The Contract Management Body of Knowledge: Understanding an Essential Tool for the Acquisition Profession, Neal J Couture
George Washington University - Law School, Steven L. Schooner
George Washington University - Law School, 2013, CONTRACT MANAGEMENT, 36 (December 2013), GWU Law School Public Law Research Paper No. 2013-135, GWU Legal Studies Research Paper No. 2013-135
Abstract: The collective knowledge of any profession is commonly referred to as its body of knowledge. In the acquisition, procurement, or government contracting profession, the collective wisdom of the National Contract Management Association (NCMA) organizes, and periodically updates, a broadly accepted conceptual inventory of the profession’s acquired knowledge. This article describes the NCMA Guide to the Body of Knowledge, how it was developed and is maintained, and its importance and relevance to people concerned with the contract management profession.
Rethinking the World Bank's Sanctions System by Christopher R. Yukins George WashingtonUniversity - Law School, 2013, 55 The Government Contractor, No. 42, 355 (November 2013) GWU Legal Studies Research Paper No. 2013-132 GWU Law School Public Law Research Paper No. 2013-132
Abstract: The World Bank is reviewing its system for suspending and debarring contractors (known formally as the World Bank sanctions system). The system is used to suspend and debar contractors that have engaged in fraud or corruption (and other enumerated bad acts) related to Bank-financed projects. After reviewing the sanctions process, and identifying what appear to be the Bank’s current goals in its sanctions system (stemming reputational and fiduciary risks), the article recommends that the World Bank defer finalizing any reforms until it concludes its assessment of first principles, and has at hand all the data necessary to assess the sanctions system against those first principles. Reform of the World Bank sanctions system is important, both to those working on World Bank projects and to the broader developing world. The World Bank finances tens of billions of dollars in procurement every year, across the globe, and its procurement guidelines—and its sanctions system—offer important models for nations and institutions building new systems to fight corruption in procurement.
Operations of the Department of Defense During a Lapse in Appropriations by
Pat Towell Specialist in U.S. Defense Policy and Budget and Amy Belasco
Specialist in U.S. Defense Policy and Budget October 7, 2013 Congressional
SUMMARY: Because Congress did not provide any FY2014 funding for DOD by October 1, 2013, the beginning of the new fiscal year, DOD, like other agencies, is now subject to a lapse in appropriations during which agencies are generally required to shut down. The Office of Management and Budget (OMB), however, has identified a number of exceptions to the requirement that agencies cease operations, including a blanket exception for activities that “provide for the national security.”
USPS's de-regulated purchasing policies stymie defective pricing fraud cases by David P. Hendel, Husch Blackwell LLP
De-regulation of the U.S. Postal Service’s purchasing policies has stymied the prosecution of defective pricing fraud cases, according to a September 18, 2013 report issued by the USPS Office of Inspector General (OIG). U.S. Attorney’s offices have thus declined to criminally prosecute suppliers for submitting defective cost or pricing data in procurement actions valued at $36 million. The OIG therefore recommends that the Postal Service require suppliers to certify that cost or pricing data are accurate, complete, and current. USPS management, however, disagrees. The Postal Service believes its interests are already fully protected and the disadvantages of imposing a new certification requirement would outweigh any benefits.
Automatic/Mandatory Cross-Border Debarment: Key Constitutional & Trade Conflict Considerations That Any Robust Debarment Framework Must Necessarily Address,Sandeep Verma
Government of India - Ministry of Defence, September 20, 2013
Abstract: This short policy note contains an outline of certain key constitutional and trade conflict implications of cross-border debarment systems such as the World Bank Sanctions System. The issues raised herein could perhaps be examined and addressed in the ongoing reassessment process, while this policy note may also provide some useful inputs for designing automatic/ mandatory cross-border debarment systems in general.
Collaborative Public Procurement: A Quick Review of International Best Practices and the Indian Position on Pooled Procurement from Competition Law Perspectives by Sandeep Verma, Government of India - Ministry of Defence, August 10, 2013
Abstract: While collaborative public procurement can, under certain circumstances, result in overall economic efficiencies; such collaboration amongst dominant market players can sometimes raise significant anti-trust and other competition concerns. This short working paper contains a preliminary exploration of important issues of intersection between public procurement rules on collaborative procurement on the one hand with competition law issues on the other. The two important frameworks studied herein are the US and the EU frameworks on collaboration, together with a comparative review of the Indian position.
