(c) Any negotiated contract for perishable subsistence supplies in which the aggregate amount involved does not exceed $25,000.

(d) Any contract for services which are required to be performed by an individual contractor in person under Government supervision and paid for on a time basis.

(e) Any contract for public utility services furnished by a public utility company where the utility company's rates for the services furnished are subject to regulation by Federal, State, or other regulatory body and the public utility company is the sole source of supply.

(f) Contracts to be made in foreign countries.

(g) Any other contracts, individually or by class, of the Department of Defense, designated by the Secretary. Reports of any such exceptions shall be filed promptly with the Administrator of General Services.

§ 1-1.508-1 Failure or refusal to furnish representation and agreement. Each executive agency shall take the necessary steps to assure that the indicated successful bidder or proposed contractor has furnished a representation (negative or affirmative) and agreement as described in § 1-1.505.

(a) If the indicated successful bidder or proposed contractor makes such representation in the negative, such representation may be accepted and award made or offer accepted in accordance with established procedure.

(b) If the indicated successful bidder ur proposed contractor makes such representation in the affimative, a completed Standard Form 119 shall be requested from the bidder or proposed contractor. In the case of formal advertising, the making of an award in accordance with established procedure need not be delayed pending receipt of the form. In the case of negotiation, if the proposed contractor makes such representation in the affirmative, he shall be required to file a completed Standard Form 119 prior to acceptance of the offer or execution of the contract unless the head of the executive agency concerned, or his authorized representative, considers that the interest of the Government will be prejudiced by the suspension of negotiations pending receipt and consideration of an executed Standard Form 119.

(c) If the indicated successful bidder or proposed contractor fails to furnish the representation and agreement as described in § 1-1.505, such failure shall be considered a minor informality and, prior to award, such bidder or proposed contractor shall be afforded a further opportunity to furnish such representation and agreement. A refusal or failure to furnish such representation and agreement, after such opportunity has been afforded, shall require rejection of the bid or offer.

§ 1-1.508-2 Failure or refusal to furnish Standard Form 119.

If the successful bidder or contractor, upon request, refuses or fails to furnish a completed Standard Form 119, or a statement in lieu thereof as provided in § 1-1.507-2, the executive agency concerned shall take one or more of the followering actions, or other action, as may be appropriate:

(a) If an award has not been made or offer accepted, determine whether the bid or offer should be rejected.

(b) If the contract has been awarded or offer accepted, determine what action shall be taken, such as making an independent investigation or considering the eligibility of the contractor as a future contractor in accordance with established procedure.

§ 1-1.508-3 Misrepresentations or violations of the covenant against contingent fees.

In case of misrepresentation, or violation or breach of the covenant against contingent fees, or some other relevant impropriety, the executive agency concerned shall take one or more of the following actions, or other action, as may be appropriate:

(a) If an award has not been made, or offer has not been accepted, determine whether the bid or offer should be rejected.

(b) If an award has been made or offer has been accepted, take action to enforce the covenant in accordance with its terms; that is, as the best interests of the Government may appear, annul the contract without liability or recover the amount of the fee involved.

(c) Consider the future eligiblity as a contractor of the bidder or contractor in accordance with established procedure.

(d) Determine whether the case should be referred to the Department of

Justice in accordance with established procedure with respect to determining matters of fraud or criminal conduct. § 1-1.509 Preservation of records.

Executive agencies shall preserve, for enforcement or report purposes, at least one executed copy of any representation and completed Standard Form 119 (or statement in lieu of form) together with a record of any other pertinent data, including data as to action taken.

Subpart 1-1.6-Debarred, Suspended, and Ineligible Bidders § 1-1.600 Scope of subpart.

This subpart prescribes policies and procedures relating to: (a) The debarment of bidders for cause; (b) the suspension of bidders for cause under prescribed conditions; and (c) the placement of bidders in ineligibility status under section 1 of the Walsh-Healey Public Contracts Act (41 U.S.C. 35). It is directly applicable to executive agencies in negotiated or advertised purchasing and in contracting for the construction, repair, alteration, destruction, or dismantlement of public works or buildings. Other Federal agencies are requested to comply therewith in conducting their purchasing and contracting operations. § 1-1.601 General.

