Guidance on Reviewing the Federal Exclusion List and Verifying Eligibility

IM2022-042
Instruction Memorandum

United States Department of the Interior
BUREAU OF LAND MANAGEMENT
https://www.blm.gov

July 8, 2022

In Reply Refer To:
2809/3100/3180/3200/3400/3500 (HQ-310/320/330) P

EMS TRANSMISSION 07/08/2022
Instruction Memorandum No. 2022-042
Expires: 9/30/2025

To:                  All Field Office Officials

From:              Assistant Director, Energy, Minerals, and Realty Management

Subject:           Guidance on Reviewing the Federal Exclusion List and Verifying Eligibility

Program Area: Federal Fluid Mineral, Solid Mineral Leasing Programs

Purpose: The purpose of this Instruction Memorandum (IM) and accompanying attachments is to supply background information and direction on verifying that the Federal Government has not suspended, debarred, voluntarily excluded, or disqualified an entity or individual from receiving Federal contracts or awards. This direction must be followed prior to the Bureau of Land Management (BLM) issuing any lease or other agreement for fluid minerals or solid minerals[1] to any entity or individual. This process of verifying eligibility should also be followed for surety companies listed on surety bonds submitted for BLM acceptance. Suspensions and debarments are administrative remedies used to prevent parties who are “not presently responsible” from being eligible to enter into a contract with the government. “Not presently responsible” refers to parties that have engaged in criminal or other improper conduct or showed poor performance of such a compelling and serious nature that it would lead one to question their honesty, ethics, or competence.  The Office of Management and Budget Guidelines to Agencies on Governmentwide Debarment and Suspension at 2 C.F.R. Part 180, which are implemented and adopted by the Department of the Interior (DOI) at 2 C.F.R. Part 1400, establish the suspension and debarment framework for nonprocurement actions

Administrative or Mission Related:  Mission Related.

Policy/Action: Prior to issuing a lease, approving an agreement, accepting a bond, or approving a transfer of interest in a lease or an agreement, the BLM must verify that the Federal government has not excluded or disqualified the entity or individual by listing them in the System for Award Management (SAM.gov) or the Federal Awardee Performance and Integrity Information System (FAPIIS.gov). This verification process applies to surety companies before accepting a surety bond.  The Verification of Eligibility Procedure (Attachment 1) supplies procedures to ensure that BLM staff conduct a comprehensive review of SAM.gov and FAPIIS.gov.

If the Federal Government has suspended, debarred, voluntarily excluded, or disqualified an entity, individual, and/or its principal/representative, then the BLM must deny or refuse to accept applications for the issuance, assignment, or transfer of a lease, agreement, surety bond, or other nonprocurement award, to that entity or individual.

The Mineral & Land Records System (MLRS) allows tracking and documenting verification of eligibility. The Verification of Eligibility Checklist (Attachment 2) supplies a checklist that each office must complete for the entity receiving an interest in a covered nonprocurement transaction[2] and upload into MLRS.[3] Nonprocurement transactions (and the entities that the BLM should verify are eligible) include:

  • Issuance of a fluid mineral lease (lessee, record title owner, and operating rights owner);
  • Approval of a fluid mineral agreement (operator, co-operator, and suboperator);
  • Issuance of a solid mineral lease (lessee);
  • Acceptance of a surety bond, including surety bonds for right-of-way actions (surety company);
  • Approval of reinstatement or renewal of any of the above cases; and,
  • A transfer of interest or ownership in any of the above cases (e.g., new lessee, record title owner, operating rights owner, operator, co-operator, suboperator, surety company, etc.).

Oversight

The BLM headquarters will complete an annual oversight review of BLM’s verification of eligibility process for the identified nonprocurement transactions in March of each year and report these findings to senior leadership and state office leadership.

Federally Excluded Entity with a Federal Lease or Agreement

Whenever a BLM office identifies a Federal lease or agreement with an entity, which the Federal Government suspended, debarred, voluntarily excluded, or disqualified, the office must notify the Headquarters’ Senior Mineral Leasing Specialist in the Division of Fluid Minerals. The Senior Mineral Leasing Specialist will work with the DOI’s Suspending and Debarring Official and the BLM office to take appropriate action with respect to the entity’s interest in a Federal lease or agreement.

Coordination for Potential Suspension or Debarment Actions

In situations where the BLM identifies bad actors, the BLM should make a referral to the Office of Inspector General (OIG) Administrative Remedies Division (ARD) at oig_debarment@doioig.gov and provide evidence of the entity’s offense or serious poor performance. Even in the absence of an indictment or conviction, ARD may consider and refer cases to the Suspending and Debarring Official for a suspension, when immediate action is necessary to protect the Government’s interest, or a debarment, with a preponderance of evidence.

Additional Disqualifications

In addition to the Federal exclusion list, the BLM also maintains a list of entities in noncompliance with the reclamation requirements of Section 17(g) of the Mineral Leasing Act for oil and gas leases (see 30 USC 226(g) and 43 CFR 3102.5 1(e)). Appendix 4 in the H-3120-1, Competitive Leases (P) handbook, provides guidance related to the list of entities in noncompliance with the reclamation requirements of Section 17(g) of the Mineral Leasing Act.

