Per FAR 52.209-6 (c)The Contractor shall require each proposed subcontractor whose subcontract will exceed the threshold specified in FAR 9.405-2(b) on the date of subcontract award, other than a subcontractor providing a commercially available off-the-shelf item, to disclose to the Contractor, in writing, whether as of the time of award of the subcontract, the subcontractor, or its principals, is or is not debarred, suspended, proposed for debarment, or voluntarily excluded, by the Federal Government.

If we put the certification on the PO for the supplier to sign , but the supplier doesn’t sign the PO the day it was issued, is that a problem?

15 hours ago, rsmith said:

If we put the certification on the PO for the supplier to sign , but the supplier doesn’t sign the PO the day it was issued, is that a problem?

I guess it depends on the context of "problem".

Would you not request such certification prior to issuing the PO in the quote/solicitation process and do due diligence to determine if the certification is correct? Could not that certification have a statement of something like "Upon issuance of a purchase order in response to this request for quotation you the seller hereby certifies that upon promise to ship the goods or by actually shipping the goods hereby cerifies that is not debarred........"

Noting that the ideal with regard to the clause is for a prime/subcontractor to report that the prime/subcontractor intends to use a lower tier subcontractor that is debarred etc. and it is determined post issuance that the contractor is debarred etc. the prime/subcontractor in the case of a "surprise" post issuance finding of a debarement etc. would be left to either canceling the PO or reporting per the clause.

1 minute ago, C Culham said:

I guess it depends on the context of "problem".

Would you not request such certification prior to issuing the PO in the quote/solicitation process and do due diligence to determine if the certification is correct? Could not that certification have a statement of something like "Upon issuance of a purchase order in response to this request for quotation you the seller hereby certifies that upon promise to ship the goods or by actually shipping the goods hereby cerifies that is not debarred........"

Noting that the ideal with regard to the clause is for a prime/subcontractor to report that the prime/subcontractor intends to use a lower tier subcontractor that is debarred etc. and it is determined post issuance that the contractor is debarred etc. the prime/subcontractor in the case of a "surprise" post issuance finding of a debarement etc. would be left to either canceling the PO or reporting per the clause.

They do SAM.gov checks before issuing the PO but do not get a certification ahead of time , other than yearly reps and certs.

43 minutes ago, rsmith said:

certification

Play on words? Certification as opposed to a disclosure in writing as to is or is not. Seems due dilegence is occuring. A problem if the intent is not to give a PO to a debarred etc. contractor but if it happens then reporting per the clause seems to be the fix in my view. Once reported let the dice roll as they may.

11 minutes ago, C Culham said:

Play on words? Certification as opposed to a disclosure in writing as to is or is not. Seems due dilegence is occuring. A problem if the intent is not to give a PO to a debarred etc. contractor but if it happens then reporting per the clause seems to be the fix in my view. Once reported let the dice roll as they may.

Thanks. Mostly worried about the CPSR team saying this is not sufficient.

20 minutes ago, rsmith said:

Thanks. Mostly worried about the CPSR team saying this is not sufficient.

That is always a worthy thing to worry about. My feeling is that, so long as the supplier does sign within a reasonable time then you should be okay, especially if you can show you are checking the list of parties excluded (or whatever it's called today). However, if you never obtain a signature, then yes, I would think you would be at risk for a finding. Relying solely on annual reps & certs would not be sufficient, in my opinion.

1 hour ago, rsmith said:

Mostly worried about the CPSR team saying this is not sufficient.

Okay CPSR then I suggest you consider this guidance as to what your entity may or may not want to do. Page 24 starts discussion on Debarred etc.

https://www.dcma.mil/Portals/31/Documents/CPSR/CPSR_Guidebook_091021.pdf

@rsmith The requirement is to include this clause in applicable subcontracts. When doing so, there is a requirement to disclose to your company in writing. Depending on the exact language you use for your "certification," you should be prepared to explain how a signature actually discloses what to your company in writing. Also, how does your company monitor for receipt of this signature and ensure there is actually no "live" contract in your system until actuated that the signature was received. Bear in mind and discuss with an attorney the risks related to the potential that a recipient of a contract offer may not sign and return your document but accept the offer by performance and thereafter notify your company of a debarment in effect on the date of your subcontract offer.This is a difficult clause to literally comply with. In my CPSR experiences, it can be selected for a focused look. I have found that the best practice is to include the FAR clause in solicitation and contract documents coupled with a strong documented process that ensures the subcontract is not released without a documented debarment check on the date shown on the subcontract. Primes may have a more sophisticated method such as daily Federal Register checks of debarment that trigger a hold on issuance of any system generated contract to a named supplier.

Edited April 22Apr 22 by Neil Roberts
comma after certification

@rsmith Short Answer: Suggest defining "award" or "effective" date in the the subcontract, require the sub to notify you immediately if they are even being considered for an exclusion, ensure they are flowing down the clause where required, and include language that the PO is terminable immediately if the sub is or becomes debarred, suspended, etc. and USG will not consent to the subcontract. Then point to this language and your process if CSPR asks. Also have a second look at FAR 9.405-2, and the relevant agency supp reg, which has vital additional guidance on the process USG follows for 52.209-6.

Also, agree with @Neil Roberts excellent practical advice, except daily Federal Register checks (way too onerous, clause requires pre-award SAM exclusion checks only, encourages enforcement of a standard that isn't actually required).

