[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR145]
[Page 551-575]
TITLE 13--BUSINESS CREDIT AND ASSISTANCE
CHAPTER I--SMALL BUSINESS ADMINISTRATION
PART 145_GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT)
Sec.
145.25 How is this part organized?
145.50 How is this part written?
145.75 Do terms in this part have special meanings?
Subpart A_General
145.100 What does this part do?
145.105 Does this part apply to me?
145.110 What is the purpose of the nonprocurement debarment and
suspension system?
145.115 How does an exclusion restrict a person's involvement in covered
transactions?
145.120 May we grant an exception to let an excluded person participate
in a covered transaction?
145.125 Does an exclusion under the nonprocurement system affect a
person's eligibility for Federal procurement contracts?
145.130 Does exclusion under the Federal procurement system affect a
person's eligibility to participate in nonprocurement
transactions?
[[Page 552]]
145.135 May the SBA exclude a person who is not currently participating
in a nonprocurement transaction?
145.140 How do I know if a person is excluded?
145.145 Does this part address persons who are disqualified, as well as
those who are excluded from nonprocurement transactions?
Subpart B_Covered Transactions
145.200 What is a covered transaction?
145.205 Why is it important to know if a particular transaction is a
covered transaction?
145.210 Which nonprocurement transactions are covered transactions?
145.215 Which nonprocurement transactions are not covered transactions?
145.220 Are any procurement contracts included as covered transactions?
145.225 How do I know if a transaction in which I may participate in is
a covered transaction?
Subpart C_Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
145.300 What must I do before I enter into a covered transaction with
another person at the next lower tier?
145.305 May I enter into a covered transaction with an excluded or
disqualified person?
145.310 What must I do if a Federal agency excludes a person with whom I
am already doing business in a covered transaction?
145.315 May I use the services of an excluded person as a principal
under a covered transaction?
145.320 Must I verify that principals of my covered transactions are
eligible to participate?
145.325 What happens if I do business with an excluded person in a
covered transaction?
145.330 What requirements must I pass down to persons at lower tiers
with whom I intend to do business?
Disclosing Information--Primary Tier Participants
145.335 What information must I provide before entering into a covered
transaction with the SBA?
145.340 If I disclose unfavorable information required under Sec.
145.335, will I be prevented from participating in the
transaction?
145.345 What happens if I fail to disclose the information required
under Sec. 145.335?
145.350 What must I do if I learn of the information required under
Sec. 145.335 after entering into a covered transaction with
the SBA?
Disclosing Information--Lower Tier Participants
145.355 What information must I provide to a higher tier participant
before entering into a covered transaction with that
participant?
145.360 What happens if I fail to disclose the information required
under Sec. 145.355?
145.365 What must I do if I learn of information required under Sec.
145.355 after entering into a covered transaction with a
higher tier participant?
Subpart D_Responsibilities of SBA Officials Regarding Transactions
145.400 May I enter into a transaction with an excluded or disqualified
person?
145.405 May I enter into a covered transaction with a participant if a
principal of the transaction is excluded?
145.410 May I approve a participant's use of the services of an excluded
person?
145.415 What must I do if a Federal agency excludes the participant or a
principal after I enter into a covered transaction?
145.420 May I approve a transaction with an excluded or disqualified
person at a lower tier?
145.425 When do I check to see if a person is excluded or disqualified?
145.430 How do I check to see if a person is excluded or disqualified?
145.435 What must I require of a primary tier participant?
145.440 What method do I use to communicate those requirements to
participants?
145.445 What action may I take if a primary tier participant knowingly
does business with an excluded or disqualified person?
145.450 What action may I take if a primary tier participant fails to
disclose the information required under Sec. 145.335?
145.455 What may I do if a lower tier participant fails to disclose the
information required under Sec. 145.355 to the next higher
tier?
Subpart E_Excluded Parties List System
145.500 What is the purpose of the Excluded Parties List System (EPLS)?
145.505 Who uses the EPLS?
145.510 Who maintains the EPLS?
145.515 What specific information is in the EPLS?
145.520 Who places the information into the EPLS?
145.525 Whom do I ask if I have questions about a person in the EPLS?
145.530 Where can I find the EPLS?
[[Page 553]]
Subpart F_General Principles Relating to Suspension and Debarment
Actions
145.600 How do suspension and debarment actions start?
145.605 How does suspension differ from debarment?
145.610 What procedures does the SBA use in suspension and debarment
actions?
145.615 How does the SBA notify a person of a suspension and debarment
action?
145.620 Do Federal agencies coordinate suspension and debarment actions?
145.625 What is the scope of a suspension or debarment action?
145.630 May the SBA impute the conduct of one person to another?
145.635 May the SBA settle a debarment or suspension action?
145.640 May a settlement include a voluntary exclusion?
145.645 Do other Federal agencies know if the SBA agrees to a voluntary
exclusion?
Subpart G_Suspension
145.700 When may the suspending official issue a suspension?
145.705 What does the suspending official consider in issuing a
suspension?
145.710 When does a suspension take effect?
145.715 What notice does the suspending official give me if I am
suspended?
145.720 How may I contest a suspension?
145.725 How much time do I have to contest a suspension?
145.730 What information must I provide to the suspending official if I
contest a suspension?
145.735 Under what conditions do I get an additional opportunity to
challenge the facts on which the suspension is based?
145.740 Are suspension proceedings formal?
145.745 How is fact-finding conducted?
145.750 What does the suspending official consider in deciding whether
to continue or terminate my suspension?
145.755 When will I know whether the suspension is continued or
terminated?
145.760 How long may my suspension last?
145.765 How may I appeal my suspension?
Subpart H_Debarment
145.800 What are the causes for debarment?
145.805 What notice does the debarring official give me if I am proposed
for debarment?
145.810 When does a debarment take effect?
145.815 How may I contest a proposed debarment?
145.820 How much time do I have to contest a proposed debarment?
145.825 What information must I provide to the debarring official if I
contest a proposed debarment?
145.830 Under what conditions do I get an additional opportunity to
challenge the facts on which the proposed debarment is based?
145.835 Are debarment proceedings formal?
145.840 How is fact-finding conducted?
145.845 What does the debarring official consider in deciding whether to
debar me?
145.850 What is the standard of proof in a debarment action?
145.855 Who has the burden of proof in a debarment action?
145.860 What factors may influence the debarring official's decision?
145.865 How long may my debarment last?
145.870 When do I know if the debarring official debars me?
145.875 May I ask the debarring official to reconsider a decision to
debar me?
145.880 What factors may influence the debarring official during
reconsideration?
145.885 May the debarring official extend a debarment?
145.890 How may I appeal my debarment?
Subpart I_Definitions
145.900 Adequate evidence.
145.905 Affiliate.
145.910 Agency.
145.915 Agent or representative.
145.920 Civil judgment.
145.925 Conviction.
145.930 Debarment.
145.935 Debarring official.
145.940 Disqualified.
145.945 Excluded or exclusion.
145.950 Excluded Parties List System.
145.955 Indictment.
145.960 Ineligible or ineligibility.
145.965 Legal proceedings.
145.970 Nonprocurement transaction.
145.975 Notice.
145.980 Participant.
144.985 Person.
145.990 Preponderance of the evidence.
145.995 Principal.
145.1000 Respondent.
145.1005 State.
145.1010 Suspending official.
145.1015 Suspension.
145.1020 Voluntary exclusion or voluntarily excluded.
Subpart J [Reserved]
Appendix to Part 145--Covered Transactions
Authority: 5 U.S.C. 301 et seq.; 15 U.S.C. 631 et seq.; Sec. 2455,
Pub. L. 103-355, 108 Stat. 3327 (31 U.S.C. 6101 note); E.O. 11738, 3
CFR, 1973 Comp., p. 799; E.O. 12549, 3 CFR, 1986 Comp., p. 189; E.O.
12689, 3 CFR, 1989 Comp., p. 235.
Source: 68 FR 66544, 66570, Nov. 26, 2003, unless otherwise noted.
[[Page 554]]
Sec. 145.25 How is this part organized?
(a) This part is subdivided into ten subparts. Each subpart contains
information related to a broad topic or specific audience with special
responsibilities, as shown in the following table:
------------------------------------------------------------------------
You will find provisions
In subpart . . . related to . . .
------------------------------------------------------------------------
A...................................... general information about this
rule.
B...................................... the types of SBA transactions
that are covered by the
Governmentwide nonprocurement
suspension and debarment
system.
C...................................... the responsibilities of persons
who participate in covered
transactions.
D...................................... the responsibilities of SBA
officials who are authorized
to enter into covered
transactions.
E...................................... the responsibilities of Federal
agencies for the Excluded
Parties List System
(Disseminated by the General
Services Administration).
