Join another outstanding 60-minute webinar with the National Bar Association and George Washington University Law School’s Government Procurement Program, to discuss contractors’ road to recovery – the challenges and opportunities facing government contractors as the country emerges from the COVID-19 pandemic
Michael Bennett, Evans & Chambers Technology, LLC; Chair, DC Board of Elections
Michelle Coleman, Counsel, Crowell & Moring
Dominique Casimir
Danielle Conway, Dean, Penn State Dickinson Law
Dominique Casimir, Partner, Blank Rome LLP
Liza Craig, Counsel, Reed Smith
Judge Jeri Somers
Kendra Perkins Norwood, Wiley. For an earlier webinar on Section 3610 reimbursement in which Kendra Perkins Norwood and other attorneys from the government and the private sector participated, click here.
Judge Jeri Somers, Chair, US Civilian Board of Contract Appeals
Moderators: National Bar Association President Alfreda Robinson (GW Law School) & Christopher Yukins (GW Law School)
The first phase of the COVID-19 pandemic brought a new wave of trade controls, as countries imposed new barriers against trade in vital supplies such as masks and ventilators. Now as the COVID-19 pandemic enters its next phase – as the disease recedes in some populations, and attacks others with new ferocity – a simple but critical question has come into focus: do trade barriers make sense in a pandemic?
One striking aspect of the pandemic has been the global supply chain needed for supplies essential to fight the virus. In an April 2020 report, the World Trade Organization highlighted the global sources for medical supplies, and the World Health Organization and other international organizations have stressed the need for international cooperation in fighting the COVID-19 pandemic.
Zornitsa Kutlina-Dimitrova
Concerns over new protectionism in the United States arose earlier this year, when the Trump administration signaled that the United States might withdraw from the WTO Government Procurement Agreement (GPA) in response to a GAO study which suggested that European exporters enjoy lop-sided access to the federal procurement market. Lucian Cernat and Zornitsa Kutlina-Dimitrova, trade economists at the European Commission, have responded that the U.S.-EU trade balance in procurement, if read broadly, is actually much more favorable to the United States.
Another potential Trump administration initiative would impose new trade controls to force pharmaceutical companies to bring their production to the United States. This initiative, long pressed by senior White House trade advisor Peter Navarro, appears to have faded as well.
The Trump administration instead took a focused approach to trade controls, when on April 10, 2020 the Federal Emergency Management Agency imposed export controls under the Defense Production Act on personal protection equipment, including certain masks and gloves. At the same time, companies such as 3M were being savaged by President Trump for shipping emergency supplies abroad, even when (as 3M made clear) those shipments might be critical to other countries’ efforts to fight the pandemic.
Tom McSorley
But even the Trump administration’s most aggressive export controls, such as those aimed at Iran, Cuba, Venezuela and other sanctioned nations, will not necessarily block life-saving supplies. As Tom McSorley and his colleagues have pointed out, exceptions built into the U.S. export regime will still allow humanitarian supplies to reach Iran and other nations under U.S. sanctions. The FEMA ban on exports of PPE also allows for exceptions – under FEMA’s approval – for humanitarian purposes, Tom McSorley and his colleagues have noted. [Editor’s update: FEMA’s exceptions to the export ban — including a blanket exception for shipments to Canada and Mexico — are published in draft form here.]
Even more striking was the Trump administration’s decision to waive certain import controls – long the heart of Trump’s “Buy American” rhetoric – on vital items in short supply, from N95 masks to bleach. In normal times, the U.S. General Services Administration, which runs “schedule” contracts used by federal agencies for tens of billions of dollars in annual sales, complies with the Trade Agreements Act (TAA) by banning supplies from countries that have not entered into free trade agreements with the United States (“non-TAA” countries). Because of acute shortages in fighting the pandemic, however, GSA has temporarily lifted that ban for certain supplies. [Editor’s note: Jean Grier’s summary of this development is at Perspectives on Trade: ‘US Temporarily Lifts Procurement Ban’] The Trump administration’s abrupt volte face suggests that trade controls can raise dangerous barriers in times of crisis.