Long Answer: This question is tricky for four reasons. It boils down to what is a purchase order and what are the prime's actual duties?

First, the subK PO's "award date" depends on the scope, any specific T's and C's, and state law standards. While there are federal restrictions (like FAR 9.405-2, FAR subpart 19.5 and 19.7, and FAR subpart 44.2) and some mandatory flow-down clauses (like FAR 52.212-5(e)(1)), state law rights and rules primarily govern subcontracts. If the subK PO is for goods, it is probably governed by your state's version of the UCC (all 50 states have one). Most goods PO's are bilateral, not "awarded" until accepted in writing by the sub. Some goods PO's can be unilateral though, "awarded" when issued ... this is possible in specific situations under the UCC, for example if you have a routine sub and an established course of business (the law protects a sub who reasonably relies on such orders to start performing). If the subK PO is for services, it is likely governed by the state's common law of contracts, and probably must be bilateral and accepted in writing by the sub to be considered "awarded". If the subK PO is issued under some sort of ordering contract (similar to an IDIQ or a BPA, but prime-to-sub), then there's a question whether the sub certifies only when the master ordering contract is signed, or at the time of each individual order. The FAR does not consider these nuances, but the Short Answer above resolves them. Make sure your lawyer knows enough about the governing state's contract laws as well as the FAR to properly advise you on how to write the language needed.

Second, federal PO's and commercial PO's are slightly different. FAR 2.101 and FAR 13.3 do not define "award" or "award date". Per FAR 13.302-1(a), a purchase order is generally "issued", not "awarded", even though PO's are commonly referred to as awards. Per FAR 2.101 and 13.004(b), a federal government purchase order is not a binding "contract" unless bilaterally accepted in writing or substantially performed, while a UCC order can be binding unilaterally on the issuer in particular situations. Most fed folks have little experience with private commercial orders, and vice versa.

Third, the CSPR guidance fails to discuss FAR 9.405-2, and FAR 9.405-2 and 52.209-6 are both are a challenge to read and apply. Both only apply to subcontracts over $35K for non-COTS items. Note the definition in 52.209-6(a) for COTS, which matches FAR 2.101's definition. Both also require advance notification to the Contracting Officer if a prime "intends to" and "before entering into" a subcontract with a subKtr who has an exclusion in SAM. In those situations, 9.405-2(a) also requires advance consent for the subcontract by the agency head. Consent to subcontracting authority is often delegated in agency FAR supplements to a senior procurement executive or perhaps an HCA (and is similar to, but distinct from FAR subpart 44.2 consent to subcontracting). Finally, and weirdly, while 9.405-2(b) requires notification only for first-tier-subs if subcontracting for commercial products (which are slightly different than COTS as defined in 2.101 and 52.209-6(a)) and any-tier-subs if subcontracting for for anything else, 52.209-6(e) appears to exempt subK's for both commercial products (COTS) and commercial services from flow-down. I personally think that may be a mistake in the clause.

Fourth (and this is a disconnect), for businesses that receive federal grants, cooperative agreements, loans, loan guarantees, etc. (think SBA loans or COVID-era payments that were forgiven), the threshold is $25K, not $35K, for procurement subcontracts. It's a long story, but OMB codified regulations at 2 C.F.R. subpart 180 with a lower threshold. See 180.970 for the list of "nonprocurements" that trigger the lower threshold and 180.220 for a discussion of subcontracts. I really dislike guidance that is unclear and contradictory.

My advice for a CSPR-compliant process: 1. Ensure your PO template clearly defines "award" or "effective" date and has other terms in the Short Answer. 2. Check the SAM exclusion list before award (FAR 9.404 and 52.209-6 are specific to SAM exclusions) and on a regular basis for your GovCon subs (it only takes a few minutes), and print or document results. 3. If any hits for a sub, confirm with the sub and immediately inform the CO (and request consent if there's a good case). 4. Double-check that your sub is flowing down 52.209-6 to lower-tier subs where required (anything over $35K except COTS). 5. If you have any sort of "nonprocurement", use $25K, not $35K as your threshold. This is well beyond what the CSPR manual says to check for, but it is simple to set up and administer, impresses the heck out of most COs and CSPRs, protects the prime's good name, and positions a prime to quickly hold a bad sub accountable in case a problem arises (they fail to notify, they're in breach and you can pursue damages ... they notify, you get the dirt and see if its rescuable or they're likely toast and time to move on).

P.S. Fun fact: Purchase orders have existed commercially in the United States since the late 1800s. Federal purchase orders have been around since World War I, when the rapid deployment of millions forced the U.S. government to abandon "public advertisement and the submission and acceptance of bids" in favor of expedited contracting methods--purchase orders by the thousands. For a trip down memory lane, see Swift & Co v. United States (U.S. Court of Claims, 1924, discussing wartime contracting, apologies for the typos) and this post from a historian at the Library of Congress. Purchase orders have been mentioned briefly in federal law since at least the 1950s, and were included in the first version of the FAR in 1984 under then-subpart 13.5 (now 13.3), but restricted to acquisition under $25K. They went mainstream following the Federal Acquisition and Streamlining Act in 1994, after DoD recommended Congress raise the simplified threshold to $100K and expand use of simplified procedures; and increases since then.

Hope this helps!