What restriction applies to current contracts with a contractor placed on the List of Parties Excluded from Federal Procurement?

The correct answer emphasizes that agencies may continue current contracts unless directed otherwise, which is significant in understanding how federal procurement regulations manage contract relationships with contractors who may be excluded.

When a contractor is placed on the List of Parties Excluded from Federal Procurement (generally referred to as the Excluded Parties List System, or EPLS), it primarily serves as a cautionary measure against doing business with that contractor in future procurements. However, existing contracts do not automatically become void or require immediate action. Instead, the policy allows for the continuation of those existing relationships to avoid disruption and ensure that the agency can fulfill its obligations, as long as no directive is issued to terminate those contracts.

This approach allows flexibility while maintaining oversight over procurement practices. It ensures that agencies can manage ongoing projects without disruption, as abrupt termination of all contracts could adversely affect government operations. Therefore, when the contractor's status is changed, it is the responsibility of the agencies to evaluate the situation and take appropriate actions if mandated, rather than automatically terminating all existing agreements.

This understanding aligns with federal procurement regulations designed to balance risk management with the practicality of executing pre-existing contractual obligations, making the chosen answer the most accurate reflection of policy.