[Federal Register Volume 79, Number 213 (Tuesday, November 4, 2014)]
[Rules and Regulations]
[Pages 65342-65346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-26111]
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POSTAL SERVICE
39 CFR Part 601
Purchasing of Property and Services; Supplier Debarment,
Suspension, and Ineligibility
AGENCY: Postal Service.TM
ACTION: Final rule.
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SUMMARY: The Postal Service is revising its regulations governing
supplier debarment, suspension, and ineligibility to reflect that the
Postal Service has eliminated its separate list of debarred, suspended,
or ineligible suppliers, and now uses the list maintained by the
General Services Administration (GSA) under its System for Award
Management (SAM).
DATES: Effective date: December 4, 2014.
FOR FURTHER INFORMATION CONTACT: Paul McGinn, 202-268-4368.
SUPPLEMENTARY INFORMATION: The Postal Service (USPS[supreg]) is
revising 39 CFR 601.113, governing supplier debarment, suspension, and
ineligibility. The Postal Service has eliminated its own separate list
of debarred, suspended, and ineligible suppliers, and now uses the
GSA's System for Award Management (SAM) to determine whether a
particular supplier is suspended, debarred, or ineligible, and to
notify the public when the USPS suspends or debars a supplier.
Necessary changes have been made to the language of Sec. 601.113,
including replacement of the term ``debarment, suspension, and
ineligibility'' with ``suspension, debarment, and ineligibility'' to
reflect the sequence of events followed in that
[[Page 65343]]
process. These changes are explained in more detail below.
Additionally, 39 CFR 601.108(c), concerning SDR Official
disagreement resolution, has been revised to provide a new address for
lodging supplier disagreements.
Explanation of Changes
Section 601.108: SDR Official Disagreement Resolution
Paragraph (c) of this section has been revised to provide a new
address for a supplier to lodge a disagreement with the Supplier
Disagreement Resolution Official (SDRO).
Section 601.113: Debarment, Suspension, and Ineligibility
Throughout this section, references to the Postal Service's List of
Debarred, Suspended, and Ineligible Suppliers have been replaced by
references to the General Services Administration's (GSA) System for
Award Management (SAM).
The title of Sec. 601.113 Debarment, suspension, and ineligibility
has been changed to Suspension, debarment, and ineligibility, and
throughout this section, the term ``debarred, suspended, and
ineligible'' and variants thereof have been replaced by the term
``suspended, debarred, and ineligible.''
Paragraph (c)(1) states that the Postal Service uses SAM to
determine whether a supplier has been suspended, debarred, or proposed
for debarment.
Paragraph (c)(2) states that SAM maintains a consolidated database
of all persons and entities suspended, debarred, proposed for
debarment, or declared ineligible by Federal agencies or the Government
Accountability Office (GAO), which is accessible to the public at
https://www.sam.gov.
Paragraph (c)(3) states that, through a representative, the Postal
Service's vice president, Supply Management, will use SAM to report
Postal Service suspension, debarment, and proposed debarment decisions,
including changes in the status of any suspended or debarred supplier
or affiliate.
The title of paragraph (d)(1) has been changed to Treatment of
suppliers included in the SAM Exclusions database, and this paragraph
has been revised to delete the reference to the Postal Service list.
Old paragraph (d)(2) has been deleted because of the discontinuance
of the Postal Service list, and paragraphs (d)(3), (d)(4), and (d)(5)
have been renumbered. Earlier discussion and references in these
paragraphs to the Postal Service list have been deleted. These
paragraphs have all been revised to reference SAM rather than previous
lists.
Paragraph (e) has been retitled Causes for suspension. No further
changes have been made to this paragraph.
Paragraph (f) has been retitled Period of suspension. No further
changes have been made to this paragraph.
Paragraph (g) has been retitled Procedural requirements for
suspension. No further changes have been made to this paragraph.
Paragraph (h) has been retitled Causes for debarment. No further
changes have been made to this paragraph.
Paragraph (i) has been retitled Mitigating factors. No further
changes have been made to this paragraph.
