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Due Process of Law Rights of Government Contractors who are Denied Work or Public Bidding Rights due to 'De Facto Debarment' from Federal, State or Local Government Bidding or Public Contracting

Government Contractors who have been accused of by a Government agency of committing offenses or conduct which constitute grounds for “debarment” under the government contract, regulations, or other law, are frequently prevented from bidding on public or government contracts even before any debarment hearing is held and before or the existence of those grounds have been finally determined by the public agency.

One example of this is found in paragraph 9.405 and related sections of the Federal Acquisition, Regulations (“F.A.R.”), where a contractor who has been “proposed” for debarment may not be a bidder or subcontractor on any public contract, even though it has not yet been found to be guilty of anything at a hearing!

Similar “de facto debarments” are often imposed by state and local public agencies.

However, because a low bidder on a competitively bid contract, or one who has contracted with such an agency in the past, has a sort of “property right” or liberty right in a government contract, the Due Process of Law Provisions of the U.S. and State Constitutions require that the public agency give you some sort of “Due Process Hearing”, where the contractor can contest the allegations against him, before he may be barred or prohibited from public contracting.

The required nature of this hearing is still unclear in the law, but it presumably includes the right to present testimony and witnesses in opposition to the allegations made, and some sort of fair decision by an objective hearing officer, administrative law judge, or other official.

Bidders found to be not “responsible” or reliable bidders on a public contract also have similar Due Process rights under California Law.

Consequently, if you are denied a contract based on a “proposed” or “de facto” debarment or finding of non-responsibility under the F.A.R. or other wise, it is advisable to immediately consult an experienced government contract attorney and in writing demand a Prompt Due Process hearing on the charges or accusations against you.

And, of course, if a hearing is granted or allowed, you must put forth your best factual and legal arguments and testimony challenging the charges, similar to what might be done at a trial or other type of evidentiary “hearing”.

Recovery of lost profits or other damages for improper debarment, suspension from public bidding, or loss of a public contract are often difficult or impossible to obtain under the current state of the law. Therefore, your best efforts must be immediately directed towards challenging the debarment, suspension or disqualification in a hearing and later in Court, if necessary.

If you fail to do so, you will likely lose, and your ability to contest the findings against you in a Court administrative review proceeding will be minimal, as you will be held to these prior standards of presentation by the Court.

Consequently, if you are ever accused of improper practices or proposed for debarment or found to be a “non-responsible bidder”, you should immediately and in writing request a hearing on the accusations against, you and retain an experienced government contact attorney to help you assemble and present evidence, witnesses, and legal arguments in your defense.

If you fill to do so, you will likely lose any ability to effectively challenge any findings against you in Court, and will not be able to recover lost income or profits.

N.B. The contents of this Article do not constitute legal advice or create an attorney-client relationship, and you may not rely on it without seeking legal advice regarding your particular situation and contract from a competent government construction contracts attorney. Please also note that contracts very, and statutes and case law are frequently changing, and thus these materials may become outdated or incorrect.

For further information on this topic and how the current law may apply to your particular project and issues, Contact Us via email, phone (415)788-1881 or visit our website at www.wolfflaw.com for other contract information.

© 2011, George W. Wolff all rights reserved