Chapter Adm 24

Adm 24.05(1)(b) (b) Debarment of a contractor constitutes debarment of all divisions or other organizational elements of the debarred contractor, unless the debarment is explicitly limited to specific divisions or organizational elements.

Adm 24.05(1)(c) (c) The department may extend the debarment to include any affiliates of a debarred contractor, if the affiliates are specifically named and are given written notice of the proposed debarment and an opportunity to respond pursuant to sub. (4).

Adm 24.05(1)(d) (d) When no suspension is in effect pursuant to s. Adm 24.06 at the time the department contemplates debarment of a contractor, no contracts shall be awarded to, and no subcontracts shall be approved for, the contractor, pending a debarment decision by the department.

Adm 24.05(2) (2) Causes for debarment. The secretary may debar a contractor for any one or more of the following causes:

Adm 24.05(2)(a) (a) Conviction, civil judgment or admission of:

Adm 24.05(2)(a)1. 1. Fraud, collusion or any criminal offense in connection with obtaining, attempting to obtain or performing a public contract or subcontract;

Adm 24.05(2)(a)2. 2. Violation of any federal or state antitrust statute relating to the submission of bids or proposals;

Adm 24.05(2)(a)3. 3. Embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property or obstruction of justice; or

Adm 24.05(2)(a)4. 4. Any other offense indicating a lack of business integrity or of business honesty which offense seriously and directly affects the responsibility of the contractor or subcontractor.

Adm 24.05(2)(b) (b) Violation of the terms of any government contract or subcontract when that violation is so serious as to justify debarment, including:

Adm 24.05(2)(b)1. 1. Willful failure to perform in accordance with a contract; or

Adm 24.05(2)(b)2. 2. A history of failure to perform or of unsatisfactory performance of one or more contracts.

Adm 24.05(2)(c) (c) Any other cause that is so serious or compelling that it affects the ability of a contractor or subcontractor to meet all contract requirements.

Adm 24.05(2)(d) (d) Debarment for any of the above causes listed in pars. (a) to (c) by another state or federal entity.

Adm 24.05(3) (3) Procedures for debarment.

Adm 24.05(3)(a) (a) Referral. Department and other state employees having information appropriate for department consideration under this section shall promptly report that information to the secretary.

Adm 24.05(3)(b) (b) Decision-making process; fact finding.

Adm 24.05(3)(b)1. 1. The debarment decision-making process shall be as informal as practicable, consistent with fundamental due process of law principles. The debarment decision-making process shall permit contractors and any specifically named affiliates to submit information and arguments in opposition to a proposed debarment. The department may require that a contractor’s opposition be submitted in writing or may permit an oral presentation in person or through a representative.

Adm 24.05(3)(b)2. 2. Whenever a proposal to debar is based upon a conviction, civil judgment, admission or debarment by another state or federal entity for any of the causes listed in sub. (2), the department need not conduct a fact-finding hearing.

Adm 24.05(3)(b)3. 3. Whenever a proposal to debar is not based upon a conviction, civil judgment, admission or debarment by another state or federal entity, and if the department finds that the contractor’s opposition raises a genuine dispute over facts relevant to the proposed debarment, the department shall conduct a fact-finding hearing. A department hearing examiner shall:

Adm 24.05(3)(b)3.a. a. Permit the contractor to appear with counsel, to submit documents, to present witnesses and to confront and cross-examine any person the department presents;

Adm 24.05(3)(b)3.b. b. Ensure that a transcript of the hearing is prepared and made available to the contractor at a reasonable cost, unless the contractor and the department mutually waive the transcript requirement; and

Adm 24.05(3)(b)3.c. c. Act in accord with and have the authority provided by s. 227.46, Stats.

