Department of Defense Debarment Enjoined Due to Procedural Missteps

Covington & Burling – The Eastern District of New York has enjoined a New York contractor’s federal debarment, in a rebuke of agency debarment actions that fail to honor contractors’ procedural rights.  On July 8, 2022, part supplier Precision Metals Corporation (“Precision”) was granted a Temporary Restraining Order (“TRO”) vacating and setting aside a Defense Logistics Agency (“DLA”) debarment and enjoining debarment while court proceedings are pending.  The decision, which emphasizes two procedural violations, serves as a reminder that an agency’s authority to debar contractors is not unlimited, and that it must strictly adhere to the rights granted contractors before taking action.  Each procedural violation, and its practical implications, is discussed below.