F...................................... the general principles
governing suspension,
debarment, voluntary exclusion
and settlement.
G...................................... suspension actions.
H...................................... debarment actions.
I...................................... definitions of terms used in
this part.
J...................................... [Reserved]
------------------------------------------------------------------------
(b) The following table shows which subparts may be of special
interest to you, depending on who you are:
------------------------------------------------------------------------
If you are . . . See subpart(s) . . .
------------------------------------------------------------------------
(1) a participant or principal in a A, B, C, and I.
nonprocurement transaction.
(2) a respondent in a suspension action... A, B, F, G and I.
(3) a respondent in a debarment action.... A, B, F, H and I.
(4) a suspending official................. A, B, D, E, F, G and I.
(5) a debarring official.................. A, B, D, E, F, H and I.
(6) a (n) SBA official authorized to enter A, B, D, E and I.
into a covered transaction.
(7) Reserved.............................. J.
------------------------------------------------------------------------
Sec. 145.50 How is this part written?
(a) This part uses a ``plain language'' format to make it easier for
the general public and business community to use. The section headings
and text, often in the form of questions and answers, must be read
together.
(b) Pronouns used within this part, such as ``I'' and ``you,''
change from subpart to subpart depending on the audience being
addressed. The pronoun ``we'' always is the SBA.
(c) The ``Covered Transactions'' diagram in the appendix to this
part shows the levels or ``tiers'' at which the SBA enforces an
exclusion under this part.
Sec. 145.75 Do terms in this part have special meanings?
This part uses terms throughout the text that have special meaning.
Those terms are defined in Subpart I of this part. For example, three
important terms are--
(a) Exclusion or excluded, which refers only to discretionary
actions taken by a suspending or debarring official under this part or
the Federal Acquisition Regulation (48 CFR part 9, subpart 9.4);
(b) Disqualification or disqualified, which refers to prohibitions
under specific statutes, executive orders (other than Executive Order
12549 and Executive Order 12689), or other authorities.
Disqualifications frequently are not subject to the discretion of an
agency official, may have a different scope than exclusions, or have
special conditions that apply to the disqualification; and
(c) Ineligibility or ineligible, which generally refers to a person
who is either excluded or disqualified.
Subpart A_General
Sec. 145.100 What does this part do?
This part adopts a governmentwide system of debarment and suspension
for SBA nonprocurement activities. It also provides for reciprocal
exclusion of persons who have been excluded under the Federal
Acquisition Regulation, and provides for the consolidated listing of all
persons who are excluded, or disqualified by statute, executive order,
or other legal authority. This part satisfies the requirements in
section 3 of Executive Order 12549, ``Debarment and Suspension'' (3 CFR
1986 Comp., p. 189), Executive Order 12689, ``Debarment and Suspension''
(3 CFR 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Public
Law 103-355, 108 Stat. 3327).
Sec. 145.105 Does this part apply to me?
Portions of this part (see table at Sec. 145.25(b)) apply to you if
you are a(n)--
(a) Person who has been, is, or may reasonably be expected to be, a
participant or principal in a covered transaction;
[[Page 555]]
(b) Respondent (a person against whom the SBA has initiated a
debarment or suspension action);
(c) SBA debarring or suspending official; or
(d) SBA official who is authorized to enter into covered
transactions with non-Federal parties.
Sec. 145.110 What is the purpose of the nonprocurement debarment and
suspension system?
(a) To protect the public interest, the Federal Government ensures
the integrity of Federal programs by conducting business only with
responsible persons.
(b) A Federal agency uses the nonprocurement debarment and
suspension system to exclude from Federal programs persons who are not
presently responsible.
(c) An exclusion is a serious action that a Federal agency may take
only to protect the public interest. A Federal agency may not exclude a
person or commodity for the purposes of punishment.
Sec. 145.115 How does an exclusion restrict a person's involvement in
covered transactions?
With the exceptions stated in Sec. Sec. 145.120, 145.315, and
145.420, a person who is excluded by the SBA or any other Federal agency
may not:
(a) Be a participant in a(n) SBA transaction that is a covered
transaction under subpart B of this part;
(b) Be a participant in a transaction of any other Federal agency
that is a covered transaction under that agency's regulation for
debarment and suspension; or
(c) Act as a principal of a person participating in one of those
covered transactions.
Sec. 145.120 May we grant an exception to let an excluded person
participate in a covered transaction?
(a) The SBA Debarring Official may grant an exception permitting an
excluded person to participate in a particular covered transaction. If
the SBA Debarring Official grants an exception, the exception must be in
writing and state the reason(s) for deviating from the governmentwide
policy in Executive Order 12549.
(b) An exception granted by one agency for an excluded person does
not extend to the covered transactions of another agency.
Sec. 145.125 Does an exclusion under the nonprocurement system affect
a person's eligibility for Federal procurement contracts?
If any Federal agency excludes a person under its nonprocurement
common rule on or after August 25, 1995, the excluded person is also
ineligible to participate in Federal procurement transactions under the
FAR. Therefore, an exclusion under this part has reciprocal effect in
Federal procurement transactions.
Sec. 145.130 Does exclusion under the Federal procurement system
affect a person's eligibility to participate in nonprocurement
transactions?
If any Federal agency excludes a person under the FAR on or after
August 25, 1995, the excluded person is also ineligible to participate
in nonprocurement covered transactions under this part. Therefore, an
exclusion under the FAR has reciprocal effect in Federal nonprocurement
transactions.
Sec. 145.135 May the SBA exclude a person who is not currently
participating in a nonprocurement transaction?
Given a cause that justifies an exclusion under this part, we may
exclude any person who has been involved, is currently involved, or may
reasonably be expected to be involved in a covered transaction.
Sec. 145.140 How do I know if a person is excluded?
Check the Excluded Parties List System (EPLS) to determine whether a
person is excluded. The General Services Administration (GSA) maintains
the EPLS and makes it available, as detailed in subpart E of this part.
When a Federal agency takes an action to exclude a person under the
nonprocurement or procurement debarment and suspension system, the
agency enters the information about the excluded person into the EPLS.
[[Page 556]]
Sec. 145.145 Does this part address persons who are disqualified, as
well as those who are excluded from nonprocurement
transactions?
Except if provided for in Subpart J of this part, this part--
(a) Addresses disqualified persons only to--
(1) Provide for their inclusion in the EPLS; and
(2) State responsibilities of Federal agencies and participants to
check for disqualified persons before entering into covered
transactions.
(b) Does not specify the--
(1) SBA transactions for which a disqualified person is ineligible.
Those transactions vary on a case-by-case basis, because they depend on
the language of the specific statute, Executive order, or regulation
that caused the disqualification;
(2) Entities to which the disqualification applies; or
(3) Process that the agency uses to disqualify a person. Unlike
exclusion, disqualification is frequently not a discretionary action
that a Federal agency takes.
Subpart B_Covered Transactions
Sec. 145.200 What is a covered transaction?
A covered transaction is a nonprocurement or procurement transaction
that is subject to the prohibitions of this part. It may be a
transaction at--
(a) The primary tier, between a Federal agency and a person (see
appendix to this part); or
(b) A lower tier, between a participant in a covered transaction and
another person.
Sec. 145.205 Why is it important if a particular transaction is a
covered transaction?
The importance of a covered transaction depends upon who you are.
(a) As a participant in the transaction, you have the
responsibilities laid out in Subpart C of this part. Those include
responsibilities to the person or Federal agency at the next higher tier
from whom you received the transaction, if any. They also include
responsibilities if you subsequently enter into other covered
transactions with persons at the next lower tier.
(b) As a Federal official who enters into a primary tier
transaction, you have the responsibilities laid out in subpart D of this
part.
(c) As an excluded person, you may not be a participant or principal
in the transaction unless--
(1) The person who entered into the transaction with you allows you
to continue your involvement in a transaction that predates your
exclusion, as permitted under Sec. 145.310 or Sec. 145.415; or
(2) A(n) SBA official obtains an exception from the SBA Debarring
Official to allow you to be involved in the transaction, as permitted
under Sec. 145.120.
Sec. 145.210 Which nonprocurement transactions are covered
transactions?
All nonprocurement transactions, as defined in Sec. 145.970, are
covered transactions unless listed in Sec. 145.215. (See appendix to
this part.)
Sec. 145.215 Which nonprocurement transactions are not covered
transactions?
The following types of nonprocurement transactions are not covered
transactions:
(a) A direct award to--
(1) A foreign government or foreign governmental entity;
(2) A public international organization;
(3) An entity owned (in whole or in part) or controlled by a foreign
government; or
(4) Any other entity consisting wholly or partially of one or more
foreign governments or foreign governmental entities.
(b) A benefit to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits received
in an individual's business capacity are not excepted). For example, if
a person receives social security benefits under the Supplemental
Security Income provisions of the Social Security Act, 42 U.S.C. 1301 et
seq., those benefits are not covered transactions and, therefore, are
not affected if the person is excluded.
(c) Federal employment.
[[Page 557]]
(d) A transaction that the SBA needs to respond to a national or
agency-recognized emergency or disaster.
(e) A permit, license, certificate, or similar instrument issued as
a means to regulate public health, safety, or the environment, unless
the SBA specifically designates it to be a covered transaction.
(f) An incidental benefit that results from ordinary governmental
operations.
(g) Any other transaction if the application of an exclusion to the
transaction is prohibited by law.
Sec. 145.220 Are any procurement contracts included as covered
transactions?
(a) Covered transactions under this part--
(1) Do not include any procurement contracts awarded directly by a
Federal agency; but
(2) Do include some procurement contracts awarded by non-Federal
participants in nonprocurement covered transactions (see appendix to
this part).
(b) Specifically, a contract for goods or services is a covered
transaction if any of the following applies:
(1) The contract is awarded by a participant in a nonprocurement
transaction that is covered under Sec. 145.210, and the amount of the
contract is expected to equal or exceed $25,000.
(2) The contract requires the consent of a(n) SBA official. In that
case, the contract, regardless of the amount, always is a covered
transaction, and it does not matter who awarded it. For example, it
could be a subcontract awarded by a contractor at a tier below a
nonprocurement transaction, as shown in the appendix to this part.
(3) The contract is for federally-required audit services.
(c) The contract is awarded by any contractor, subcontractor,
supplier, consultant or its agent or representative in any transaction,
regardless of tier, to be funded or provided by the SBA under a
nonprocurement transaction that is expected to equal or exceed $25,000.
(See optional lower tier coverage shown in the diagram in the appendix
to this part.)
Sec. 145.225 How do I know if a transaction in which I may participate
is a covered transaction?
As a participant in a transaction, you will know that it is a
covered transaction because the agency regulations governing the
transaction, the appropriate agency official, or participant at the next
higher tier who enters into the transaction with you, will tell you that
you must comply with applicable portions of this part.
Subpart C_Responsibilities of Participants Regarding Transactions
Doing Business With Other Persons
Sec. 145.300 What must I do before I enter into a covered transaction
with another person at the next lower tier?
When you enter into a covered transaction with another person at the
next lower tier, you must verify that the person with whom you intend to
do business is not excluded or disqualified. You do this by:
(a) Checking the EPLS; or
(b) Collecting a certification from that person if allowed by this
rule; or
(c) Adding a clause or condition to the covered transaction with
that person.
Sec. 145.305 May I enter into a covered transaction with an excluded
or disqualified person?
(a) You as a participant may not enter into a covered transaction
with an excluded person, unless the SBA grants an exception under Sec.
145.120.
(b) You may not enter into any transaction with a person who is
disqualified from that transaction, unless you have obtained an
exception under the disqualifying statute, Executive order, or
regulation.
Sec. 145.310 What must I do if a Federal agency excludes a person with
whom I am already doing business in a covered transaction?
(a) You as a participant may continue covered transactions with an
excluded person if the transactions were in existence when the agency
excluded the person. However, you are not required to continue the
transactions,
[[Page 558]]
and you may consider termination. You should make a decision about
whether to terminate and the type of termination action, if any, only
after a thorough review to ensure that the action is proper and
appropriate.
(b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, unless the SBA grants an
exception under Sec. 145.120.
Sec. 145.315 May I use the services of an excluded person as a
principal under a covered transaction?
(a) You as a participant may continue to use the services of an
excluded person as a principal under a covered transaction if you were
using the services of that person in the transaction before the person
was excluded. However, you are not required to continue using that
person's services as a principal. You should make a decision about
whether to discontinue that person's services only after a thorough
review to ensure that the action is proper and appropriate.
(b) You may not begin to use the services of an excluded person as a
principal under a covered transaction unless the SBA grants an exception
under Sec. 145.120.
Sec. 145.320 Must I verify that principals of my covered transactions
are eligible to participate?
Yes, you as a participant are responsible for determining whether
any of your principals of your covered transactions is excluded or
disqualified from participating in the transaction. You may decide the
method and frequency by which you do so. You may, but you are not
required to, check the EPLS.
Sec. 145.325 What happens if I do business with an excluded person in
a covered transaction?
If as a participant you knowingly do business with an excluded
person, we may disallow costs, annul or terminate the transaction, issue
a stop work order, debar or suspend you, or take other remedies as
appropriate.
Sec. 145.330 What requirements must I pass down to persons at lower
tiers with whom I intend to do business?
Before entering into a covered transaction with a participant at the
next lower tier, you must require that participant to--
(a) Comply with this subpart as a condition of participation in the
transaction. You may do so using any method(s), unless Sec. 145.440
requires you to use specific methods.
(b) Pass the requirement to comply with this subpart to each person
with whom the participant enters into a covered transaction at the next
lower tier.
Disclosing Information--Primary Tier Participants
Sec. 145.335 What information must I provide before entering into a
covered transaction with the SBA?
Before you enter into a covered transaction at the primary tier, you
as the participant must notify the SBA office that is entering into the
transaction with you, if you know that you or any of the principals for
that covered transaction:
(a) Are presently excluded or disqualified;
(b) Have been convicted within the preceding three years of any of
the offenses listed in Sec. 145.800(a) or had a civil judgment rendered
against you for one of those offenses within that time period;
(c) Are presently indicted for or otherwise criminally or civilly
charged by a governmental entity (Federal, State or local) with
commission of any of the offenses listed in Sec. 145.800(a); or
(d) Have had one or more public transactions (Federal, State, or
local) terminated within the preceding three years for cause or default.
Sec. 145.340 If I disclose unfavorable information required under
Sec. 145.335, will I be prevented from participating in the
transaction?
As a primary tier participant, your disclosure of unfavorable
information about yourself or a principal under Sec. 145.335 will not
necessarily cause us to deny your participation in the covered
transaction. We will consider the information when we determine whether
to
[[Page 559]]
enter into the covered transaction. We also will consider any additional
information or explanation that you elect to submit with the disclosed
information.
Sec. 145.345 What happens if I fail to disclose information required
under Sec. 145.335?
If we later determine that you failed to disclose information under
Sec. 145.335 that you knew at the time you entered into the covered
transaction, we may--
(a) Terminate the transaction for material failure to comply with
the terms and conditions of the transaction; or
(b) Pursue any other available remedies, including suspension and
debarment.
Sec. 145.350 What must I do if I learn of information required under
Sec. 145.335 after entering into a covered transaction with
the SBA?
At any time after you enter into a covered transaction, you must
give immediate written notice to the SBA office with which you entered
into the transaction if you learn either that--
(a) You failed to disclose information earlier, as required by Sec.
145.335; or
(b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 145.335.
Disclosing Information--Lower Tier Participants
Sec. 145.355 What information must I provide to a higher tier
participant before entering into a covered transaction with
that participant?
Before you enter into a covered transaction with a person at the
next higher tier, you as a lower tier participant must notify that
person if you know that you or any of the principals are presently
excluded or disqualified.
Sec. 145.360 What happens if I fail to disclose the information
required under Sec. 145.355?
If we later determine that you failed to tell the person at the
higher tier that you were excluded or disqualified at the time you
entered into the covered transaction with that person, we may pursue any
available remedies, including suspension and debarment.
Sec. 145.365 What must I do if I learn of information required under
Sec. 145.355 after entering into a covered transaction with a
higher tier participant?
At any time after you enter into a lower tier covered transaction
with a person at a higher tier, you must provide immediate written
notice to that person if you learn either that--
(a) You failed to disclose information earlier, as required by Sec.
145.355; or
(b) Due to changed circumstances, you or any of the principals for
the transaction now meet any of the criteria in Sec. 145.355.
Subpart D_Responsibilities of SBA Officials Regarding Transactions
Sec. 145.400 May I enter into a transaction with an excluded or
disqualified person?
(a) You as an agency official may not enter into a covered
transaction with an excluded person unless you obtain an exception under
Sec. 145.120.
(b) You may not enter into any transaction with a person who is
disqualified from that transaction, unless you obtain a waiver or
exception under the statute, Executive order, or regulation that is the
basis for the person's disqualification.
Sec. 145.405 May I enter into a covered transaction with a participant
if a principal of the transaction is excluded?
As an agency official, you may not enter into a covered transaction
with a participant if you know that a principal of the transaction is
excluded, unless you obtain an exception under Sec. 145.120.
Sec. 145.410 May I approve a participant's use of the services of an
excluded person?
