domestic review mechanisms in public procurement january 17, 2003 professor steven l. schooner...
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Domestic Review Mechanismsin Public ProcurementJanuary 17, 2003
Professor Steven L. SchoonerGeorge Washington University
Washington, D.C., USA
www.law.gwu.edu/facweb/sschooner
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Domestic Review Mechanisms
Permit (both domestic and foreign) potential offerors (such as bidders) and disappointed offerors (contractors that compete unsuccessfully for the award of a contract) the opportunity to seek correction of anomalies or inequities in the contractor selection process.
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Considerations
• Why invest in challenge mechanisms?
• What do they do?
• Who resolves challenges?
• How are challenges resolved?
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Desiderata, Goals, Constraints?• Transparency• Integrity• Competition• Uniformity• Risk Avoidance• Wealth Distribution(*)• Best value• Efficiency (administrative)• Customer Satisfaction
Traditional?
Transitional?
Current?
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Challenge Regime: Aspirations
• Synergy with other aspirations for procurement system (transparency, competition, integrity…..)
• Public Trust (non-economic issue)• Credibility with both domestic and
international communities• Minimum standards for GPA Article
XX (Challenge Procedures)
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Protests and Disputes• Solicitation defects• Pre-award and
Post-award• Multiple parties• Contractor
selection process• Disappointed
offeror litigation
• Post-award• Contracting Parties• Contract Performance
&/or Administration• Contract interpretation• Remedy granting
clauses• Different rules/fora
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Why Bid Challenges or Protests?
Partial Delegation of the Oversight Regime --
delegation by Government to Contractor Community
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“Private Attorneys General”(Third-Party/ External Oversight)
Conventional Procurement Oversight: Managers, Auditors, Inspectors General
Supplemental Oversight:– Protests
– Disputes
– Fraud (whistle-blowers)
– Media (Investigative Reporting)
$$$?
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People, Culture, Norms
• Perception of Rule of Law– Commitment to due process
• Respect for Courts, Judges, Administrative Tribunals
• Willingness to Litigate– avoid “bite the hand…” instinct
– difficult hurdle (public confidence)
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What do protests challenge?• Pre-award
– Lack of notice of solicitation– Overly restrictive solicitation– Ambiguous specifications– Exclusion from competition (interim)
• Post-award– Did not receive contract– Improper application of evaluation criteria– Anything learned during debriefing(***)
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What are remedies?
• the stay or suspension
• re-solicit, re-compete
• issue new solicitation
• terminate awarded contract (T/C)
• direct award
• bid and proposal (B&P) costs
• attorney’s fees
• re-open negotiations; re-evaluate offers
• refrain from exercising option
• lost profits?
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Lessons from the US model?
• Large, developed, complicated procurement regime
• Broad industrial base• Generally open to foreign
contractors• Fully evolved judicial regime• (Relatively) litigious culture
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Election of Forum
• Agency
• Administrative (quasi-judicial)
• Judicial
•no exhaustion requirement
•no entry fee (or nominal fee)
•Three (3) options – too many?
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Three Options
• Individual Purchasing Agencies
• General Accounting Office (administrative)
• Judicial (Civil) U.S. Court of Federal Claims
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Agency Protests• Long, unimpressive history
–Constant efforts to reform
• Most “efficient” (inexpensive) forum
• Obvious problem = objectivity
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Administrative Protests(most popular option)
U.S. General Accounting Office (GAO)
Unique forum
(legislative instrumentality)
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GAO's role in government procurement
• Pre-award: ensure that agencies have not improperly restricted competition
• Award: ensure that the selection was reasonable and consistent with the solicitation criteria
• Post-award: does not consider challenges to contract administration
• Audit: all phases
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Bid Protests at GAO• function began in 1920s; codified in 1984
Competition in Contracting Act (CICA)
• mandate: independent, expeditious, and inexpensive resolution of protests
• decisions establish a uniform body of law relied on by Congress, the courts, contracting agencies, and the public
• Familiar rules -- 4 CFR 21
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GAO strives for balance…
need to hold agencies accountable and protect aggrieved offerors' due process rights
…and…
need to ensure that the government procurement process can proceed without undue disruption
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General Accounting Office• Automatic Stay -- 37 cent injunction
(letter, plus price of a stamp)• Huge body of precedent• Agency Report• Sufficient, but limited, process
– discovery– hearings (live witnesses)– counsel = optional (but typical)
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Judicial Option
• U.S. Court of Federal Claims– In Washington, D.C.
• Willing to travel (but impractical)
– High burden for temporary restraining order (TRO) or preliminary injunction (PI) versus automatic stay• “likelihood of success on merits”
– Low volume - Not a forum of choice
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A Robust Challenge Regime Supports Key Elements of the
Procurement Process• Transparency• Integrity• Competition• Uniformity• Best Value• Efficiency