§ 457.13. Suspension or debarment.
(a) Reasons for suspension or debarment. The Department may temporarily suspend or may debar, for a set period or permanently, a contractor, subcontractor or individual from bidding on or participating in State supervised or funded highway construction work for any of the following reasons:
(1) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements or receiving stolen property.
(2) Commission of fraud or a criminal offense or other improper conduct or knowledge or approval of, or acquiescence in these activities by a contractor or an affiliate, officer, employe or other individual or entity associated with either obtaining, attempting to obtain or performing a public contract or subcontract. The contractor’s acceptance of the benefits derived from the conduct shall be deemed evidence of knowledge, approval or acquiescence.
(3) Violation of Federal or State antitrust statutes.
(4) Violation of a State or Federal law regulating campaign contributions.
(5) Violation of a State or Federal environmental law.
(6) Violation of a State or Federal law regulating hours of labor, minimum wage standards or prevailing wage standards; discrimination in wages; or child labor violations.
(7) Violation of the Workers’ Compensation Act (77 P. S. § § 1—2626).
(8) Violation of a State or Federal law prohibiting discrimination in employment.
(9) Suspension or debarment by the Commonwealth or an agency thereof or an agency of another state or by an agency or department of the Federal government.
(10) Three or more occurrences where a contractor has been declared ineligible for a contract.
(11) Unsatisfactory performance including failure to comply with the terms of a Commonwealth contract or subcontract including:
(i) Willful failure to perform in accordance with the terms of one or more contracts, or a history of failure to perform, or of unsatisfactory performance of one or more contracts, or offering unbalanced bids.
(ii) Failure to complete the work in the time frame specified in the contract.
(iii) Being declared in default on prior work or project.
(iv) Failure to submit documents, information or forms as required by contract.
(v) Making false statements or failing to provide information or otherwise to cooperate with the contracting agency, the Office of State Inspector General or other Commonwealth authorities.
(vi) Discrimination in violation of laws or regulations in the conduct of business as a contractor.
(12) Providing false or misleading information to the Office of State Inspector General, Office of the Budget, the Department of the Auditor General, the Office of Attorney General, the Treasury Department, the Board of Claims, or other tribunal or court, the Department, or a representative of an agency as part of any investigation, audit, program review, prequalification statement of certification, contract bids or proposals, contractor applications or claims for payment. This information includes:
(i) Financial statements.
(ii) Nondiscrimination forms.
(iii) Affidavits or statements of compliance with prevailing wage statutes.
(iv) Product descriptive literature and documents submitted in connection with claims for payment made or litigation against Commonwealth agencies.
(13) Other acts or omissions indicating a lack of skill, ability, capacity, quality control, business integrity or business honesty that seriously and directly affect the present responsibility of a contractor or any basis for debarment or suspension in the Commonwealth’s Contractor Responsibility Program, Management Directive 215.9.
(b) Substantial evidence. The filing of criminal charges or initiation of legal proceedings for any of the reasons in subsection (a)(1)—(8) may constitute substantial evidence for suspension.
(c) Debarment based on criminal conduct. Debarment solely on the basis of any of the reasons in subsection (a)(1)—(8) shall be based on a conviction or plea of guilty or no contest in a court of law or a finding, ruling or adjudication of guilt for noncompliance by a court of law, commission, board or administrative body. It is not required that the appeals process be completed or that a sentence or other penalty be imposed.
(d) Effect of appeal. The filing of an appeal does not constitute a basis for delay or postponement of a suspension/debarment action.
(e) Suspension for criminal conduct. If a contractor, subcontractor or individual is suspended because of the filing of criminal charges or initiation of legal proceedings for other applicable reasons in subsection (a)(1)—(8) and there has been no conviction or ruling sufficient to justify debarment within the suspension period, the Department may, if appropriate, based on all of the relevant facts, initiate debarment proceedings.