Paragraph (j) has been retitled Period of debarment. No further
changes have been made to this paragraph.
Paragraph (k) has been retitled Procedural requirements for
debarment. In addition, language has been added to lay out in greater
detail the procedural steps of the debarment process, including the
requirement that the supplier may submit, in person or in writing,
information and argument in opposition to the proposed debarment.
Old paragraph (k)(3) has been deleted and (k)(4) and (k)(5) have
been renumbered.
List of Subjects in 39 CFR Part 601
Government procurement, Postal Service.
Accordingly, 39 CFR part 601 is amended as follows:
PART 601--PURCHASING OF PROPERTY AND SERVICES
0
1. The authority citation for 39 CFR part 601 continues to read as
follows:
Authority: 39 U.S.C. 401, 404, 410, 411, 2008, 5001-5605.
0
2. In Sec. 601.108, revise paragraph (c) to read as follows:
Sec. 601.108 SDR Official disagreement resolution.
* * * * *
(c) Lodging. The disagreement under Sec. 601.107 or contest of
decision under Sec. 601.105 must be lodged with the SDR Official in
writing via facsimile, email, hand delivery, or U.S. Mail. The
disagreement under Sec. 601.107 or contest of decision under Sec.
601.105 must state the factual circumstances relating to it and the
remedy sought. A disagreement under Sec. 601.107 must also state the
scope and outcome of the initial disagreement resolution attempt with
the contracting officer. The address of the SDR Official is: Supply
Management, Room 1141 (Attn: SDR Official), United States Postal
Service Headquarters, 475 L'Enfant Plaza SW., Washington, DC 20260-
1141; email Address: [email protected]; Fax Number: (202) 268-0075.
* * * * *
0
3. Revise Sec. 601.113 to read as follows:
Sec. 601.113 Suspension, debarment, and ineligibility.
(a) General. Except as provided otherwise in this part, contracting
officers may not solicit proposals from, award contracts to, or, when a
contract provides for such consent, consent to subcontracts with
suspended, debarred, or ineligible suppliers.
(b) Definitions.--(1) Affiliate. A business, organization, person,
or individual connected by the fact that one controls or has the power
to control the other or by the fact that a third party controls or has
the power to control both. Indications of control include, but are not
limited to, interlocking management or ownership, identity of interests
among family members, shared facilities and equipment, contractual
relationships, common use of employees, or a business entity organized
following the suspension, debarment, or proposed debarment of a
supplier which has the same or similar management, ownership, or
principal employees as the supplier that was suspended, debarred, or
proposed for debarment. Franchise agreements are not conclusive
evidence of affiliation if the franchisee has a right to profit in
proportion to its ownership and bears the risk of loss or failure.
(2) Debarment. An exclusion from contracting and subcontracting for
a reasonable, specified period of time commensurate with the
seriousness of the offense, failure, or inadequacy of performance.
(3) General Counsel. This includes the General Counsel's authorized
representative.
(4) Indictment. Indictment for a criminal offense. An information
or other filing by competent authority charging a criminal offense is
given the same effect as an indictment.
(5) Ineligible. An exclusion from contracting and subcontracting by
an entity other than the Postal Service under statutes, executive
orders, or regulations, such as the Davis-Bacon Act, the Service
Contract Act, the Equal Employment Opportunity Acts, the Walsh-Healy
Public Contracts Act, or the Environmental Protection Acts and related
regulations or executive orders, to which the Postal Service is subject
or has adopted as a matter of policy.
(6) Suspension. An exclusion from contracting and subcontracting
for a
[[Page 65344]]
reasonable period of time due to specified reasons or the pendency of a
debarment proceeding.
(7) Supplier. For the purposes of this part, a supplier is any
individual, person, or other legal entity that:
(i) Directly or indirectly (e.g., through an affiliate) submits
offers for, is awarded, or reasonably may be expected to submit offers
for or be awarded, a Postal Service contract, including a contract for
carriage under Postal Service or commercial bills of lading, or a
subcontract under a Postal Service contract; or
(ii) Conducts business or reasonably may be expected to conduct
business with the Postal Service as a subcontractor, an agent, or as a
representative of another supplier.
