PART 3485 - NONPROCUREMENT DEBARMENT AND SUSPENSION
Source:
77 FR 18673, Mar. 28, 2012, unless otherwise noted.
§ 3485.12 What does this part do?
(a)
(1) The Department of Education (the “Department” or “ED”) adopts subparts A through I of the Office of Management and Budget guidance in 2 CFR part 180. Thus, this part gives regulatory effect to the OMB guidance and supplements the guidance as needed for the Department. This part satisfies the requirements in section 3 of Executive Order 12549, “Debarment and Suspension” (3 CFR part 1986 Comp., p. 189), Executive Order 12689, “Debarment and Suspension” (3 CFR part 1989 Comp., p. 235) and 31 U.S.C. 6101 note (Section 2455, Pub. L. 103-355, 108 Stat. 3327).
(2) The table of contents for this part contains only those sections in part 3485 that include supplements to the guidance in part 180 and new sections needed to implement the guidance for the Department's programs. In those sections of the OMB guidance that are supplemented, the section in part 3485 includes both the text of the OMB guidance that is not affected by the change and any additional paragraphs that need to be added to the OMB guidance. For example, § 180.220 of this title contains only paragraphs (a) and (b). The text of § 3485.220, which supplements § 180.220 to extend lower-tier transactions to certain transactions below the primary tier, includes both the text of paragraph (a) and (b) of § 180.220 and the text of added paragraph (c).
(3) In those sections in part 180 that do not have paragraph designations and that the Department supplements, the section in this part implementing the OMB guidance designates the undesignated paragraph from part 180 as paragraph (a) and the first supplemental paragraph as paragraph (b). For example, 2 CFR 180.330 includes an undesignated lead in paragraph and two subparagraphs designated (a) and (b). In § 3485.330, the undesignated paragraph in 2 CFR 180.330 is designated paragraph (a) and the two subparagraphs are designated paragraphs (1) and (2). The added paragraphs are designated paragraph (b) and (c).
(b) The authority for all the provisions in 2 CFR part 180 as adopted in this part is listed as follows.
§ 3485.22 Does this part apply to me?
This part applies to you if you are—
(a) A participant or principal in a “covered transaction” (see subpart B of this part and the definition of “nonprocurement transaction” in § 180.970 of this title).
(b) A respondent in a suspension or debarment action of the Department.
(c) An ED deciding official; or
(d) An ED officer authorized to enter into any type of nonprocurement transaction that is a covered transaction.
§ 3485.32 What policies and procedures must I follow?
The Department's policies and procedures that you must follow are the policies and procedures specified in this part and in Subparts A through I of 2 CFR part 180. The contracts that are covered transactions, for example, are specified in § 3485.220. Section 180.205 of this title does not require supplementation, so it is not included in the table of contents for this part and is not separately stated in this part.
Subpart A - General
§ 3485.137 May the Department grant an exception to let an excluded person participate in a covered transaction?
(a) Yes, the Secretary delegates to the ED Deciding Official the authority under this section to grant an exception permitting an excluded person to participate in a particular covered transaction.
(b) If the ED Deciding Official grants an exception, the exception must be in writing and state the reason(s) for deviating from the Governmentwide policy in Executive Order 12549.
Subpart B - Covered Transactions
§ 3485.220 Are any procurement contracts included as covered transactions?
(a) Covered transactions under this part—
(1) Do not include any procurement contracts awarded directly by a Federal agency; but
(2) Do include some procurement contracts awarded by non-Federal participants in nonprocurement covered transactions.
(b) Specifically, a contract for goods or services is a covered transaction if any of the following applies:
(1) The contract is awarded by a participant in a nonprocurement transaction that is covered under § 180.210 of this title, and the amount of the contract is expected to equal or exceed $25,000.
(2) The contract requires the consent of an official of a Federal agency. In that case, the contract, regardless of the amount, always is a covered transaction, and it does not matter who awarded it. For example, it could be a subcontract awarded by a contractor at a tier below a nonprocurement transaction, as shown in the Appendix to Part 3485—Covered Transactions.
(3) The contract is for Federally-required audit services.
(4) The contract is to perform services as a third party servicer in connection with a title IV, HEA program.