(f) Denial or nonrenewal. Denial of prequalification or refusal to renew prequalification for any of the reasons set forth in this section shall constitute a suspension or debarment for the purposes of this chapter. The Department will advise the contractor in writing accordingly.
(g) Suspension procedure. When a suspension is imposed against a contractor or an affiliate, the Department will immediately notify the contractor and any specifically named affiliate, officer, employe or other individual or entity associated with the contractor, by certified mail, return receipt requested and regular mail that it has been:
(1) Suspended for an initial period of up to 3 months accompanied by a concise statement of the reasons for the suspension.
(2) Declared ineligible for Department contracting and subcontracting pending the completion of investigation and ensuing legal proceedings. During the suspension period, the contractor shall make available all relevant documents, records and information to investigators.
(h) Reply to suspension. A contractor, subcontractor or individual suspended by the Department may, within 21 days after the suspension mailing date, submit, in person, in writing, or through a representative, information in opposition to the suspension. Upon review of the information or the completion of an investigation, or both, the Department will notify the contractor, subcontractor or individual whether the suspension shall be continued or withdrawn or whether debarment proceedings will be initiated.
Source The provisions of this § 457.13 adopted September 21, 1973, effective September 22, 1973, 3 Pa.B. 2133; amended April 11, 1979, effective April 14, 1979, 9 Pa.B. 1308; amended November 28, 1980, effective November 29, 1980, 10 Pa.B. 4470; amended April 11, 1997, effective July 1, 1997, 27 Pa.B. 1798. Immediately preceding text appears at serial page (134719).
Notes of Decisions Discretion
Department of Transportation did not abuse its discretion in imposing 3-year suspension which prevented contractor from bidding on government contracts, where it was discovered that contractor had been convicted of violation of Federal anti-trust laws in regard to bid on Department of Transportation contract, despite dismissal of employe responsible for violation, which action was taken after suspension letter was received. Latrobe Road Construction, Inc. v. Department of Transportation, 527 A.2d 214 (Pa. Cmwlth. 1987); appeal denied 536 A.2d 1335 (Pa. 1987).
Due Process
The procedures of § 457.13 providing for notice of suspension and a ‘‘reply,’’ but never an actual hearing, violate due process. Balfour Beatty Construction Co. v. Department of Transportation, 783 A.2d 901 (Pa. Cmwlth. 2001).
Exhaustion of Administrative Remedies
Because the contractor claims that the Department’s regulations violate constitutional due process requirements, the expertise of the Secretary is not required and there is no need to exhaust administrative remedies before filing an appeal to court. The parties’ arguments with respect to notice and timing of filing administrative appeals are therefore moot. Balfour Beatty Construction Co. v. Department of Transportation, 783 A.2d 901 (Pa. Cmwlth. 2001).
Management Directive
Management directive relied on by Department of Transportation to debar contractor due to criminal charges brought against two former employees based on actions outside scope of their employment lacked full force and effect of law and was unenforceable; directive was only an internal procedural directive and not a regulation and was contrary to statute and regulations that set forth debarment procedures. Schuylkill Products v. Dept. of Transportation, 962 A.2d 1249, 1254 (Pa. Cmwlth. 2008).
Nature of Notice
A notice of suspension or debarment is not in the nature of a rule to show cause. Unlike a rule to show cause, it does not contain a notice that allegations may deemed admitted if not challenged. Balfour Beatty Construction Co. v. Department of Transportation, 783 A.2d 901 (Pa. Cmwlth. 2001).
Reply to Suspension Notice
The failure to file a reply to a notice of suspension within 21 days does not preclude the contractor from seeking review of the suspension. Section 457.13(h) permits a contractor to submit information to the Department, but does not require it. Even in the absence of a reply, the Department is to continue its investigation. Balfour Beatty Construction Co. v. Department of Transportation, 783 A.2d 901 (Pa. Cmwlth. 2001).
Cross References This section cited in 67 Pa. Code § 457.16 (relating to sublettings); and 67 Pa. Code § 459.3 (relating to permit application procedure).
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
