GW Law Summer Series: State Bid Protests
Meeting with Principal Investigators on Congressionally Commissioned Study on Bid Protests at the Department of Defense
Tuesday, April 19, 12 noon – online
In the conference report which accompanied section 886 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021, Congress called for the Defense Department to launch a new study of bid protests, to follow up on an earlier report by the RAND Corporation. Congress called for a new study to address:
- The rate at which protestors are awarded the contract that was the subject of the bid protest;
- The time it takes the Defense Department to implement corrective actions after a ruling or decision, the percentage of those corrective actions that are subsequently protested, and the outcomes of those protests;
- Analysis of the time spent at each phase of the procurement process attempting to prevent a protest, addressing a protest, or taking corrective action in response to a protest, including the efficacy of any actions attempted to prevent the occurrence of a protest; and
- Analysis of the number and disposition of protests filed within the Defense Department.
The conferees also emphasized “the potential benefits of a robust agency-level bid protest process.” The conferees further said that the study “should review existing law, the Federal Acquisition Regulation, and agency policies and procedures,” and should “solicit input from across the DOD and industry stakeholders.”
Further information on the study is available at https://publicprocurementinternational.com/congressionally-commissioned-bid-protest-study/.
The first of several public meetings will be held on the study on Tuesday, April 19, 2022 at 12:00 – 1:30 Eastern. Principal investigators David Drabkin and Christopher Yukins will discuss initial steps from the study, and will seek input on the questions posed by Congress, above. The meeting will be virtual and will not be recorded, and attendance is limited.
King’s College, London / GW Law Symposium: Anti-Corruption and the New UK Procurement Rules
Live and Online – Free
Wednesday, May 25, 2022 – 14:00-17:00 UK
Streaming Online: 9:00-12:00 Eastern US / 15:00-18:00 CET
Join us at King’s College London for a discussion of proposed anti-corruption measures in the United Kingdom’s new procurement regime, post-Brexit.
Topics
- Update on the current proposals
- Remedies — new approaches to bid challenges
- Transparency
- Crisis procurement
- Exclusion and debarment
- Australia-UK free trade agreement
Moderator
- Michael Bowsher QC, Monckton Chambers & Visiting Professor, King’s College London
Panelists
- Sue Hawley, Executive Director, Spotlight on Corruption
- Gavin Hayman, Executive Director, Open Contracting Partnership
- Albert Sanchez-Graells, Professor of Economic Law, University of Bristol Law School
- Jessica Tillipman, Assistant Dean for Government Procurement Law Studies & Professorial Lecturer in Law, George Washington University Law School
- Sope Williams-Elegbe, Professor and Head of Department of Mercantile Law, and Deputy Director of the African Procurement Law Unit, Stellenbosch University
- Christopher Yukins, Lynn David Research Professor in Government Procurement Law, George Washington University Law School
Registration is for the online session; health conditions permitting, a limited number of spaces for the in-person session will be made available
Resources
Official
UK Cabinet Office, Transforming Public Procurement (Dec. 2020) (the “Green Paper, calling for public consultation)
UK Cabinet Office, Transforming Government Procurement: Government Response to Consultation (Dec. 2021)
The Queen’s Speech (May 10, 2022) (announcing new legislation)
UK Government resource page on new procurement legislation.
UK Government Cost Impact Assessment
House of Lords — Collected Materials on Bill
House of Lords — Summary of the Procurement Bill (May 20, 2022)
House of Lords Debate (Second Reading of the Bill) (May 25, 2022)
Academic/COMMENTARY
Sue Arrowsmith, Constructing Rules on Exclusions (Debarment) Under a Post-Brexit Regime on Public Procurement: A Preliminary Analysis (July 24, 2020), https://ssrn.com/abstract=3659909
Nigel Boardman, Review of Government Procurement in the COVID-19 Pandemic (May 2021) (independent report published by UK Cabinet Office)
Alison Jones, Combatting Corruption and Collusion in UK Public Procurement: Proposals for Post-Brexit Reform, 84 Modern L. Rev. 667 (July 2021), https://doi.org/10.1111/1468-2230.12626
Albert Sanchez-Graells, UK Procurement Law Reform: Queen’s Speech Update (May 10, 2022).
Albert Sanchez-Graells, Initial comments on the UK’s Procurement Bill: A lukewarm assessment (May 2021)
Jessica Tillipman & Samantha Block, Canada’s Integrity Regime: The Corporate Grim Reaper, 53 Geo. Wash. Int’l L. Rev. 475 (2022), https://ssrn.com/abstract=4081297
King’s College, London / GW Law on Exclusion and Debarment (March 2019)
Open Contracting Partnership, Mythbusting Confidentiality in Public Contracting
John Pachter, Christopher Yukins & Jessica Tillipman, U.S. Debarment: An Introduction (discussion draft 24 February 2019), published in Cambridge Handbook of Compliance (Cambridge University Press, Daniel Sokol & Benjamin van Rooij eds.).