Cross-Debarment: A Stakeholder Analysis by Christopher R. Yukins
George Washington University - Law School, 2013. George Washington International Law Review, Vol. 45, 2013 GWU Legal Studies Research Paper No. 2013-112
GWU Law School Public Law Research Paper No. 2013-112
Abstract: As more nations and organizations establish debarment (or "blacklisting") systems, to exclude corrupt or incompetent firms and individuals from contracting, a serious question has arisen: if a contractor is debarred, should other jurisdictions automatically exclude that contractor in a “cross-debarment”? This paper, which grew out of an October 2012 symposium at the World Bank, discusses the advantages and disadvantages of cross-debarment, from the standpoint of various stakeholders. The article concludes that some stakeholders (such as debarring officials themselves) might prefer that there be no automatic cross-debarment, so that government officials retain discretion -- and so leverage -- to persuade contractors to take remedial measures. The paper concludes that while automatic cross-debarment might enhance anti-corruption efforts, automatic cross-debarment is likely to raise real -- and, in most cases, legitimate -- concerns in the affected stakeholder communities. Stakeholders would more likely coalesce around a more moderate approach, which ensured that debarments were fully publicized, and that officials in other nations had due notice of corruption and performance failure, but which left those officials with flexibility and discretion in addressing a foreign debarment.
The Congressional War on Contractors by Jessica Tillipman
The George Washington University Law School, 2013, George Washington International Law Review, Vol. 45, p. 235, 2013,
GWU Legal Studies Research Paper No. 2013-110,
GWU Law School Public Law Research Paper No. 2013-110
Abstract: The U.S. Suspension & Debarment regime is designed to ensure that the federal government does business only with “responsible” partners. One of the most fundamentally (and frequently) misunderstood aspects of the FAR 9.4 suspension & debarment system is that these tools are only to be used for the purpose of protecting the Government, not to punish contractors for their past misconduct. Unfortunately, recent congressional initiatives demonstrate many legislators’ desire to transform debarment into a tool of punishment by banishing contractors from the procurement system “with little consideration of whether such action is needed or fair.”
Instead of focusing on the government’s nuanced best interests, certain members of Congress continue to propose unnecessary, and in many instances counterproductive, legislation designed to fundamentally overhaul the debarment regime, often undermining contractor due process rights in the process. This article provides a sharp critique of recent congressional initiatives designed to transform the suspension and debarment regime into a punitive and non-discretionary sanction.
Restrain 'Risky Business': Treat High-Risk Private Security Contractors as Inherently Governmental. Charles Tiefer, University of Baltimore School of Law. 2013
Harvard Journal on Legislation, Vol. 50, 2013, pp. 209-237
Abstract: Should Congress limit private security contractors ("PSCs") in wartime by declaring that high-risk activities are "inherently governmental"? In government contracting law, private contractors are not permitted to conduct activities deemed inherently governmental. As a result, only governmental actors may perform those functions. The role of PSCs in war zones raises a number of questions as to where the line exists, in determining what is, or is not, within this classification. Traditionally, the government draws the line at combat and combat-related activities-only these functions are inherently governmental. This Article argues that the line should instead be drawn at "high-risk" activities, which would include a number of functions outside of combat. The author bases much of his argument on his personal experiences and observations as a member of the Commission on Wartime Contracting.
The Lower-Bid Bias in Public Procurement
Omer Dekel Academic Center of Law and Business - Ramat Gan Law School,
Amos Schurr Ben-Gurion University of the Negev, May 27, 2013
Abstract: Competitive bidding (CB) is the dominant governmental contracting mechanism by which hundreds of billions of dollars are allocated annually. We claim that when bid evaluators assess the qualitative components of competing bids while being exposed to the bid prices, a systematic bias occurs that gives an unjust advantage to the lower bidder. We term this the Lower-Bid Bias. It is then shown that this bias can be neutralized by splitting the evaluation process into two stages, whereby bid price is revealed only after the evaluation process has culminated (two-stage CB). This is demonstrated through the findings of a survey and two controlled experiments, the first to be conducted with procurement officials. We also explain why this bias is undesirable and suggest a mandatory rule, requiring two-stage CB for any competitive public procurement based on evaluation criteria other than price. Further applications of the experiments' findings are also discussed.
RESTRAIN “RISKY BUSINESS”: TREAT HIGHRISK PRIVATE SECURITY
CONTRACTORS AS INHERENTLY GOVERNMENTAL by CHARLES TIEFER, 50 Harv. J. on Legis.
Should Congress limit private security contractors (“PSCs”) in wartime by declaring that high-risk activities are “inherently ”governmental”? In government contracting law, private contractors are not permitted to conduct activities deemed inherently governmental. As a result, only governmental actors may perform those functions. The role of PSCs in war zones raises a number of questions as to where the line exists, in determining what is, or is not, within this classification. Traditionally, the government draws the line at combat and combat-related activities—only these functions are inherently governmental. This Article argues that the line should instead be drawn at “high-risk” activities, which would include a number of functions outside of combat. The author bases much of his argument on his personal experiences and observations as a member of the Commission on Wartime Contracting.