Even more striking was the Trump administration’s decision to waive certain importcontrols – long the heart of Trump’s “Buy American” rhetoric – on federal procurements of vital items in short supply
Simon Evenett – University of St. Gallen (Switzerland)
U.S. trade controls in the pandemic are part of a broader trend around the world, as nations try to reshape trade flows to husband supplies needed to address the COVID-19 disease. Those trade controls, which Simon Evenett of the University of St. Gallen calls “sickening-thy-neighbor” measures, raise serious humanitarian and political questions now that some countries no longer need equipment that is desperately sought in other nations. With the pandemic receding, New York will now share ventilators it no longer needs with Maryland and Ohio; should the United States do the same for Senegal, or for new hotspots such as Sweden? And what role should international institutions, such as the WTO, the World Bank and the OECD, play in facilitating international cooperation rather than trade barriers – global cooperation, as Laurence Folliot Lalliot has argued, that will be needed to save lives. (An update: EU Commissioner Phil Hogan on April 16, 2020 called for a temporary international ban on tariffs for vitally needed COVID-19 supplies, and made clear that European Union cannot “on-shore” its manufacturing in the long term — it will continue to rely on an international supply chain for key medical supplies.)
Laurence Folliot Lalliot – University of Paris Nanterre
Solving that puzzle – weighing protectionism in the pandemic – may require a new set of policy metrics. Zornitsa Kutlina-Dimitrova of the European Commission has argued that trade restraints make little sense when weighed against the secondary economic effects (e.g., the industrial atrophy, the isolation from innovation) that trade controls cause. Her research bears special attention now, when human lives – not just dollars – weigh in the balance.
Editor’s note: Join a free GW Law webinar on Tuesday, April 21, 2020 at 9:00 ET/14:00 UK/15:00 CET/21:00 CST. Simon Evenett, Robert Anderson, Jean Heilman Grier, Tom McSorley and Zornitsa Kutlina-Dimitrova (invited) will convene before a worldwide audience to discuss “Protectionism in the Pandemic.” The program will be moderated by Laurence Folliot Lalliot, Vanessa Sciarra of the NFTC and Christopher Yukins. Program information and registration.
Tuesday, April 21, 2020, 9:00 ET/14:00 UK/15:00 CET/21:00 CST
Governments around the world are imposing trade controls that may cut off access to life-saving equipment. GW Law held an open webinar on protectionism in the COVID-19 pandemic – the barriers to imports and exports that threaten to deepen the pandemic. The program materials are below.
Program Recording –Instructions on Using Auto-Captioning in 100+ Languages
Tom McSorley, Arnold & Porter (Washington DC) – BioHumanitarian aid US Export Controls
Zornitsa Kutlina-Dimitrova, European Union – DG for Trade – Bio – Works
Moderators: Christopher Yukins, GW Law School; Vanessa Sciarra, National Foreign Trade Council; Laurence Folliot Lalliot (University of Paris Nanterre (joining from Dakar))
A new threat has emerged in the pandemic: fraud in the supply chain for critical COVID-19 supplies. Governments the world over are fighting back against price gouging and defective supplies. What tools are available, and will they work? Join a free one-hour webinar with GW Law, as experts discuss these critical global developments in anti-corruption and procurement.
Moderators: Christopher Yukins, GW Law School (Washington); Jean-Bernard Auby (Professor emeritus, Sciences Po Law School (Paris)); Gabriella Racca (University of Turin); Laurence Folliot Lalliot (University of Paris Nanterre (joining from Dakar))
At a press briefing on March 19, President Trump brushed aside demands that the federal government take the lead in buying medical equipment – including the coronavirus tests, ventilators and protective gear – critically needed to save lives in the current pandemic. “We are not a shipping clerk” Trump said, and left it to the states to take first responsibility for procuring life-saving equipment.