Debarment, suspension, and placement in ineligibility status are measures which may be invoked by the Government either to exclude or to disqualify bidders and contractors from participation in Government contracting or subcontracting. These measures should be used for the purpose of protecting the interests of the Government and not for punishment. To assure the Government the benefits to be derived from the full and free competition of interested bidders, these measures should not be instituted for any time longer than deemed necessary to protect the interests of the Government, and should preclude awards only for the probable duration of the period of non-responsibility.

mented by the rules and regulations of the President's Committee on Equal Employment Opportunity, the term debarment also means an exclusion from Government contracting or subcontracting for an indefinite period of time pending the elimination of the circumstances for which the exclusion was imposed.

(b) "Suspension" means a disqualification from Government contracting and subcontracting for a temporary period of time because a concern or individual is suspected upon adequate evidence (see § 1-1.605) of engaging in criminal, fraudulent, or seriously improper conduct.

(c) "Placement in ineligibility status" means a disqualification from Government contracting and subcontracting pending the elimination of the circumstances which constitute the basis for the imposition of the disqualification. Ineligibility under section 1(a) of the Walsh-Healey Public Contracts Act (41 U.S.C. 35(a)) refers to a situation where the Secretary of Labor has determined a concern or individual to be ineligible to receive procurement contracts for specified materials, articles, or equipment in excess of $10,000 because such concern or individual does not qualify as a "manufacturer" or "regular dealer" within the meaning of that Act. Such ineligibility status remains in effect until rescinded by the Secretary of Labor.

(d) A "debarment list" or "debarred bidders' list" means a list of names of concerns or individuals against whom any or all of the measures referred to in this section have been invoked.

(e) "Affiliates". Business concerns are affiliates of each other when either directly or indirectly one concern or individual controls or has the power to control another, or when a third party controls or has the power to control both. § 1-1.602 Establishment and maintenance of a list of concerns or individuals debarred, suspended, or declared ineligible.

(a) Each executive agency shall establish and maintain, on the bases contained in § 1-1.602-1, a consolidated list of concerns and individuals to whom contracts will not be awarded and from whom bids or proposals will not be solicited as provided in § 1-1.603.

(b) The list shall show as a minimum the following information:

(1) The names of those concerns or Individuals debarred or ineligible (in al

phabetical order) with appropriate cross reference where more than one name is involved in a single action;

(2) The basis of authority for each action;

(3) The extent of restrictions imposed; and

(4) The termination date for each debarred listing.

(c) Each executive agency shall determine, in its discretion, as the interests of the national security may require, the necessity for and degree of classification of its list and correspondence relating thereto. If the agency determines that its list shall not be classified, the list should be marked "For Official Use Only" or with a word or phrase of equivalent meaning to prevent inspection of the contents by any and other than personnel required to have access thereto.

(d) The list shall be kept current by issuance of notices of additions and deletions.

§ 1-1.602-1 Bases for entry on the debarred, suspended, and ineligible list.

Entry shall be made on the debarred, suspended, and ineligible list of firms or individuals on the following bases:

(a) Those listed by the Comptroller General in accordance with the provisions of section 3 of the Walsh-Healey Public Contracts Act (41 U.S.C. 37), which have been found by the Secretary of Labor to have violated any of the agreements or representations required by that Act.

(b) Those listed by the Comptroller General in accordance with the provisions of section 3 of the Davis-Bacon Act (40 U.S.C. 276a-2(a)), as found by the Comptroller General to have violated said Act.

(c) Those listed by the Comptroller General in accordance with the provisions of Part 5, section 56(b) of the Regulations of the Secretary of Labor issued pursuant to authority granted under Reorganization Plan 14 of 1950, as found by the Secretary of Labor to be in aggravated or wilful violation of the prevailing wage or overtime pay provisions of any of the following statutes

(1) Davis-Bacon Act (40 U.S.C. 276a). (2) Anti-Kickback Act (18 U.S.C. 874, 40 U.S.C. 276b, c).

(3) The Contract Work Hours Standards Act (40 U.S.C. 327-330).

(4) National Housing Act (12 U.S.C. 1703).

(5) Hospital Survey and Construction Act (42 U.S.C. 291).

(6) Federal Airport Act (49 U.S.C. 1101).

(7) Housing Act of 1949 (42 U.S.C. 1401).

(8) School Survey and Construction Act of 1950 (20 U.S.C. 251).

(9) Defense Housing and Community Facilities and Services Act of 1951 (42 U.S.C. 1591).

(10) Federal Civil Defense Act of 1950 (50 App. U.S.C. 2281 (i)).