Is “Protection” Always in the Best Interests of the Government?: An Argument to Narrow the Scope of Suspension and Debarment by Yuri Weigel · March 2013, 81 GEO. WASH. L. REV. 627 (2013)
The federal government spent over $550 billion procuring goods, services, and construction from the private sector last year. To keep these taxpayer dollars from going to inscrutable contractors, the government uses the remedies of suspension and debarment to ensure that only “responsible” parties perform government contracts. The current regulations, however, are too broad and permit agencies to suspend and debar individuals and companies that do not have an established connection to government contracting. In the face of political pressures to increase suspension and debarment actions, these overbroad regulations invite misuse. Not only do actions against such individuals and companies violate the purposes of the suspension and debarment regulations—protecting the government and acting in the public interest—they are inefficient and waste valuable taxpayer resources. Narrowing the scope of suspension and debarment regulations so that agencies may take actions only against those individuals and companies that currently contract, or have previously contracted, with the government ensures suspension and debarment programs are efficiently employing their limited resources with an aim toward protecting the government, not generally policing contractor behavior.
Be Careful What You Wish for: Thoughts on a Compliance Defense under the Foreign Corrupt Practices Act
by Peter J. Henning Wayne State University Law School 2012
Ohio S state Law Journal, Vol. 73, No. 883
Wayne State University Law School Research Paper No. 2013-03
Abstract: The Foreign Corrupt Practices Act has become a major weapon to police the conduct of global corporations. The number of prosecutions by the Department of Justice and Securities & Exchange Commission has increased steadily over the past decade, accompanied by larger fines and penalties for companies caught paying bribes as part of their overseas operations. Given the scope of corporate criminal liability, which allows for a prosecution based on the acts of virtually any agent acting on behalf of the organization, companies have agitated for the ability to defend against charges when they have in place compliance programs designed to prevent and report violations. This compliance defense has been extolled as a means to give corporations a weapon to fight the government when they have tried, but failed, to prevent misconduct that would otherwise result in potentially crippling criminal charges. This article, which was the basis for the keynote address given at the symposium “The FCPA at Thirty-Five and Its Impact on Global Business” put on by the Ohio State Law Journal, considers how a compliance defense would operate, and its benefits and burdens. While often advanced as a boon to corporations and the government, it could subject companies to intrusive investigations by prosecutors seeking information that could be used to overcome it, and there are questions about how aggressively a company might advance the defense when cooperation is the key to avoiding criminal charges. While the defense would provide a means to combat criminal charges, the compliance defense may not be as significant as sometimes portrayed by its proponents.
Ready for Primetime? The Interagency Suspension and Debarment
Committee, the Nonprocurement Common Rule, and Lead Agency Coordination by
Brian Young*, WILLIAM & MARY POLICY REVIEW VOL. 4:110
The Interagency Suspension and Debarment Committee (ISDC) is a unique governmental body whose responsibilities are directed by both the executive and legislative branches. But this was not always the case. Prior to 2008, the ISDC remained largely an obscure organization unknown to anyone outside of the Office of Management and Budget (OMB) or the agency personnel charged with handling suspension and debarment matters. Legislation in 2008 changed all of this by requiring the ISDC to designate an agency to take the lead on a suspension or debarment action where more than one agency had an interest, and to also report annually to Congress on suspension and debarment issues. These responsibilities, although new, were years in the making and the result of several legislative efforts since 2002 that had alternatively died in committee or were objected to by the OMB.
This Article reviews the historical foundation for a uniform suspension and debarment system dating back to the 1960s and leading up to the creation of the ISDC in 1986. This Article also explores how the ISDC’s influence grew to include both nonprocurement and procurement suspension and debarment matters, as well as how a lead agency is designated for a suspension or debarment action. Special attention is also given to assessing the ISDC’s success in performing its 2008 statutory responsibilities, including the coordinating and staffing difficulties that prevented the ISDC from timely meeting its reporting obligation to Congress. Also analyzed is recent guidance from the OMB directing greater executive agency participation in the ISDC, as well as current Congressional appropriations and contingency contracting initiatives that could potentially complicate the ISDC’s coordinating functions.
This Article concludes with several recommendations the ISDC should take to improve its functioning, enhance its credibility, and restructure its leadership and mission. Specifically, the ISDC should continue its efforts to fully unify non-procurement and procurement suspension and debarment practices, establish formal guidelines by which lead agencies are selected, revitalize the ISDC website with fully accessible suspension and debarment content, address the need for permanent staffing, and assess the selection and priorities of future leaders of the ISDC. Implementing these recommendations will better enable the ISDC to remain at the forefront of the suspension and debarment field.
