9.406-5
Scope of debarment
Misconduct by individuals or partners can be attributed to the contractor or others in joint ventures, making all parties potentially liable for debarment.
Overview
FAR 9.406-5 defines how the consequences of fraudulent, criminal, or seriously improper conduct can extend beyond the individual directly involved to the contractor as a whole, or to others associated with the contractor, including in joint ventures. The regulation allows for the "imputation" of misconduct, meaning that the actions of one person or entity can be attributed to another under certain circumstances, expanding the scope of debarment. This ensures that contractors cannot avoid responsibility for misconduct by attributing it solely to individuals or partners.
Key Rules
- Imputation to Contractor
- Misconduct by individuals associated with a contractor can be attributed to the contractor if it occurred during their duties for the contractor or with the contractor’s knowledge, approval, or acquiescence. Acceptance of benefits from the misconduct is evidence of such knowledge.
- Imputation to Individuals
- Misconduct by a contractor can be attributed to associated individuals (officers, directors, employees, etc.) if they participated in, knew of, or should have known about the conduct.
- Imputation in Joint Ventures
- Misconduct by one contractor in a joint venture can be attributed to other participating contractors if it was done for or on behalf of the joint venture, or with their knowledge, approval, or acquiescence. Acceptance of benefits is evidence of such knowledge.
Responsibilities
- Contracting Officers: Must consider the scope of imputation when evaluating debarment cases.
- Contractors: Must ensure compliance and oversight of all associated individuals and partners, including in joint ventures.
- Agencies: Must enforce debarment provisions and ensure proper investigation of all potentially responsible parties.
Practical Implications
- This section exists to prevent contractors from evading responsibility for misconduct by shifting blame to individuals or partners.
- It impacts daily compliance by requiring robust oversight and ethical standards throughout the organization and in joint ventures.
- Common pitfalls include failing to monitor the actions of employees or partners, or benefiting from improper conduct without taking corrective action.