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Acquisition Policy Flash! 13-07

What's New?

Procedures for Determining Whether to Terminate Contracts with Ineligible Firms

(Note:  A separate process will be instituted for Veteran-Owned Small Businesses (including Service-Disabled Veteran-Owned Small Businesses) deemed ineligible because of a sustained status protest.  This process is currently pending publication in the Federal Register as a final rule.)

Purpose:  To inform the acquisition workforce about class deviation 809.405-1, Continuation of Contracts, which re-delegates, from the Deputy Senior Procurement Executive (DSPE) to the Head Contracting Activity (HCA), the authority to determine whether to continue current contracts with suspended or debarred firms.

Background:  A Government Accountability Office (GAO) audit determined that VA’s fraud prevention controls for the SDVOSB program have improved since Public Law 111-275 was enacted; however, further enhancements would help to reduce the program’s vulnerability to fraud, waste, and abuse.  To address the identified vulnerabilities, GAO recommended the VA take 13 actions.  One of the required actions is to provide guidance to the acquisition workforce on the existing procedures to terminate contracts with ineligible veteran-owned firms.

Although, the GAO audit focused on procedures for continuing or discontinuing contracts with ineligible firms participating in the Veterans First Program, the subject deviation provides each HCA with the authority to establish procedures to determine whether to continue a contact when any firm is suspended or debarred.

Relevant FAR and VAAR Sections:

  • FAR 9.405-1, Continuation of current contracts
  • VAAR 809.405-1, Continuation of current contracts

Guidance:

  1. Notwithstanding the debarment, suspension, or proposed debarment of a contractor, VA may continue contracts or subcontracts in existence at the time the contractor was debarred, suspended, or proposed for debarment unless the Head Contracting Activity (HCA) directs otherwise.

  2. For contractors debarred, suspended, or proposed for debarment, unless the HCA makes a written determination of the compelling reasons for doing so, ordering activities shall not—

    (1)  Place orders exceeding the guaranteed minimum under indefinite quantity contracts;

    (2)  Place orders under optional use Federal Supply Schedule contracts, blanket purchase agreements, or basic ordering agreements; or

    (3)  Add new work, exercise options, or otherwise extend the duration of current contracts or orders.

Procedures:

  1. Each HCA shall develop procedures for determining whether to continue contracts when a firm is suspended or debarred.

  2. COs shall follow the procedures established by their respective HCA to determine whether to continue contracts when a firm is suspended or debarred.

For questions or concerns regarding this Acquisition Policy Flash, please contact LeStancia N. Spaght, Senior Procurement Analyst, at va.procurement.policy@va.gov.