Preproposal statement of inquiry was filed as WSR 12-16-098.
Title of Rule and Other Identifying Information: Debarment procedures.
Hearing Location(s): Presentation Room, 1500 Jefferson, Olympia, WA 98501, on March 13, 2013, at 1 p.m. PST.
Date of Intended Adoption: April 17, 2013.
Submit Written Comments to: On-line https://www.surveymonkey.com/s/DESRulemaking, e-mail email@example.com, comments will be accepted through March 25, 2013.
Assistance for Persons with Disabilities: Contact Amy Julsrud at (360) 407-9317 or e-mail firstname.lastname@example.org.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Chapter 39.26 RCW, procurement reform, goes into effect January 1, 2013. RCW 39.26.200 grants the director of the department of enterprise services (DES) the authority to debar a vendor from future state contracting opportunities if the director finds cause, provides notice to the vendor and any affiliates and affords an opportunity to be heard. RCW 39.26.200 (1)(a) provides that the department must establish the debarment process by rule. The purpose of this proposal is to establish the debarment process by rule as required.
Reasons Supporting Proposal: The director of DES will not be able to exercise the new authority to debar vendors and affiliates without enactment of rules that set out the process for a debarment. The process must provide for due process of the law, so that vendors and affiliates may not be debarred without notice and an opportunity to be heard.
Statutory Authority for Adoption: RCW 39.26.200.
Statute Being Implemented: RCW 39.26.200.
Rule is not necessitated by federal law, federal or state court decision.
Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: To obtain a copy of the rules, or to submit written comments on the rules, please contact either Jack Zeigler, Policy and Rules Manager, phone (360) 407-9209, e-mail email@example.com; written comments on-line https://www.surveymonkey.com/s/DESRulemaking, e-mail firstname.lastname@example.org.
Name of Proponent: DES, governmental.
Name of Agency Personnel Responsible for Drafting[, Implementation and Enforcement]: Roselyn Marcus, 1500 Jefferson Avenue, P.O. Box 41408, Olympia, WA 98504, (360) 407-8569.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The implementation of these rules have no or minimal cost to small business.
A cost-benefit analysis is not required under RCW 34.05.328. DES is not an agency listed in RCW 34.05.328 (5)(a)(i). Further, DES does not voluntarily make section 201 applicable to this rule adoption nor to date, has the joint administrative rules review committee made section 201 applicable to this rule adoption.
December 31, 2012
Policy and Rules Manager
(1) "Affiliate" means a person that is in affiliation with another person or persons. Persons are affiliates of each other and an affiliation exists if, directly or indirectly, either one controls or has the power to control the other or a third party controls or has the power to control both. Factors used to determine control include:
(a) Interlocking management or ownership;
(b) Identity of interests among family members;
(c) Shared facilities and equipment;
(d) Common use of employees; or
(e) A business entity organized following the debarment or proposed debarment of a person which has the same or similar management, ownership, or principal employees as the person that was debarred or proposed for debarment.
(2) "Agency" means any state office or activity of the executive and judicial branches of state government, including state agencies, departments, offices, divisions, boards, commissions, institutions of higher education as defined in RCW 28B.10.016, and correctional and other types of institutions.
(3) "Bid" means an offer, proposal, or quote for goods or services in response to a solicitation issued for such goods or services by the department or an agency of Washington state government.
(4) "Bidder" means an individual or entity who submits a bid, quotation, or proposal in response to a solicitation issued for such goods or services by the department or an agency of Washington state government.
(5) "Contractor" means an individual or entity awarded a contract with an agency to perform a service or provide goods.
(6) "Conviction" means:
(a) A judgment or any other determination of guilt of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or plea, including a plea of nolo contendere; or
(b) Any other resolution that is the functional equivalent of a judgment, including probation before judgment and deferred prosecution. A disposition without the participation of the court is the functional equivalent of a judgment only if it includes an admission of guilt.
(7) "Covered transaction" means submitting a bid, having a bid considered, entering into a state contract, or subcontracting on a state contract.
(8) "Debar" means to prohibit a contractor, individual, or other entity from submitting a bid, having a bid considered, or entering into a state contract during a specified period of time as set forth in a debarment order.
(9) "Debarring official" means the director of the department of enterprise services or the director's designee.
(10) "Department" means the department of enterprise services.
