Debarment & Suspension Guide: Avoiding Exclusion from Federal Contracts
Complete guide to federal debarment and suspension. Learn about causes, the exclusion process, how to avoid being debarred, and what to do if you face exclusionary actions in government contracting.
Quick Answer
Debarment and suspension are administrative actions that exclude contractors from receiving federal contracts or subcontracts. Debarment is typically 3 years; suspension is temporary pending investigation. Causes include fraud, criminal convictions, and serious contract violations. Exclusions are listed in SAM.gov and apply government-wide.
Understanding Debarment & Suspension
Debarment and suspension are the government's tools for protecting federal procurement from contractors who lack present responsibility. These are not punishments—they are meant to ensure the government only does business with responsible parties.
When a contractor is debarred or suspended, they are excluded from receiving federal contracts or subcontracts. The exclusion applies government-wide, meaning once one agency excludes you, you cannot do business with any federal agency.
Debarment
- • Long-term exclusion (typically 3 years)
- • Follows investigation and due process
- • Based on determination of non-responsibility
- • Can be shortened with remediation
- • Government-wide effect
Suspension
- • Temporary exclusion (up to 12 months)
- • Immediate action pending investigation
- • No prior notice required
- • May lead to debarment or be lifted
- • Often linked to pending criminal case
Causes of Exclusion
FAR 9.406-2 lists the causes for debarment. Suspension generally uses the same causes but requires less proof (adequate evidence vs. preponderance).
Common Causes for Debarment
Fraud, bribery, theft, tax evasion, antitrust violations
False Claims Act violations, fraud findings
False statements, misrepresentation, falsified data
Willful failure to perform, repeated poor performance
Drug-Free Workplace violations, lobbying restrictions
Any cause affecting present responsibility
Individual vs. Company
Debarment can apply to individuals, companies, or both. Key employees and controlling owners may be individually debarred. A debarred individual cannot circumvent exclusion by working through a different company.
The Exclusion Process
Debarment Process
Referral
Inspector General, contracting officer, or other source refers matter to Suspending and Debarring Official (SDO)
Notice
SDO sends notice of proposed debarment with specific causes and supporting facts
Response
Contractor has 30 days to submit written response, including mitigating factors
Fact-Finding (if needed)
If facts are disputed, contractor may request hearing before neutral fact-finder
Decision
SDO issues final decision—debarment, reduced penalty, or no action
Suspension Process
Suspension is more immediate and requires less process:
- SDO can suspend immediately when adequate evidence exists
- Notice provided within 10 days (but after suspension effective)
- Contractor can respond within 30 days of notice
- Suspension typically continues pending related legal proceedings
Consequences of Exclusion
Immediate Effects
- • Cannot receive new federal prime contracts
- • Cannot be a subcontractor on federal work
- • Existing contracts may be terminated
- • Listed publicly in SAM.gov
- • May affect state/local contracts
- • Grant eligibility affected
Long-Term Impact
- • Reputation damage (public record)
- • Customer and partner concerns
- • Difficulty getting bonding/insurance
- • May affect private sector business
- • Employee retention challenges
- • Re-entry barriers after debarment ends
Defending Against Exclusion
Defense Strategies
Dispute factual basis; request fact-finding hearing
Demonstrate corrective actions already taken
Rogue employee, cooperation with investigation
New management, ethics programs, internal controls
Limit exclusion to specific divisions or time period
Agree to monitoring in lieu of exclusion
Get Legal Help Immediately
Upon receiving notice of proposed debarment or suspension, immediately engage counsel experienced in suspension and debarment. The response deadline is firm and the consequences are severe.
Prevention Best Practices
Ethics & Compliance Program
Implement written code of conduct, training, reporting mechanisms, and enforcement. FAR requires compliance programs for larger contracts.
Internal Controls
Strong financial controls, separation of duties, regular audits, and oversight prevent the conditions that lead to fraud.
Screening & Monitoring
Check SAM.gov exclusions before hiring, subcontracting, or partnering. Monitor employees and business partners.
Voluntary Disclosure
Self-reporting misconduct can be mitigating. FAR mandatory disclosure requirements apply to certain contracts.
Reinstatement & Recovery
Path to Recovery
Complete Debarment Period
Debarment has a fixed end date; you are automatically eligible to contract again when it expires
Request Early Termination
You may request reduction of debarment period if you can demonstrate present responsibility
Demonstrate Rehabilitation
Show new management, ethics programs, internal controls, and responsible conduct
Re-enter Market Carefully
Start with smaller contracts, build new past performance, rebuild relationships
Frequently Asked Questions
Can I complete existing contracts if suspended?
Generally yes, agencies may (but are not required to) allow completion of existing contracts. New contracts and options are prohibited.
Does debarment apply to commercial work?
Federal debarment only directly affects federal contracts and grants. However, some state/local governments and private companies check SAM.gov exclusions and may decline to work with debarred entities.
Can I start a new company to avoid debarment?
No. The government can extend debarment to affiliates and successors. Attempting to circumvent debarment is itself grounds for debarment and potentially criminal prosecution.
How do I check if someone is debarred?
Search the SAM.gov Exclusions database. You should check all contractors, subcontractors, and key personnel before award and periodically during performance.
What's the difference between debarment and responsibility?
Debarment is a formal administrative action. A contractor can be found non-responsible (and denied a specific contract) without being debarred. Non-responsibility determinations are contract-specific.
Stay Compliant with BidFinds
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