UK Anti-Corruption Coalition, Our Ten-Point Improvement Plan for the UK Procurement Bill (May 2021)
Christopher Yukins & Michal Kania, Suspension and Debarment in the U.S. Government: Comparative Lessons for the EU’s Next Steps in Procurement, 19-2 UrT 47 (2019), https://ssrn.com/abstract=3422499
Webinar — Buy American and the New U.S. Infrastructure Legislation
GW Law Webinar – Wed. 19 January 2022 – 9 am Eastern – 14:00 UK – 15:00 CET
President Biden recently signed into law the Infrastructure Investment and Jobs Act, Public Law 117-58 (Nov. 15, 2021), trillion-dollar legislation intended to rebuild U.S. infrastructure. This webinar will focus on Title IX of the new law, the “Build America, Buy America” Act (BABA), which will impose much broader domestic-preference requirements on items purchased using federal grants, tighten federal procurement requirements under the Buy American Act, and launch a review of U.S. agreements that have opened defense markets with U.S. allies around the world.
Part I of the BABA addresses procurement for infrastructure supported by federal financial assistance. As commentator Dustin Painter noted, unlike the “Buy American” requirements of Section 1605 of the 2009 American Recovery and Reinvestment Act, the domestic content requirements imposed by the BABA are “not limited to the funds appropriated or authorized” by the new legislation — and so the new law likely will have a broader impact on all federally funded infrastructure programs.
For a closer look at BABA issues:
click here
Under the new legislation, all iron and steel products and construction materials must be produced in the United States. Manufactured products will need to be manufactured in the United States, and at least 55 % of their component costs will need to be U.S.-origin.
Domestic-content waivers on projects funded with federal assistance will need to be published for comment (much as the Biden administration has begun to publish federal waivers for Buy American Act purposes). Waivers will be available only if applying the U.S. preference (1) will be inconsistent with the public interest, (2) iron, steel, manufactured products or construction materials are not produced in U.S. in sufficient and reasonably available quantity or satisfactory quality, or (3) inclusion of domestic products or materials will increase overall project cost by 25 percent.
In line with the new legislation, the U.S. Office of Management & Budget (OMB) guidance for federal grantees (set forth in Title 2 of the Code of Federal Regulations) may be amended to reflect the new domestic content requirements, which are to be applied consistently with international trade agreements. In the meantime, in a December 20, 2021 memorandum, OMB asked federal agencies for extensive data on the iron and steel, manufactured goods and construction materials used in federally supported infrastructure projects.
As former U.S. trade official Jean Heilman Grier noted in a recent post, under most current free trade agreements the United States has already excepted highways, mass transit and airport projects. This has meant that foreign firms may “participate in such projects but must comply with the ‘Buy America’ requirements.” Under the new legislation, Ms. Grier wrote, the “broader implication of the expansion of domestic preferences to all infrastructure projects that receive federal funds is that the U.S. would not likely be able to offer [those projects as market-opening concessions] in future procurement negotiations.”
Part II of the the BABA includes a suite of “Make It In America” provisions, which echo President Biden’s January 2021 Executive Order 14005. Under the legislation, a new “Made in America Office” is to be established in OMB, which will oversee more rigorous standards for Buy American Act (BAA) waivers. The new legislation also reflects a sense of Congress that the Buy American Act should be applied with a 75% domestic content requirement — a substantial increase from the traditional 50% requirement, which was increased by President Trump.
As with the requirements for federal grants, Buy American Act requirements under the new law are to be implemented consistently with standing international trade agreements. This means that the stronger Buy American requirements will not apply to procurements over the Trade Agreements Act threshold, which per FAR 25.402 is generally $183,000 for supplies.
Notably, the new legislation calls for a review of the impact of free trade agreements on U.S. procurement. That review will include reciprocal defense procurement agreements, which are the key to open international trade in defense materiel and services between the United States and its allies. Existing trade agreements are to be assessed for “equal and proportionate” access by U.S. suppliers. The new law also codifies longstanding exceptions to Buy American requirements, such as those for U.S. allies under the reciprocal defense procurement agreements, and general exemptions for least developed nations.
Panelists
Webinar — Brazil’s Public Procurement Market: New Opportunities, New Challenges
GW Law Summer Series – Introduction to U.S. Bid Protests
Rethinking Bid Protests — International Webinar and Article
Join an hourlong webinar on Tuesday, June 15, 2021, 9 am ET / 14:00 UK / 15:00 CET to discuss next steps in bid challenges internationally. The free session, sponsored by GW Law School and King’s College, London, will feature leading experts in procurement from three continents: Europe, Africa and North America. Among other global developments, the panel will discuss a pending congressionally mandated study of bid protests at the U.S. Department of Defense — a study, Chris Yukins argued in a recent essay in the University of Pennsylvania’s Regulatory Review, that should recognize that governments increasingly look to bid challenges for early warnings of failure in a procurement system.
