United States: Congress Mandates Posting Contractor Integrity And Performance Information On A Publicly-Available Website

On 29 July 2010, President Obama signed into law a requirement that will make a broad range of contractor and grantee integrity and performance information available to the public.¹ The requirement encompasses sensitive information pertaining to the contractor or any of its "principals"² and includes findings of non-responsibility, contract terminations, certain defective pricing findings, criminal convictions, civil judgments, findings of fault in administrative proceedings, and other admissions of fault stemming from the award or performance of a federal government contract or grant.

Two years ago, in the annual defense appropriations bill, Congress directed the U.S. General Services Administration (GSA) to establish the Federal Awardee Performance and Integrity Information System (FAPIIS), a government-wide database that compiles integrity and performance information on all entities awarded federal contracts and grants worth more than $500,000.³ FAPIIS was originally intended to enhance the scope of information available to government officials (primarily contracting officers) for purposes of evaluating the business ethics and expected performance quality of prospective contractors and protecting the government from awarding contracts to non-responsible contractors. After several stakeholders, including the Bush Administration and industry, identified serious concerns associated with public access to the database (e.g., it could contain incorrect information that was not adequately vetted by the government), Congress initially decided that FAPIIS should not be publically available and limited access to federal acquisition officials, officials identified by the GSA Administrator, and the Chairman and Ranking Member of the Congressional Committees having jurisdiction.

The new law, included in a supplemental appropriations bill through an amendment introduced by Senator Bernie Sanders (I-VT), reverses Congress' initial decision to keep FAPIIS non-public by requiring that GSA post FAPIIS information (other than past performance reviews) on a publicly-available website. The Sanders Amendment is the latest in a series of Congressional mandates intended to improve the transparency of the federal procurement process. Most notably, in the Federal Funding Accountability and Transparency Act, Congress required the Office of Management and Budget (OMB) to establish a free, publicly-available website containing basic information for all federal contracts and awards and first-tier subcontracts and subawards over $25,000.⁴ The Sanders Amendment, however, significantly exceeds the scope of the pre-existing requirements by making sensitive integrity and performance information publicly available.

Congress' directive to make FAPIIS information publicly-available comes at a time when contractors are trying to understand and comply with a final Federal Acquisition Regulation (FAR) rule issued in March 2010 to implement the original FAPIIS requirements.⁵ Much of the FAPIIS information is compiled from existing systems, including the Excluded Parties List System (EPLS), the Past Performance Information Retrieval System (PPIRS), and the Contractor Performance Assessment Reporting System (CPARS). However, certain data must be collected directly from contractors and grantees. To that end, a new FAR clause requires that contractors submitting proposals on federal contracts over $500,000 and holding more than $10 million in active contracts or grants at the time of proposal submission disclose certain criminal, civil, or administrative proceedings. Specifically, covered contractors must disclose whether, in connection with the award or performance of a federal contract or grant, the contractor or any of its principals have been the subject of a proceeding within the past five years at the federal or state level that resulted in:

• a criminal conviction;
• a finding of civil fault and liability that results in a fine, penalty, reimbursement, restitution, or damages of $5,000 or more;
• a finding of fault and liability in an administrative proceeding that results in a fine of $5,000 or more, or reimbursement, restitution, or damages in excess of $100,000; or
• the settlement in a criminal, civil, or administrative proceeding resulting in an admission of fault by the contractor where the proceeding could have resulted in any of the outcomes above.

When competing for a contract valued at more than $500,000, covered contractors must certify that the FAPIIS information it disclosed through the Central Contractor Registration (CCR) system is "current, accurate, and complete" at the time of the submission of its proposal. Further, another new FAR clause requires that contractors update the information at least every six months.

Contracting officers and suspension and debarment officials are also obligated to enter data into FAPIIS, including contracts terminated for default, affirmative findings of non-responsibility, suspension and debarment actions, and administrative agreements entered into in lieu of suspension or debarment.⁶ When the government posts this or other types of information affecting a contractor's record of responsibility and performance to the FAPIIS system, the contractor must be given an opportunity to respond in writing. The contractor's comments are retained in FAPIIS with the government information and will also become publicly available under the new law.

Public access to the FAPIIS system and the sensitive contractor information it contains raises a series of important questions, including the following:

• When will the FAPIIS information be made available to the public? The statute does not provide a deadline by which GSA must do so.
• Will the public be able to access all previously non-public contractor data immediately or will access occur gradually as the covered contracts are amended so that the language limiting FAPIIS access to certain government officials is removed?
• How will the requirement to make FAPIIS information publicly available be reconciled with the government's obligations under the Trade Secrets Act⁷ and Exemption 4 of the Freedom of Information Act to protect contractor proprietary information?⁸
• How broadly will the exception for "past performance reviews" be applied?
• What steps, if any, will the government take to ensure that the FAPIIS system does not lead to de facto debarments or "blacklisting" of contractors?
• How will the government ensure that the publicly-available information is accurate? What remedies will be available to contractors if inaccurate information is posted to the publicly-available website?

The drafters of the implementing regulations will have to address each of these questions and many others when implementing the new requirement to make FAPIIS information available to the public.

Footnotes

1 Supplemental Appropriations Act for Fiscal Year 2010, § 3010, Pub. L. No. 111-212.

2 FAR 2.101 defines a principal as an officer, director, owner, partner, or person having primary management or supervisory responsibilities within a business entity.

3 Duncan Hunter National Defense Authorization Act for Fiscal Year 2009, § 872, Pub. L. No. 110-417.

4 Pub. L. No. 109-282.
5 75 Fed. Reg. 14,059 (Mar. 23, 2010). The Office of Management and Budget also recently issued proposed guidance on the use of FAPIIS for grants. See 75 Fed. Reg. 7,316 (Feb. 18, 2010).

6 The requirement does not apply to agency actions such as contract audits, site visits, corrective plans, or inspections of deliverables.

7 18 U.S.C. § 1905.

8 5 U.S.C. § 552(b)(4).

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