Analysis of U.S. Government Contractor Exclusion Status Circa 2007 for Specific Entities in the Smokeless Powder Industry

Executive Summary

This report analyzes the U.S. government contractor exclusion status for key companies in the smokeless powder industry. It focuses specifically on the period from 2006 to 2008. The inquiry investigates whether several entities were debarred, suspended, or otherwise restricted from federal contracting. These include the original Accurate Arms Company, its supplier Explosia a.s., Western Powders, Inc., and Hodgdon Powder Company.

Key Findings

A thorough search of all relevant U.S. government exclusion databases yielded no records of debarment or suspension for any of the investigated entities. The absence of such records is not absolutely conclusive due to documented database deficiencies of the era. However, this lack of records is highly indicative that officials took no such actions. The context of active and public enforcement against other ammunition contractors, such as AEY, Inc., during the same period strongly supports this conclusion.⁴¹

Caveats

This assessment is subject to two important limitations. First, the primary database of the era, the Excluded Parties List System (EPLS), had significant, documented data integrity and functional flaws.⁷ Second, federal data retention policies may have resulted in the lawful destruction of relevant records from the 2006-2008 period in the intervening years.¹³ Despite these caveats, the lack of findings across multiple independent federal lists provides a high degree of confidence in the conclusion.

The Framework of U.S. Government Contractor Exclusions Circa 2007

To accurately assess a company’s status regarding U.S. government contracts during the 2006-2008 period, one must first understand the governing framework. The system at that time was defined by specific legal actions. It was maintained through a central database that, while authoritative, had significant and documented deficiencies.

Defining Debarment, Suspension, and Ineligibility

The U.S. government uses several administrative actions to protect its interests. These actions ensure it only conducts business with “responsible” contractors.¹ The Federal Acquisition Regulation (FAR) governs these tools. They are intended as protective measures, not as punishment.¹ The primary forms of exclusion are debarment, suspension, and ineligibility.

Suspension: A temporary and immediate measure. It excludes a party from government contracting and subcontracting while an investigation or legal proceeding is pending.² A suspension requires a low evidentiary standard of “adequate evidence,” such as a criminal indictment.³ This tool allows the government to act proactively to mitigate potential harm.

Debarment: A more conclusive and long-term action. It is an exclusion for a fixed period, generally not exceeding three years, imposed after a finding of cause.² The causes are serious and include conviction or civil judgment for offenses like fraud or bribery.⁴ Debarment requires a higher evidentiary standard: a “preponderance of the evidence”.³ It is a reactive measure taken after wrongdoing has been more formally established.

Ineligibility refers to an exclusion from government contracting for reasons defined by specific statutes, separate from the general causes for debarment or suspension.¹, ⁴

The consequences of being placed on an exclusion list are severe. Government agencies are prohibited from soliciting offers from, awarding new contracts to, or consenting to most subcontracts with any listed entity.²

Action	Basis	Evidentiary Standard	Duration	Purpose
Suspension	Pending investigation or legal proceedings	“Adequate evidence” (e.g., indictment)	Temporary; typically not to exceed 12-18 months	Proactive protection of government interests from immediate risk
Debarment	Conviction or civil judgment for specified offenses	“Preponderance of the evidence”	Fixed term; generally not exceeding 3 years	Reactive protection of government interests from parties lacking present responsibility

The Excluded Parties List System (EPLS): Functionality and Deficiencies

Circa 2007, the official mechanism for tracking these exclusions was the Excluded Parties List System (EPLS).⁵ The General Services Administration (GSA) maintained this web-based system.⁶ It was intended to be the single, authoritative source for identifying parties ineligible for federal awards.⁶, ⁵ Federal contracting officers were required to consult the EPLS before awarding contracts.⁶

However, the reliability of the EPLS during this period is a matter of significant concern. A comprehensive February 2009 report by the Government Accountability Office (GAO) documented these issues.⁷, ⁸ The GAO’s investigation uncovered profound systemic failures. It concluded that excluded businesses were improperly receiving federal contracts for egregious offenses, from national security violations to tax fraud.⁸

The GAO identified several key deficiencies:

Failure of Due Diligence: Agency officials frequently failed to search the EPLS before awarding contracts.⁷
Ineffective Search Technology: The EPLS database had insufficient search capabilities, which could fail to identify an existing exclusion.⁹
Poor Data Integrity: Agencies often failed to report exclusions in a timely manner and omitted critical identifiers like the Data Universal Numbering System (DUNS) number.⁷, ⁹
Willful Circumvention: Excluded parties could bypass controls by operating under different business names.¹⁰

This documented unreliability serves as a critical caveat for any historical inquiry. An archival search that yields no results is not conclusive proof that an exclusion never occurred.

