a form of debarment, primarily referring to persons or firms suspected of fraud or criminal conduct in government contracting or other business dealings.
For pioneering surveys of government contractor debar-
ment, highly critical of government procedures and
practices, see Miller, Administrative Discretion in the
Award of Federal Contracts, 53 Mich. L. Rev. 781
(1955); Gantt and Panzer, The Government Blacklist:
Debarment and Suspension of Bidders on Government
Contracts, 25 Geo. Wash. L. Rev. 175 (1957).
See notes 7, 15, and 16 infra and related text.
See notes 12 and 17 infra.
This is recognized by the Comptroller General in decision B-139720 of January 6, 1960, to the Secretary of Labor:
"... A conclusion reached by the Attorney
General's Committee on Administrative Procedure
in 1939 (mimeographed monograph), that the penalty
of blacklisting is so severe that its imposition may
destroy a going business, appears to be even more
valid under present day conditions. As such, the
power of debarment is tantamount to one of life or
death over a business, and, when administrative
debarment is employed for its deterrent or retalia-
tory value alone, it is seriously questionable that
no more is entailed than deprivation of a benefit or
privilege, within the bonds of 'due process', with-
out redressable injury to personal or property
rights. However, whether or not liability is incur-
red in refusing to deal with a responsible bidder,
it is certain that the statutory directions requiring
competition are binding upon and must be observed
by contracting agencies. The discretion properly
exercisable by them is not absolute, "
The text of this decision is set forth in App. E infra.
Section 3 (b) of the Buy-American Act, 47 Stat. 1520
(1933), 41 U. S. C. § 10b(b) (1958), provides that "If
the head of a department, bureau, agency, or indepen-
dent establishment which has made any contract con-
taining the provisions required by subsection (a) of
this section finds that in the performance of such con-
tract there has been a failure to comply with such pro-
visions (requiring the use of supplies of domestic
origin in the performance of government construction
contracts and subcontracts), he shall make public his
findings, including therein the name of the contractor
obligated under such contract, and no other contract
for the construction, alteration, or repair of any
public building or public work in the United States, or
elsewhere shall be awarded to such contractor, sub-
contractors, material men, or suppliers which with
such contractor is associated or affiliated, within a
period of three years after such finding is made public."
In recent years, there is only one reported case of
debarment under this authority. 25 Fed. Reg. 223
(Jan. 12, 1960). No regulations or procedures of
executive agencies have been published concerning
debarment under this authority. Perhaps as a techni-
cal error of draftsmanship, the debarment procedures
set forth in the Federal Procurement and Armed Ser-
vices Procurement Regulations do not literally apply
to debarment under this statutory authority.
The Davis-Bacon Act, which prescribes minimum wage rates for government construction contracts, provides in section 3(a), 49 Stat. 1011(1935), 40 U. S. C. § 276a-2 (a) (1958), for contractor debarment as follows:
"The Comptroller General of the United States is authorized and directed to pay directly to laborers and mechanics from any accrued payments withheld under the terms of the contract any wages found to be due laborers and mechanics pursuant to sections 276a to 276a-5 of this title; and the Comptroller
General of the United States is further authorized
and is directed to distribute a list to all depart-
ments of the Government giving the names of
persons or firms whom he has found to have dis-
regarded their obligations to employees and sub-
contractors. No contract shall be awarded to the
persons or firms appearing on this list or to any
firm, corporation, partnership, or association in
which such persons or firms have an interest until
three years have elapsed from the date of publica-
tion of the list containing the names of such persons
or firms."'
The procedures for debarment under this authority involve
both the Department of Labor and the General Accounting
Office. While the power of debarment for violation of
the Davis-Bacon Act is vested in the Comptroller General,
that official as a matter of practice acts upon recommenda-
tions of the Department of Labor which, in conjunction with
the government contracting agency concerned, investigates
and evaluates reported violations pursuant to Reorganiza-
tion Plan No. 14 of 1950 and regulations issued thereunder
(see note 11 infra). The General Accounting Office in acting
on the Labor Department's recommendation for debarment
for violations of the Davis-Bacon Act does not offer the
persons affected thereby the opportunity for an adversary
hearing; but prior to debarring the individual or firm in
question, the General Accounting Office as a matter of
practice gives advance notice of that proposed action to
the persons affected and affords them an opportunity to
present information in opposition, including an opportunity
to confer with appropriate GAO officials. As of April 1,
1962, 34 firms were debarred by the Comptroller General
for violations of this Act. As pointed out in note 33 infra,
debarment for violation of the Davis-Bacon Act extends
not only to all government contracts as provided in the
Act, but also to participation in certain federally assisted
construction work described in note 11 infra.