[Maj. Brian Young, GW LLM 2012, recently published his thesis on the Interagency Suspension & Debarment Committee ]
Anti-Corruption Internationally: Challenges In Procurement Markets Abroad - Part II: The Path Forward for Using Procurement Law to Help with Development and the Fight Against Corruptio Daniel I. Gordon George Washington University - Law School 2013 West Government Contracts Year in Review Conference Covering 2012 Conference Briefs, Thomson Reuters, 2013
GWU Legal Studies Research Paper No. 2013-40
GWU Law School Public Law Research Paper No. 2013-40
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2012), discusses developing issues in international public procurement. Among other things, the paper suggests that there is growing recognition of the role that procurement can play in national development and the fight against corruption. In the paper the author points out that, while there is a worldwide trend toward more and more similar procurement systems, that trend does not mean that procurement systems are becoming, or should become, uniform. Moreover, the author contends in the paper that procurement law has only a limited role in national development and the fight against corruption, and it is important that the focus shift more to implementation. With respect to the procurement legal framework, the author advocates a focus on key principles and the essential minimum requirements, rather than on specific details.
2012 - Guide to Enactment of the UNCITRAL Model Law on Public Procurement
See full text of the guide
UNCITRAL Model Law on Public Procurement, 2011
*Note: This version of the Guide to Enactment of the UNCITRAL Model Law on Public Procurement is posted on the UNCITRAL website in English only. An official electronic publication of the Guide, with cross-references hyperlinked for ease of use, is being prepared and will be posted on this web page in all languages in due course.
Date of adoption: 28 June 2012
The United Nations Commission on International Trade Law (UNCITRAL) has prepared this Guide to enactment of its 2011 Model Law on Public Procurement (the Model Law) to provide background and explanatory information on the policy considerations reflected in the Model Law.
This Guide is intended as a reference tool for policymakers and legislators, regulators and those providing guidance to users of a procurement system based on the Model Law. The primary focus of these readers will vary: for policymakers and legislators, it may be on whether to engage in procurement reform and, if so, the scope of the reform to be undertaken and which provisions to enact. For regulators and those providing guidance to users, it may be on specific issues of implementation and use of the provisions of the Model Law. For this reason, the Guide separates, to the extent possible, commentary on policy issues and on issues of implementation and use of the Model Law.
This Guide is also intended to assist users of the earlier UNCITRAL Model Law in the area of public procurement - the Model Law on Procurement of Goods, Construction and Services (adopted in 1994, the "1994 Model Law") - in updating their legislation to reflect recent developments in public procurement. It therefore addresses the expanded scope of the Model Law as compared with its 1994 counterpart, and also explains, as necessary, the main recent developments in procurement policies and practice that underlie the revisions made to that 1994 Model Law.
Defining the Borders of Uniform International Contract Law: The CISG and Remedies for
Innocent, Negligent or Fraudulent Misrepresentation, Ulrich G. Schroeter University of Mannheim - Faculty of Law, March 12, 2013, Villanova Law Review (2013, Forthcoming)
Abstract: The exact definition of the substantive scope of the United Nations Convention on Contracts for the International Sale of Goods (CISG) of 11 April 1980 is a difficult but necessary task: Necessary because the scope determines over which domestic rules of law the Convention prevails, thereby preempting the concurrent domestic law’s application, and difficult because the CISG itself provides limited guidance about the method through which this definition is to be achieved.
This article commences by discussing two approaches used in this regard in case law and legal writings on the Convention: (1) the reliance on Article 4 CISG, and (2) the use of dogmatic categories of domestic law such as “contracts” and "torts". Both are found wanting, in particular in light of Article 7(1) CISG calling for an internationally uniform interpretation of the Convention’s scope.
Against this background, the article develops a novel two-step approach with Article 7(1) CISG in mind. According to this approach, a domestic law rule is displaced by the Convention if (1) it is triggered by a factual situation which the Convention also applies to (the “factual” criterion), and (2) it pertains to a matter that is also regulated by the Convention (the "legal" criterion). Only if both criteria are cumulatively fulfilled, the domestic law rule concerned overlaps with the Convention’s sphere of application in a way that will generally result in its preemption.
In third part of the article, the two-step approach is being applied to remedies for misrepresentation known in Common law jurisdictions, in turn dealing with remedies for innocent misrepresentation, negligent misrepresentation and fraudulent misrepresentation and thus defining their relationship towards the uniform law rules of the Sales Convention.