The Modern Archival Landscape

The EPLS no longer exists as a standalone system. In July 2012, its data were integrated into the System for Award Management (SAM.gov).¹¹ SAM.gov is now the official U.S. government portal for entity registration and exclusion records.¹²

Federal data retention policies further complicate access to historical records. The National Archives and Records Administration (NARA) classifies EPLS records as “Temporary.” This schedule mandates their destruction 6 years and 3 months after an exclusion terminates.¹³ For example, a three-year debarment from 2007 would have been eligible for destruction as early as late 2016. The absence of a record today could be the result of a lawful data purge.

Analysis of Corporate Entities and Jurisdictional Nexus

To properly scope this investigation, it is essential to understand the corporate lineage of the entities in question. This background clarifies which company was responsible for the “Accurate” brand during the 2006-2008 timeframe and establishes the jurisdictional basis for a U.S. government inquiry.

Corporate Lineage of the “Accurate” Brand

The history of the “Accurate” brand involves three distinct corporate stewards.

Pre-2004/2005: The Original “Accurate Arms Company”
- This U.S. distributor primarily imported and marketed powders manufactured by Explosia a.s. in the Czech Republic, with some powders also reportedly sourced from Israel.¹⁴, ¹⁵
2004/2005 – 2020: Western Powders, Inc.
- Western Powders, Inc. acquired the “Accurate Arms” brand, often shortening the name to “Accurate”.¹⁶
- This acquisition marked a fundamental shift. Western Powders ceased sourcing from Explosia a.s. and moved to a new supply chain, including PB Clermont (Belgium) and General Dynamics (Canada and U.S.).¹⁴, ¹⁷
2020 – Present: Hodgdon Powder Company
- Hodgdon acquired the Accurate brand from Western Powders, effective October 1, 2020.¹⁸, ¹⁹ This transaction falls outside the 2007 timeframe of interest.

This corporate evolution requires a bifurcated investigation. One inquiry must focus on the original Accurate Arms Company and its supplier, Explosia a.s. A second, separate inquiry must examine Western Powders, Inc., as the brand’s owner during the 2006-2008 period.

Profiles of Key Industry Players

Explosia a.s.: A state-owned Czech company founded in 1920. It is a major European manufacturer of explosives and was the primary supplier for the original Accurate Arms Company.¹⁵, ²⁰
Western Powders, Inc.: A prominent U.S. distributor of gunpowder since 1972, located in Miles City, Montana.²¹ It owned the “Accurate” brand during the 2006-2008 period.
Hodgdon Powder Company: A large, family-owned American powder company founded in 1947. It grew by selling government-surplus military propellant to the civilian market.²², ²³, ²⁴

Establishing U.S. Jurisdictional Nexus

All companies involved in the trade of defense-related articles fall under U.S. jurisdiction. Smokeless powder is a “defense article” on the United States Munitions List (USML). It is therefore subject to the International Traffic in Arms Regulations (ITAR).²⁵ This brings all entities in the supply chain, including the foreign manufacturer Explosia a.s., under the purview of the State Department’s Directorate of Defense Trade Controls (DDTC).²⁶

The U.S.-based entities were also eligible to bid on federal contracts. Hodgdon, for example, has supplied propellant for U.S. military applications, such as the Mk 248 MOD 1 sniping ammunition for Naval Special Warfare.²⁷ This makes them subject to the FAR and potential inclusion in the EPLS for any relevant misconduct.

Investigation of Exclusion and Restriction Status (2006-2008)

A systematic search was conducted across all relevant U.S. government exclusion and restriction databases. The search targeted records for the identified companies active during the 2006-2008 timeframe.

Search of SAM.gov and Historical EPLS Records

A search of the SAM.gov “Exclusions” domain was conducted for “Explosia a.s.,” “Accurate Arms Company,” “Western Powders, Inc.,” and “Hodgdon Powder Company”.²⁸, ²⁹ The search yielded no records indicating that any of the target companies were debarred or suspended during the specified timeframe.

As previously established, this finding must be qualified. The documented failures of the EPLS during this period mean the absence of a record is not conclusive proof that an exclusion was never enacted.⁷, ⁸

Review of Related Federal Restriction Lists

The investigation was expanded to other critical federal restriction lists.

Bureau of Industry and Security (BIS): The Department of Commerce’s Denied Persons List (DPL) and Entity List identify parties whose export privileges are revoked or restricted.³⁰, ³¹ A review of Federal Register notices from 2006-2008 found no mention of any of the target companies.³², ³³, ³⁴
Directorate of Defense Trade Controls (DDTC): Under the Arms Export Control Act (AECA), the DDTC can impose a statutory debarment for ITAR violations.³⁵ A search of public records from the period revealed no such actions against the target companies.
Office of Foreign Assets Control (OFAC): The Treasury Department’s Specially Designated Nationals and Blocked Persons (SDN) List prohibits transactions with listed parties. A review of OFAC sanctions programs active in 2007 found no evidence of sanctions targeting the entities under investigation.³⁶, ³⁷

Consolidated Findings

The comprehensive search yielded no adverse records for any of the companies in question for the 2006-2008 period.

