Government Contracts: Suspension, Debarment Caseloads Up, Individuals Targeted

October 30, 2015 – In The News
Bloomberg BNA

Reggie Jones was featured in Bloomberg BNA article, “Government Contracts: Suspension, Debarment Caseloads Up, Individuals Targeted.” Full text can be found in the October 30, 2015, issue, but a synopsis is below.

According to the Interagency Suspension and Debarment Committee (ISDC), the total number of suspensions, debarments and proposed debarments has increased from 2,850 in fiscal 2010 to 5179 in fiscal 2015.

Fox Rothschild Partner Reggie Jones told Bloomberg BNA that there are several factors responsible for the upward trend. Some noted elements include the American Recovery and Reinvestment Act increasing funding for staffing and the standard for proving fraud being lowered due to the implementation of the Fraud Enforcement and Recovery Act. Additionally, the Government Accountability Office found lax suspension and debarment programs in a 2011 investigation.

“We have witnessed an increase in the government's desire to suspend or debar an individual employee despite having settled a suspension and debarment action involving the same allegations with the corporate entity,” Jones said. In addition he has witnessed a “corresponding increase” in False Claims Act allegations and prosecutions.

Heightened focus on individuals in suspension and debarment action has also been noted by many attorneys. “Employees have historically been afterthoughts for the government in fraud matters, as they tended to focus their efforts on pursuing the corporate entity as the primary wrongdoer,” mentioned Jones. Now, the government “appears to be equally pursuing the corporate entity and its key employees in fraud matters as the facts of each case allow.”

“There appears to be no end in sight for the ever increasing suspension/debarment proceedings and False Claims Act prosecutions,” Jones told Bloomberg BNA. “The government is operating in a new environment under a more aggressive set of rules that allows it to zealously pursue, prosecute and suspend and debar contractors for alleged fraud.” As a result, it's “imperative that contractors be well-versed in this new environment” to avoid trouble, he said.