(11) "Director" means the director of the department of enterprise services.
(12) "Person" means any individual, corporation, partnership, association, unit of government, or legal entity, however organized.
(13) "Principal" means:
(a) An officer, director, owner, partner, principal investigator, or other person within a bidder or contractor with management or supervisory responsibilities related to a covered transaction; or
(b) A consultant or other person, whether or not employed by the bidder or contractor, who:
(i) Is in a position to handle state funds;
(ii) Is in a position to influence or control the use of those funds; or
(iii) Occupies a technical or professional position capable of substantially influencing the development or outcome of an activity required to perform the covered transaction.
(14) "Service" for any delivery required under this chapter means personal delivery, delivery by US postal mail service, electronic mail delivery, or delivery by other reasonable commercially acceptable means of delivery.
(1) The actual or potential harm or impact that resulted or may result from the wrongdoing.
(2) The frequency of incidents and/or duration of the wrongdoing.
(3) Whether there is a pattern or prior history of wrongdoing.
(4) Whether the contractor or affiliate has been excluded or disqualified by an agency of the federal government or has not been allowed to participate in state or local contracts or assistance agreements on a basis of conduct similar to one or more of the causes for debarment specified in this rule.
(5) Whether the contractor or affiliate has entered into an administrative agreement with a federal agency or a state or local government that is not government-wide but is based on conduct similar to one or more of the causes for debarment specified in this rule.
(6) Whether the contractor or affiliate has accepted responsibility for the wrongdoing and recognizes the seriousness of the misconduct that led to the cause for debarment.
(7) Whether the contractor or affiliate has paid or agreed to pay all criminal, civil and administrative liabilities for the improper activity, including any investigative or administrative costs incurred by the government, and has made or agreed to make full restitution.
(8) Whether the contractor or affiliate has cooperated fully with the government agencies during the investigation and any court or administrative action. In determining the extent of cooperation, the reviewing official or debarring official may consider when the cooperation began and whether the contractor or affiliate disclosed all known pertinent information.
(9) The kind of positions held by the individuals involved in the wrongdoing.
(10) Whether the contractor or affiliate took appropriate corrective action or remedial measures, such as establishing ethics training and implementing programs to prevent recurrence.
(11) Whether the contractor or affiliate brought the activity cited as a basis for the debarment to the attention of the appropriate government agency in a timely manner.
(12) Whether the contractor or affiliate has fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the reviewing official or debarring official.
(13) Whether the contractor or affiliate had effective standards of conduct and internal control systems in place at the time the questioned conduct occurred.
(14) Whether the contractor or affiliate has taken appropriate disciplinary action against the individuals responsible for the activity that constitutes the cause for debarment.
(15) Other factors appropriate to the circumstances of a particular case.
(a) The name and contact information of the person submitting the referral;
(b) The specific facts supporting the request for debarment, including the dates and locations for all events upon which the referral is made;
(c) The cause or causes specified in RCW 39.26.200(2) upon which debarment may be based that the referring party believes are supported by the facts presented; and
(d) The name of the contractor and any affiliates the referring party believes should be subject to debarment.
(2) The person submitting the referral should provide additional information if requested by the department.
(3) The department will make an initial assessment of the submittal. If the department determines that the facts as presented, if true, support a debarment, the department will conduct a review to substantiate the allegations. Otherwise, the department will reject the referral.
(4) The department will notify the referring party in writing and state whether the referral will be reviewed or rejected.
(2) The notice must:
(a) State the applicable cause(s) for debarment and the factual allegations supporting each cause in terms sufficient to put the contractor and affiliates on notice of the specific reasons for the review;
(b) Identify the statutory and administrative code provisions addressing debarment;
(c) Request a written response to the allegations including any documents that support the response, and state that failure to respond will result in the department making a decision without the recipient's input; and
(d) State the effects of a debarment order.
(3) At the conclusion of the review, the reviewing official will issue a report that includes the following information:
(a) Facts found by the reviewing official;
(b) Whether the facts support debarment; and
(c) Either a recommendation that the referral be dismissed with no further action taken or that a debarment order be issued, including the duration of the debarment.