Company/Entity	EPLS / SAM.gov	BIS Denied Persons List	BIS Entity List	DDTC Statutory Debarment	OFAC SDN List
Explosia a.s.	No Records Found	No Records Found	No Records Found	No Records Found	No Records Found
Accurate Arms Company	No Records Found	No Records Found	No Records Found	No Records Found	No Records Found
Western Powders, Inc.	No Records Found	No Records Found	No Records Found	No Records Found	No Records Found
Hodgdon Powder Company	No Records Found	No Records Found	No Records Found	No Records Found	No Records Found

Note: The “No Records Found” result for the EPLS/SAM.gov search is subject to the historical data integrity and archival limitations detailed in this report.

Contextual Analysis and Industry Precedent

The absence of a debarment record is more meaningful when viewed against active enforcement within the same industry at the same time. The high-profile case of AEY, Inc., which unfolded during the 2007-2008 timeframe, provides a powerful benchmark.

Case Study: The AEY, Inc. (“War Dogs”) Debarment

In January 2007, the U.S. Army awarded AEY, Inc. a contract worth up to $300 million to supply ammunition to Afghan Security Forces.³⁸, ³⁹ The company was subsequently found to have knowingly violated federal law. It supplied millions of rounds of prohibited, decades-old Chinese ammunition, which it attempted to conceal by repackaging.⁴⁰, ⁴¹, ⁴²

The government’s response was decisive. The Army suspended AEY from federal contracting in March 2008 and terminated the contract.⁴¹, ⁴⁴ A federal grand jury then indicted the company’s principals on 71 counts of fraud in June 2008.⁴¹, ⁴² AEY and its president were ultimately debarred for an extended period.⁴⁵

The AEY case demonstrates that the government’s enforcement mechanisms for significant ammunition procurement fraud were active and effective during the 2007-2008 period. The public nature of this case provides a strong contextual baseline. If any of the companies in this inquiry had been involved in similar misconduct, it is highly probable that some form of public enforcement action would have occurred and created a public record.

GAO Findings on EPLS Integrity

The GAO’s 2009 report on EPLS failures provides additional context. The report’s case studies of contractors who improperly received federal funds spanned several industries.⁷, ⁸ However, the public-facing text and summaries do not mention any companies from the firearms, explosives, or ammunition powder industries among their examples of systemic failure.⁷, ¹⁰

Conclusion and Strategic Recommendations

Summary of Findings

A thorough investigation across multiple federal databases found no conclusive evidence of debarment, suspension, or other formal exclusion for the companies in question during the 2006-2008 timeframe. This absence of adverse records, particularly when contrasted with the contemporaneous enforcement action against AEY, Inc., strongly suggests it is highly probable that the companies were not subject to any such exclusion.

This conclusion is subject to two important caveats:

The GAO documented significant data integrity issues and functional deficiencies within the EPLS during the 2006-2007 period.⁷
Federal records retention policies allow for the lawful destruction of temporary records, such as exclusion actions, after a set period.¹³

Recommendations for Comprehensive Due Diligence

This investigation underscores the complexities of historical due diligence. For ongoing and future assessments, the following practices are recommended:

Multi-Source Verification: Do not rely on a single database. Regular screening should include SAM.gov (Exclusions), the BIS Consolidated Screening List, and the OFAC SDN List.
Public Record Monitoring: Formal exclusion often follows public events. Monitoring court filings and news media for indications of investigations or lawsuits can provide early warnings of potential risks.
Export Control Compliance Assessment: For any company in the defense supply chain, a thorough assessment of ITAR and EAR compliance programs is critical, as violations can lead to statutory debarment.
Stay Abreast of Regulatory Evolution: Government systems for contractor oversight evolve. It is important to stay updated on these changes, such as the transition from EPLS to SAM.gov, to ensure due diligence processes remain effective.

Glossary of Acronyms

AECA: Arms Export Control Act
BIS: Bureau of Industry and Security
DDTC: Directorate of Defense Trade Controls
DUNS: Data Universal Numbering System
EPLS: Excluded Parties List System
FAR: Federal Acquisition Regulation
GAO: Government Accountability Office
GSA: General Services Administration
ITAR: International Traffic in Arms Regulations
NARA: National Archives and Records Administration
OFAC: Office of Foreign Assets Control
SAM.gov: System for Award Management
SDN: Specially Designated Nationals
USML: United States Munitions List

Works Cited

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