Adm 24.05(4) (4) Notice of proposal to debar. The department shall initiate a debarment proceeding by informing the involved contractor and any specifically named affiliate by certified mail return receipt requested. The mailed notice shall state:

Adm 24.05(4)(a) (a) That the department is considering a debarment;

Adm 24.05(4)(b) (b) The reasons for the proposed debarment in terms sufficient to notify the contractor of the conduct or transaction upon which debarment is proposed;

Adm 24.05(4)(c) (c) The cause or causes under sub. (2) that the department relies upon for the proposed debarment;

Adm 24.05(4)(d) (d) That the contractor may submit, within 15 days after the date of the department’s mailed notice, a written response providing information or argument in opposition to the proposed debarment;

Adm 24.05(4)(e) (e) The department’s procedures governing debarment decision-making as specified in sub. (5);

Adm 24.05(4)(f) (f) The potential effect of the proposed debarment as provided under s. Adm 24.04; and

Adm 24.05(4)(g) (g) That pending a debarment decision, no contract will be awarded to, and no subcontracts will be approved for, the contractor.

Adm 24.05(5) (5) Department’s debarment decision.

Adm 24.05(5)(a) (a) In debarment actions based upon a conviction, civil judgment, or admission or upon debarment by another state or federal entity for any of the causes listed in sub. (2) or in debarment actions in which no dispute exists over facts relevant to the proposed debarment, the secretary shall make a debarment decision based upon the information in the administrative record, including any submission made by the affected contractor. If no suspension is in effect under s. Adm 24.06, the debarment decision shall be made within 30 days after the secretary receives the written response providing information or argument in opposition to the proposed debarment as provided for in sub. (4) (d).

Adm 24.05(5)(b) (b) In debarment actions in which a fact-finding hearing is necessary under sub. (3) (b) 3., the designated hearing examiner shall prepare written findings of fact, and the secretary or designee shall render a debarment decision based upon those written findings of fact. A cause for debarment shall be established by a preponderance of the evidence. The debarment decision shall be made after the conclusion of the proceedings with respect to the disputed facts.

Adm 24.05(6) (6) Notice of department decision.

Adm 24.05(6)(a) (a) If debarment is imposed, the department shall promptly notify the contractor and any affiliates involved by certified mail return receipt requested. The notice shall contain the following:

Adm 24.05(6)(a)1. 1. Reference to the notice of proposed debarment that initiated the action under sub. (4);

Adm 24.05(6)(a)2. 2. Reasons for debarment; and

Adm 24.05(6)(a)3. 3. Period of debarment, specifying the effective date.

Adm 24.05(6)(b) (b) If debarment is not imposed, the department shall give prompt notice of that fact to the contractor and any affiliates involved by certified mail return receipt requested.

Adm 24.05(7) (7) Period of debarment.

Adm 24.05(7)(a) (a) Debarments shall be for a period commensurate with the seriousness of the cause or causes for debarment. Generally, debarment shall not exceed 3 years. If suspension precedes a debarment, the suspension period shall be considered in determining the debarment period.

Adm 24.05(7)(b) (b) After the department imposes a debarment period upon a contractor, the department may extend that period if it determines that an extension is necessary to protect the public interest. However, an extension may not be based solely on the facts and circumstances upon which the initial debarment was based. Any extension proposed shall follow the procedures in sub. (3) above.

Adm 24.05(7)(c) (c) The department may terminate a debarment or may reduce the period or extent of a debarment, upon the contractor’s request, for reasons considered appropriate by the department, such as:

Adm 24.05(7)(c)1. 1. Newly discovered relevant evidence;

Adm 24.05(7)(c)2. 2. Reversal of the conviction or civil judgment upon which debarment was based;

Adm 24.05(7)(c)3. 3. A bona fide change in ownership or management of the contractor; or

Adm 24.05(7)(c)4. 4. Elimination of the cause or causes for which debarment was imposed.

Adm 24.05(8) (8) Imputed conduct.

