9.405-1 Continuation of current contracts
Source: FAR 9.405-1 on acquisition.gov
Agencies may continue existing contracts with debarred or suspended contractors only with proper review, but cannot extend or add new work without a written compelling reason from the agency head.
Overview
FAR 9.405-1 addresses how agencies should handle ongoing contracts with contractors who have been debarred, suspended, proposed for debarment, or voluntarily excluded from federal contracting. It outlines the circumstances under which agencies may continue, terminate, or limit actions on existing contracts and orders with such contractors, and provides specific rules for contractors declared ineligible under 10 U.S.C. 983.
Key Rules
- Continuation of Existing Contracts
- Agencies may continue contracts or subcontracts in place at the time of debarment, suspension, proposed debarment, or voluntary exclusion, unless the agency head decides otherwise. Any termination or modification must be reviewed by contracting, technical, and legal personnel.
- Restrictions on New Actions
- Unless the agency head provides a written determination of compelling reasons, agencies cannot: (i) place orders exceeding the guaranteed minimum under indefinite quantity contracts; (ii) place orders under Federal Supply Schedules, BPAs, or BOAs; or (iii) add new work, exercise options, or extend current contracts/orders with affected contractors.
- Ineligible Contractors under 10 U.S.C. 983
- Covered agencies must terminate existing contracts and refrain from awarding new contracts or orders to contractors declared ineligible under 10 U.S.C. 983, except for contracts at or below the simplified acquisition threshold or for commercial products/services.
Responsibilities
- Contracting Officers: Must review ongoing contracts with affected contractors, seek legal and technical input before termination, and ensure no new work or orders are placed unless justified in writing by the agency head.
- Contractors: Must comply with any agency decisions regarding continuation, modification, or termination of contracts.
- Agencies: Must document compelling reasons for exceptions and ensure compliance with statutory ineligibility requirements.
Practical Implications
- This section ensures agencies do not automatically terminate all contracts with debarred or suspended contractors, but imposes strict limits on new work or extensions. It requires careful review and documentation, reducing risk of improper contract continuation and ensuring statutory compliance. Common pitfalls include failing to obtain required agency head determinations or improperly extending contracts.
(a) Contractors debarred, suspended, proposed for debarment, or voluntarily excluded .
(1) Notwithstanding the debarment, suspension, proposed debarment, or voluntary exclusion, of a contractor, agencies may continue contracts or subcontracts in existence at the time the contractor was debarred, suspended, proposed for debarment, or voluntarily excluded, unless the agency head directs otherwise. A decision as to the type of termination action, if any, to be taken should be made only after review by agency contracting and technical personnel and by counsel to ensure the propriety of the proposed action.
(2) For contractors debarred, suspended, proposed for debarment, or voluntarily excluded, unless the agency head makes a written determination of the compelling reasons for doing so, ordering activities shall not—
(i) Place orders exceeding the guaranteed minimum under indefinite quantity contracts;
(ii) Place orders under Federal Supply Schedule contracts, blanket purchase agreements, or basic ordering agreements; or
(iii) Add new work, exercise options, or otherwise extend the duration of current contracts or orders.
(b) Ineligible contractors. A covered agency, as defined in 9.110-1, shall terminate existing contracts and shall not place new orders or award new contracts with contractors that have been declared ineligible pursuant to http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title10-section983&num=0&edition=prelim" target="_blank">10 U.S.C. 983 (see 9.110), except for contracts at or below the simplified acquisition threshold or contracts for the acquisition of commercial products and commercial services.