David Drabkin (Procurement Round Table) and Christopher Yukins (George Washington University Law School) discuss two reports done for the Acquisition Innovation Research Center (AIRC), on U.S Defense Department bid protests (bid challenges) and mandatory debarment (exclusion). This presentation was prepared for the annual Swedish public procurement conference (“Upphandlingskonferensen“) in Stockholm, May 4-5, 2023, hosted by Prof Andrea Sundstrand of Stockholm University.
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 — 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.”
Trade Policy in Procurement in the Biden Administration
“Assessing the Trade Agenda for Government Procurement in the Biden Administration,” paper presented by Chris Yukins at the Thomson Reuters Government Contracts Year in Review Conference (Feb. 2021)
The attached paper, prepared shortly before President Biden was inaugurated, discussed key trade issues for the incoming administration in public procurement. The piece reviewed major trade measures in procurement taken during the Trump administration – most of which were predictable from the time Trump was elected. The paper turned to the major trade challenges that face the Biden administration, in areas as diverse as climate change, cybersecurity and the protectionism in post-Brexit Europe, and then assessed how the Biden administration might address these challenges, especially given Joe Biden’s support for “Buy American” policies during the 2020 campaign. The paper also assessed how the new administration might cooperate on these difficult issues with the United States’ allies abroad. The paper concluded that the Biden administration’s main challenge was restoring confidence abroad in the United States as a responsible trading partner in procurement; once that goal was met, the paper argued, the more technical issues of trade in procurement would be much easier to address.
The paper’s concerns that the new administration might take a protectionist turn, per Joe Biden’s campaign promises, soon proved well-founded. On January 25, 2021, only a few days after entering office, President Biden signed an executive order calling for strengthened “Buy American” policies in U.S. procurement. Commenting on the order, The Economist wrote that while the order was “protectionist in spirit,” the United States’ existing trade commitments “mean that Mr Biden’s measures may not have much effect.” For background on the executive order– including the history of the Trump administration trade policies in procurement, and questions raised by the new order — please see the slides attached here.
The denouement to the Biden executive order suggests that, in the short term at least, the Biden administration will not go beyond the tighter Buy American Act requirements imposed by the Trump administration
The denouement to the Biden executive order suggested that, while it called for closer scrutiny of waivers and exceptions to the Buy American Act, in the short term at least the Biden administration would not go beyond the tighter Buy American requirements launched by President Trump in July 2019 under Executive Order 13881. President Trump’s order calling for stricter “Buy American” requirements was published as a proposed implementing Federal Acquisition Regulation (FAR) rule on September 14, 2020 (85 FR 56558), and the final FAR rule was published on January 19, 2021 (86 FR 6180). The final Trump rule, in keeping with his executive order, aggressively tightened domestic content requirements under the Buy American Act. President Biden took office the next day, on January 20, 2021. President Biden issued his “Buy American” executive order (EO 14005) several days later, on January 25, 2025. On or about that same date, the Biden administration undertook a FAR review to assess whether the Trump regulations needed to be reconsidered. By February 25, 2021 (roughly one month later) the Biden administration concluded that no further changes were needed to the “Buy American” regulations. FAR Case 2021-004, closed 2/25/21. The Biden administration thus appeared to close the book on further changes to the FAR “Buy American” rules, at least temporarily — perhaps at least until the broader policy reviews called for by the Biden order (such as a review of the “Buy American” exception for commercial information technology) are concluded.
Webinar – Cybersecurity Challenges – February 2, 2021 – 9:00 ET / 15:00 CET
Webinar – European Commission White Paper on Foreign Government Subsidies – December 1, 2020
King’s College London and GW Law will be presenting a free webinar on the European Commission’s “White Paper” on foreign government subsidies, which would impose new EU measures to address foreign subsidies, including in public procurement.
Comment on European Commission White Paper That Could Exclude “Subsidized” Foreign Vendors from EU Public Procurement
In a guest post in the International Economic Law and Policy Blog, Professors Andrea Biondi and Michael Bowsher QC, King’s College London, Professor Christopher Yukins, George Washington University, Dr Luca Rubini, University of Birmingham, and PhD candidate Gabriele Carovano, King’s College London, addressed a European Commission “White Paper” which proposes (among other measures) to exclude foreign competitors from EU procurements if those vendors receive government “subsidies” (very broadly defined) that boost their ability to compete for public contracts in the European Union.