After entering into a covered transaction with a participant, you as
an agency official may not approve a participant's use of an excluded
person as a principal under that transaction, unless you obtain an
exception under Sec. 145.120.
[[Page 560]]
Sec. 145.415 What must I do if a Federal agency excludes the
participant or a principal after I enter into a covered
transaction?
(a) You as an agency official may continue covered transactions with
an excluded person, or under which an excluded person is a principal, if
the transactions were in existence when the person was excluded. You are
not required to continue the transactions, however, and you may consider
termination. You should make a decision about whether to terminate and
the type of termination action, if any, only after a thorough review to
ensure that the action is proper.
(b) You may not renew or extend covered transactions (other than no-
cost time extensions) with any excluded person, or under which an
excluded person is a principal, unless you obtain an exception under
Sec. 145.120.
Sec. 145.420 May I approve a transaction with an excluded or
disqualified person at a lower tier?
If a transaction at a lower tier is subject to your approval, you as
an agency official may not approve--
(a) A covered transaction with a person who is currently excluded,
unless you obtain an exception under Sec. 145.120; or
(b) A transaction with a person who is disqualified from that
transaction, unless you obtain a waiver or exception under the statute,
Executive order, or regulation that is the basis for the person's
disqualification.
Sec. 145.425 When do I check to see if a person is excluded or
disqualified?
As an agency official, you must check to see if a person is excluded
or disqualified before you--
(a) Enter into a primary tier covered transaction;
(b) Approve a principal in a primary tier covered transaction;
(c) Approve a lower tier participant if agency approval of the lower
tier participant is required; or
(d) Approve a principal in connection with a lower tier transaction
if agency approval of the principal is required.
Sec. 145.430 How do I check to see if a person is excluded or
disqualified?
You check to see if a person is excluded or disqualified in two
ways:
(a) You as an agency official must check the EPLS when you take any
action listed in Sec. 145.425.
(b) You must review information that a participant gives you, as
required by Sec. 145.335, about its status or the status of the
principals of a transaction.
Sec. 145.435 What must I require of a primary tier participant?
You as an agency official must require each participant in a primary
tier covered transaction to--
(a) Comply with subpart C of this part as a condition of
participation in the transaction; and
(b) Communicate the requirement to comply with Subpart C of this
part to persons at the next lower tier with whom the primary tier
participant enters into covered transactions.
Sec. 145.440 What method do I use to communicate those requirements to
participants?
To communicate the requirements to participants, you must include a
term or condition in the transaction requiring the participant's
compliance with subpart C of this part and requiring them to include a
similar term or condition in lower tier covered transactions.
Sec. 145.445 What action may I take if a primary tier participant
knowingly does business with an excluded or disqualified
person?
If a participant knowingly does business with an excluded or
disqualified person, you as an agency official may refer the matter for
suspension and debarment consideration. You may also disallow costs,
annul or terminate the transaction, issue a stop work order, or take any
other appropriate remedy.
Sec. 145.450 What action may I take if a primary tier participant
fails to disclose the information required under Sec.
145.335?
If you as an agency official determine that a participant failed to
disclose information, as required by Sec. 145.335, at the time it
entered into a
[[Page 561]]
covered transaction with you, you may--
(a) Terminate the transaction for material failure to comply with
the terms and conditions of the transaction; or
(b) Pursue any other available remedies, including suspension and
debarment.
Sec. 145.455 What may I do if a lower tier participant fails to
disclose the information required under Sec. 145.355 to the
next higher tier?
If you as an agency official determine that a lower tier participant
failed to disclose information, as required by Sec. 145.355, at the
time it entered into a covered transaction with a participant at the
next higher tier, you may pursue any remedies available to you,
including the initiation of a suspension or debarment action.
Subpart E_Excluded Parties List System
Sec. 145.500 What is the purpose of the Excluded Parties List System
(EPLS)?
The EPLS is a widely available source of the most current
information about persons who are excluded or disqualified from covered
transactions.
Sec. 145.505 Who uses the EPLS?
(a) Federal agency officials use the EPLS to determine whether to
enter into a transaction with a person, as required under Sec. 145.430.
(b) Participants also may, but are not required to, use the EPLS to
determine if--
(1) Principals of their transactions are excluded or disqualified,
as required under Sec. 145.320; or
(2) Persons with whom they are entering into covered transactions at
the next lower tier are excluded or disqualified.
(c) The EPLS is available to the general public.
Sec. 145.510 Who maintains the EPLS?
In accordance with the OMB guidelines, the General Services
Administration (GSA) maintains the EPLS. When a Federal agency takes an
action to exclude a person under the nonprocurement or procurement
debarment and suspension system, the agency enters the information about
the excluded person into the EPLS.
Sec. 145.515 What specific information is in the EPLS?
(a) At a minimum, the EPLS indicates--
(1) The full name (where available) and address of each excluded or
disqualified person, in alphabetical order, with cross references if
more than one name is involved in a single action;
(2) The type of action;
(3) The cause for the action;
(4) The scope of the action;
(5) Any termination date for the action;
(6) The agency and name and telephone number of the agency point of
contact for the action; and
(7) The Dun and Bradstreet Number (DUNS), or other similar code
approved by the GSA, of the excluded or disqualified person, if
available.
(b)(1) The database for the EPLS includes a field for the Taxpayer
Identification Number (TIN) (the social security number (SSN) for an
individual) of an excluded or disqualified person.
(2) Agencies disclose the SSN of an individual to verify the
identity of an individual, only if permitted under the Privacy Act of
1974 and, if appropriate, the Computer Matching and Privacy Protection
Act of 1988, as codified in 5 U.S.C. 552(a).
Sec. 145.520 Who places the information into the EPLS?
Federal officials who take actions to exclude persons under this
part or officials who are responsible for identifying disqualified
persons must enter the following information about those persons into
the EPLS:
(a) Information required by Sec. 145.515(a);
(b) The Taxpayer Identification Number (TIN) of the excluded or
disqualified person, including the social security number (SSN) for an
individual, if the number is available and may be disclosed under law;
(c) Information about an excluded or disqualified person, generally
within five working days, after--
(1) Taking an exclusion action;
[[Page 562]]
(2) Modifying or rescinding an exclusion action;
(3) Finding that a person is disqualified; or
(4) Finding that there has been a change in the status of a person
who is listed as disqualified.
Sec. 145.525 Whom do I ask if I have questions about a person in the
EPLS?
If you have questions about a person in the EPLS, ask the point of
contact for the Federal agency that placed the person's name into the
EPLS. You may find the agency point of contact from the EPLS.
Sec. 145.530 Where can I find the EPLS?
(a) You may access the EPLS through the Internet, currently at
http://epls.arnet.gov.
(b) As of November 26, 2003, you may also subscribe to a printed
version. However, we anticipate discontinuing the printed version. Until
it is discontinued, you may obtain the printed version by purchasing a
yearly subscription from the Superintendent of Documents, U.S.
Government Printing Office, Washington, DC 20402, or by calling the
Government Printing Office Inquiry and Order Desk at (202) 783-3238.
Subpart F_General Principles Relating to Suspension and Debarment
Actions
Sec. 145.600 How do suspension and debarment actions start?
When we receive information from any source concerning a cause for
suspension or debarment, we will promptly report and investigate it. We
refer the question of whether to suspend or debar you to our suspending
or debarring official for consideration, if appropriate.
Sec. 145.605 How does suspension differ from debarment?
Suspension differs from debarment in that--
------------------------------------------------------------------------
A suspending official . . . A debarring official . . .
------------------------------------------------------------------------
(a) Imposes suspension as a temporary Imposes debarment for a
status of ineligibility for specified period as a final
procurement and nonprocurement determination that a person is
transactions, pending completion of an not presently responsible.
investigation or legal proceedings.
(b) Must--............................. Must conclude, based on a
(1) Have adequate evidence that there preponderance of the evidence,
may be a cause for debarment of a that the person has engaged in
person; and. conduct that warrants
(2) Conclude that immediate action is debarment.
necessary to protect the Federal
interest.
(c) Usually imposes the suspension Imposes debarment after giving
first, and then promptly notifies the the respondent notice of the
suspended person, giving the person an action and an opportunity to
opportunity to contest the suspension contest the proposed
and have it lifted. debarment.
------------------------------------------------------------------------
Sec. 145.610 What procedures does the SBA use in suspension and
debarment actions?
In deciding whether to suspend or debar you, we handle the actions
as informally as practicable, consistent with principles of fundamental
fairness.
(a) For suspension actions, we use the procedures in this subpart
and subpart G of this part.
(b) For debarment actions, we use the procedures in this subpart and
subpart H of this part.
