CooperCitiWest and Others Face FAPIIS Negative Rating

CooperCitiWest and other National Prime Vendors are facing the specter of having negative ratings entered into the Federal Awardee Performance and Integrity Information System (FAPIIS).  For months they and others, according to Contractors whom have submitted spreadsheets to Foreclosurepedia and HUD have refused to pay debts owed against HUD Properties under the HUD 3.0 Contract.  To date, HUD states that the HUD OIG has been made aware of the allegations; however, no contact has been made to any Contractor.

Section 1334 of the Act also requires prime contractors with subcontracting plans to notify their CO if the prime contractor reduces or delays payment for more than ninety days to its small business subcontractors. If the prime contractor’s actions are not justified, then the CO must enter this information into the Federal Awardee Performance and Integrity Information System (“FAPIIS”), with a potentially consequent negative effect on the prime contractor’s past performance rating. The regulations provided direction as to how COs are to assess and record a contractor’s failure to satisfy this requirement. But whatever those regulations say, this new requirement puts prime contractors on notice that “slow-paying” subcontractors is now a high-risk practice that places a potent weapon in the hands of small business subcontractors.

Government contractors must report and maintain accurate information on FAPIIS concerning occurrences “within the last five years” relating to the following categories:

  • Criminal Convictions: An offeror must provide information concerning whether the offeror and/or its principals has, in connection with the award or performance of a federal contract or grant, been subject to a federal or state criminal proceeding that resulted in a criminal conviction. The clause also requires the contractor to write a narrative description for all reported actions. 75 Fed. Reg. 14067 (Mar. 23, 2010).
  • Civil Proceedings: An offeror must provide information concerning whether the offeror and/or its principals has, in connection with the award or performance of a federal contract or grant, been subject to a federal or state civil proceeding that resulted in a finding of fault and liability and required the payment of a monetary fine or penalty, reimbursement, restitution or damages of $5000 or more.
  • Administrative Proceedings: The new rule defines an “administrative proceeding” as a “non-judicial process that is adjudicatory in nature in order to make a determination of fault or liability.” Id. The rule provides the following examples of what is considered an administrative proceeding: (1) Securities and Exchange Commission proceedings; (2) Civilian Board of Contract Appeals proceedings; and (3) Armed Services Board of Contract Appeals proceedings. The rule also states that the definition does not include agency actions such as contract audits, site visits, correction plans, or inspection of deliverables.

Under the new rule, an offeror must provide information concerning whether the offeror and/or its principals has, in connection with the award or performance of a federal contract or grant, been subject to a state or federal administrative proceeding that resulted in a finding of fault and liability that required the payment of a monetary fine or penalty of $5,000 or more, or the payment for any reimbursement, restitution, or damages in excess of $100,000.

Settlements: An offeror also must provide information relating to the award or performance of a government contract or grant where a federal or state administrative proceeding was disposed of by consent or settlement with an acknowledgment of fault by the contractor.

If the Nationals pay you out the MUST report this into FAPIIS!  At the end of the day, this mechanism will be the ultimate tool to remove them from the game!  I am currently awaiting a statement from HUD as to whether or not they will enter information into FAPPIS.  Remember folks, the Nationals damn well know precisely what is going on and have for years.  It’s time to put an end to the despotic actions which have been collapsing small businesses across this great Nation of ours!

 

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