(a) Date when the recommended debarment takes effect;
(b) Each cause for the recommended debarment and the facts that the reviewing official found that support each cause;
(c) The period of the recommended debarment;
(d) How the recommended debarment will impact either the contractor or affiliates or both;
(e) Either the contractor or affiliates or both may request a hearing in accordance with WAC 200-305-070 to dispute the recommended debarment or the recommended debarment period. The notice shall state that if no hearing is requested within thirty days of the date of issuance of the notice, the debarring official shall issue a final, unappealable debarment order; and
(f) The recommended debarment order will not go into effect until the resolution of the hearing in accordance with WAC 200-305-080.
(2) In the event either an affected contractor or affiliate or both does not request a hearing, the reviewing official will provide the report and recommendation to the debarring official, who may issue a final debarment order. The order shall include the effective date of the debarment order.
The request for hearing must be in writing and must specify:
(1) The name of the person requesting the hearing and the person's contact information; and
(2) The items, facts or conclusions in the notice of recommended debarment that the requestor contests.
(2) The reviewing official shall have the burden of proving the basis for the cause for debarment and the debarment period as set forth in the notice for recommended debarment.
(3) The hearing shall be conducted in accordance with the Administrative Procedure Act, chapter 34.05 RCW and to the extent not covered in this chapter, by the uniform procedural rules in chapter 1-08 WAC.
(4) If the director presides over the hearing, the director shall issue a final decision in writing that includes findings of fact, conclusions of law, and, if appropriate the debarment period. The director shall cause service of the final decision on all parties.
(5) If the director's delegate or an administrative law judge presides over the hearing, she or he shall issue a proposed decision that includes findings of fact, conclusions of law and if appropriate the debarment period. The proposed decision shall also include instructions on how to file objections and written arguments or briefs with the debarring official. Objections and written arguments and briefs must be filed within twenty (20) days from the date of receipt of the proposed decision.
(6) The parties shall agree to the method of service, as defined in WAC 200-305-010(14) for the proposed decision.
(a) Allow the parties to present oral arguments;
(b) Allow the parties to submit additional information if circumstances so warrant; or
(c) Remand the matter to the delegate or administrative law judge for further proceedings;
(2) The debarring official shall issue a final decision that adopts in whole or in part, modifies or rejects the proposed decision. If the decision is to issue a debarment order, the debarment becomes effective on the date specified in the debarment order, but in no event will the debarment order go into effect sooner than five (5) days from the date issued.
(3) The debarring official shall cause service of the final decision on all parties. Either the contractor or affiliate or both may file a petition for review of the final decision to superior court. If neither the contractor nor affiliate appeals within the period set by RCW 34.05.542, the debarring official's decision is conclusive and binding on all parties. The appeal must be filed within 30 days from service of the final decision.
(1) A debarred contractor and affiliate is ineligible to be a participant in any covered transaction or act as a principal of a person participating in any covered transaction as defined in WAC 200-305-010(7).
(2) Debarment constitutes debarment of all divisions or other organizational elements of the debarred person, unless the debarment decision is limited by its terms to specific divisions, organizational elements, or commodities.
(3) A person's debarment shall be effective in every agency, unless the director states in writing the compelling reasons justifying continued business dealings between an agency and the debarred person.
(1) Agencies shall not permit debarred persons to participate in covered transactions, unless the debarring official determines in writing that there is a compelling reason to do so.
(2) If the period of debarment expires or is terminated prior to award, the contracting officer may, but is not required to, consider a debarred persons bid.
(3) Notwithstanding debarment, agencies may continue contracts or subcontracts in existence at the time the person was debarred unless the debarring official determines otherwise.
(4) Agencies shall not add new work, exercise options, or otherwise extend the duration of current contracts or orders for debarred persons, unless the debarring official makes a written determination of the compelling reasons for doing so.
(2) The debarring official may reduce or terminate the debarment based on:
(a) Newly discovered material evidence;
(b) A reversal of the conviction upon which debarment was based;
(c) A bona fide change in ownership or management;
(d) Elimination of other causes for which the debarment was imposed; or
(e) Other reasons the debarring official finds appropriate.
Department of Enterprise Services
1500 Jefferson Street SE
Olympia, WA 98504-1466
Attn: Office of the Director
(2) Or, mailed, by certified mail, return receipt requested to:
Department of Enterprise Services
Office of the Director
1500 Jefferson Street SE
Olympia, WA 98504-1466
(3) Or, electronically mailed to Department of Enterprise Services at the following email address: