[Title 40 CFR C]
[Code of Federal Regulations (annual edition) - July 1, 2002 Edition]
[Title 40 - PROTECTION OF ENVIRONMENT]
[Chapter I - ENVIRONMENTAL PROTECTION AGENCY]
[Subchapter B - GRANTS AND OTHER FEDERAL ASSISTANCE]
[Part 32 - GOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS); CLEAN AIR ACT]
[Subpart C - Debarment]
[From the U.S. Government Printing Office]


40PROTECTION OF ENVIRONMENT12002-07-012002-07-01falseCSubpart CPROTECTION OF ENVIRONMENTENVIRONMENTAL PROTECTION AGENCYGRANTS AND OTHER FEDERAL ASSISTANCEGOVERNMENTWIDE DEBARMENT AND SUSPENSION (NONPROCUREMENT) AND GOVERNMENTWIDE REQUIREMENTS FOR DRUG-FREE WORKPLACE (GRANTS); CLEAN AIR ACT
                          Subpart C--Debarment



Sec. 32.300  General.

    The debarring official may debar a person for any of the causes in 
Sec. 32.305, using procedures established in Secs. 32.310 through 
32.314. The existence of a cause for debarment, however, does not 
necessarily require that the person be debarred; the seriousness of the 
person's acts or omissions and any mitigating factors shall be 
considered in making any debarment decision.



Sec. 32.305  Causes for debarment.

    Debarment may be imposed in accordance with the provisions of 
Secs. 32.300 through 32.314 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, 
receiving stolen property,

[[Page 388]]

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 the 
present responsibility of a person.
    (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, the effective date of these regulations, or a 
procurement debarment by any Federal agency taken pursuant to 48 CFR 
subpart 9.4;
    (2) Knowingly doing business with a debarred, suspended, ineligible, 
or voluntarily excluded person, in connection with a covered 
transaction, except as permitted in Secs. 32.215 or 32.220;
    (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. 32.315 or of any settlement of a 
debarment or suspension action; or
    (5) Violation of any requirement of subpart F of this part, relating 
to providing a drug-free workplace, as set forth in Sec. 32.615 of this 
part.
    (d) Any other cause of so serious or compelling a nature that it 
affects the present responsibility of a person.

[53 FR 19196, 19204, May 26, 1988, as amended at 54 FR 4962, Jan. 31, 
1989]



Sec. 32.310  Procedures.

    EPA shall process debarment actions as informally as practicable, 
consistent with the principles of fundamental fairness, using the 
procedures in Secs. 32.311 through 32.314.



Sec. 32.311  Investigation and referral.

    Information concerning the existence of a cause for debarment from 
any source shall be promptly reported, investigated, and referred, when 
appropriate, to the debarring official for consideration. After 
consideration, the debarring official may issue a notice of proposed 
debarment.



Sec. 32.312  Notice of proposed debarment.

    A debarment proceeding shall be initiated by notice to the 
respondent advising:
    (a) That debarment is being considered;
    (b) Of the reasons for the proposed debarment in terms sufficient to 
put the respondent on notice of the conduct or transaction(s) upon which 
it is based;
    (c) Of the cause(s) relied upon under Sec. 32.305 for proposing 
debarment;
    (d) Of the provisions of Sec. 32.311 through Sec. 32.314, and any 
other EPA procedures, if applicable, governing debarment decisionmaking; 
and
    (e) Of the potential effect of a debarment.



Sec. 32.313  Opportunity to contest proposed debarment.

    (a) Submission in opposition. Within 30 days after receipt of the 
notice of proposed debarment, the respondent may submit, in person, in 
writing, or through a representative, information and argument in 
opposition to the proposed debarment.
    (1) If the respondent desires a hearing, it shall submit a written 
request to the debarring official within the 30-day period following 
receipt of the notice of proposed debarment.
    (2) [Reserved]
    (b) Additional proceedings as to disputed material facts. (1) In 
actions not based upon a conviction or civil judgment, if the debarring 
official finds that the respondent's submission in opposition raises a 
genuine dispute over

[[Page 389]]

facts material to the proposed debarment, respondent(s) shall be 
afforded an opportunity to appear with a representative, submit 
documentary evidence, present witnesses, and confront any witness the 
agency presents.
    (2) A transcribed record of any additional proceedings shall be made 
available at cost to the respondent, upon request, unless the respondent 
and the agency, by mutual agreement, waive the requirement for a 
transcript.

[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19197, May 26, 
1988]



Sec. 32.314  Debarring official's decision.

    (a) No additional proceedings necessary. In actions based upon a 
conviction or civil judgment, or in which there is no genuine dispute 
over material facts, the debarring official shall make a decision on the 
basis of all the information in the administrative record, including any 
submission made by the respondent. The decision shall be made within 45 
days after receipt of any information and argument submitted by the 
respondent, unless the debarring official extends this period for good 
cause.
    (b) Additional proceedings necessary. (1) In actions in which 
additional proceedings are necessary to determine disputed material 
facts, written findings of fact shall be prepared. The debarring 
official shall base the decision on the facts as found, together with 
any information and argument submitted by the respondent and any other 
information in the administrative record.
    (2) The debarring official may refer disputed material facts to 
another official for findings of fact. The debarring official may reject 
any such findings, in whole or in part, only after specifically 
determining them to be arbitrary and capricious or clearly erroneous.
    (3) The debarring official's decision shall be made after the 
conclusion of the proceedings with respect to disputed facts.
    (c)(1) Standard of proof. In any debarment action, the cause for 
debarment must be established by a preponderance of the evidence. Where 
the proposed debarment is based upon a conviction or civil judgment, the 
standard shall be deemed to have been met.
    (2) Burden of proof. The burden of proof is on the agency proposing 
debarment.
    (d) Notice of debarring official's decision. (1) If the debarring 
official decides to impose debarment, the respondent shall be given 
prompt notice:
    (i) Referring to the notice of proposed debarment;
    (ii) Specifying the reasons for debarment;
    (iii) Stating the period of debarment, including effective dates; 
and
    (iv) Advising that the debarment is effective for covered 
transactions throughout the executive branch of the Federal Government 
unless an agency head or an authorized designee makes the determination 
referred to in Sec. 32.215.
    (2) If the debarring official decides not to impose debarment, the 
respondent shall be given prompt notice of that decision. A decision not 
to impose debarment shall be without prejudice to a subsequent 
imposition of debarment by any other agency.



Sec. 32.315  Settlement and voluntary exclusion.

    (a) When in the best interest of the Government, EPA may, at any 
time, settle a debarment or suspension action.
    (1) The debarring and suspending official is the official authorized 
to settle debarment or suspension actions.
    (2) [Reserved]
    (b) If a participant and the agency agree to a voluntary exclusion 
of the participant, such voluntary exclusion shall be entered on the 
Nonpro-curement List (see subpart E).
    (c) The EPA Debarring Official may consider matters regarding 
present responsibility, as well as any other matter regarding the 
conditions giving rise to alleged CAA or CWA violations in anticipation 
of entry of a plea, judgment or conviction. If, at any time, it is in 
the interest of the United States to conclude such matters pursuant to a 
comprehensive settlement agreement, the EPA Debarring Official may 
conclude the debarment and ineligibility matters as part of any such 
settlement, so long as he or she certifies that the

[[Page 390]]

condition giving rise to the CAA or CWA violation has been corrected.

[53 FR 19196, 19204, May 26, 1988, as amended at 53 FR 19197, May 26, 
1988; 61 FR 28757, June 6, 1996]



Sec. 32.320  Period of debarment.

    (a) Debarment shall be for a period commensurate with the 
seriousness of the cause(s). If a suspension precedes a debarment, the 
suspension period shall be considered in determining the debarment 
period.
    (1) Debarment for causes other than those related to a violation of 
the requirements of subpart F of this part generally should not exceed 
three years. Where circumstances warrant, a longer period of debarment 
may be imposed.
    (2) In the case of a debarment for a violation of the requirements 
of subpart F of this part (see Sec. 32.305(c)(5)), the period of 
debarment shall not exceed five years.
    (b) The debarring official may extend an existing debarment for an 
additional period, if that official determines that an extension is 
necessary to protect the public interest. However, a debarment may not 
be extended solely on the basis of the facts and circumstances upon 
which the initial debarment action was based. If debarment for an 
additional period is determined to be necessary, the procedures of 
Secs. 32.311 through 32.314 shall be followed to extend the debarment.
    (c) The respondent may request the debarring official to reverse the 
debarment decision or to reduce the period or scope of debarment. Such a 
request shall be in writing and supported by documentation. The 
debarring official may grant such a request for reasons including, but 
not limited to:
    (1) Newly discovered material evidence;
    (2) Reversal of the conviction or civil judgment upon which the 
debarment was based;
    (3) Bona fide change in ownership or management;
    (4) Elimination of other causes for which the debarment was imposed; 
or
    (5) Other reasons the debarring official deems appropriate.