Bid Protests: The Costs are Real, but the Benefits Outweigh Them, Daniel I. Gordon ,George Washington University - Law School, 2013, 42:3 Pub. Contract L.J. (Spring 2013), Forthcoming GWU Legal Studies Research Paper No. 2013-41, GWU Law School Public Law Research Paper No. 2013-41
Abstract: The author analyzes the costs and benefits of bid protests, with a focus on protests filed at the Government Accountability Office (GAO). The author explains that the costs are often overstated, in that GAO’s reporting methodology leads observers to overstate the number of protests and the frequency of successful protests. The author also reports on research regarding what happens after GAO sustains protests, and indicates that firms that successfully protest to GAO generally do not obtain the contract that was the subject of the protest. The article also explains that the “automatic stay” of procurements triggered by a protest to GAO rarely stays in place for the maximum allowable time. The author also addresses the benefits of protests, such as the increase in transparency and accountability that they bring.
"Considering the Effects of Public Procurement Regulations on Competitive Markets," by Christopher Yukins & Jose Cora, 55 Government Contractor para. 64 (Mar. 6, 2013),
Abstract: Professor Albert Sanchez Graells of the University of Hull (UK), who will be joining a symposium on competition and procurement law at GW Law School on March 12, 2013, Competition Procurement Symposium,recently published a vitally important book on procurement law, Public Procurement and the EU Competition Rules (Hart Publishing 2011). In his study, Sanchez Graells asked what seems like a simple question: Shouldn’t regulators, when writing procurement regulations, consider the likely impact of those regulations on competitive markets? Sanchez Graells pointed out that far too little attention has been paid to the anticompetitive impact of public procurement regulation. This article assesses Sanchez Graells’ thesis from a U.S. perspective. In many ways the U.S. federal procurement system stands at one end of a spectrum: Even when squarely addressing the intersection of procurement regulation and the commercial market, U.S. procurement regulators have not considered their rules’ likely effects on competitive commercial markets. The article points out that this is in sharp contrast to the European Union’s strong emphasis on using procurement rules to integrate a broader European market. The article notes that there is substantial legal authority in the United States for assessing, as part of the rulemaking process, the likely competitive impact of proposed procurement rules -- and that doing so could integrate the $500 billion federal procurement system much more efficiently into the commercial marketplace.
Emerging Policy and Practice Issues
by Steven L. Schooner
George Washington University - Law School, David J. Berteau
Center for Strategic and International Studies, Defense - Industrial Initiatives Group 2013 ,West Government Contracts Year in Review Conference Covering 2012 Conference Briefs, Thomson Reuters, 2013, GWU Legal Studies Research Paper No. 2013-38 ,GWU Law School Public Law Research Paper No. 2013-38
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2012), attempts to identify the key trends and issues for 2013 in U.S. federal procurement. Budgetary and financial insecurity emerge as the most significant emerging issues in government contracting. Consistent with prior practice, this chapter offers extensive coverage of the federal procurement spending trend and attempts to predict what lies ahead. Among other things, it discusses the pending sequestration, procurement spending rates, agency purchasing data (particularly at the Defense Department, Department of Homeland Security, and the Department of State and the Agency for International Development), grants spending, outsourcing versus insourcing, the continued Defense Department Better Buying Power Initiative (now in version 2.0), the acquisition workforce, the PSC Acquisition Survey, and contractor fatalities.
Competition Agency Design: What's on the Menu?
by William E. Kovacic
George Washington University - Law School and David A. Hyman
University of Illinois College of Law, November 21, 2012, GWU Legal Studies, Research Paper No. 2012-135, GWU Law School Public Law Research Paper No. 2012-135
Abstract: In recent years the United Kingdom and various other countries have decided to restructure the institutions responsible for enforcing competition laws. How should a nation choose among myriad alternative arrangements? This paper lays out nine major institutional choices that governments must address in designing the implementation mechanism for a competition law. The paper discusses tradeoffs associated with each choice and examines interdependencies among different design elements. In doing so, the paper offers a structured framework that countries can use in forming new competition systems or altering existing institutional arrangements.
Debarment and Suspension in Public Procurement:
A Quick Survey of Associated Government Regulations and Practice in India, by Sandeep Verma Ministry of Defence, Government of India, December 5, 2012.
Abstract: Debarment and suspension of erring contractors are important tools for ensuring compliance with integrity-obligations of government contractors. These actions are commonly referred to under Indian government regulations as banning of business dealings and suspension of business dealings respectively; and executive guidance in India on the subject typically originates from a wide and rich variety of sources. This short paper undertakes a quick survey of available regulatory literature on the subject, and suggests a way forward for procurement reform through early harmonisation and consolidation of guidance, particularly in context of expected developments under the newly proposed Public Procurement Bill, 2012.
