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The post describes the federal government as “banning the company from doing business with any company that does business with FedGov.” In U.S. federal procurement, the standard government-wide sanction is suspension/debarment (or related exclusions), whose effect is defined in the Federal Acquisition Regulation (FAR) and agency guidance.

What the FAR actually says the effect is

FAR 9.405 explains the “effect of listing” for debarred/suspended/proposed-for-debarment/voluntarily excluded contractors: they are “excluded from receiving contracts” and agencies must not solicit offers from, award contracts to, or consent to subcontracts with them (absent a compelling-reason determination). It also excludes them from doing business with the government as agents/representatives of other contractors. This is a restriction on federal contracting activity and certain federal subcontracts/agency-consent subcontracts, not a general prohibition on all private-sector commerce with any firm that also has federal business.

FAR 9.405-2 further addresses “Restrictions on subcontracting” in the federal-contracting context (e.g., limits on entering into certain subcontracts above a threshold with excluded parties, tied to FAR clause 52.209-6). Again, these are procurement rules about government-related subcontracts, not a broad government ban on doing business with all private companies that have any relationship with the federal government.

Agency explanation of the effect

GSA’s Suspension & Debarment FAQ likewise describes the consequence as being listed as ineligible such that offers won’t be solicited, contracts won’t be awarded/renewed/extended, and certain subcontracts and covered federal transactions won’t be approved/entered into (subject to compelling-reason exceptions). It does not describe a blanket legal ban on doing business with any private company merely because that company does business with the federal government.

Bottom line

The credible, primary sources (FAR + GSA guidance) describe exclusion from federal procurement/nonprocurement “covered transactions” and certain federal-contract-related subcontracting—not a universal prohibition on doing business with any company that does business with the federal government. That makes the post’s statement inaccurate as written.