(c) Suspension, debarment, and ineligible list. (1) The Postal
Service uses the General Services Administration's System for Award
Management (SAM) to determine if suppliers are suspended, debarred, or
proposed for debarment.
(2) SAM maintains a consolidated database of all persons and
entities suspended, debarred, proposed for debarment, or declared
ineligible by Federal agencies or the Government Accountability Office.
SAM is accessible by the public on GSA's Web site at https://www.sam.gov.
(3) Through a representative, the vice president, Supply Management
will use the SAM Exclusions database to report Postal Service
suspensions, debarments and proposed debarment decisions; including
changes in the status of suppliers and any of their affiliates.
Inquiries concerning listed suppliers should be directed to the agency
or other authority that took the action.
(d) Treatment of suppliers included in the SAM Exclusions database.
(1) Contracting officers will review the SAM Exclusions database before
making a contract award.
(2) Suppliers included in the SAM Exclusions database are excluded
from receiving contracts and subcontracts, and contracting officers may
not solicit proposals or quotations from, award contracts to, or, when
a contract provides for such consent, consent to subcontracts with such
suppliers, unless the vice president, Supply Management, or his or her
designee, after consultation with the General Counsel, has approved
such action.
(3) Suppliers included in the SAM Exclusions database may not
provide goods or services to other persons or entities for resale, in
whole or part, to the Postal Service and such other persons or entities
are obligated to review the consolidated GSA list in order to exclude
suppliers suspended or debarred by the Postal Service from performing
any part of a Postal Service contract.
(4) The suspension, debarment, or ineligibility of a supplier does
not, of itself, affect the rights and obligations of the parties to any
valid, pre-existing contract. The Postal Service may terminate for
default a contract with a supplier that is suspended, debarred, or
determined to be ineligible. Contracting officers may not add new work
to any contract with a supplier that is suspended, debarred, or
determined to be ineligible by supplemental agreement, by exercise of
an option, or otherwise (unless the work is classified as an
insignificant or significant minor service change to a mail
transportation contract), except with the approval of the vice
president, Supply Management, or designee after consultation with the
General Counsel.
(e) Causes for suspension. (1) The vice president, Supply
Management, may suspend any supplier, including any of its affiliates,
for causes such as the following:
(i) If the supplier commits, is indicted for, or is convicted of
fraud or a criminal offense incidental to obtaining, attempting to
obtain, or performing a government contract, violates a Federal
antitrust statute arising out of the submission of bids and proposals,
or commits or engages in embezzlement, theft, forgery, bribery,
falsification or destruction of records, or receipt of stolen property,
or any other offense indicating a lack of business integrity or
business honesty;
(ii) For any other cause of such serious and compelling nature that
suspension is warranted; or
(iii) If the Postal Service has notified a supplier of its proposed
debarment under this part.
(f) Period of suspension. A suspension will not exceed one year in
duration, except a suspension may be extended for reasonable periods of
time beyond one year by the vice president, Supply Management. The
termination of a suspension will not prejudice the Postal Service's
position in any debarment proceeding. A suspension will be superseded
by a decision rendered by the vice president, Supply Management, under
paragraph (k)(5) of this section.
(g) Procedural requirements for suspension. (1) The vice president,
Supply Management will notify a supplier of a suspension or an
extension of a suspension and the reason(s) for the suspension or
extension in writing sent to the supplier by Certified Mail, return
receipt requested, within ten days after the effective date of the
suspension or extension. A copy of the notice will be furnished to the
Office of the Inspector General.
(2) The notice will state the cause(s) for the suspension or
extension.
(3) Within thirty days of notice of suspension or an extension, a
supplier may submit to the vice president, Supply Management, in
writing, any information or reason(s) the supplier believes makes a
suspension or an extension inappropriate, and the vice president,
Supply Management, in consultation with the General Counsel, will
consider the supplier's submission, and, in their discretion, may
revoke a suspension or an extension of a suspension. If a suspension or
extension is revoked, the revocation will be in writing and a copy of
the revocation will be sent to the supplier by Certified Mail, return
receipt requested. A copy of the revocation will be furnished to the
Office of the Inspector General.