Sec. 145.615 How does the SBA notify a person of a suspension or
debarment action?
(a) The suspending or debarring official sends a written notice to
the last known street address, facsimile number, or e-mail address of--
(1) You or your identified counsel; or
(2) Your agent for service of process, or any of your partners,
officers, directors, owners, or joint venturers.
(b) The notice is effective if sent to any of these persons.
[[Page 563]]
Sec. 145.620 Do Federal agencies coordinate suspension and debarment
actions?
Yes, when more than one Federal agency has an interest in a
suspension or debarment, the agencies may consider designating one
agency as the lead agency for making the decision. Agencies are
encouraged to establish methods and procedures for coordinating their
suspension and debarment actions.
Sec. 145.625 What is the scope of a suspension or debarment?
If you are suspended or debarred, the suspension or debarment is
effective as follows:
(a) Your suspension or debarment constitutes suspension or debarment
of all of your divisions and other organizational elements from all
covered transactions, unless the suspension or debarment decision is
limited--
(1) By its terms to one or more specifically identified individuals,
divisions, or other organizational elements; or
(2) To specific types of transactions.
(b) Any affiliate of a participant may be included in a suspension
or debarment action if the suspending or debarring official--
(1) Officially names the affiliate in the notice; and
(2) Gives the affiliate an opportunity to contest the action.
Sec. 145.630 May the SBA impute conduct of one person to another?
For purposes of actions taken under this rule, we may impute conduct
as follows:
(a) Conduct imputed from an individual to an organization. We may
impute the fraudulent, criminal, or other improper conduct of any
officer, director, shareholder, partner, employee, or other individual
associated with an organization, to that organization when the improper
conduct occurred in connection with the individual's performance of
duties for or on behalf of that organization, or with the organization's
knowledge, approval or acquiescence. The organization's acceptance of
the benefits derived from the conduct is evidence of knowledge, approval
or acquiescence.
(b) Conduct imputed from an organization to an individual, or
between individuals. We may impute the fraudulent, criminal, or other
improper conduct of any organization to an individual, or from one
individual to another individual, if the individual to whom the improper
conduct is imputed either participated in, had knowledge of, or reason
to know of the improper conduct.
(c) Conduct imputed from one organization to another organization.
We may impute the fraudulent, criminal, or other improper conduct of one
organization to another organization when the improper conduct occurred
in connection with a partnership, joint venture, joint application,
association or similar arrangement, or when the organization to whom the
improper conduct is imputed has the power to direct, manage, control or
influence the activities of the organization responsible for the
improper conduct. Acceptance of the benefits derived from the conduct is
evidence of knowledge, approval or acquiescence.
Sec. 145.635 May the SBA settle a debarment or suspension action?
Yes, we may settle a debarment or suspension action at any time if
it is in the best interest of the Federal Government.
Sec. 145.640 May a settlement include a voluntary exclusion?
Yes, if we enter into a settlement with you in which you agree to be
excluded, it is called a voluntary exclusion and has governmentwide
effect.
Sec. 145.645 Do other Federal agencies know if the SBA agrees to a
voluntary exclusion?
(a) Yes, we enter information regarding a voluntary exclusion into
the EPLS.
(b) Also, any agency or person may contact us to find out the
details of a voluntary exclusion.
[[Page 564]]
Subpart G_Suspension
Sec. 145.700 When may the suspending official issue a suspension?
Suspension is a serious action. Using the procedures of this subpart
and subpart F of this part, the suspending official may impose
suspension only when that official determines that--
(a) There exists an indictment for, or other adequate evidence to
suspect, an offense listed under Sec. 145.800(a), or
(b) There exists adequate evidence to suspect any other cause for
debarment listed under Sec. 145.800(b) through (d); and
(c) Immediate action is necessary to protect the public interest.
Sec. 145.705 What does the suspending official consider in issuing a
suspension?
(a) In determining the adequacy of the evidence to support the
suspension, the suspending official considers how much information is
available, how credible it is given the circumstances, whether or not
important allegations are corroborated, and what inferences can
reasonably be drawn as a result. During this assessment, the suspending
official may examine the basic documents, including grants, cooperative
agreements, loan authorizations, contracts, and other relevant
documents.
(b) An indictment, conviction, civil judgment, or other official
findings by Federal, State, or local bodies that determine factual and/
or legal matters, constitutes adequate evidence for purposes of
suspension actions.
(c) In deciding whether immediate action is needed to protect the
public interest, the suspending official has wide discretion. For
example, the suspending official may infer the necessity for immediate
action to protect the public interest either from the nature of the
circumstances giving rise to a cause for suspension or from potential
business relationships or involvement with a program of the Federal
Government.
Sec. 145.710 When does a suspension take effect?
A suspension is effective when the suspending official signs the
decision to suspend.
Sec. 145.715 What notice does the suspending official give me if I am
suspended?
After deciding to suspend you, the suspending official promptly
sends you a Notice of Suspension advising you--
(a) That you have been suspended;
(b) That your suspension is based on--
(1) An indictment;
(2) A conviction;
(3) Other adequate evidence that you have committed irregularities
which seriously reflect on the propriety of further Federal Government
dealings with you; or
(4) Conduct of another person that has been imputed to you, or your
affiliation with a suspended or debarred person;
(c) Of any other irregularities in terms sufficient to put you on
notice without disclosing the Federal Government's evidence;
(d) Of the cause(s) upon which we relied under Sec. 145.700 for
imposing suspension;
(e) That your suspension is for a temporary period pending the
completion of an investigation or resulting legal or debarment
proceedings;
(f) Of the applicable provisions of this subpart, Subpart F of this
part, and any other SBA procedures governing suspension decision making;
and
(g) Of the governmentwide effect of your suspension from procurement
and nonprocurement programs and activities.
Sec. 145.720 How may I contest a suspension?
If you as a respondent wish to contest a suspension, you or your
representative must provide the suspending official with information in
opposition to the suspension. You may do this orally or in writing, but
any information provided orally that you consider important must also be
submitted in writing for the official record.
Sec. 145.725 How much time do I have to contest a suspension?
(a) As a respondent you or your representative must either send, or
make arrangements to appear and present, the information and argument to
the
[[Page 565]]
suspending official within 30 days after you receive the Notice of
Suspension.
(b) We consider the notice to be received by you--
(1) When delivered, if we mail the notice to the last known street
address, or five days after we send it if the letter is undeliverable;
(2) When sent, if we send the notice by facsimile or five days after
we send it if the facsimile is undeliverable; or
(3) When delivered, if we send the notice by e-mail or five days
after we send it if the e-mail is undeliverable.
Sec. 145.730 What information must I provide to the suspending
official if I contest a suspension?
(a) In addition to any information and argument in opposition, as a
respondent your submission to the suspending official must identify--
(1) Specific facts that contradict the statements contained in the
Notice of Suspension. A general denial is insufficient to raise a
genuine dispute over facts material to the suspension;
(2) All existing, proposed, or prior exclusions under regulations
implementing E.O. 12549 and all similar actions taken by Federal, state,
or local agencies, including administrative agreements that affect only
those agencies;
(3) All criminal and civil proceedings not included in the Notice of
Suspension that grew out of facts relevant to the cause(s) stated in the
notice; and
(4) All of your affiliates.
(b) If you fail to disclose this information, or provide false
information, the SBA may seek further criminal, civil or administrative
action against you, as appropriate.
Sec. 145.735 Under what conditions do I get an additional opportunity
to challenge the facts on which the suspension is based?
(a) You as a respondent will not have an additional opportunity to
challenge the facts if the suspending official determines that--
(1) Your suspension is based upon an indictment, conviction, civil
judgment, or other finding by a Federal, State, or local body for which
an opportunity to contest the facts was provided;
(2) Your presentation in opposition contains only general denials to
information contained in the Notice of Suspension;
(3) The issues raised in your presentation in opposition to the
suspension are not factual in nature, or are not material to the
suspending official's initial decision to suspend, or the official's
decision whether to continue the suspension; or
(4) On the basis of advice from the Department of Justice, an office
of the United States Attorney, a State attorney general's office, or a
State or local prosecutor's office, that substantial interests of the
government in pending or contemplated legal proceedings based on the
same facts as the suspension would be prejudiced by conducting fact-
finding.
(b) You will have an opportunity to challenge the facts if the
suspending official determines that--
(1) The conditions in paragraph (a) of this section do not exist;
and
(2) Your presentation in opposition raises a genuine dispute over
facts material to the suspension.
(c) If you have an opportunity to challenge disputed material facts
under this section, the suspending official or designee must conduct
additional proceedings to resolve those facts.
Sec. 145.740 Are suspension proceedings formal?