Government Lawyering by Jessica Tillipman, The George Washington University Law School and Robert Mahini, George Washington University Law School. 2011, 11-3 BRIEFING PAPERS 1-28, February 2011, GWU Legal Studies Research Paper No. 2012-117,
GWU Law School Public Law Research Paper No. 2012-117
Abstract: The legal profession is regulated with numerous ethical rules designed to ensure that practitioners comply with its high standards of professional conduct. Federal Government attorneys, while generally held to the same ethical standards as other attorneys, are subject to an additional set of requirements mandated by federal laws and regulations. This article focuses on the rules most crucial to the protection of the public welfare: 1) Government attorneys’ ethical obligations, and 2) Government attorneys’ duty to properly control information.
Government attorneys of the Executive Branch must comply with the “Standards of Ethical Conduct for Employees of the Executive Branch.” This article provides an overview of the rules most relevant to daily practice, such as the acceptance of gifts, bribery and gratuities, conflicts of interest, post-employment restrictions, and limitations on outside activities. In addition, the paper discusses the Hatch Act, which restricts Government attorneys from engaging in certain political activities.
Government attorneys face a unique tension when handling nonpublic information. Generally, Government attorneys should keep client information confidential; however there are two important exceptions: 1) the Freedom of Information Act (“FOIA”), and 2) the Whistleblower Protection Act (“WPA”). The article provides an overview of both statutes and their impact on Government attorneys.
Misrepresentation: The Restatement’s Second Mistake by Stephanie R. Hoffer
Ohio State University (OSU) - Michael E. Moritz College of Law, September 18, 2012, Ohio State Public Law Working Paper No. 173
Abstract: The contract defenses of mistake and misrepresentation, while conceptually distinct in theory, contain an inefficient amount of overlap in practice. This is because a misrepresentation of one party, when believed, results in a mistaken belief of the other. Each produces a failure of consent resulting from at least one party’s misconception of the facts, and each may result in rescission coupled with restitution. The coextensiveness of the defenses suggests that, absent an overriding normative justification, the legal test and remedy should be the same for each. Such a normative justification exists only in the case of fraudulent misrepresentation which, unlike mistake or non-fraudulent misrepresentation, involves the intentional infliction of a dignitary harm. In such cases, punishment and deterrence are appropriate normative goals.
Because punishment and deterrence are best achieved through provision of a punitive remedy rather than through determination of the remedy’s availability, they present no impediment to the adoption of a single defense in lieu of separate defenses of mistake and misrepresentation. Furthermore, punishment and deterrence are not fully achieved by the commonly available remedy of rescission coupled with restitution, which may impose reputational cost but leaves the wrongdoer in a financial position no worse than if fraud had not been committed. Accordingly, this Article recommends the adoption of a single defense of misconception coupled with a grant of discretion to courts for punitive damages in cases of fraud. Eliminating separate defenses and allowing an expanded remedy on the basis of intentionally false assertions would promote simplicity, efficiency, and predictability while buttressing the unique role of the fraud defense in contract law.
The Breakdown of the United States Government Purchase Card Program and Proposals for Reform, by Jessica Tillipman,
The George Washington University Law School, 2003, 12 Public Procurement Law Review 229 (2003) ,GWU Legal Studies Research Paper No. 2012-116 ,
GWU Law School Public Law Research Paper No. 2012-116
Abstract: The Government Purchase Card Program introduced purchase cards to streamline the acquisition of items and services under $2,500. Purchase cards have proved to be extremely efficient, with some estimates putting the savings for the Government at $75 per transaction. Unfortunately, the Government has failed to maintain effective controls over cardholders and this has led to systemic abuse, preventing the Government from realizing the full potential of the purchase card program.
There are three main problems with the current scheme. First, cardholders are ignoring internal controls, resulting in purchases that supervisors cannot verify as consistent with procurement regulations. Second, the proliferation of cardholders has also led to a lack of control. In some agencies, one out of every four employees carries a purchase card, making it difficult to accurately supervise spending. Finally, cardholders do not receive enough training before being authorized to spend taxpayer money.
This paper recommends a thorough overhaul of the purchase card program. The GAO has recommended several initiatives, including; pre-approval of purchase card transactions; establishment of documentation requirements; and a reduction in the number of cardholders. In addition to adopting these recommendations, the Government must improve its relationships with financial institutions and take advantage of the data-mining software those institutions have available. The Government should also learn from the private sector by implementing a policy of stringent oversight, to include daily and monthly spending limits; blocks on specific categories of expenditure; and “24/7 monitoring” of spending. These improvements would allow the Government to truly benefit from this efficient method of procurement.