[53 FR 19196, 19204, May 26, 1988, as amended at 54 FR 4962, Jan. 31, 
1989]



Sec. 32.321  Reinstatement of facility eligibility.

    (a) A written petition to reinstate the eligibility of a CAA or CWA 
ineligible facility may be submitted to the EPA Debarring Official. The 
petitioner bears the burden of providing sufficient information and 
documentation to establish, by a preponderance of the evidence, that the 
condition giving rise to the CAA or CWA conviction has been corrected. 
If the material facts set forth in the petition are disputed, and the 
Debarring Official denies the petition, the petitioner shall be afforded 
the opportunity to have additional proceedings as provided in 
Sec. 32.314(b).
    (b) A decision by the EPA Debarring Official denying a petition for 
reinstatement may be appealed under Sec. 32.335.

[61 FR 28757, June 6, 1996]



Sec. 32.325  Scope of debarment.

    (a) Scope in general. (1) Debarment of a person under these 
regulations constitutes debarment of all its divisions and other 
organizational elements from all covered transactions, unless the 
debarment decision is limited by its terms to one or more specifically 
identified individuals, divisions or other organizational elements or to 
specific types of transactions.
    (2) The debarment action may include any affiliate of the 
participant that is specifically named and given notice of the proposed 
debarment and an opportunity to respond (see Secs. 32.311 through 
32.314).
    (b) Imputing conduct. For purposes of determining the scope of 
debarment, conduct may be imputed as follows:
    (1) Conduct imputed to participant. The fraudulent, criminal or 
other seriously improper conduct of any officer, director, shareholder, 
partner, employee, or other individual associated with a participant may 
be imputed to the participant when the conduct occurred in connection 
with the individual's performance of duties for or on behalf of the 
participant, or with the participant's knowledge, approval, or 
acquiescence. The participant's acceptance of the benefits derived from 
the conduct shall be evidence of such knowledge, approval, or 
acquiescence.

[[Page 391]]

    (2) Conduct imputed to individuals associated with participant. The 
fraudulent, criminal, or other seriously improper conduct of a 
participant may be imputed to any officer, director, shareholder, 
partner, employee, or other individual associated with the participant 
who participated in, knew of, or had reason to know of the participant's 
conduct.
    (3) Conduct of one participant imputed to other participants in a 
joint venture. The fraudulent, criminal, or other seriously improper 
conduct of one participant in a joint venture, grant pursuant to a joint 
application, or similar arrangement may be imputed to other participants 
if the conduct occurred for or on behalf of the joint venture, grant 
pursuant to a joint application, or similar arrangement may be imputed 
to other participants if the conduct occurred for or on behalf of the 
joint venture, grant pursuant to a joint application, or similar 
arrangement or with the knowledge, approval, or acquiescence of these 
participants. Acceptance of the benefits derived from the conduct shall 
be evidence of such knowledge, approval, or acquiescence.



Sec. 32.335  Appeal.

    (a) The debarment determination under Sec. 32.314 shall be final. 
However, any party to the action may request the Director, Office of 
Grants and Debarment (OGD Director), to review the findings of the 
Debarring Official by filing a request with the OGD Director within 30 
calendar days of the party's receipt of the debarment determination, or 
its reconsideration. The request must be in writing and set forth the 
specific reasons why relief should be granted.
    (b) A review under this section shall be at the discretion of the 
OGD Director. If a review is granted, the debarring official may stay 
the effective date of a debarment order pending resolution of the 
appeal. If a debarment is stayed, the stay shall be automatically lifted 
if the OGD Director affirms the debarment.
    (c) The review shall be based solely upon the record. The OGD 
Director may set aside a determination only if it is found to be 
arbitrary, capricious, and abuse of discretion, or based upon a clear 
error of law.
    (d) The OGD Director's subsequent determination shall be in writing 
and mailed to all parties.
    (e) A determination under Sec. 32.314 or a review under this section 
shall not be subject to a dispute or a bid protest under parts 30, 31 or 
33 of this subchapter.

[53 FR 19197, May 26, 1988, as amended at 59 FR 50693, Oct. 5, 1994; 62 
FR 47149, Sept. 8, 1997]