraud counsel  Early suspension and debarment can “enhance” parallel criminal and civil proceedings for Government or vice versa  Government does not have a policy of global settlements Government Coordination of Remedies

dwt.com  Debarment – FAR  Suspension – Uses the same factors as debarment  A contractor has to consider which mitigation factors it has satisfied or can satisfy prior to presentation of its position and then implement the mitigation factors, as appropriate in the individual case FAR Mitigation Factors

dwt.com  The existence/nonexistence of any single mitigating factor is not necessarily dispositive  Contractor must demonstrate to SDO's satisfaction that it is presently responsible and that suspension or debarment is unnecessary FAR Mitigation Factors (cont)

dwt.com Special Considerations for the 8(a) Contractor

dwt.com Special Considerations for the 8(a) Contractor  SBA 8(a) program has certain admission requirements  SBA regulations state that “good character” is required for admission into the program. Good character means: (1) no past / present criminal conduct; (2) no debarment or suspension; and (3) no violations of SBA rules  If statements on admission application are not true there are consequences

dwt.com SBA 8(a) Suspension: 13 CFR  Following a notice of intent to terminate participation in the 8(a) program, the SBA may suspend a participant when the SBA determines that suspension is needed to protect the interests of the Federal Government – Clear lack of program eligibility – Conduct indicating a lack of business integrity Biggie: false statements to the Federal Government

dwt.com SBA 8(a) Suspension: 13 CFR Notice A notice of suspension will provide the following information the basis of the suspension and that  Suspension is immediate and will continue pending: – completion of further investigation – a final program termination determination, – or some other specified period of time;  8(a) contracts, will not be made during the pendency of the suspension unless – it is determined by the head of the relevant procuring agency or an authorized representative to be in the best interest of the Government to do so, – and SBA adopts that determination;

dwt.com SBA 8(a) Suspension: 13 CFR Notice  Company must complete previously awarded section 8(a) contracts  Suspension is effective throughout SBA  A request for a hearing on the suspension will be considered by an Administrative Law Judge at OHA, and granted or denied as a matter of discretion  The program term will resume only if the suspension is lifted or the firm is not terminated

dwt.com SBA 8(a) Suspension: 13 CFR Appeal  A company can appeal a suspension decision – the suspension remains in effect during appeal  On appeal, the SBA has the burden of showing that "adequate evidence" exists for the suspension  "Adequate evidence" – Information in the record before SBA – Sufficient to support the belief that suspension is necessary  SBA need not demonstrate that an act or omission actually occurred

dwt.com SBA 8(a) Termination: 13 CFR  The SBA can terminate a company’s participation in the 8(a) program if the contractor or its principles is debarred or suspended under the FAR  The SBA may also terminate a company’s participation in the 8(a) program for other reasons, including conduct by the company, or a principal of the company, indicating a lack of business integrity  Such conduct may be demonstrated by information related to a criminal indictment or guilty plea, a criminal conviction, or a judgment or settlement in a civil case

dwt.com SBA 8(a) Termination: 13 CFR Examples  False information on 8(a) application  Failure by the company to maintain its eligibility for program participation  Failure by the company for any reason, to maintain ownership, full-time day-to-day management, and control by disadvantaged individuals-including death; [ownership/control]

dwt.com SBA 8(a) Termination: 13 CFR Examples  Debarment, suspension, voluntary exclusion, or ineligibility of the company or its principals  Conduct by the company, or any of its principals, indicating a lack of business integrity  Willful failure by the Participant to comply with applicable labor standards and obligations  Material breach of any terms and conditions of the 8(a) Program Participation Agreement  Willful violation by a company, or any of its principals, of any SBA regulation pertaining to material issues

dwt.com SBA Mitigating Factors  Likely a lot like the FAR provisions  Intent or mistake  What type  How far reaching

dwt.com Questions???