Contract Theory and the Failures of Public-Private Contracting, by Wendy Netter Epstein
Illinois Institute of Technology - Chicago-Kent College of Law; Kirkland & Ellis, October 23, 2012, Cardozo Law Review, Forthcoming
Abstract: The market for public-private contracting is huge and flawed. Public-private contracts for services such as prisons and welfare administration tend to result in cost savings at the sacrifice of quality service. For instance, to cut costs, private prisons skimp on security. Public law scholars have studied these problems for decades and have proposed various public law solutions. But the literature is incomplete because it does not approach the problem through a commercial lens. This Article fills that gap. It considers how economic analysis of contract law, in particular efficiency theory and agency theory, bear upon the unique problems of public-private contracting.
Public-private contracts are subject to systematic biases that cause the parties to impose a cost on service recipients in the form of low quality service. Because there is essentially no competitive market for these services, the contracting parties are not forced to internalize these costs. As a result, contracts tend to be underpriced. Thus, what appears to be a cost-saving mechanism is often, in fact, a systematic market failure.
This Article proposes two unconventional and counterintuitive solutions to force the parties to internalize the cost of poor service provision. First, it suggests reading into public-private contracts a mandatory duty to act in furtherance of the public interest. Although efficiency theory assumes that mandatory restrictions on contracting parties are inefficient, a mandatory rule is justified, here, because the law must protect non-parties to the contract who cannot adequately protect themselves. Second, this Article argues, based on, behavioral economics studies, that these contracts should be less detailed. Although agency theory suggests that detailed tasks, performance incentives, and monitoring mitigate agency costs, those mechanisms do not work with public-private contracts. Studies indicate that less detailed contracts that rely on social norms such as reciprocity may better align incentives.
Contracting Command - Aberdeen Proving Ground Contracting Center's Management
ofNoncompetitive Awards Was Generally Justified (Report No.
What We Found
ACC-APG contracting personnel adequately justified contracts as sole source for 28 of the 30 noncompetitive contracts. However, contracting personnel did not provide adequate justification for the noncompetitive award of two contracts. ACC-APG contracting personnel did not:
• approve the Justification and Approval (J&A) until 462 days after contract award for one contract because of funding and organizational changes; or
•produce evidence that a J&A was completed or that market research was adequately documented for one contract. We made multiple attempts to obtain the contract documentation; however, ACC-APG contracting personnel did not provide an adequate reason for why the documentation was not included in the contract file.
In addition, ACC-APG contracting personnel did not include one or both of the statements required in nine contracts to ensure that interested sources were aware of actions they can take to compete for the contracts.
As a result, ACC-APG contracting personnel did not approve the J&A within a reasonable time after contract award as required by the Federal Acquisition Regulation (FAR). Also, ACC-APG contracting personnel did not have adequate documentation justifying the award of one contract as sole source. In addition, interested sources may not have been aware of actions they could have taken to compete for nine contract awards because ACC-APG contracting personnel did not follow applicable FAR guidance.
Government by Contract and the Structural Constitution, by Kimberly N. Brown, University of Baltimore School of Law ,May 15, 2012, Notre Dame Law Review, Vol. 87, No. 2, 2011, pp. 491-535, University of Baltimore School of Law Legal Studies Research Paper No. 2012-12
Abstract: Although private parties have performed government functions throughout most of Western history, mainstream administrative law scholarship is dotted with concerns over the extent to which modern federal government activities are outsourced to private contractors. Federal contractors routinely exercise authority that is classically “executive” in nature. They write regulations, interpret laws, administer foreign aid, manage nuclear weapons sites and intelligence operations, interrogate detainees, control borders, design surveillance systems, and provide military support in combat zones. Administrative law places few constraints on private contractors, and prevailing constitutional principles—the state action and private delegation doctrines, in particular—are either inept at holding private contractors to constitutional norms or utterly moribund. A common theme that appears in the vast literature on privatization, therefore, is accountability. There is no recognized constitutional theory that meaningfully prohibits Congress or the President from transferring significant amounts of discretionary governmental power to wholly private entities that operate beyond the purview of the Constitution, and there is relatively sparse scholarly analysis of the subject. This Article searches for a constitutional principle that could be employed to address hypothetical outsourcing arrangements that go too far for the American appetite. In that pursuit, it looks to the law governing independent agencies as a natural starting point for evaluating the propriety of outsourcing relationships from the standpoint of the structural Constitution. It then introduces two ideas with an eye toward sparking fresh thinking about the constitutionality of privatization: first, the notion that all actors exercising federal government power should be viewed along a constitutional continuum and not as occupying separate private/public spheres; and, second, that a democratic accountability principle may be derived from the Supreme Court’s recent decision in Free Enterprise Fund v. Public Co. Accounting Oversight Board, as a constitutional hook for addressing government-by-contract gone awry.