Adm 24.05(8)(a) (a) The fraudulent, criminal or other seriously improper conduct of any officer, director, shareholder, partner, employee or other individual associated with a contractor may be imputed to the contractor when the conduct occurred in connection with the individual’s performance of duties for or on behalf of the contractor, or with the contractor’s knowledge, approval or acquiescence. The contractor’s acceptance of the benefits derived from the conduct shall be evidence of the contractor’s knowledge, approval or acquiescence.

Adm 24.05(8)(b) (b) The fraudulent, criminal or other seriously improper conduct of a contractor may be imputed to any officer, director, shareholder, partner, employee or other individual associated with the contractor who participated in, knew of or had reason to know of the contractor’s conduct.

Adm 24.05(8)(c) (c) The fraudulent, criminal or other seriously improper conduct of one contractor participating in a joint venture or similar arrangement may be imputed to other participating contractors if the conduct occurred for or on behalf of the joint venture or similar arrangement or with the knowledge, approval or acquiescence of those contractors. Acceptance of the benefits derived from the conduct shall be evidence of the contractor’s knowledge, approval or acquiescence.

Adm 24.05 History History: CR 10-063: cr. Register December 2010 No. 660, eff. 1-1-11.

Adm 24.06 Adm 24.06 Suspension.

Adm 24.06(1) (1) General.

Adm 24.06(1)(a) (a) The department may, in the public interest, suspend a contractor for any of the causes contained in sub. (2), using the procedures in sub. (3).

Adm 24.06(1)(b) (b) Suspension may be imposed only on the basis of adequate evidence of one or more of the causes set out in sub. (2), pending completion of investigation or legal proceedings, when immediate action is necessary to protect the public interest. In assessing the adequacy of the evidence, the department may consider the amount of available information, the credibility of that information, whether important allegations are corroborated, and what reasonable inferences can be drawn. The department’s assessment may include examination of available basic documents such as contracts, inspection reports and correspondence.

Adm 24.06(1)(c) (c) Suspension of a contractor constitutes suspension of all divisions or other organizational elements of the suspended contractor, unless the suspension is explicitly limited to specific divisions or organizational elements.

Adm 24.06(1)(d) (d) The department may extend the suspension to include any affiliates of a suspended contractor if the affiliates are specifically named and are given written notice of the proposed suspension and an opportunity to respond.

Adm 24.06(2) (2) Causes for suspension.

Adm 24.06(2)(a) (a) The department may suspend a contractor whenever it finds adequate evidence that the contractor has engaged in one or more of the following:

Adm 24.06(2)(a)1. 1. Fraud, collusion or any criminal offense in connection with obtaining, attempting to obtain or performing a public contract or subcontract;

Adm 24.06(2)(a)2. 2. Violation of any federal or state antitrust statute relating to the submission of bids or proposals;

Adm 24.06(2)(a)3. 3. Embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, receiving stolen property or obstruction of justice; or

Adm 24.06(2)(a)4. 4. Any other offense indicating a lack of business integrity or of business honesty, seriously and directly affecting the responsibility of the contractor or subcontractor.

Adm 24.06(2)(b) (b) An indictment for any of the causes set forth in par. (a) may constitute adequate evidence for suspension.

Adm 24.06(2)(c) (c) The department may suspend a contractor whenever it finds adequate evidence of any other cause of so serious or compelling a nature that it affects the ability of a contractor or subcontractor to meet all contract requirements.

Adm 24.06(2)(d) (d) The department may suspend a contractor based upon a suspension or debarment imposed by another state or federal entity for any of the causes in par. (a), (b), or (c).

Adm 24.06(3) (3) Procedures for suspension.

Adm 24.06(3)(a) (a) Referral. Department employees and all other persons having information appropriate for department consideration under this section shall promptly report that information to the secretary.

Adm 24.06(3)(b) (b) Decision-making process; fact-finding.

Adm 24.06(3)(b)1. 1. The suspension decision-making process shall be as informal as practicable, consistent with fundamental due process of law principles. The suspension decision-making process shall permit contractors and any specifically named affiliates to submit information and arguments in opposition to a proposed debarment. The department may require that a contractor’s opposition be submitted in writing or may permit an oral presentation in person or through a representative.