(a) Suspension proceedings are conducted in a fair and informal
manner. The suspending official may use flexible procedures to allow you
to present matters in opposition. In so doing, the suspending official
is not required to follow formal rules of evidence or procedure in
creating an official record upon which the official will base a final
suspension decision.
(b) You as a respondent or your representative must submit any
documentary evidence you want the suspending official to consider.
Sec. 145.745 How is fact-finding conducted?
(a) If fact-finding is conducted--
(1) You may present witnesses and other evidence, and confront any
witness presented; and
(2) The fact-finder must prepare written findings of fact for the
record.
[[Page 566]]
(b) A transcribed record of fact-finding proceedings must be made,
unless you as a respondent and the SBA agree to waive it in advance. If
you want a copy of the transcribed record, you may purchase it.
Sec. 145.750 What does the suspending official consider in deciding
whether to continue or terminate my suspension?
(a) The suspending official bases the decision on all information
contained in the official record. The record includes--
(1) All information in support of the suspending official's initial
decision to suspend you;
(2) Any further information and argument presented in support of, or
opposition to, the suspension; and
(3) Any transcribed record of fact-finding proceedings.
(b) The suspending official may refer disputed material facts to
another official for findings of fact. The suspending official may
reject any resulting findings, in whole or in part, only after
specifically determining them to be arbitrary, capricious, or clearly
erroneous.
Sec. 145.755 When will I know whether the suspension is continued or
terminated?
The suspending official must make a written decision whether to
continue, modify, or terminate your suspension within 45 days of closing
the official record. The official record closes upon the suspending
official's receipt of final submissions, information and findings of
fact, if any. The suspending official may extend that period for good
cause.
Sec. 145.760 How long may my suspension last?
(a) If legal or debarment proceedings are initiated at the time of,
or during your suspension, the suspension may continue until the
conclusion of those proceedings. However, if proceedings are not
initiated, a suspension may not exceed 12 months.
(b) The suspending official may extend the 12 month limit under
paragraph (a) of this section for an additional 6 months if an office of
a U.S. Assistant Attorney General, U.S. Attorney, or other responsible
prosecuting official requests an extension in writing. In no event may a
suspension exceed 18 months without initiating proceedings under
paragraph (a) of this section.
(c) The suspending official must notify the appropriate officials
under paragraph (b) of this section of an impending termination of a
suspension at least 30 days before the 12 month period expires to allow
the officials an opportunity to request an extension.
Sec. 145.765 How may I appeal my suspension?
(a) If the SBA suspending official issues a decision under Sec.
145.755 to continue your suspension after you present information in
opposition to that suspension under Sec. 145.720, you can ask for
review of the suspending official's decision in two ways:
(1) You may ask the suspending official to reconsider the decision
for material errors of fact or law that you believe will change the
outcome of the matter; and/or
(2) You may request that the SBA Office of Hearings and Appeals
(OHA), review the suspending official's decision to continue your
suspension within 30 days of your receipt of the suspending official's
decision under Sec. 145.755 or paragraph (a)(1) of this section.
However, OHA can reverse the suspending official's decision only where
OHA finds that the decision is based on a clear error of material fact
or law, or where OHA finds that the suspending official's decision was
arbitrary, capricious, or an abuse of discretion.
(b) A request for review under this section must be in writing;
state the specific findings you believe to be in error; and include the
reasons or legal bases for your position.
(c) OHA, in its discretion, may stay the suspension pending review
of the suspending official's decision.
(d) The SBA suspending official and OHA must notify you of their
decisions under this section, in writing, using the notice procedures at
Sec. Sec. 145.615 and 145.975.
[[Page 567]]
Subpart H_Debarment
Sec. 145.800 What are the causes for debarment?
We may debar a person for--
(a) Conviction of or civil judgment for--
(1) Commission of fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing a public or private
agreement or transaction;
(2) Violation of Federal or State antitrust statutes, including
those proscribing price fixing between competitors, allocation of
customers between competitors, and bid rigging;
(3) Commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements, tax
evasion, receiving stolen property, making false claims, or obstruction
of justice; or
(4) Commission of any other offense indicating a lack of business
integrity or business honesty that seriously and directly affects your
present responsibility;
(b) Violation of the terms of a public agreement or transaction so
serious as to affect the integrity of an agency program, such as--
(1) A willful failure to perform in accordance with the terms of one
or more public agreements or transactions;
(2) A history of failure to perform or of unsatisfactory performance
of one or more public agreements or transactions; or
(3) A willful violation of a statutory or regulatory provision or
requirement applicable to a public agreement or transaction;
(c) Any of the following causes:
(1) A nonprocurement debarment by any Federal agency taken before
October 1, 1988, or a procurement debarment by any Federal agency taken
pursuant to 48 CFR part 9, subpart 9.4, before August 25, 1995;
(2) Knowingly doing business with an ineligible person, except as
permitted under Sec. 145.120;
(3) Failure to pay a single substantial debt, or a number of
outstanding debts (including disallowed costs and overpayments, but not
including sums owed the Federal Government under the Internal Revenue
Code) owed to any Federal agency or instrumentality, provided the debt
is uncontested by the debtor or, if contested, provided that the
debtor's legal and administrative remedies have been exhausted;
(4) Violation of a material provision of a voluntary exclusion
agreement entered into under Sec. 145.640 or of any settlement of a
debarment or suspension action; or
(5) Violation of the provisions of the Drug-Free Workplace Act of
1988 (41 U.S.C. 701); or
(d) Any other cause of so serious or compelling a nature that it
affects your present responsibility.
Sec. 145.805 What notice does the debarring official give me if I am
proposed for debarment?
After consideration of the causes in Sec. 145.800 of this subpart,
if the debarring official proposes to debar you, the official sends you
a Notice of Proposed Debarment, pursuant to Sec. 145.615, advising
you--
(a) That the debarring official is considering debarring you;
(b) Of the reasons for proposing to debar you in terms sufficient to
put you on notice of the conduct or transactions upon which the proposed
debarment is based;
(c) Of the cause(s) under Sec. 145.800 upon which the debarring
official relied for proposing your debarment;
(d) Of the applicable provisions of this subpart, Subpart F of this
part, and any other SBA procedures governing debarment; and
(e) Of the governmentwide effect of a debarment from procurement and
nonprocurement programs and activities.
Sec. 145.810 When does a debarment take effect?
A debarment is not effective until the debarring official issues a
decision. The debarring official does not issue a decision until the
respondent has had an opportunity to contest the proposed debarment.
Sec. 145.815 How may I contest a proposed debarment?
If you as a respondent wish to contest a proposed debarment, you or
your
[[Page 568]]
representative must provide the debarring official with information in
opposition to the proposed debarment. You may do this orally or in
writing, but any information provided orally that you consider important
must also be submitted in writing for the official record.
Sec. 145.820 How much time do I have to contest a proposed debarment?
(a) As a respondent you or your representative must either send, or
make arrangements to appear and present, the information and argument to
the debarring official within 30 days after you receive the Notice of
Proposed Debarment.
(b) We consider the Notice of Proposed Debarment to be received by
you--
(1) When delivered, if we mail the notice to the last known street
address, or five days after we send it if the letter is undeliverable;
(2) When sent, if we send the notice by facsimile or five days after
we send it if the facsimile is undeliverable; or
(3) When delivered, if we send the notice by e-mail or five days
after we send it if the e-mail is undeliverable.
Sec. 145.825 What information must I provide to the debarring official
if I contest a proposed debarment?
(a) In addition to any information and argument in opposition, as a
respondent your submission to the debarring official must identify--
(1) Specific facts that contradict the statements contained in the
Notice of Proposed Debarment. Include any information about any of the
factors listed in Sec. 145.860. A general denial is insufficient to
raise a genuine dispute over facts material to the debarment;
(2) All existing, proposed, or prior exclusions under regulations
implementing E.O. 12549 and all similar actions taken by Federal, State,
or local agencies, including administrative agreements that affect only
those agencies;
(3) All criminal and civil proceedings not included in the Notice of
Proposed Debarment that grew out of facts relevant to the cause(s)
stated in the notice; and
(4) All of your affiliates.
(b) If you fail to disclose this information, or provide false
information, the SBA may seek further criminal, civil or administrative
action against you, as appropriate.
Sec. 145.830 Under what conditions do I get an additional opportunity
to challenge the facts on which a proposed debarment is based?
(a) You as a respondent will not have an additional opportunity to
challenge the facts if the debarring official determines that--
(1) Your debarment is based upon a conviction or civil judgment;
(2) Your presentation in opposition contains only general denials to
information contained in the Notice of Proposed Debarment; or
(3) The issues raised in your presentation in opposition to the
proposed debarment are not factual in nature, or are not material to the
debarring official's decision whether to debar.