Under section 3 of the Walsh-Healey Public Contracts Act, 49 Stat. 2037 (1936), 41 U. S. C. § 37 (1958), debarment for
violation of the minimum wage and hour or labor-safety requirements of the act applicable to government contracts for supplies in excess of $10,000, is provided as follows:
"The Comptroller General is authorized and
directed to distribute a list to all agencies of the
United States containing the names of persons or
firms found by the Secretary of Labor to have
breached any of the agreements or representations
required by Section 35-45 of this Title. Unless the
Secretary of Labor otherwise recommends, no
contract shall be awarded to such persons or firms or
to any firm, corporation, partnership, or association
in which such persons or firms have a controlling
interest until three years have elapsed from the date
the Secretary of Labor determines such breach to
have occurred, "
For purposes of determining whether or not these labor
standards have been violated, § 5 of the act, 49 Stat. 3038
(1936), as amended, 41 U. S. C. § 39 (1958), provides for
adversary hearings to be held by the Secretary of Labor
or by "an impartial representative designated by him".
Under this provision, the Secretary of Labor has issued
rules of practice which by their terms are applicable to
debarments under section 3 of the act. These rules of
practice are set forth in Appendix D infra. As of April,
1962, approximately 53 firms were debarred under this
authority. It is the policy of the Department of Labor
not to debar for inadvertent violations.
See Copper Plumbing & Heating Co. v. Campbell, 290
F. 2d 368 (D. C. Cir. 1961); Schlesinger v. Gates, 249
F. 2d 111 (D. C. Cir. 1957). See also App. E infra.
Section 1(a) of the Walsh-Healey Act, 49 Stat. 2036 (1936),
as amended, 41 U. S. C. § 35 (a) (1958), limits government
contracts for supplies in excess of $10,000 to persons
found under regulations of the Secretary of Labor to
qualify either as manufacturers of or regular dealers in
the supplies contracted for. As of April 1, 1962, 117
individuals or firms were found not to qualify as manu-
facturers or regular dealers as to some or all commodities,
and were to that extent ineligible for contracts subject
to the Walsh-Healey Act. As pointed out in note 2
supra, the Department of Defense, but not other govern-
ment contracting agencies, has extended this ineligibility
to contracts for supplies under $10,000.
For example, 10 U. S. C. § 2305 (c), and 41 U. S. C. § § 5
and 253 (b), which apply to most government contracting,
provide that contracts are to be awarded to "responsible"
bidders.
See Comptroller General decisions set forth in App. E
infra.
Reorganization Plan No. 14 of 1950, 15 Fed. Reg. 3176,
64 Stat. 1267, 5 U. S. C. § 133z note (1958), provides for
the "coordination of administration and consistency of
enforcement by the Secretary of Labor of the labor standards"
provisions of various federal statutes relating to govern-
ment construction contracts and federally assisted con-
struction projects such as airports, highways, hospitals,
and public housing.
Under this Reorganization Plan, the Secretary of Labor
has published regulations which are set forth in 29 C. F. R.
subtitle A, Part 5 (Supp. 1961). Section 5. 6 (b) provides
for debarment as follows:
"Whenever any contractor or subcontractor is
found by the Secretary of Labor or the Agency Head
to be in aggravated or wilful violation of the pre-
vailing wage or overtime pay provisions of any of the
applicable statutes listed § 5. 1, other than the Davis-
Bacon Act, such contractor or subcontractor or any
firm, corporation, partnership, or association in
which such contractor or subcontractor has a substan-
tial interest shall be ineligible for a period of 3 years
(from the date of publication by the Comptroller General
of the name or names of said contractor or subcontractor
on the ineligible list as provided below) to receive any
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