Adm 24.06(3)(b)2. 2. Whenever a proposal to suspend is not based upon an indictment or a suspension or debarment imposed by another state or federal entity, and if the department finds that the contractor’s opposition raises a genuine dispute over facts relevant to the proposed suspension, and if no determination is made on the basis of advice from the department of justice or other prosecuting official that substantial interests of the government in pending or contemplated legal proceedings based upon the same facts as the suspension would be prejudiced, the department shall conduct a fact-finding hearing. A department hearing examiner shall conduct the fact-finding hearing and shall:

Adm 24.06(3)(b)2.a. a. Permit the contractor to appear with counsel, to submit documents, to present witnesses and to confront and cross-examine any person the department presents;

Adm 24.06(3)(b)2.b. b. Ensure that a transcript of the hearing is prepared and made available to the contractor at a reasonable cost, unless the contractor and the department mutually waive the transcript requirement; and

Adm 24.06(3)(b)2.c. c. Act in accord with and have the authority provided by s. 227.46, Stats.

Adm 24.06(3)(c) (c) Notice of suspension. If suspension is imposed, the department shall promptly notify the contractor and any affiliates involved by certified mail return receipt requested. The notice shall state the following:

Adm 24.06(3)(c)1. 1. A decision to suspend has been made, and it was made based upon one or more of the causes enumerated in sub. (2), which cause or causes shall be sufficiently described to notify the contractor but shall not disclose government evidence unnecessarily.

Adm 24.06(3)(c)2. 2. The suspension is temporary pending the completion of an investigation and of whatever legal proceedings may follow.

Adm 24.06(3)(c)3. 3. The effect of the suspension as provided for under s. Adm 24.04 (1).

Adm 24.06(3)(c)4. 4. The contractor may submit within 15 days, or such lesser time as the department shall state, after the date of the department’s certified mailing a written response providing information or argument in opposition to the suspension.

Adm 24.06(3)(c)5. 5. A fact-finding hearing to determine disputed relevant facts shall be conducted under par. (b), unless:

Adm 24.06(3)(c)5.a. a. The suspension is based upon an indictment or upon a suspension or debarment imposed by another state or federal entity; or

Adm 24.06(3)(c)5.b. b. A determination is made, on the basis of advice from the department of justice or another prosecuting official, that substantial interests of the government in pending or contemplated legal proceedings based upon the same facts as the suspension would be prejudiced.

Adm 24.06(3)(c)6. 6. If a fact-finding hearing is required, the department shall schedule a hearing within 30 days after the secretary receives the last written response providing information or argument in opposition to the suspension, as provided for in subd. 4.

Adm 24.06(3)(d) (d) Department’s suspension decision.

Adm 24.06(3)(d)1. 1. In suspension or debarment actions based upon an indictment or a suspension by another state or federal entity for any of the causes enumerated in sub. (2), in suspension actions in which no dispute exists over facts relevant to the suspension or in suspension actions in which a fact-finding hearing to determine disputed relevant facts is denied on the basis of advice from the department of justice or other prosecuting official, the secretary shall make a decision based upon the information in the administrative record, including any submission made by the affected contractor. The suspension decision shall be made within 30 days after the secretary receives the written response providing information or argument in opposition to the proposed suspension as provided in par. (c) 4.

Adm 24.06(3)(d)2. 2. In suspension actions in which a fact-finding hearing is necessary under par. (b) 2., the designated hearing examiner shall prepare written findings of fact, and the secretary or designee shall render a decision based upon those written findings of fact. The suspension decision shall be made as soon as can reasonably be done after the conclusion of the proceedings with respect to the disputed facts.

Adm 24.06(3)(d)3. 3. The department may modify, terminate or leave in effect a suspension for the reasons set forth in s. Adm 24.05 (7) (c) for modifying or terminating a debarment.