Is President Trump right – should state governments be left to procure emergency equipment – or is this one of the most serious mistakes he has made in this pandemic?
The need for emergency equipment is desperate. On March 18, for
example, the New York Times reported that there are only roughly 170,000
ventilators in this country, although many hundreds of thousands of coronavirus
patients may need them soon. In a March 19 interview,
Governor Andrew Cuomo of New York was brutally direct. “We now have about
5,000, 6,000 ventilators in New York State,” Cuomo reported. “We are going to
need about 30,000 ventilators because these people who come in all have
respiratory illnesses.” Experience
in Italy, already overwhelmed by the pandemic, shows that if emergency
equipment is not procured immediately, thousands of American patients and healthcare
providers may die unnecessarily.
Trump’s comment deflecting responsibility for buying emergency
equipment came at a March 19 White House press
briefing, when he was asked why the federal government had (by executive
order) invoked, but not triggered, the Defense
Production Act. The Act allows
the federal government to direct manufacturers to produce vitally needed items.
The states’ governors, Trump responded, “are supposed to be doing a lot of this
work.” The federal government, he continued,
“is not supposed to be out there buying vast amounts of items and then
shipping.” “You know,” Trump said, “we’re
not a shipping clerk. The governors are supposed to be – as with testing, the governors
are supposed – are supposed to be doing it.”
Trump’s insistence that the states take the lead in emergency procurement contradicts his own administration’s “Crimson Contagion” study, confidentially drafted before the pandemic and disclosed on March 19 by the New York Times. The Trump administration draft report clearly foresaw that the federal government would have to coordinate equipment requests from the states in times of pandemic. Public health experts now reinforce the administration’s own conclusion: the federal government must take the lead in purchasing emergency equipment such as ventilators.
Trump’s approach
also contradicts what other nations facing the same pandemic are doing. Italy, for
example, has centralized
(and radically simplified) procurements of emergency equipment. CONSIP,
the Italian centralized purchasing agency, has taken charge of buying
thousands of ventilators, and it has open
requests to the market for emergency equipment.
By pushing
procurement responsibility out to the states, Trump’s approach also ignores a critical
tool available to the federal government: the United States’ unmatched ability
to assure vendors that if they build equipment, the manufacturers’ costs will
be covered even if the equipment is never used.
While the
Defense Production Act allows the government to direct the production process –
always a risky prospect – the federal government’s contracting tools include the
power to “terminate for convenience.” This simple, largely unknown contracting
power became a central part of U.S.
procurement after World War I, when the federal government canceled large numbers
of wartime contracts. The termination for convenience clause – now
required
in every federal supply contract – says that while the government may terminate
contracts for its own convenience (a right most commercial parties do not have),
the United States will make its contractors whole if the federal government
does prematurely end a contract.
This simple
termination right is extremely powerful in a time of crisis, because it means
that manufacturers – from Ford
to Tesla – can incur huge cost risks in retooling to build vital equipment. Although contractors may lose commercial
opportunities by temporarily retooling their production lines, at least those companies
know their sunk costs will be covered
by the United States – and here, that federal government guarantee may enable
many more manufacturers to join this battle against death by disease.
“This simple termination right is extremely powerful in a time of crisis, because it means that manufacturers . . . can incur huge cost risks in retooling to build vital equipment.”
This simple
procurement tool also explains why the federal government must take the lead in
procuring emergency equipment. State governments
typically have the same contract clause
– the same right of termination for convenience – but state governments do not
have the federal government’s massive resources backing the promise to make
manufacturers whole, or the United States’ preeminent market position. In
contrast to the states’ limited resources, the U.S. government’s procurement rules
channel the federal government’s nearly unlimited resources – its commitment to
pay, and the world’s largest procurement apparatus – to drive procurement of
equipment that will save lives. The time
for the federal government to exercise that procurement power is now.
