Before issuing a subaward or entering into certain covered transactions, organizations need to verify that the other party is eligible to participate. Learn where suspension and debarment checks fit into your process, what to document, and how to make the review a consistent part of your federal grant procedures.
When your organization is ready to issue a subaward or enter into another agreement involving federal funds, there is usually plenty to review before anyone signs. Scope of work, budget, period of performance, reporting requirements, and other terms may all get attention.
One compliance check can be much easier to overlook: suspension and debarment.
Federal rules restrict organizations from entering into certain covered transactions with parties that have been suspended, debarred, or otherwise excluded from participation in federal programs. Appendix II to 2 CFR Part 200 reinforces this by requiring a suspension and debarment provision in contracts under a federal award, so the obligation shows up both in how you vet a party and in the terms you put in writing.
This is why the check belongs in your procurement process as a standard step, not as a separate task someone remembers to run at the end. When suspension and debarment verification is built into how your organization selects and approves parties for covered transactions, it becomes a consistent part of procurement rather than an afterthought.
The check itself may only take a few minutes. The bigger question is whether your organization has built it into the right point in the process and can demonstrate that it was completed.
Suspension and debarment are governmentwide mechanisms used to protect federal programs from parties that are not presently responsible. Debarment generally excludes a party from participating in covered federal transactions for a specified period. Suspension is typically a temporary action that may be imposed while an investigation or proceeding is underway. These actions are intended to protect the federal government's interests rather than serve as punishment.
For recipients, subrecipients, and contractors, the practical concern is straightforward: before entering into a covered transaction, you need to know whether the other party is eligible to participate.
SAM.gov maintains federal exclusion records and allows organizations to search for entities and individuals that are excluded from certain federal transactions. Before entering into a covered transaction, your organization may need to verify that the prospective party isn't suspended, debarred, or otherwise excluded.
The exact requirements depend on the transaction and applicable federal rules, so organizations should know which transactions within their grant programs require this verification. This is particularly important when issuing subawards because the organization making the subaward has responsibilities that begin before the agreement is executed.
One of the easiest ways to create problems is to treat the exclusion check as the final administrative step before someone signs. By that point, staff may have already spent considerable time negotiating the scope, reviewing a budget, establishing timelines, and preparing the agreement.
Instead, make the verification part of your preaward process. For example, your workflow might require staff to complete the appropriate exclusion check after identifying a prospective subrecipient but before final approval and execution of the subaward. That creates a natural compliance checkpoint and reduces the chance that the requirement will be missed when staff are focused on getting an agreement out the door.
Completing the check is only part of the process. Your organization should also be able to show that it happened. Think about what your files would tell someone reviewing the transaction six months or two years later. Would they know:
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Who was checked?
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When the check occurred?
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What system or source was used?
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What the search showed?
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Who completed or reviewed the verification?
Your procedure should establish what documentation is retained and where it is stored. Depending on your organization's process, that might include a dated search result, screenshot, PDF, checklist, system record, or other documentation demonstrating that the required verification occurred before the transaction.
Consistency matters. If one department saves screenshots, another writes a note in a spreadsheet, and another doesn't retain anything, proving that the organization followed its process becomes much harder.
A search is only useful if it is performed against accurate information. Names can be similar, organizations may operate under different names, and search results can sometimes require a closer look.
Your procedure should tell staff what identifying information they should use when conducting and documenting the search. When appropriate, that may include the entity's legal business name and Unique Entity Identifier. Staff should also know what to do when a search returns a possible match rather than simply assuming that a similar name belongs to the organization they are reviewing.
A good procedure should answer another basic question: who owns this step? If everyone assumes someone else checked, nobody may actually do it. Your written procedures should identify which role is responsible for conducting the verification, when it must occur, where the evidence is retained, and what happens if there is a possible exclusion.
The process should also account for staff turnover. A new employee shouldn't have to rely on institutional memory to figure out whether an exclusion check is required or how to complete one.
It is also important not to turn a legitimate compliance requirement into an automatic rule applied without considering the governing requirements. Suspension and debarment rules apply to covered transactions, and organizations should determine which agreements and transactions fall within those requirements.
Your policies and procedures should reflect the federal rules applicable to your awards rather than relying on a blanket assumption that every payment, purchase, contract, or agreement requires exactly the same process. This is one reason written procedures are so valuable. They give staff a repeatable framework for determining when a check is required and what they need to do when it is.
This week, take a look at how your organization handles suspension and debarment verification.
Start with one recent subaward or other covered transaction and trace it backward.
Find the documentation showing that the prospective party's eligibility was checked before the agreement was executed. Then ask whether another employee could look at the same file and immediately understand what was checked, when it happened, and who completed it.
If finding that evidence takes longer than expected, or if it doesn't exist, you have identified a process worth strengthening. A suspension and debarment check may be a relatively small step in the federal grant lifecycle, but small steps are often the easiest ones to miss when they aren't clearly assigned, documented, and built into the workflow.