(h) Causes for debarment. (1) The vice president, Supply
Management, with the concurrence of the General Counsel, may debar a
supplier, including its affiliates, for cause such as the following:
(i) Conviction of a criminal offense incidental to obtaining or
attempting to obtain contracts or subcontracts, or in the performance
of a contract or subcontract.
(ii) Conviction under a Federal antitrust statute arising out of
the submission of bids or proposals.
(iii) Commission of embezzlement, theft, forgery, bribery,
falsification or destruction of records, making false statements, tax
evasion, or receiving stolen property.
(iv) Violation of a Postal Service contract so serious as to
justify debarment, such as willful failure to perform a Postal Service
contract in accordance with the specifications or within the time
limit(s) provided in the contract; a record of failure to perform or of
unsatisfactory performance in accordance with the terms of one or more
Postal Service contracts occurring within a reasonable period of time
preceding the determination to debar (except that failure to perform or
unsatisfactory performance caused by acts beyond the control of the
supplier may not be considered a basis for debarment); violation of a
contractual provision against contingent fees; or acceptance of a
contingent fee paid in violation of a contractual provision against
contingent fees.
(v) Any other offense indicating a lack of business integrity or
business honesty.
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(vi) Any other cause of a serious and compelling nature that
debarment is warranted.
(2) The existence of a conviction in paragraph (h)(1)(i) or (ii) of
this section can be established by proof of a conviction in a court of
competent jurisdiction. If an appeal taken from such conviction results
in a reversal of the conviction, the debarment may be removed upon the
request of the supplier, unless another cause or another basis for
debarment exists.
(3) The existence of any of the other causes in paragraphs
(h)(1)(iii), (iv), (v), or (vi) of this section can be established by a
preponderance of the evidence, either direct or indirect, in the
judgment of the vice president of Supply Management.
(4) The criminal, fraudulent, or improper conduct of an individual
may be imputed to the firm with which he or she is or has been
connected when an impropriety was committed. Likewise, when a firm is
involved in criminal, fraudulent, or other improper conduct, any person
who participated in, knew of, or had reason to know of the impropriety
may be debarred.
(5) The criminal, fraudulent, or other improper conduct of one
supplier participating in a joint venture or similar arrangement may be
imputed to other participating suppliers if the conduct occurred for or
on behalf of the joint venture or similar arrangement, or with the
knowledge, approval, or acquiescence of the supplier. Acceptance of the
benefits derived from the conduct will be evidence of such knowledge,
approval, or acquiescence.
(i) Mitigating factors. (1) The existence of any cause for
debarment does not necessarily require that a supplier be debarred. The
decision to debar is within the discretion of the vice president,
Supply Management, with the concurrence of the General Counsel, and
must be made in the best interest of the Postal Service. The following
factors may be assessed in determining the seriousness of the offense,
failure, or inadequacy of performance, and may be taken into account in
deciding whether debarment is warranted:
(i) Whether the supplier had established written standards of
conduct and had published internal control systems at the time of the
activity that constitutes cause for debarment or had adopted such
procedures prior to any Postal Service investigation of the activity
cited as a cause for debarment.
(ii) Whether the supplier brought the activity cited as a cause for
debarment to the attention of the Postal Service in a prompt, timely
manner.
(iii) Whether the supplier promptly and fully investigated the
circumstances involving debarment and, if so, made the full results of
the investigation available to appropriate officials of the Postal
Service.
(iv) Whether the supplier cooperated fully with the Postal Service
during its investigation into the matter.
(v) Whether the supplier paid or agreed to pay all criminal, civil
and administrative liability, and other costs arising out of the
improper activity, including any investigative or administrative costs
incurred by the Postal Service, and made or agreed to make full
restitution.
(vi) Whether the supplier took appropriate disciplinary action
against the individual(s) responsible for the activity that could cause
debarment.
(vii) Whether the supplier implemented and/or agreed to implement
remedial measures, including those identified by the Postal Service.