By Christopher Yukins, the Lynn David Research Professor
in Government Procurement Law at the George Washington University Law School,
Washington, DC. The Law School’s
government procurement program will host an international online
colloquium on public procurement and the COVID-19 pandemic on Tuesday,
March 24, 2020, at 12:00 ET.
Tuesday, February 18, 2020, 9 to 11 am – GWU Law School, Law Learning Center, 2028 G Street NW, Room LLC006
WTO Government Procurement Agreement Members and Observers
According to press reports, the Trump administration is mulling an executive order that would trigger U.S. withdrawal from the WTO Agreement on Government Procurement (GPA). This free colloquium will assess the United States’ potential withdrawal from the GPA, which would deprive U.S. suppliers of a key point of access to public procurement markets internationally — although the GPA, experts note, has set global standards and opened an estimate $1.7 trillion dollars annually in business opportunities. The United States could forfeit access to important public procurement markets in Canada and many other countries, and the United States could lose its leadership role (which dates back to World War II) in shaping global standards in public procurement, even as more countries (such as Brazil) are joining the GPA.
Colloquium will be held downstairs at the GWU Law Learning Center – 2028 G Street NW (photo: Google)
Jean Heilman Grier is a leading internationally recognized expert on the World Trade Organization’s (WTO) Government Procurement Agreement (GPA), bilateral and regional agreements, international trade negotiations and international procurement systems. She has more than 30 years of experience in international trade as a U.S. trade negotiator, lawyer, adviser and consultant, including as the government procurement negotiator for the U.S. government. For a decade, she represented the United States in the WTO Committee on Government Procurement where she played a leading role in the revision of the GPA and accessions to the Agreement. Since 2013, she has been the Trade Principal with Djaghe, LLC., where she advises and provides technical assistance to governments, international organizations, businesses and trade groups on international procurement and trade issues. She writes extensively on international procurement and other international trade topics, and maintains a blog, Perspectives on Trade, at http://trade.djaghe.com; there, she recently published a piece on the impacts that the United States leaving the GPA could have.
Robert Anderson
Robert Anderson is a teacher and independent researcher on matters relating to the multilateral trading system, competition policy and government procurement. He previously worked in the Secretariat of the World Trade Organization from 1997 through 2019, and held the position of Counsellor and Team Leader for Government Procurement and Competition Policy in the Organization from 2005 through 2019.
Current academic positions include that of Honorary Professor in the School of Law at the University of Nottingham (United Kingdom). Mr Anderson also is an external faculty member at the World Trade Institute, the University of Bern (Switzerland); the University of Rome Tor Vergata (Italy); and the Catholic University of Lyon (France). He also has been a guest speaker, on multiple occasions, in relevant courses of the George Washington University Law School (United States).
Roundtable Participants: Michael Bowsher QC (Monckton Chambers, London) – Andrea Sundstrand (University of Stockholm) – Pascal Friton (Blomstein, Berlin) – Paul Lalonde (Dentons, Toronto) – Colette Langos (University of Adelaide) – Christopher Yukins (GWU Law School)
Program information: Cassandra Crawford, ccrawford@law.gwu.edu
On January 15, 2020, Overstock.com, Inc., a competitor in the pending U.S. General Services Administration (GSA) procurement for “electronic marketplaces” reportedly protested the reissued (and revised) solicitation at the U.S. Government Accountability Office. Per GAO’s rules on the public availability of records, 4 Code of Federal Regulations (CFR) Part 81, Professor Yukins submitted a formal request to GAO for electronic versions of the redacted materials filed in the referenced pending bid protest (attached). These records were requested so that information and analysis regarding the subject procurement – a multi-billion dollar procurement to open commercial electronic marketplaces to federal users – can be made available to the public. If these records are not released, key information on this major procurement may be blocked from the public for roughly three months – the 100-day period for a GAO bid protest to be decided.