(c) In addition to the contracts covered under 2 CFR 180.220(b) of the OMB guidance, this part applies to any contract, regardless of tier, that is awarded by a contractor, subcontractor, supplier, consultant, or its agent or representative in any transaction, if the contract is to be funded or provided by ED under a covered nonprocurement transaction and the amount of the contract is expected to equal or exceed $25,000. This extends the coverage of the ED nonprocurement suspension and debarment requirements to all lower tiers of subcontracts under covered nonprocurement transactions, as permitted under the OMB guidance at 2 CFR 180.220(c) (see optional lower tier coverage in the figure in Appendix A to Part 3485—Covered Transactions).
Subpart C - Responsibilities of Participants Regarding Transactions
§ 3485.310 What must I do if a Federal agency excludes a person with whom I am already doing business in a covered transaction?
(a) You as a participant may continue covered transactions with an excluded person if the transactions were in existence when the agency excluded the person. However, you are not required to continue the transactions, and you may consider termination. You should make a decision about whether to terminate and the type of termination action, if any, only after a thorough review to ensure that the action is proper and appropriate.
(b) You may not renew or extend covered transactions (other than no-cost time extensions) with any excluded person, unless another Federal agency responsible for the transaction grants an exception under § 180.135 of this title or ED grants an exception under § 3485.137.
(c) If you are a title IV, HEA participant, you may not continue a title IV, HEA transaction with an excluded person after the effective date of the exclusion unless permitted by 34 CFR 668.26, 682.702, or 668.94, as applicable.
§ 3485.315 May I use the services of an excluded person as a principal under a covered transaction?
(a) You as a participant may continue to use the services of an excluded person as a principal under a covered transaction if you were using the services of that person in the transaction before the person was excluded. However, you are not required to continue using that person's services as a principal. You should make a decision about whether to discontinue that person's services only after a thorough review to ensure that the action is proper and appropriate.
(b) You may not begin to use the services of an excluded person as a principal under a covered transaction unless another Federal agency responsible for the transaction grants an exception under § 180.135 of this title or, if ED took the action, an ED deciding official grants an exception under § 3485.137.
(c) If you are a title IV, HEA participant—
(1) You may not renew or extend the term of any contract or agreement for the services of an excluded person as a principal with respect to a title IV, HEA transaction; and
(2) You may not continue to use the services of that excluded person as a principal under this kind of an agreement or arrangement more than 90 days after you learn of the exclusion or after the close of the Federal fiscal year in which the exclusion takes effect, whichever is later.
§ 3485.330 What methods must I use to pass requirements down to participants at lower tiers with whom I intend to do business?
(a) Before entering into a covered transaction with a participant at the next lower tier, you must require that participant to—
(1) Comply with this subpart as a condition of participation in the transaction. You must do so using the method specified in paragraph (b) of this section; and
(2) Pass the requirement to comply with this subpart to each person with whom the participant enters into a covered transaction at the next lower tier.
(b) To communicate the requirements in this part to a participant, you must include a term or condition in the transaction that requires the participant's compliance with part 180, subpart C, of this title, as adopted at § 3485.12, and requires the participant to include a similar term or condition in lower-tier covered transactions.
(c) The failure of a participant to include a requirement to comply with Subpart C of 2 CFR part 180 in the agreement with a lower tier participant does not affect the lower tier participant's responsibilities under this part.
Subpart D - Responsibilities of the Department's Officials Regarding Transactions
§ 3485.415 What must I do if a Federal agency excludes the participant or a principal after I enter into a covered transaction?
(a) You as a Federal agency official may continue covered transactions with an excluded person, or under which an excluded person is a principal, if the transactions were in existence when the person was excluded. You are not required to continue the transactions, however, and you may consider termination. You should make a decision about whether to terminate and the type of termination action, if any, only after a thorough review to ensure that the action is proper.
(b) You may not renew or extend covered transactions (other than no-cost time extensions) with any excluded person, or under which an excluded person is a principal, unless you obtain an exception under § 3485.137.