NASPO Study of State Procurement in the Pandemic – Key Lessons Learned
In a groundbreaking academic study coordinated by the National Association of State Procurement Officials (NASPO), private and public supply chain professors from across the United States conducted a nationwide survey of states’ responses to the pandemic. The study was based on over 100 hours of interviews conducted by the academic research team (Professors Robert Handfield (North Carolina State University), Zhaohui Wu (Oregon State University), Andrea Patrucco (Florida International University), Christopher Yukins (George Washington University) and Thomas Kull (Arizona State University)) with many states’ procurement staff, suppliers, and other state officials. Key takeaways from the study:
Assessing state procurement systems through a maturity model. Different states responded very differently to the pandemic, based in part on their organizational structures and preparations for the disaster. To help states better prepare, the researchers developed a “maturity model” to assess state procurement systems, in preparation for future catastrophes.
Courage and professionalism in the face of catastrophe. The researchers’ interviews with state procurement officials and suppliers “corroborate observations made in much of the disaster science research: disasters often bring out the best in us, and people rise to the occasion.” The study noted “how private citizens collaborated with entrepreneurial state employees to identify innovative and little-known PPE suppliers and often established innovative solutions to seemingly hopeless situations where PPE could not be found. Purchasing managers, staff members, and CPOs [Chief Procurement Officers] emerged as heroes. Our interviews revealed the pride and renewed sense of professional identity . . . . We observed a growing sense of camaraderie as people faced a common crisis.”
Centralization of the state procurement function was a key factor in success. The study’s results suggested “that increased centralized governance of state procurement led to a more effective response in tackling large-scale supply chain disruptions.” Centralized procurement “enabled increased coordination, improved leveraging of the volume of the state’s purchasing power, and provided for more efficient application of contracting expertise to a difficult market situation.” A centralized approach, the study found “also led to better coordination among disaster relief entities, PPE suppliers and hospitals, counties, and agencies requiring PPE to operate.”
Constitutional issues in federal-state confrontations over critical supplies. In principle, the federal government should have helped better coordinate states’ responses to the pandemic. In practice, however, during the early stages of the pandemic the federal government was repeatedly accused of abusing its powers under the Defense Production Act to seize and redirect emergency supplies that had been purchased by individual states — although, under the U.S. federalist system of government, the states bear first responsibility for the health and welfare of their citizens, constitutionally, practically, and politically. The study argued that “[s]erious consideration should be given to whether the Defense Production Act should be amended to recognize the deference owed by the federal government to the states under the Constitution, much as many other federal laws (such as those governing federal grants, use of National Guard troops, etc.) recognize and defer to the sovereign authority of the states.”
Organizational Conflict of Interest (OCI) Proposed Rule Is Withdrawn, Ten Years Later
Regulators have withdrawn a proposed rule, first published a decade ago, which would have revamped federal rules on contractors’ organizational conflicts of interest.
The current OCI regulations, which have been developed since the 1960s, are set forth at Subpart 9.5 of the Federal Acquisition Regulation. The OCI regulations leave it to contracting officials to exclude bidders if those vendors have corporate conflicts of interest – competing business interests, for example, which will keep the contractor from providing unbiased advice, or if a vendor would be helping draw specifications against which the vendor (or its affiliate) will be bidding in the future. The OCI rules also allow contracting officials to exclude vendors that have an unfair competitive advantage due to unequal access to information.
Daniel Gordon, who as head of the bid protest unit at the Government Accountability Office (GAO) helped shape the GAO caselaw on OCI’s, also wrote a leading article on OCI’s. Dan Gordon took over as head of the White House’s Office of Federal Procurement Policy (OFPP) (where his work was highly regarded) in 2009, and in 2011 the proposed rule was published. Dan Gordon left the White House shortly thereafter, to serve as an associate dean at George Washington University Law School.
The proposed rule (76 Fed. Reg. 23236 (2011)) reflected opposition at the time, in both government and industry, to stringent application of OCI rules. Recognizing the practical problems that overly strict enforcement could bring, the proposed rule called for a more measured approach, which would tolerate apparent conflicts when they did not pose significant reputational or performance risks to the government.
Since the proposed rule was published in 2011, much has changed. The Defense Department separately addressed congressional concerns about conflicts of interest in a major defense acquisition programs (MDAP’s) by issuing the Department’s own regulations on OCI’s in MDAP’s. At the same time, the popular concern that contractors play an outsize role in government – a concern which informed the proposed rule, and which helped drive GAO’s prior decisions – has subsided. As observers have noted, GAO is less likely to sustain protests regarding OCI’s, and agencies now regularly grant waivers regarding apparent conflicts of interest. While OCI’s remain an important issue, there seems less appetite to revamp the existing OCI law – and so the proposed rule was withdrawn.