(11) Area Redevelopment Act of 1961 (42 U.S.C. 2518).

(12) Delaware River Basin Compact (sec. 15.1, 75 Stat. 714).

(13) Health Professions Educational Assistance Act of 1963 (sec. 721, 77 Stat. 167).

(14) Mental Retardation Facilities Construction Act (secs. 101, 122, 135, 77 Stat. 282, 284, 288).

(15) Community Mental Health Centers Act (sec. 205, 77 Stat. 292).

(d) Those the executive agency determines to debar administratively for any of the causes and under all of the appropriate conditions listed in § 1-1.604.

(e) Those debarred by the President's Committee on Equal Employment Opportunity, or by the head of the agency (with the prior approval of the Committee), from participation in Government contracting or subcontracting by reason of noncompliance with the Equal Opportunity Clause.

(f) Those the executive agency determines to suspend administratively for the reasons and under the conditions set forth in § 1-1.605.

(g) Those determined by an executive agency in accordance with section 3(b) of the Buy American Act (41 U.S.C. 10b (b)) to have failed to comply with the provisions of section 3(a) of that Act under any contract containing the specific provision required by said section 3(a) and made by the agency for construction, alteration, or repair of any public building or public work.

(h) Those found by the Secretary of Labor ineligible to be awarded contracts for the reason that they do not qualify as "manufacturers" or "regular dealers" within the meaning of section 1(a) of the Walsh-Healey Public Contracts Act (41 U.S.C. 35(a)).

§ 1-1.603 Treatment to be accorded firms or individuals in debarred, suspended, or ineligible status.

Firms or individuals listed by the agency as debarred, suspended, or ineligible shall be treated as follows:

(a) Total restrictions. A contract shall not be awarded to a concern or individual that is listed on the basis of § 1-1.602-1 (a), (b), (d), or (e) or to any concern, corporation, partnership, or association in which the former concern or individual has a controlling interest, nor shall bids or proposals be solicited therefrom. However, when it is determined essential in the public interest by the head of an agency or his designee, an exception may be made with respect to a particular procurement action when a concern or individual is listed as debarred on the basis of § 1-1.602-1(d).

(b) Restrictions under statutes designated in the regulations of the Secretary of Labor. A contractor listed on the basis of § 1-1.602-1(c), or any concern, corporation, partnership, or association in which such contractor has a controlling interest, shall be ineligible for a period of three years (from the date of publication by the Comptroller General) to receive any contracts subject to any of the statutes listed in § 1-1.603 (c).

(c) Buy American Act restrictions. As specified in the Buy American Act (41 U.S.C. 10b (b)), contracts shall not be awarded for construction, alteration, or repair of public buildings or public works in the continental United States or elsewhere to concerns or individuals listed on the basis of § 1-1.602-1 (g), nor shall bids or proposals therefor be solicited therefrom. However, firms or individuals listed on this basis may be awarded contracts and may be solicited for bids or proposals for other than construction, alteration, or repair of public buildings or public works in the continental United States or elsewhere.

(d) Ineligibility restrictions of the Walsh-Healey Act. Contracts shall not be awarded to firms or individuals in any amount exceeding $10,000 for those materials, supplies, articles, or equipment with respect to which the firm or individual has been found to be ineligible to be awarded a contract by the Secretary of Labor, as provided in § 1-1.602-1 (h). However, firms or individuals listed on this basis may, in the discretion of each executive agency, be awarded contracts and may be solicited by bids or pro

posals, for (1) such materials, supplies, articles, or equipment when the amount does not exceed $10,000; (2) services regardless of amount; and (3) commodities in which not declared ineligible regardless of amount.

(e) Restrictions for non-compliance with the Equal Opportunity Clause. A concern or individual debarred for noncompliance with the Equal Employment Opportunity Clause shall not be awarded a Government contract.

(f) Restrictions on subcontracting. Where a concern or individual listed on the debarred bidders' list is proposed as a subcontractor, the contracting officer should decline to approve subcontracting with that firm or individual in any instance in which consent is required of the Government before the subcontract is made, unless it is determined by the agency to be in the best interest of the Government to do so.

§ 1-1.604 Causes and conditions applicable to determination of debarment by an executive agency.