Timeframe: This policy is effective immediately.

Budget Impact: There will be an increase in demand on staff time with the implementation of the verification of eligibility checklist process and data entry into MLRS. All BLM offices can carry out this policy.

Background: On January 20, 2022, the OIG issued a report entitled The Bureau of Land Management Did Not Review the Federal Exclusions List Before Issuing Federal Mineral Leases (Report No. 2021-CR-007). The report presented the results of the OIG’s inspection of the BLM’s compliance with suspension and debarment regulations as they relate to mineral leasing programs. The OIG found that the BLM did not review the Federal exclusions list to determine whether the Federal Government suspended or debarred the mineral lease recipients and, further, did not have policies and procedures in place to require leasing staff to review the Federal exclusions list before issuing Federal mineral leases. The OIG recommended:

  1. BLM immediately require leasing staff to review the Federal exclusions list before issuing, transferring, or assigning leases and to document that review in the lease file.
  2. BLM develop and implement an oversight mechanism that ensures that the leasing staff reviews the Federal exclusions list and documents the review.
  3. BLM develop and implement policies in compliance with DOI-AAAP-0039 requiring leasing staff to document the review of the Federal exclusions list before issuing, transferring, or assigning leases.
  4. BLM update applicable manuals to detail the processes for documenting the review of the Federal exclusions list for all leasing actions.

The BLM issued this IM to address OIG’s recommendations one through three. The BLM will resolve recommendation four as part of its efforts to update its handbooks related to these and other processes.

Manual/ Handbook Sections Affected: H-3101-1, Issuance of Leases (Rel. 3-308, 2/2/1996); MS-3101, Issuance of Leases (Rel. 3-86, 2/2/1996); H-3104-1, Bonds (Rel. 3-129, 12/27/1985); H-3106-1, Transfers by Assignment, Sublease, or Otherwise (Rel. 3-295, 8/31/1994); MS-3160-9, Communitization (Rel. 3-215, 7/7/1988); MS-3160-11 Underground Storage of Natural Gas (Rel. 3-236, 2/14/1989); H-3180-1, Unitization (Rel. 3-102, 10/28/1984); H-3420-1, Competitive Coal Leasing (Rel. 3-235, 4/20/1989); MS-3450, Management of Existing Leases (Rel. 3-64, 2/10/1983); MS-3474, Bonds (Rel. 3-194, 2/18/1988); and H-3510-1, Phosphate Leasing Handbook (Rel. 3-259, 10/27/1989).

Coordination: The Directorate of Energy, Minerals, and Realty Management coordinated internally and with the Solicitor’s Office and the Department of the Interior’s Suspending and Debarring Official on this policy.

Contact: If you have questions or concerns about this IM, please contact Nicholas Douglas at 970-256-4944. For program questions, your staff may contact Peter Cowan, Senior Mineral Leasing Specialist, BLM Headquarters Division of Fluid Minerals, at picowan@blm.gov or 720-838-1641.

 

Signed by:                                   Authenticated by:
Lindsey Curnutt                          Robert M. Williams
Acting, Assistant Director          Division of Regulatory Affairs and Directives,(HQ-630)
Energy, Minerals, and Realty
   Management

 

2 Attachments

  1. Verification of Eligibility Procedure (7 pp)
  2. Verification of Eligibility Checklist (2 pp)
 

[1] Note that DOI's regulations at 2 C.F.R. 1400.215(b) exclude rights-of-way and permits (such as oil and gas applications for permit to drill) from the transactions covered by this policy. See footnote 2 for additional details.

[2] Nonprocurement transactions covered by this policy include, but are not limited to: Federal acquisition of a leasehold interest or any other interest in real property; concession contracts, dispositions of Federal real and personal property and natural resources; and any other nonprocurement transaction between the Department and a person under 2 C.F.R. § 1400.970; and, grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurances, payments for specified uses and donation agreements under 2 C.F.R. § 180.970.

Transactions that are not covered are listed at 2 C.F.R. §§1400.215 and 180.215 and include, but are not limited to: transactions entered into pursuant to Public Law 93-638; under natural resource management programs, permits, licenses, exchanges, and other acquisitions of real property, rights-of-way and easements; transactions concerning mineral patent claims entered into pursuant to 30 U.S.C. 22, et seq.; water service contracts and repayment entered into pursuant to 43 U.S.C. § 485;  a benefit to an individual as a personal entitlement without regard to the individual’s present responsibility (but benefits received in an individual’s business capacity are not excepted); a permit, license, certificate or similar instrument issued as a means to regulate public health, safety or the environment, unless a Federal agency specifically designates it to be a covered transaction; and, a direct award to a foreign government, a public international organization, and an entity owned in whole or in part or controlled by a foreign government.

[3] Currently, solid mineral leases and right-of-way bonds are still in LR2000. Until these leases move to MLRS, these case types do not need to complete the steps associated with MLRS.