On January 22, 2020, GAO denied the request, saying that it is estimated that the documents will not be available until the proceedings are concluded, projected to be on or about April 24, 2020, over three months later. In practical terms, this means that the thousands of vendors and customers which need to prepare for the new electronic markets to be opened by GSA’s procurement may need to wait months for information on the ongoing procurement and protest — even though that information (because redacted) is otherwise publicly releasable.
Roger Waldron, Coalition for Government Procurement
Editor’s Note: On January 24, 2020, the Federal News Network published an op-ed by Roger Waldron of the Coalition for Government Procurement which concluded: “. . . there are broad implications for the procurement system associated with the e-Marketplace acquisition, and those implications extend into other areas of importance, like supply chain security, socioeconomic programs, and the protection of proprietary data. Yukins is right. Absent the release of these [GAO protest] records, ‘key information on this major procurement may be blocked from the public for roughly three months – the 100-day period for a GAO bid protest to be decided.’ So too, from the perspective of Coalition members, it highlights that more review and reflection on the acquisition is needed. “
Jessica Tillipman, GWU Law School – Co-chair, ABA SIL Anti-Corruption Committee
On February 13, 2020, at 12:00 noon ET, the American Bar Association (ABA) Section of International Law (SIL) Anti-Corruption Committee will join with the ABA Public Contract Law Section (PCLS) Suspension and Debarment Committee, for an informal lunchtime session on developments in international debarment. The session will be moderated by Assistant Dean Jessica Tillipman, George Washington University Law School, Washington DC.
Christopher Yukins, George Washington University Law School (who co-teaches courses on anti-corruption with Dean Tillipman), will discuss emerging international models for debarment, and the impact that new electronic marketplaces may have on debarment globally. With regard to the U.S. experience, he has drafted a book chapter with John Pachter and Jessica Tillipman, for a forthcoming book on compliance by Cambridge University Press. Professor Yukins has also co-written a piece with Professor Michal Kania (U. Silesia – Katowice), comparing debarment in the United States and the European Union.
Pascal Friton, a partner in the BLOMSTEIN firm, Berlin, will discuss how the European Union’s member states are addressing exclusion and debarment, drawing on a piece he presented at the Thomson Reuters Government Contracts Year in Review in February 2019. He also will be speaking on the afternoon of Tuesday, February 18, 2020 at this year’s Year in Review conference.
Collin Swan, World Bank
Collin Swan, of the World Bank’s Office of Suspension & Debarment, will discuss his office’s debarment survey and the office’s ongoing research into other debarment systems (beyond the United States and the World Bank). See his FCPA Blog post on the survey.
Grace Sullivan, a third-year student at the George Washington University Law School, recently won first prize in the Public Contract Law Journal annual writing contest for her note (which was also accepted for publication in the Journal). Her note analyzes three case studies of foreign contractors debarred by the U.S. government: Chinese telecommunications giants ZTE and Huawei, and Russian cybersecurity firm Kaspersky. Ms. Sullivan will be presenting on her note at the March 2020 ABA PCLS Federal Procurement Institute in Annapolis, MD.
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Debarment – the exclusion of a firm or individual from working with a government – allows governments to protect themselves from the reputational and performance risks posed by unqualified firms and individuals. As a March 2019 conference at King’s College, London made clear, governments the world over are reforming their debarment systems, though often in strikingly different ways. The U.S. government is now moving to reform its debarment system, by more closely aligning the rules that govern debarments for grants and contracts. The rules would be revised “to improve consistency between the procurement and non-procurement procedures on suspension and debarment, based on recommendations of the Interagency Suspension and Debarment Committee,” under a pending Federal Acquisition Regulation (FAR) reform case No. 2019-015. Many have long argued for this reform, and a 2017 Public Contract Law Journal article by Robert Meunier and Trevor Nelson described the issue in detail. A report on the pending FAR case is currently due in January 2020, and the U.S. Office of Management and Budget anticipates that a Notice of Proposed Rulemaking (NPRM) will be published in February 2020. We will be tracking this issue closely in a special short seminar that George Washington University Law School offers online, on suspension and debarment.
