Compliance in the Federal Acquisition Regulation in the European context University of Florida, January 18 2019 Professor Michal Kania University of Silesia (Poland) Fulbright Visiting Scholar at the George Washington University

An Introduction. Cambridge Handbook On Compliance Authors Christopher Yukins Jessica Tillipman John Pachter US Debarment: An Introduction. Cambridge Handbook On Compliance University of Florida, January 18 2019

Compliance Under the FAR -- the European context Summary Part 1 General remarks about U.S. suspension and debarment, per the Federal Acquisition Regulation (FAR) Part 2 Suspension and debarment regulation in the European context Thesis Improving EU exclusion (debarment) regulation by using U.S. approaches to compliance University of Florida, January 18 2019

Part 1 General remarks about suspension and debarment Under the FAR 1. Concept of “Present Responsibility’’ 2. Purpose of suspension and debarment 3. Role of compliance measures in suspension and debarment University of Florida, January 18 2019

Concept of Present Responsibility Contractor-specific risks addressed at contract award (by contracting officer) and by a Suspending and Debarring Officer: Reputational Performance University of Florida, January 18 2019

Concept of Present Responsibility FAR 9. 103(a) Purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only For suspension or debarment: In determining whether a contractor is presently responsible, an agency looks to the seriousness of the contractor’s acts or omissions and any remedial measures or mitigating factors counseling against exclusion University of Florida, January 18 2019

Purpose of suspension and debarment – Not punishment FAR 9.402(b) The serious nature of debarment and suspension requires that these sanctions be imposed only in the public interest for the Government’s protection and not for purposes of punishment. Agencies shall impose debarment or suspension to protect the Government’s interest and only for the causes and in accordance with the procedures set forth in the FAR The purpose of suspension and debarment is not punitive but rather to protect the Government and the public interest In other words, to address performance and reputational risks University of Florida, January 18 2019

University of Florida, January 18 2019 Role of compliance in suspension and debarment Under the Federal Acquisition Regulation FAR 9.406-1 Before arriving at any debarment decision, the debarring official should consider factors such as the following: (1) Whether the contractor had effective standards of conduct and internal control systems in place at the time of the activity which constitutes cause for debarment or had adopted such procedures prior to any Government investigation of the activity cited as a cause for debarment University of Florida, January 18 2019

University of Florida, January 18 2019 Role of compliance in assessing responsibility and Suspension /debarment under the FAR FAR 3. 1002(b) requires that contractors have a written Code of Business Ethics and Conduct To promote compliance with such code of business ethics and conduct, contractors should have an employee business ethics and compliance training program and an internal control system that— (1) Are suitable to the size of the company and extent of its involvement in Government contracting; (2) Facilitate timely discovery and disclosure of improper conduct in connection with Government contracts; and (3) Ensure corrective measures are promptly instituted and carried out University of Florida, January 18 2019

University of Florida, January 18 2019 Role of compliance in assessing responsibility and Suspension/debarment under the FAR (continued) The FAR requirements for contractor compliance mirror the requirements of the United States Sentencing Commission’s Organizational Sentencing Guidelines, Manual § 8B 2.1 – Effective Compliance and Ethics Program University of Florida, January 18 2019

Part 2 Assessing U.S. suspension and debarment in the European context 1. Need for sound business relations between EU and the United States, including in Public Procurement 2. Need for transatlantic harmonization in public procurement rules 3. Main differences between the EU and U.S. debarment/exclusion rules University of Florida, January 18 2019

University of Florida, January 18 2019 Need for business and regulatory cooperation in the Transatlatnic relations Intensive work on Transatlantic Trade and Investment Partnership (TTIP) in years 2010-2016 Call for the creation of the strong alliance in challenging areas of global policy University of Florida, January 18 2019

Need for harmonization in public procurement regulatory regimes Possible business exchanges and transatlantic cooperation require an understanding of the main legal and economic constructs on both sides of the Atlantic GWU Law School and King’s College, London hold annual conferences for those exchanges in procurement law University of Florida, January 18 2019

University of Florida, January 18 2019

University of Florida, January 18 2019 Main differences between EU and U.S. suspension and debarment regulations University of Florida, January 18 2019

U.S. suspension and debarment in the European context Thesis Possibility of improving the EU regulation by using U.S. legal constructs Legal space for the adoption of U.S. regulation University of Florida, January 18 2019

U.S. suspension and debarment FAR in the European context Article 57, paragraph 6 of the 2014/24/EU Directive  Any economic operator that is in one of the situations referred to in paragraphs 1 and 4 may provide evidence to the effect that measures taken by the economic operator are sufficient to demonstrate its reliability despite the existence of a relevant ground for exclusion For this purpose, the economic operator shall prove that it has paid or undertaken to pay compensation in respect of any damage caused by the criminal offence or misconduct, clarified the facts and circumstances in a comprehensive manner by actively collaborating with the investigating authorities and taken concrete technical, organisational and personnel measures that are appropriate to prevent further criminal offences or misconduct University of Florida, January 18 2019

University of Florida, January 18 2019 Thank you! Michał Kania University of Silesia (Poland) Fulbright Visiting Scholar at the George Washington University Phone + 1 571-274-7438 Email michal.kania@us.edu.pl University of Florida, January 18 2019