(viii) Whether the supplier instituted and/or agreed to institute
new and/or revised review and control procedures and ethics programs.
(ix) Whether the supplier had adequate time to eliminate
circumstances within the supplier's organization that could lead to
debarment.
(x) Whether the supplier's senior officers and mid-level management
recognize and understand the seriousness of the misconduct giving rise
to debarment.
(2) The existence or nonexistence of mitigating factors or remedial
measures such as those above is not determinative whether or not a
supplier should be debarred. If a cause for debarment exists, the
supplier has the burden of demonstrating, to the satisfaction of the
vice president, Supply Management that debarment is not warranted or
necessary.
(j) Period of debarment. (1) When an applicable statute, executive
order, or controlling regulation of other agencies provides a specific
period of debarment, that period applies. In other cases, debarment by
the Postal Service should be for a reasonable, definite, stated period
of time, commensurate with the seriousness of the offense or the
failure or inadequacy of performance. Generally, a period of debarment
should not exceed three years. When debarment for an additional period
is deemed necessary, notice of the proposed additional period of
debarment must be furnished to the supplier as in the case of original
debarment.
(2) Except as precluded by an applicable statute, executive order,
or controlling regulation of another agency, debarment may be removed
or the period may be reduced by the vice president, Supply Management
when requested by the debarred supplier and when the request is
supported by a reasonable justification, such as newly discovered
material evidence, reversal of a conviction, bona fide change of
ownership or management, or the elimination of the causes for which
debarment was imposed. The vice president, Supply Management may, at
his or her discretion, deny any request or refer it to the Judicial
Officer for a hearing and for findings of fact, which the vice
president, Supply Management will consider when deciding the matter.
When a debarment is removed or the debarment period is reduced, the
vice president, Supply Management must state in writing the reason(s)
for the removal of the debarment or the reduction of the period of
debarment.
(k) Procedural requirements for debarment. (1) After securing the
concurrence of the General Counsel, the vice president, Supply
Management will initiate a debarment proceeding by sending the supplier
a written notice of proposed debarment. The notice will be served by
sending it to the last known address of the supplier by Certified Mail,
return receipt requested. A copy of the notice will be furnished to the
Office of Inspector General. The notice will state that debarment is
being considered; the reason(s) for the proposed debarment; the
anticipated period of debarment and the proposed effective date; and
that, within thirty days of the notice, the supplier, individually or
through a representative, may submit in person or in writing
information and argument in opposition to the proposed debarment. In
the event a supplier does not submit information or argument in
opposition to the proposed debarment to the vice president, Supply
Management within the time allowed, the debarment will become final
with no further review or appeal.
(2) If the proposed debarment is based on a conviction or civil
judgment, the vice president, Supply Management, with the concurrence
of the General Counsel, may decide whether debarment is merited based
on the conviction or judgment, including any information received from
the supplier. If the debarment is based on other circumstances or if
there are questions regarding material facts, the vice president,
Supply Management may seek additional information from the supplier
and/or other persons, and may request the Judicial Officer to hold a
fact-finding hearing on such matters.
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The hearing will be governed by rules of procedure promulgated by the
Judicial Officer. The vice president, Supply Management may reject any
findings of fact, in whole or in part, when they are clearly erroneous.
(3) Questions of fact to be resolved by a hearing before the
Judicial Officer will be based on the preponderance of the evidence.
(4) After consideration of the circumstances and any information
and argument submitted by the supplier, the vice president, Supply
Management, with the concurrence of the General Counsel, will issue a
written decision regarding whether the supplier is debarred, and, if
so, for the period of debarment. The decision will be mailed to the
supplier by Certified Mail, return receipt requested. A copy of the
decision will be furnished to the Office of the Inspector General. The
decision will be final and binding, unless the decision was procured by
fraud or other criminal misconduct, or the decision was obtained in
violation of the regulations contained in this part or an applicable
public law enacted by Congress.
Stanley F. Mires,
Attorney, Federal Requirements.
[FR Doc. 2014-26111 Filed 11-3-14; 8:45 am]
BILLING CODE 7710-12-P