(b) You will have an additional opportunity to challenge the facts
if the debarring official determines that--
(1) The conditions in paragraph (a) of this section do not exist;
and
(2) Your presentation in opposition raises a genuine dispute over
facts material to the proposed debarment.
(c) If you have an opportunity to challenge disputed material facts
under this section, the debarring official or designee must conduct
additional proceedings to resolve those facts.
Sec. 145.835 Are debarment proceedings formal?
(a) Debarment proceedings are conducted in a fair and informal
manner. The debarring official may use flexible procedures to allow you
as a respondent to present matters in opposition. In so doing, the
debarring official is not required to follow formal rules of evidence or
procedure in creating an official record upon which the official will
base the decision whether to debar.
(b) You or your representative must submit any documentary evidence
you want the debarring official to consider.
Sec. 145.840 How is fact-finding conducted?
(a) If fact-finding is conducted--
[[Page 569]]
(1) You may present witnesses and other evidence, and confront any
witness presented; and
(2) The fact-finder must prepare written findings of fact for the
record.
(b) A transcribed record of fact-finding proceedings must be made,
unless you as a respondent and the SBA agree to waive it in advance. If
you want a copy of the transcribed record, you may purchase it.
Sec. 145.845 What does the debarring official consider in deciding
whether to debar me?
(a) The debarring official may debar you for any of the causes in
Sec. 145.800. However, the official need not debar you even if a cause
for debarment exists. The official may consider the seriousness of your
acts or omissions and the mitigating or aggravating factors set forth at
Sec. 145.860.
(b) The debarring official bases the decision on all information
contained in the official record. The record includes--
(1) All information in support of the debarring official's proposed
debarment;
(2) Any further information and argument presented in support of, or
in opposition to, the proposed debarment; and
(3) Any transcribed record of fact-finding proceedings.
(c) The debarring official may refer disputed material facts to
another official for findings of fact. The debarring official may reject
any resultant findings, in whole or in part, only after specifically
determining them to be arbitrary, capricious, or clearly erroneous.
Sec. 145.850 What is the standard of proof in a debarment action?
(a) In any debarment action, we must establish the cause for
debarment by a preponderance of the evidence.
(b) If the proposed debarment is based upon a conviction or civil
judgment, the standard of proof is met.
Sec. 145.855 Who has the burden of proof in a debarment action?
(a) We have the burden to prove that a cause for debarment exists.
(b) Once a cause for debarment is established, you as a respondent
have the burden of demonstrating to the satisfaction of the debarring
official that you are presently responsible and that debarment is not
necessary.
Sec. 145.860 What factors may influence the debarring official's
decision?
This section lists the mitigating and aggravating factors that the
debarring official may consider in determining whether to debar you and
the length of your debarment period. The debarring official may consider
other factors if appropriate in light of the circumstances of a
particular case. The existence or nonexistence of any factor, such as
one of those set forth in this section, is not necessarily determinative
of your present responsibility. In making a debarment decision, the
debarring official may consider the following factors:
(a) The actual or potential harm or impact that results or may
result from the wrongdoing.
(b) The frequency of incidents and/or duration of the wrongdoing.
(c) Whether there is a pattern or prior history of wrongdoing. For
example, if you have been found by another Federal agency or a State
agency to have engaged in wrongdoing similar to that found in the
debarment action, the existence of this fact may be used by the
debarring official in determining that you have a pattern or prior
history of wrongdoing.
(d) Whether you are or have been excluded or disqualified by an
agency of the Federal Government or have not been allowed to participate
in State or local contracts or assistance agreements on a basis of
conduct similar to one or more of the causes for debarment specified in
this part.
(e) Whether you have entered into an administrative agreement with a
Federal agency or a State or local government that is not governmentwide
but is based on conduct similar to one or more of the causes for
debarment specified in this part.
(f) Whether and to what extent you planned, initiated, or carried
out the wrongdoing.
(g) Whether you have accepted responsibility for the wrongdoing and
[[Page 570]]
recognize the seriousness of the misconduct that led to the cause for
debarment.
(h) Whether you have paid or agreed to pay all criminal, civil and
administrative liabilities for the improper activity, including any
investigative or administrative costs incurred by the government, and
have made or agreed to make full restitution.
(i) Whether you have cooperated fully with the government agencies
during the investigation and any court or administrative action. In
determining the extent of cooperation, the debarring official may
consider when the cooperation began and whether you disclosed all
pertinent information known to you.
(j) Whether the wrongdoing was pervasive within your organization.
(k) The kind of positions held by the individuals involved in the
wrongdoing.
(l) Whether your organization took appropriate corrective action or
remedial measures, such as establishing ethics training and implementing
programs to prevent recurrence.
(m) Whether your principals tolerated the offense.
(n) Whether you brought the activity cited as a basis for the
debarment to the attention of the appropriate government agency in a
timely manner.
(o) Whether you have fully investigated the circumstances
surrounding the cause for debarment and, if so, made the result of the
investigation available to the debarring official.
(p) Whether you had effective standards of conduct and internal
control systems in place at the time the questioned conduct occurred.
(q) Whether you have taken appropriate disciplinary action against
the individuals responsible for the activity which constitutes the cause
for debarment.
(r) Whether you have had adequate time to eliminate the
circumstances within your organization that led to the cause for the
debarment.
(s) Other factors that are appropriate to the circumstances of a
particular case.
Sec. 145.865 How long may my debarment last?
(a) If the debarring official decides to debar you, your period of
debarment will be based on the seriousness of the cause(s) upon which
your debarment is based. Generally, debarment should not exceed three
years. However, if circumstances warrant, the debarring official may
impose a longer period of debarment.
(b) In determining the period of debarment, the debarring official
may consider the factors in Sec. 145.860. If a suspension has preceded
your debarment, the debarring official must consider the time you were
suspended.
(c) If the debarment is for a violation of the provisions of the
Drug-Free Workplace Act of 1988, your period of debarment may not exceed
five years.
Sec. 145.870 When do I know if the debarring official debars me?
(a) The debarring official must make a written decision whether to
debar within 45 days of closing the official record. The official record
closes upon the debarring official's receipt of final submissions,
information and findings of fact, if any. The debarring official may
extend that period for good cause.
(b) The debarring official sends you written notice, pursuant to
Sec. 145.615 that the official decided, either--
(1) Not to debar you; or
(2) To debar you. In this event, the notice:
(i) Refers to the Notice of Proposed Debarment;
(ii) Specifies the reasons for your debarment;
(iii) States the period of your debarment, including the effective
dates; and
(iv) Advises you that your debarment is effective for covered
transactions and contracts that are subject to the Federal Acquisition
Regulation (48 CFR chapter 1), throughout the executive branch of the
Federal Government unless an agency head or an authorized designee
grants an exception.
Sec. 145.875 May I ask the debarring official to reconsider a decision
to debar me?
Yes, as a debarred person you may ask the debarring official to
reconsider
[[Page 571]]
the debarment decision or to reduce the time period or scope of the
debarment. However, you must put your request in writing and support it
with documentation.
Sec. 145.880 What factors may influence the debarring official during
reconsideration?
The debarring official may reduce or terminate your debarment based
on--
(a) Newly discovered material evidence;
(b) A reversal of the conviction or civil judgment upon which your
debarment was based;
(c) A bona fide change in ownership or management;
(d) Elimination of other causes for which the debarment was imposed;
or
(e) Other reasons the debarring official finds appropriate.
Sec. 145.885 May the debarring official extend a debarment?
(a) Yes, the debarring official may extend a debarment for an
additional period, if that official determines that an extension is
necessary to protect the public interest.
(b) However, the debarring official may not extend a debarment
solely on the basis of the facts and circumstances upon which the
initial debarment action was based.
(c) If the debarring official decides that a debarment for an
additional period is necessary, the debarring official must follow the
applicable procedures in this subpart, and subpart F of this part, to
extend the debarment.
Sec. 145.890 How may I appeal my debarment?
(a) If the SBA debarring official issues a decision under Sec.
145.870 to debar you after you present information in opposition to a
proposed debarment under Sec. 145.815, you can ask for review of the
debarring official's decision in two ways:
(1) You may ask the debarring official to reconsider the decision
for material errors of fact or law that you believe will change the
outcome of the matter; and/or
(2) You may request that the SBA Office of Hearings and Appeals
(OHA), review the debarring official's decision to debar you within 30
days of your receipt of the debarring official's decision under Sec.
145.870 or paragraph (a)(1) of this section. However, OHA can reverse
the debarring official's decision only where OHA finds that the decision
is based on a clear error of material fact or law, or where OHA finds
that the debarring official's decision was arbitrary, capricious, or an
abuse of discretion.
