Friedler v. Gen. Servs. Admin.

• Decision Date: 21 September 2017
• Docket Number: No. 15–cv–2267 (KBJ),15–cv–2267 (KBJ)
• Citation: 271 F.Supp.3d 40
• Parties: Ariel FRIEDLER, Plaintiff, v. GENERAL SERVICES ADMINISTRATION, et al., Defendants.
• Court: U.S. District Court — District of Columbia

271 F.Supp.3d 40

Ariel FRIEDLER, Plaintiff,

v.GENERAL SERVICES ADMINISTRATION, et al., Defendants.

No. 15–cv–2267 (KBJ)

United States District Court, District of Columbia.

Signed September 21, 2017

Benjamin Conrad Block, Kayleigh Marie Scalzo, Frederic Mark Levy, Covington & Burling LLP, Washington, DC, for Plaintiff.

Benton Gregory Peterson, U.S. Attorney's Office, Washington, DC, for Defendants.

MEMORANDUM OPINION

KETANJI BROWN JACKSON, United States District Judge

At all times relevant to this opinion, Plaintiff Ariel Friedler was the founder and sole shareholder of Symplicity Corporation ("Symplicity"), a company that provides software solutions and information-management services to colleges, universities, and all three branches of the United States government. (See Compl., ECF No. 1, ¶¶ 6, 8.) From 2007 until 2014, Friedler was also Symplicity's President and CEO. (See id. ¶ 6.) On September 4, 2015, Defendants United States General Services Administration ("GSA") and Maria C. Swaby, GSA's Suspension and Debarment Official ("SDO" and, collectively, "Defendants"), debarred Friedler from all federal contracting for nearly four years for what appeared to be three distinct reasons. (See Letter from Maria Swaby to Ariel Friedler (Sept. 4, 2015) ("Final Debarment Notice"), Admin. R. ("A.R.") 1085–89.)¹ The Final Debarment Notice stated, among other things, that Friedler had (1) been convicted of a crime (see id. , A.R. 1085–86 (referring to his 2014 conviction for Conspiracy to Access a Protected Computer Without Authorization, in violation of 18 U.S.C. §§ 371 and 1030 )); (2) violated Swaby's directive that he remain physically absent from Symplicity's offices during a period of suspension that GSA had imposed as a result of his conviction (see id. , A.R. 1086–88); and (3) breached a specific agreement not to perform government-related work while he was suspended (see id ., A.R. 1088–89). In the instant one-count complaint, Friedler maintains that Defendants' decision to debar him was arbitrary, capricious, and in violation of the law under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 – 06, because he was not given notice of all of the grounds for his debarment and an opportunity to respond to each of them prior to the agency's final debarment determination. (See Compl. ¶¶ 47–49.)

Before this Court at present are the parties' cross-motions for summary judgment. (See Pl.'s Mot. for Summ. J. ("Pl.'s Mot."), ECF No. 28; Mem. in Supp. of Pl.'s Mot. ("Pl.'s Mem."), ECF No. 33; Mem. in Supp. of Defs.' Mot. ("Defs.' Mem."), ECF No. 31.) In his motion, Friedler argues, inter alia , that his debarment was procedurally infirm because the Final Debarment Notice included two "new causes" (apart from his criminal conviction) that were raised for the first time in the context of that announcement. (See Pl.'s Mem at 7, 32–34).² Defendants counter that Friedler was afforded ample opportunity to oppose all of the charges against him, and that the two additional grounds referenced in the Notice were not really new "causes" for debarment; instead, Defendants say, these references were merely additional findings of fact that served to extend the term of the debarment that Friedler received as a result of his conviction. (See Defs.' Mem. at 40–41.) New grounds aside, Defendants further argue that, because Swaby was free to debar Friedler based on his prior conviction alone, the debarment determination did not violate the APA. (See id. at 33–35.)

For the reasons explained below, this Court finds that Defendants relied on Friedler's alleged post-conviction conduct in reaching the conclusion that he should be debarred but failed to notify him of these purported violations—a failure that is unquestionably improper under the applicable provisions of the Federal Acquisition Regulation ("FAR"). See 48 C.F.R. § 9.406–3. And because this Court cannot reasonably find that Defendants would have debarred Friedler on the basis of his criminal conviction alone, the Court cannot conclude that the agency's error in relying on the two additional grounds without providing notice was harmless. Therefore, Plaintiff's motion for summary judgment will be GRANTED , Defendants' motion for summary judgment will be DENIED , and the matter will be remanded to the agency for further proceedings not inconsistent with this Memorandum Opinion. A separate Order will follow.

