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New US human trafficking law mandates referral of substantiated allegations to agency responsible for suspending and debarring public officials

By on November 4, 2022 0

The United States End Human Trafficking in Government Contracts Act of 2022 (“Act”) was signed into law on October 17, 2022. This Act amends the Human Trafficking Supervision and Investigation Act (22 USC § 7104b) and requires agencies to refer to the agency’s Suspension and Debarment Officer (“SDO”):

  • Substantiated allegations1 human trafficking against a recipient of a federal contract, grant, or cooperative agreement (or any contractor, subrecipient, or agent of the recipient)
  • Notifications of indictments, criminal information or criminal complaints regarding human trafficking

A referral may result in the exclusion of recipients from federal contracts or other federal scholarship programs. Previously, the law only required that the head of an agency consider referring the substantiated allegation to the agency’s SDO, which was one of several corrective actions at the discretion of an agency head.2

The law also requires that, within 90 days of its enactment, the director of the Office of Management Budget submit a report to Congress on the implementation of the law.

Background

According to the Senate Homeland Security and Governmental Affairs Committee report accompanying the law, the impetus for this legislation was an August 4, 2021 report from the Government Accountability Office (“GAO”), GAO-21-546, which found weaknesses in the Ministry of Defense’s oversight of defense contractors and subsequent reports on investigations related to government contracts. The Senate report explained that although “[t]he U.S. government has a zero-tolerance policy for human trafficking among U.S. government employees and contractors,” the GAO “found that foreign workers employed under U.S. government contracts continue to be persistently trafficked”.

In this context, Sen. James Lankford (R-Oklahoma) proposed the bill to better monitor corrective actions taken by agencies. In a Sept. 30, 2022, press release, Senator Lankford said the goal was “to prevent any contractor known to be involved in human trafficking from ever doing business again with US taxpayer dollars.” The lawmaker had previously asserted in a January 13, 2022 editorial that “the hammer must now be swift and strong against participation in human trafficking.”

Take away food

The Act’s mandatory referral of substantiated allegations of human trafficking to agency SDOs should increase their awareness of these allegations and lead to the exclusion of more contractors from federal contracting opportunities.

But the law does not impose a mandatory exclusion for such substantiated allegations.

Instead, agency SDOs retain discretion to restrict entities from doing business with the government under FAR Part 9.4 procedures for recipients of federal procurement contracts or 2 CFR § 180 for recipients of other federal grants. Thus, agency SDOs may still consider several factors in determining whether a contractor is currently liable, including whether a contractor:

  • Had effective standards of conduct or internal controls in place when the conduct occurred
  • Full cooperation with government agencies during an investigation
  • Took appropriate disciplinary action against those responsible for the conduct3
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