(c) Title IV, HEA transactions. If you are a title IV, HEA participant—
(1) You may not renew or extend the term of any contract or agreement for the services of an excluded person as a principal with respect to a title IV, HEA transaction; and
(2) You may not continue to use the services of that excluded person as a principal under this kind of an agreement or arrangement more than 90 days after you learn of the exclusion or after the close of the Federal fiscal year in which the exclusion takes effect, whichever is later.
§ 3485.437 What method do I use to communicate to a participant the requirements described in § 180.435 of this title?
To communicate the requirements in this part to a participant, you must include a term or condition in the transaction that requires the participant's compliance with part 180, subpart C, of this title, as adopted at § 3485.12 and requires the participant to include a similar term or condition in lower-tier covered transactions.
Subpart E [Reserved]
Subpart F - General Principles Relating to Suspension and Debarment Actions
§ 3485.611 What procedures do we use for a suspension or debarment action involving a title IV, HEA transaction?
(a) If we suspend a title IV, HEA participant under Executive Order 12549, we use the following procedures to ensure that the suspension prevents participation in title IV, HEA transactions:
(1) The notification procedures in § 180.715 of this title.
(2) Instead of the procedures in §§ 180.720 through 180.760 of this title, the procedures in 34 CFR part 668, subpart G, or 34 CFR part 682, subpart D or G, as applicable.
(3) In addition to the findings and conclusions required by 34 CFR part 668, subpart G, or 34 CFR part 682, subpart D or G, the suspending official, and, on appeal, the Secretary determines whether there is sufficient cause for suspension as explained in § 180.700 of this title.
(b) If we debar a title IV, HEA participant under E.O. 12549, we use the following procedures to ensure that the debarment also precludes participation in title IV, HEA transactions:
(1) The notification procedures in §§ 180.805 and 180.870 of this title.
(2) Instead of the procedures in §§ 180.810 through 180.885 of this title, the procedures in 34 CFR part 668, subpart G, or 34 CFR part 682, subpart D or G, as applicable.
(3) On appeal from a decision debarring a title IV, HEA participant, we issue a final decision after we receive any written materials from the parties.
(4) In addition to the findings and conclusions required by 34 CFR part 668, subpart G, or 34 CFR part 682, subpart D or G, the debarring official, and, on appeal, the Secretary determines whether there is sufficient cause for debarment as explained in § 180.800 of this title.
§ 3485.612 When does an exclusion by another agency affect the ability of the excluded person to participate in a title IV, HEA transaction?
(a) If a title IV, HEA participant is debarred by another agency under E.O. 12549, using procedures described in paragraph (d) of this section, that party is not eligible to enter into title IV, HEA transactions for the duration of the debarment.
(b)
(1) If a title IV, HEA participant is suspended by another agency under E.O. 12549 or under a proposed debarment under the Federal Acquisition Regulation (FAR) (48 CFR part 9, subpart 9.4), using procedures described in paragraph (d) of this section, that party is not eligible to enter into title IV, HEA transactions for the duration of the suspension.
(2)
(i) The suspension of title IV, HEA eligibility as a result of suspension by another agency lasts for at least 60 days.
(ii) If the excluded party does not object to the suspension, the 60-day period begins on the 35th day after that agency issues the notice of suspension.
(iii) If the excluded party objects to the suspension, the 60-day period begins on the date of the decision of the suspending official.
(3) The suspension of title IV, HEA eligibility does not end on the 60th day if—
(i) The excluded party agrees to an extension; or
(ii) Before the 60th day we begin a limitation or termination proceeding against the excluded party under 34 CFR part 668, subpart G, or part 682, subpart D or G.
(c)
(1) If a title IV, HEA participant is debarred or suspended by another Federal agency—
(i) We notify the participant whether the debarment or suspension prohibits participation in title IV, HEA transactions; and
(ii) If participation is prohibited, we state the effective date and duration of the prohibition.
(2) If a debarment or suspension by another agency prohibits participation in title IV, HEA transactions, that prohibition takes effect 20 days after we mail notice of our action.
(3) If the Department or another Federal agency suspends a title IV, HEA participant, we determine whether grounds exist for an emergency action against the participant under 34 CFR part 668, subpart G, or part 682, subpart D or G, as applicable.
