Contractor Wipes Away 'lingering Stigma'of Past Debarment

U.S. District Court for the Southern District of Ohio, Eastern Division

2009 U.S. Dist. LEXIS 78097 (August 12, 2009)

You may have recourse if you can show past debarment from government contracts will likely cost you future ones. In September 2005, the Defense Logistics Agency (DLA) debarred Lasmer Industries, Inc. and several individuals (collectively, Lasmer) from federal government contracting for three years due to poor performance on past government contracts, including shipping nonconforming parts. Then, in July 2008, the DLA extended the debarment period for another six months because Lasmer continued to do business with the government during the original threeyear debarment period. The 2008 proposed debarment cited Lasmer for "lack of business integrity or business honesty." Lasmer challenged the two debarments, now both expired, under the Administrative Procedures Act, 5 U.S.C.  § 701, et seq. and sought injunctive and declaratory relief.

Lasmer alleged that the debarment had damaged its reputation and its ability to secure future contracts. The court noted that injury to one's reputation can be a sufficient injury for standing purposes. Meese v. Keene, 481 U.S. 465, 476, 480 n. 14, 107 S. Ct. 1862, 95 L. Ed. 2d 415 (1987)).

But to prevail, Lasmer had to satisfy three factors under the U.S. Constitution known as proof of injury in fact, causation and redressability: (1) Lasmer must have "suffered some actual or threatened injury due to the alleged illegal conduct of the defendant," (2) the injury must be "'fairly traceable' to the challenged action," and (3) the relief requested must be likely to redress the injury.

In addition, to secure declaratory and injunctive relief, Lasmer couldn't just prove it had been exposed to past illegal