Government Contract Management: Preventing, Resolving, and (Where Necessary) Litigating Disputes. Handling Procurement Disputes: Issues & Challenges
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1 Government Contract Management: Preventing, Resolving, and (Where Necessary) Litigating Disputes International Master in Public Procurement Management Handling Procurement Disputes: Issues & Challenges Daniel I. Gordon Associate Dean for Government Procurement Law The George Washington University Law School Washington, DC
2 Names for Procurement Complaints Domestic review procedures (WTO) Challenges (UN Commission on Int l Trade Law, UNCITRAL) Remedies (EU Directive) Protests (or bid protests) (US) Complaints (generic) 2
3 Complaints During the Three Phases of a Procurement Pre-award: Protests include allegations that a solicitation is defective (for example, that it improperly restricts competition) Award: Protests include allegations that a contract award is improper (for example, that selection was unreasonable or inconsistent with the solicitation award criteria) Post-award: Complaints in this phase are generally between the government and the firm that has won the contract these are not protests 3
4 Competing Demands on Protest System Provide a forum to hear complaints by, and grant relief to, interested parties Enhance accountability of procurement officials and government agencies Promote transparency into how the procurement system works Protect integrity of procurement system Avoid unnecessary cost and delay & disruption of procurements during protest process 4
5 Handling Competing Demands There will always be tension between protecting the interests of the disappointed bidder (who would like unlimited process at any time) and avoiding undue disruption to the procurement system (which needs closure) The relative importance a state gives to the competing demands will drive the trade-offs made in defining the structure of a bid protest system Choices about the priority given to the competing demands must consider a state s values and the nature of the challenges its procurement system faces 5
6 Key Decisions Regarding a Protest Forum Where is the forum located? How broad is the forum s jurisdiction? Who is allowed to protest? ( Standing ) How is the issue of the finality of signed contracts handled? How strict are time limits for protesting to the forum? Is the procurement put on hold while the protest is pending? How is abuse of protest process avoided or dealt with? How long does the forum have to decide the case? What evidence does the forum have before it in reaching its decisions? How difficult is it for a protester to win a protest? What power does the forum have to offer (and enforce) meaningful relief? 6
7 Locating the Protest Forum Key issues: Independence Expertise/competence Power 7
8 Locating the Protest Forum 3 options: Court Independent administrative forum Contracting agency Each has advantages & disadvantages Exhaustion issue 8
9 Possibilities Regarding Breadth of Jurisdiction Jurisdiction over which agencies? Exemption for national security agencies? Exemption for entities below national level? Jurisdiction over which decisions? Use of contractors (vs. gov t staff)? Details of procurement (method, specifications)? Subcontracting decisions? 9
10 Possibilities Regarding Parties Before award, is the right to protest limited to firms that show they would win? After award, is the right to protest limited to the next-highest-ranked competitor? Is the successful competitor (the awardee ) permitted to participate? Is it required to participate? 10
11 Possibilities Regarding Expertise of Forum & Representatives Is the protest forum composed of judges, attorneys, or experts? Must protesters be represented by an attorney? 11
12 Dealing with Signed Contracts If the system precludes cancellation of signed contracts, is there a way to preserve the possibility of review prior to signature? If the system allows cancellation of signed contracts, is there a way to ensure that signed contracts are, at some point, final? 12
13 Implications of Timeliness Rules Strict timeliness rules for filing can allow significant problems to escape oversight... but generous timeliness rules may delay procurements and/or make finding a meaningful remedy later difficult and expensive Uniformity in timeliness rules has benefits... but there are benefits in having different time limits for solicitation & award challenges... and should timeliness be stricter if interim relief is sought? 13
14 Possibilities for Interim Relief Does the filing of a protest stop some/all progress in the procurement while the protest is pending? Does this depend on which phase is being challenged? Does the right to interim relief turn on a preliminary assessment of the merits? On timing? May the agency invoke particular needs to justify going forward? What deterrent, if any, is there to prevent agencies from going forward? 14
15 Avoiding Abuse Danger of abuse of the protest process: Excessive protests can disrupt procurements Can serve as improper leverage against gov t or other contractors Steps to avoid or counter use: Filing fees (but note risk) Prompt dismissal of frivolous protests Penalty/fine for frivolous protests (but note risk) 15
16 Implications of Time for Decision A longer time for decision allows for more meaningful review, but disrupts procurements longer A shorter time for decision may preclude meaningful review, but disrupts procurements less 16
17 Possibilities for Final Relief How often does the forum rule in favor of the protesting firm? How much power does the forum have to provide meaningful final relief? What forms of final relief are available? Are the costs of litigation shifted to the unsuccessful party? 17
18 Issues Related to Decisions Can decisions be made public? How is sensitive information in decisions handled? Are decisions subject to an appeal? 18
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