Payne Hackenbracht & Sullivan

Defacto Debarment

Defacto debarment occurs when an agency bars a contractor from competing for government contracts for a certain period of time without following the applicable debarment procedures found in the Federal Acquisition Regulations. See 48 C.F.R. § 9.406-3. In brief, the regulations require that an agency provide the contractor with a notice and opportunity to be heard prior to debarment.

Previous courts considering this matter have established a high standard for plaintiffs to meet when trying to establish a defacto debarment claim. To succeed, a contractor must demonstrate a "systematic effort by the procuring agency to reject all of the bidder's contract bids." Stapp Towing, Inc. v United States, 34 Fed. CL 300, 312 (1995). Two options exist to establish a defacto debarment claim: 1) by an agency's statement that it will not award the contractor future contracts; or 2) by an agency's conduct demonstrating that it will not award the contractor future contracts. CRCMarineServ., Inc. v United States, 41 Fed. CL 66, 84 (1998).