The Department of Labor’s Administrative Review Board has affirmed a three-year debarment of a federal contractor under the Service Contract Act despite the absence of willful misconduct and the payment of all back wages and fringe benefit amounts.
The issue resulted when the contractor failed to promptly implement a contract modification incorporating a new wage determination. The ARB upheld the debarment after years of administrative proceedings, and the contractor is seeking judicial review.
The ARB decision confirmed that “culpable neglect” or “culpable disregard” — such as failing to understand and implement revised contract labor requirements — can suffice for debarment. It also reminds us that debarment risk may persist long after wages are repaid.
Compliance professionals should treat contract modifications and updated wage determinations as critical compliance action items rather than as routine paperwork.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.