The European Commission’s proposal could harm U.S. vendors that receive support from the U.S. government — such as COVID-19 relief — because European competitors might claim that U.S. firms were receiving barred government subsidies.
The European Commission’s proposal would define government “subsidies” to include any “financial contribution by a government . . . of a non-EU State . . . which confers a benefit to a recipient . . . and which is limited, in law or in fact, to an individual undertaking or industry.” The commentators pointed out the European Commission’s proposal could badly harm U.S. vendors that receive “subsidies” — which some might argue includes CARES Act relief (related to COVID-19) from the U.S. government — in no small part because European competitors could claim that vendors from abroad were receiving subsidies, and thus in effect disable competition from the United States and other nations.
On June 17, 2020, the European Commission published the “White Paper” that called for “levelling the playing field as regards foreign subsidies.” The White Paper has several modules, only one of which (Module 3) addresses public procurement directly. Module 1 would establish a general regulatory instrument to address distortive effects of foreign subsidies, and Module 2 would specifically address distortions caused by foreign subsidies which facilitate the acquisition of EU companies.
The academics submitted their comments to the European Commission as part of the public comment process. While they were generally supportive of Modules 1 and 2, the academic commentators were sharply critical of Module 3, which the Commission described as follows:
Foreign subsidies could also have a harmful effect on the conduct of EU public procurement procedures. This issue is addressed under Module 3. Foreign subsidies may enable bidders to gain an unfair advantage, for example by submitting bids below market price or even below cost, allowing them to obtain public procurement contracts that they would otherwise not have obtained. Under this Module, the White Paper proposes a mechanism where bidders would have to notify the contracting authority of financial contributions received from non-EU countries. The competent contracting and supervisory authorities would then assess whether there is a foreign subsidy and whether it made the procurement procedure unfair. In this case, the bidder would be excluded from the procurement procedure.
The academic commentators noted:
While foreign subsidies may distort the market regarding undertakings (Module 1) and the acquisition of undertakings (Module 2), foreign subsidies in public procurement markets in effect reduce the costs of public services – and so should be separately assessed. Distortions that may be caused by foreign subsidies (displacing higher-cost local producers, for example) are regularly resolved through sustainability measures allowed by the European procurement directives. . . . The framework proposed under the White Paper may . . . displace the legislative regime contemplated by the existing procurement directives, and thus up-end the careful policy decisions that are reflected in those directives.
. . . Module 3 would exclude – disqualify – vendors from public procurements in the European Union, on the grounds that the vendors have received a subsidy from a foreign government. In practical terms the proposal would revise the European Union’s procurement directives by adding an additional ground for exclusion – foreign subsidy – without a normal legislative process. In doing so, the proposal could raise costs for Member States, impair competition in procurement markets across the European Union, open the door to strategic interference by competitors, delay and disrupt ongoing procurements, deprive Member States of best value in their public procurements, and undermine Europe’s relations with key trading partners internationally.
. . . [T]he proposal would defer to the European Union’s obligations under free trade agreements, but assumes – incorrectly – that those obligations are well-defined under instruments such as the WTO Government Procurement Agreement. They are not. For example, the United States covers tens of billions of dollars in preferences by a single sentence in the GPA annexes, which states that the United States’ obligations do not extend to “any set aside on behalf of a small- or minority-owned business.” If the European Commission and Member States, in implementing the proposed measures, read that reservation narrowly and excluded U.S. vendors because other procurement preferences were considered government subsidies not reserved under the GPA, trade relations with the United States and other important trading partners could be badly disrupted.
The White Paper was addressed in a GW Law webinar on EU-U.S. trade, and was discussed in detail in an October 8, 2020 webinar sponsored by Wolters Kluwer, the publishing house. While the public comment period on the White Paper has closed, Eddy De Smijter, Head of the International Relations Unit in DG Competition at the European Commission, made clear during the October 8 session that the Commission continues to welcome informal comments on the proposal.