Secondly, it would authorize as the only grounds for suspension either a criminal conviction or civil judgment affecting an individual's or firm's present responsibility as a government contractor or subcontractor, or the determination of the agency head or his designee of probable cause for belief that an individual or firm has committed fraud or engaged in other conduct showing a substantial lack of present responsibility as a government contractor or subcontractor.

Such a determination would be appropriate, for

example, when a contractor is criminally indicted or sued under the False Claims Act for fraud arising out of his government contracts, or when the contracting agency refers such a case to the Department of Justice for appropriate prosecution. And, thirdly, Recommendation 2 would limit all suspensions to a reasonable time for which incremental 90 day suspensions with a maximum period of one-year would be the rule in all cases of suspension not based on alleged fraud or other wrongdoing involving referral to the Department of Justice for prosecution or on criminal or civil proceedings brought by the Govern

ment.

A suspension based on a federal criminal indictment, criminal trial or civil prosecution involving alleged fraud or other conduct showing a present lack of honesty for government contracting could continue for the duration of any trial in a federal court of the issues raised by the suspension and notice of proposed debarment and for 120 days thereafter, during which period any debarment action would be completed. In addition, one-year suspensions would be authorized for

purposes of affording the FBI and the Department of Justice a reasonable

If no

time to determine whether the agency asserted grounds of fraud or other dishonest conduct are adequate for criminal or civil prosecution. criminal or civil prosecution were commenced within the 12 month period, the suspension would terminate; and if debarment were pressed, the individual or firm would be entitled to confront the Government's evidence on any material issue of fact unless the Attorney General or his designee were to determine and notify the agency head that disclosure of the Government's evidence of fraud or dishonesty for purposes of administrative debarment would be substantially harmful to the Government's law enforcement activities or to the successful criminal or civil prosecution of the individual or firm. Upon such a determination, notice of which would be furnished to the individual or firm concerned, the suspension could continue for not more than an additional six months or a total of 18 months from the notice of suspension and proposed debarment. Again, if no criminal or civil case was begun during this additional period, the suspension would terminate and any debarment would be subject to disclosure of the Government's evidence. If a criminal or civil prosecution were instituted within the 12 or 18 month periods, the suspension would continue for the duration of any trial in a federal court, as indicated above. When a suspension (or the reimposition of a suspension) is based on an indictment or suit, provision is made for the termination without determination of any trial-type administrative hearing previously begun involving the same issues as in the judicial trial. The Committee concurs in the view of the Department of Justice that the judicial proceedings should take precedence in this situation. 53a/

Finally, all suspensions based on other grounds, for example a criminal conviction or civil judgment, would be limited to 90 days, with power at the agency head level to extend for additional 90 day periods for good cause found, but not to exceed one year.

With regard to an earlier draft of Recommendation 2, the

Special Subcommittee of the American Bar Association has commented

as follows:

"We acknowledge the need for the Government to protect itself on an emergency basis from dealing with contractors who may be fraudulent, presently irresponsible, etc., as set forth in the Recommendation 2 of the Staff Report. We believe, however, that Recommendation 2 (ii), dealing with "probable cause for belief" that a contractor should be debarred, does not go far enough to protect the contractor. That recommendation attempts to confine temporary suspension of a contractor to 90-day periods, not to exceed an overall maximum of one year, and states that after the first 90-day suspension any new 90-day suspension must be authorized in writing by an officer of the level of Assistant Secretary, stating reasons. But this apparently permits the first 90-day suspension to be made by any employee of lesser rank, and possibly without any written statement of reasons, and with this we disagree. We would not want a Federal agency to suspend a contractor, based upon "probable cause, without notice and hearing, even for 90 days by the action of an official of lower rank than an Assistant Secretary or the equivalent. As one of us knows from first-hand knowledge of the subcontractor involved in the Copper Plumbing & Heating case, 70% of whose business was with the Government (including federally assisted construction work), such action can lead to actual bankruptcy within a year or so. We believe the Government should have emergency power to protect itself while promptly and seriously seeking the facts, but since this kind of determination lies almost entirely in the judgment of one man, we think that man should always be of Presidential-appointment rank, and certainly his reasons should be clearly stated in writing and served on the contractor."

Recommendation 2 recognizes that most suspensions are based on pending or impending criminal or civil prosecution for fraud. Whether there is probable cause for belief of fraud to support a suspension would be essentially a legal determination, and we would prefer it be made by a competent government lawyer without regard to

whether he ranks at the level of an Assistant Secretary.

The present wording of Recommendation 2 gives the agency head discretion to make this choice, and we presume the power to suspend on these grounds will be delegated to competent, fair-minded persons at high levels who will assume personal accountability for their suspension decisions. Recommendation 2 authorizes temporary suspension pending debarment in "cases of criminal conviction or civil judgment affecting an individual or firm's present responsibility as a government contractor or subcontractor." Some agencies suggest that this is unnecessary since debarment would follow promptly. We doubt debarment would follow promptly in all cases. For notwithstanding a court decision, it seems probable that some notices of proposed debarment will be contested on issues such as imputation of fraud, evidence of present responsibility notwithstanding prior conviction, the extent of business affiliation, and the like. To deny the contracting agency the power of suspension while these issues are being investigated and determined, in some cases by a trial-type hearing, would appear unwise. While a fraud-type case is being investigated or prosecuted

by the Department of Justice, the Committee recognizes that the

Government contracting agencies are ordinarily not in a position

administratively to adjudicate that issue for debarment purposes by 53b/

means of a trial-type hearing. But this is not to say that suspensions may continue indefinitely or beyond a reasonable time pending investigation and decision by the Department of Justice whether or not to

prosecute. As the Seventh Circuit Court of Appeals has pointed out in regard to the effect of such a suspension on the Government's contractual duty to settle and pay a termination claim, "There is no principle of law of which we are aware which authorizes a government agency or any other to impale a person upon a suspicion and leave him dangling in midair for ten years, without charge and without trial." 54/ We believe that 12 months in the usual fraudtype case, or 18 months upon a special finding by the Attorney General or his designee, is the maximum period compatible with fundamental fairness in which the Government reasonably may suspend an individual or firm from Government contracting for purposes of investigation and bringing criminal or civil prosecution, or both.

From the Government's standpoint, Recommendation 2 primarily concerns the Department of Justice. The Committee has formulated this recommendation after detailed discussions with officials of that

Department, and has been informed by that Department of its willingness to cooperate in the implementation of Recommendation 2 as presently worded. See Appendix F infra.

So drawn, the Committee believes Recommendation 2 would provide reasonable procedural safeguards against arbitrary or unlimited suspensions, and would also permit the Government a realistic but reasonable time to deny contracts to persons charged with serious misconduct without disclosure of Government evidence that would harm subsequent criminal or civil prosecution for that misconduct.