(b) A request for review under this section must be in writing;
state the specific findings you believe to be in error; and include the
reasons or legal bases for your position.
(c) OHA may, in its discretion, stay the debarment pending review of
the debarring official's decision.
(d) The SBA debarring official and OHA must notify you of their
decisions under this section, in writing, using the notice procedures at
Sec. Sec. 145.615 and 145.975.
Subpart I_Definitions
Sec. 145.900 Adequate evidence.
Adequate evidence means information sufficient to support the
reasonable belief that a particular act or omission has occurred.
Sec. 145.905 Affiliate.
Persons are affiliates of each other if, directly or indirectly,
either one controls or has the power to control the other or a third
person controls or has the power to control both. The ways we use to
determine control include, but are not limited to--
(a) Interlocking management or ownership;
(b) Identity of interests among family members;
(c) Shared facilities and equipment;
(d) Common use of employees; or
(e) A business entity which has been organized following the
exclusion of a person which has the same or similar management,
ownership, or principal employees as the excluded person.
Sec. 145.910 Agency.
Agency means any United States executive department, military
department, defense agency, or any other agency of the executive branch.
Other agencies of the Federal government are
[[Page 572]]
not considered ``agencies'' for the purposes of this part unless they
issue regulations adopting the governmentwide Debarment and Suspension
system under Executive orders 12549 and 12689.
Sec. 145.915 Agent or representative.
Agent or representative means any person who acts on behalf of, or
who is authorized to commit, a participant in a covered transaction.
Sec. 145.920 Civil judgment.
Civil judgment means the disposition of a civil action by any court
of competent jurisdiction, whether by verdict, decision, settlement,
stipulation, other disposition which creates a civil liability for the
complained of wrongful acts, or a final determination of liability under
the Program Fraud Civil Remedies Act of 1988 (31 U.S.C. 3801-3812).
Sec. 145.925 Conviction.
Conviction means--
(a) A judgment or any other determination of guilt of a criminal
offense by any court of competent jurisdiction, whether entered upon a
verdict or plea, including a plea of nolo contendere; or
(b) Any other resolution that is the functional equivalent of a
judgment, including probation before judgment and deferred prosecution.
A disposition without the participation of the court is the functional
equivalent of a judgment only if it includes an admission of guilt.
Sec. 145.930 Debarment.
Debarment means an action taken by a debarring official under
subpart H of this part to exclude a person from participating in covered
transactions and transactions covered under the Federal Acquisition
Regulation (48 CFR chapter 1). A person so excluded is debarred.
Sec. 145.935 Debarring official.
(a) Debarring official means an agency official who is authorized to
impose debarment. A debarring official is either--
(1) The agency head; or
(2) An official designated by the agency head.
(b) For SBA, the debarring official for financial assistance
programs means the Assistant Administrator for Lender Oversight; for all
other programs, the debarring official means the Assistant Administrator
for Administration.
Sec. 145.940 Disqualified.
Disqualified means that a person is prohibited from participating in
specified Federal procurement or nonprocurement transactions as required
under a statute, Executive order (other than Executive Orders 12549 and
12689) or other authority. Examples of disqualifications include persons
prohibited under--
(a) The Davis-Bacon Act (40 U.S.C. 276(a));
(b) The equal employment opportunity acts and Executive orders; or
(c) The Clean Air Act (42 U.S.C. 7606), Clean Water Act (33 U.S.C.
1368) and Executive Order 11738 (3 CFR, 1973 Comp., p. 799).
Sec. 145.945 Excluded or exclusion.
Excluded or exclusion means--
(a) That a person or commodity is prohibited from being a
participant in covered transactions, whether the person has been
suspended; debarred; proposed for debarment under 48 CFR part 9, subpart
9.4; voluntarily excluded; or
(b) The act of excluding a person.
Sec. 145.950 Excluded Parties List System
Excluded Parties List System (EPLS) means the list maintained and
disseminated by the General Services Administration (GSA) containing the
names and other information about persons who are ineligible. The EPLS
system includes the printed version entitled, ``List of Parties Excluded
or Disqualified from Federal Procurement and Nonprocurement Programs,''
so long as published.
Sec. 145.955 Indictment.
Indictment means an indictment for a criminal offense. A
presentment, information, or other filing by a competent authority
charging a criminal offense shall be given the same effect as an
indictment.
Sec. 145.960 Ineligible or ineligibility.
Ineligible or ineligibility means that a person or commodity is
prohibited
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from covered transactions because of an exclusion or disqualification.
Sec. 145.965 Legal proceedings.
Legal proceedings means any criminal proceeding or any civil
judicial proceeding, including a proceeding under the Program Fraud
Civil Remedies Act (31 U.S.C. 3801-3812), to which the Federal
Government or a State or local government or quasi-governmental
authority is a party. The term also includes appeals from those
proceedings.
Sec. 145.970 Nonprocurement transaction.
(a) Nonprocurement transaction means any transaction, regardless of
type (except procurement contracts), including, but not limited to the
following:
(1) Grants.
(2) Cooperative agreements.
(3) Scholarships.
(4) Fellowships.
(5) Contracts of assistance.
(6) Loans.
(7) Loan guarantees.
(8) Subsidies.
(9) Insurances.
(10) Payments for specified uses.
(11) Donation agreements.
(b) A nonprocurement transaction at any tier does not require the
transfer of Federal funds.
Sec. 145.975 Notice.
Notice means a written communication served in person, sent by
certified mail or its equivalent, or sent electronically by e-mail or
facsimile. (See Sec. 145.615.)
Sec. 145.980 Participant.
Participant means any person who submits a proposal for or who
enters into a covered transaction, including an agent or representative
of a participant.
Sec. 145.985 Person.
Person means any individual, corporation, partnership, association,
unit of government, or legal entity, however organized.
Sec. 145.990 Preponderance of the evidence.
Preponderance of the evidence means proof by information that,
compared with information opposing it, leads to the conclusion that the
fact at issue is more probably true than not.
Sec. 145.995 Principal.
Principal means--
(a) An officer, director, owner, partner, principal investigator, or
other person within a participant with management or supervisory
responsibilities related to a covered transaction; or
(b) A consultant or other person, whether or not employed by the
participant or paid with Federal funds, who--
(1) Is in a position to handle Federal funds;
(2) Is in a position to influence or control the use of those funds;
or,
(3) Occupies a technical or professional position capable of
substantially influencing the development or outcome of an activity
required to perform the covered transaction.
(c) Other examples of individuals who are principals in SBA covered
transactions include:
(1) Principal investigators.
(2) Securities brokers and dealers under the section 7(a) Loan,
Certified Development Company (CDC) and Small Business Investment
Company (SBIC) programs.
(3) Applicant representatives under the section 7(a) Loan, Certified
Development Company (CDC), Small Business Investment Company (SBIC),
Small Business Development Center (SBDC), and section 7(j) programs.
(4) Providers of professional services under section 7(a) Loan,
Certified Development Company (CDC), Small Business Investment Company
(SBIC), Small Business Development Center (SBDC), and section 7(j)
programs.
(5) Individuals that certify, authenticate or authorize billings.
Sec. 145.1000 Respondent.
Respondent means a person against whom an agency has initiated a
debarment or suspension action.
Sec. 145.1005 State.
(a) State means--
(1) Any of the states of the United States;
(2) The District of Columbia;
(3) The Commonwealth of Puerto Rico;
[[Page 574]]
(4) Any territory or possession of the United States; or
(5) Any agency or instrumentality of a state.
(b) For purposes of this part, State does not include institutions
of higher education, hospitals, or units of local government.
Sec. 145.1010 Suspending official.
(a) Suspending official means an agency official who is authorized
to impose suspension. The suspending official is either:
(1) The agency head; or
(2) An official designated by the agency head.
(b) For SBA, the suspending official for financial assistance
programs means the Assistant Administrator for Lender Oversight; for all
other programs, the suspending official means the Assistant
Administrator for Administration.
Sec. 145.1015 Suspension.
Suspension is an action taken by a suspending official under subpart
G of this part that immediately prohibits a person from participating in
covered transactions and transactions covered under the Federal
Acquisition Regulation (48 CFR chapter 1) for a temporary period,
pending completion of an agency investigation and any judicial or
administrative proceedings that may ensue. A person so excluded is
suspended.
Sec. 145.1020 Voluntary exclusion or voluntarily excluded.
(a) Voluntary exclusion means a person's agreement to be excluded
under the terms of a settlement between the person and one or more
agencies. Voluntary exclusion must have governmentwide effect.
(b) Voluntarily excluded means the status of a person who has agreed
to a voluntary exclusion.
Subpart J [Reserved]
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Appendix to Part 145--Covered Transactions
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