(4) We use the procedures in § 3485.611 to exclude a title IV, HEA participant excluded by another Federal agency using procedures that did not meet the standards in paragraph (d) of this section.
(d) If a title IV, HEA participant is excluded by another agency, we debar, terminate, or suspend the participant—as provided under this part, 34 CFR part 668, or 34 CFR part 682, as applicable—if that agency followed procedures that gave the excluded party—
(1) Notice of the proposed action;
(2) An opportunity to submit and have considered evidence and argument to oppose the proposed action;
(3) An opportunity to present its objection at a hearing—
(i) At which the agency has the burden of persuasion by a preponderance of the evidence that there is cause for the exclusion; and
(ii) Conducted by an impartial person who does not also exercise prosecutorial or investigative responsibilities with respect to the exclusion action;
(4) An opportunity to present witness testimony, unless the hearing official finds that there is no genuine dispute about a material fact;
(5) An opportunity to have agency witnesses with personal knowledge of material facts in genuine dispute testify about those facts, if the hearing official determines their testimony to be needed, in light of other available evidence and witnesses; and
(6) A written decision stating findings of fact and conclusions of law on which the decision is rendered.
Subpart G - Suspension
§ 3485.711 When does a suspension affect title IV, HEA transactions?
(a) A suspension under § 3485.611(a) takes effect immediately if the Secretary takes an emergency action under 34 CFR part 668, subpart G, or 34 CFR part 682, subpart D or G, at the same time the Secretary issues the suspension.
(b)
(1) Except as provided under paragraph (a) of this section, a suspension under § 3485.611(a) takes effect 20 days after those procedures are complete.
(2) If the respondent appeals the suspension to the Secretary before the expiration of the 20 days under paragraph (b)(1) of this section, the suspension takes effect when the respondent receives the Secretary's decision.
Subpart H - Debarment
§ 3485.811 When does a debarment affect title IV, HEA transactions?
(a) A debarment under § 3485.611(b) takes effect 30 days after those procedures are complete.
(b) If the respondent appeals the debarment to the Secretary before the expiration of the 30 days under paragraph (a) of this section, the debarment takes effect when the respondent receives the Secretary's decision.
Subpart I - Definitions
§ 3485.937 ED Deciding Official.
The ED Deciding Official is an officer of the Department who has delegated authority under the procedures of the Department of Education to decide whether to affirm a suspension or enter a debarment.
§ 3485.952 HEA.
HEA means the Higher Education Act of 1965, as amended.
§ 3485.995 Principal.
Principal means—
(a) An officer, director, owner, partner, principal investigator, or other person within a participant with management or supervisory responsibilities related to a covered transaction; or
(b) A consultant or other person, whether or not employed by the participant or paid with Federal funds, who—
(1) Is in a position to handle Federal funds;
(2) Is in a position to influence or control the use of those funds; or
(3) Occupies a technical or professional position capable of substantially influencing the development or outcome of an activity required to perform the covered transaction.
(c) For the purposes of Department of Education title IV, HEA transactions—
(1) A third-party servicer, as defined in 34 CFR 668.2 or 682.200; or
(2) Any person who provides services described in 34 CFR 668.2 or 682.200 to a title IV, HEA participant, whether or not that person is retained or paid directly by the title IV, HEA participant.
§ 3485.1016 Title IV, HEA participant.
A title IV, HEA participant is—
(a) An institution described in 34 CFR 600.4, 600.5, or 600.6 that provides postsecondary education; or
(b) A lender, third-party servicer, or guaranty agency, as those terms are defined in 34 CFR 668.2 or 682.200.
§ 3485.1017 Title IV, HEA program.
A title IV, HEA program includes any program listed in 34 CFR 668.1(c).
§ 3485.1018 Title IV, HEA transaction.
A title IV, HEA transaction includes—
(a) A disbursement or delivery of funds provided under a title IV, HEA program to a student or borrower;
(b) A certification by an educational institution of eligibility for a loan under a title IV, HEA program;
(c) Guaranteeing a loan made under a title IV, HEA program; and
(d) The acquisition or exercise of any servicing responsibility for a grant, loan, or work study assistance under a title IV, HEA program.
Subpart J [Reserved]
Appendix A to Part 3485—Covered Transactions