I. BACKGROUND

A. Debarment Procedures Under The Federal Acquisition Regulation

According to the D.C. Circuit, "[d]ebarment is an administrative action which excludes nonresponsible contractors from government contracting" and "effectuate[s] the [federal government's] policy that ‘agencies shall solicit offers from, award contracts to, and consent to subcontracts with responsible contractors only.’ " Caiola v. Carroll , 851 F.2d 395, 397, 398 (D.C. Cir. 1988) (quoting 48 C.F.R. § 9.402(a) ). Title 48, Chapter 1 of the Code of Federal Regulations, which is known as the FAR, sets forth the "policies and procedures governing the debarment and suspension of contractors by agencies[.]" 48 C.F.R. § 9.400(a)(1). The FAR makes clear that, because government contracts are awarded based on the contracting officer's "affirmative determination of [the prospective contractor's] responsibility[,]" id. § 9.103(b), the focus of a debarring official's inquiry is similarly on whether the questionable contractor can demonstrate "present responsibility[.]" Id. § 9.406–1(a) (instructing that, "if a cause for debarment exists," the debarring official should assess whether the contractor can demonstrate "its present responsibility and that debarment is not necessary").

The FAR lists certain circumstances that qualify as potential causes for the debarment of a contractor, including (1) a conviction of, or civil judgment for, an "offense indicating a lack of business integrity or business honesty that seriously and directly affects [his] present responsibility[,]" id. § 9.406–2(a)(5); and (2) "any other cause of so serious or compelling a nature that it affects [his] present responsibility[,]" id. § 9.406–2(c). The FAR also indicates that a debarring official can take into account various facts that demonstrate a contractor's present responsibility notwithstanding the existence of a cause for debarment; these considerations include whether "the contractor brought the activity cited as a cause for debarment to the attention of the appropriate Government agency in a timely manner"; whether "the contractor cooperated fully with Government agencies during the investigation and any court or administrative action"; and whether "the contractor has implemented or agreed to implement remedial measures, including any identified by the Government." Id. § 9.406–1(a). Thus, "[t]he existence of a cause for debarment ... does not necessarily require that the contractor be debarred[,]" id. , and the FAR itself cautions that this "serious" sanction should be "imposed only in the public interest for the Government's protection and not for purposes of punishment[,]" id . § 9.402(b).

Given the severity of the debarment sanction, an agency official who is considering the debarment of a contractor must satisfy certain pre-debarment procedural requirements that are "consistent with principles of fundamental fairness." Id. § 9.406–3(b)(1). The FAR generally requires each contracting agency to "establish procedures governing the debarment decisionmaking process[,]" id ., but section 9.406–3 also lays out a particular process that an agency must follow with respect to every contractor whose debarment is being considered. See id. § 9.406–1(a) (mandating that the debarring official must "us[e] the procedures in [FAR] 9.406–3" to debar a contractor for any of the established causes). Chief among these procedural requirements is the mandate that, with respect to any and all debarment actions, "[a] notice of proposed debarment shall be issued by the debarring official[.]" Id. § 9.406–3(c) ; see also Popal v. Fiore , No. 11-cv-801, 2011 WL 6826176, at *1 (D.D.C. June 17, 2011) ("When debarment is being proposed, a notice must be sent to the contractor informing it and giving the reasons why the action is being considered." (emphasis added)). And the FAR goes further—it specifies that the required notice of proposed debarment "shall" advise the contractor of the following specific information:

(1) That debarment is being considered;

(2) Of the reasons for the proposed debarment in terms sufficient to put the contractor on notice of the conduct or transaction(s) upon which it is based;

(3) Of the cause(s) relied upon under 9.406–2 for proposing debarment;

(4) That, within 30 days after receipt of the notice, the contractor may submit, in person, in writing, or through a representative, information and argument in opposition to the proposed debarment, including any additional specific information that raises a genuine dispute over the material facts;

(5) Of the agency's procedures governing debarment decisionmaking;(6) Of the effect of the issuance of the notice of proposed debarment; and

(7) Of the potential effect of an actual debarment.

48 C.F.R. § 9.406–3(c). A contractor who has received the requisite notice of proposed debarment "must be allowed to submit ‘information and argument in opposition to the proposed debarment.’ " Popal , 2011 WL 6826176, at *1 (quoting 48 C.F.R. § 9.406–3(b)(1) ). And this opportunity is crucial, because the FAR establishes that "if a cause for debarment exists, the contractor has the burden of demonstrating, to the satisfaction of the debarring official, its present responsibility and that debarment is not necessary." 48 C.F.R. § 9.406–1(a) (emphasis added).

If there is a genuine dispute of material fact regarding a proposed debarment that is not based on a conviction or civil judgment, the agency must afford the contractor a hearing. See id. § 9.406–3(b)(2)(i) (describing the circumstances under which the agency...