Subject to the following conditions, each executive agency is authorized to debar a firm or individual in the public interest for any of the following causes:

(a) Causes. (1) Conviction for commission of a criminal offense as an incident to obtaining or attempting to obtain a public or private contract, or subcontract thereunder, or in the performance of such contract or subcontract.

(2) Conviction under the Federal Antitrust Statutes arising out of the submission of bids or proposals.

(3) Violation of contract provisions, as set forth below, of a character which is regarded by the agency involved to be SO serious as to justify debarment action

(i) Willful failure to perform in accordance with the specifications or within the time limit provided in the contract.

(ii) A record of failure to perform, or of unsatisfactory performance, in accordance with the terms of one or more contracts; Provided, That such failure or unsatisfactory performance has occurred within a reasonable period of time preceding the determination to debar. Failure to perform or unsatisfactory performance caused by acts beyond the control of the firm or individual as a contractor shall not be considered to be a basis for debarment.

(iii) Violation of the contractual provision against contingent fees.

(iv) Acceptance of a contingent fee, which is paid in violation of contractual provision against contingent fees.

(4) Any other cause of such serious and compelling nature, affecting responsibility as a Government contractor, as may be determined by the head of the agency to warrant debarment.

(5) Debarment by some other executive agency.

(b) Conditions. (1) Debarment for any of the causes set forth in (a) of this § 1-1.604 shall be made only upon approval of the head of the executive agency or his duly authorized representative.

(2) The existence of any of the causes set forth in (a) of this § 1-1.604 does not necessarily require that a firm or individual be debarred. In each instance, whether the offense or failure, or inadequacy of performance, be of a criminal, fraudulent, or serious nature, the decision to debar shall be made within the discretion of the executive agency and shall be rendered in the best interests of the Govermnent. Likewise, all mitigating factors may be considered in determining the seriousness of the offense, failure, or inadequacy of performance, and in deciding whether debarment is warranted.

(3) The existence of a cause set forth in (a) (1) and (2) of this § 1-1.604 shall be established by criminal conviction by a court of competent jurisdiction. In the event that an appeal taken from such conviction results in a reversal of the conviction, the debarment shall be removed upon the request of the bidder (unless other cause for debarment exists).

(4) The existence of a cause set forth in (a) (3) and (4) of this § 1-1.604 shall be established by evidence which the executive agency determines to be clear and convincing in nature.

(5) Debarment for the cause set forth in (a) (5) of this § 1-1.604 (debarment by another agency) shall be proper provided that one of the causes for debarment set forth in (a) (1) through (4) of this § 1-1.604 was the basis for debarment by the original debarring agency. Such debarment may be based entirely on the record of facts obtained by the original debarring agency, or upon a combination of such facts and additional facts.

(c) Period of debarment. (1) Debarment of a firm or individual for causes other than failure to comply with the provisions of Equal Opportunity Clause (see § 1-1.602–1(e)), shall be for a reasonable, definitely stated period of time commensurate with the seriousness of the offense or the failure or inadequacy of performance. As a general rule, a period of debarment shall not exceed three years. However, when debarment for an additional period is deemed necessary notice of the proposed additional debarment shall be furnished to that concern or individual in accordance with § 11.604-1. Except as precluded by statute, a debarment may be removed or the period thereof may be reduced by the head of the agency or by his authorized representative, upon the submission of an application, supported by documentary evidence, setting forth appropriate grounds for the granting of relief; such as, newly discovered material evidence, reversal of a conviction, bona fide change of ownership or management, or the elimination of the causes for which the debarment was imposed.

(2) Debarment of a firm or individual for failure to comply with the provisions of the Equal Opportunity Clause generally shall continue until removed by the President's Committee or by the agency itself with the concurrence of the President's Committee. § 1-1.604-1

Procedural requirements relating to the imposition of debar

ment.

(a) Initiation of debarment action. An agency seeking to debar a concern or individual (or any affiliate thereof) for cause shall furnish that party with a written notice: (1) stating that debarment is being considered, (2) setting forth the reasons for the proposed debarment, and (3) indicating that such party will be accorded an opportunity for a hearing if he so requests within a stated period of time.

(b) Hearings. An opportunity for a hearing conducted in a manner prescribed by agency regulations shall be accorded to any concern or individual which the agency proposes to debar. Such regulations shall establish procedural safeguards which satisfy the demands of fairness, and which, at a minimum, shall provide that information in opposition to the proposed action may be presented, in person or in writing, and, if desired, through an appropriate rep