A Conceptual Framework for Efficient Design of Counter-Obligations in Government Contracts and Licenses by Sandeep Verma,
Ministry of Defence, Government of India, August 17, 2012, 5th International Public Procurement Conference, Seattle, August 2012
Abstract: A number of countries impose counter-obligations on parties desirous of obtaining government contracts and regulatory licenses, generally on account of a strong desire and need to obtain reciprocal benefits for specific constituencies for the contracts so awarded or the privileges so accorded. These counter-obligations are usually applied in inefficient procurement markets; and could also serve as useful political instruments for mollifying domestic or local constituencies. An interesting feature, in most cases, is that the license or the contract is required to be granted or entered into upfront, whereas the counter-obligations are usually required to be discharged over much longer periods of time. Effective design of a counter-obligations framework is therefore a matter of critical concern for policy-makers and other stakeholders; and this short paper attempts a comprehensive review of various important aspects that need to be taken note of while designing policies and regulations, in order that the counter-obligations mechanism is able to effectively deliver expected public benefits.
Military Law Review, Volume 211, Spring 2012., TWENTY-THIRD MAJOR FRANK B. CREEKMORE LECTURE: “WHERE WE CAME FROM AND WHERE WE MAY BE GOING,” DR. MICHAEL J. DAVIDSON, Page 263,
From the introduction
If history is a gauge there has always been procurement fraud and there will always be procurement fraud. From the birth of the nation, there have been contractors who have put personal profit before patriotic fervor and have defrauded the military. Unfortunately that misconduct continues today as our nation is engaged in two wars in Southwest Asia.
In the procurement community there are two competing forces, corruption control on one side and commercial/business-like acquisition reform advocates on the other. The corruption control forces want greater government oversight and regulation, and a strong anti-fraud legal regime. In contrast, there are those who want to procure or sell goods and services as efficiency and inexpensively as possible, with little regulation and oversight. Beginning during the Civil War, the interplay between these two forces influenced the development of our current body of law, and the tug and pull between them has been particularly pronounced in modern times.
First, I will review the history of procurement fraud, primarily focusing on the military as victim and the development of the current fraud control regime. Second, I will discuss three current issues: (1) the disturbing involvement of uniformed members of the military in procurement fraud; (2) the need for a sustained source of anti-fraud funding; and (3) the President’s recent draft Executive Order attempting to merge campaign finance reform with the procurement fraud regime.
International Procurement, Howard A. Wolf-Rodda Venue Guru International, Daniel J. Mitterhoff, University of Maryland Francis King Carey School of Law, 2012, The International Lawyer, V. 46, No. 1, Spring 2012, p. 231-237
U of Maryland Legal Studies Research Paper No. 2012-42
Abstract: This year in review article for 2011 focuses on developments in Chinese procurement law in the realm of socio-economic policies, most notably, policies aimed at (1) enhancing contracting opportunities for China's small and medium business, and (2) preferential treatment of domestically-developed technology products.x
Venture Capital Investment and Small Business Affiliation Rules: Why a Limited Exception is Crucial to Economic Recovery Efforts by Jessica Tillipman George Washington University, firstname.lastname@example.org and Damian Specht
THE TWENTY-SEVENTH GILBERT A. CUNEO LECTURE IN GOVERNMENT CONTRACT LAW Daniel I. Gordon, Volume 210, Winter 2011, Military Law Review.
Affirmatively Inefficient Jurisprudence?: Confusing Contractors Rights to Raise Affirmative Defenses with Sovereign Immunity by Steven L. Schooner
George Washington University - Law School and Pamela Kovacs
George Washington University - Law School 2012
21 Federal Circuit Bar Journal 686 (2012)
GWU Legal Studies Research Paper No. 2012-51
GWU Law School Public Law Research Paper No. 2012-51
Courts make mistakes, but such errors need not indefinitely lead to inefficient, ineffective, or unfair results. The Federal Circuit should revisit the substance of Maropakis, en banc, at the first opportunity. Until then, contractor counsel should seek en banc review in any related cases or, where appropriate, consider amicus briefing. The Justice Department’s attorneys should exercise their discretion and refrain from exploiting Maropakis. Contractor counsel should craft arguments that persuade individual COFC judges to avoid the harsh and inefficient application of Maropakis. Administrative judges on the agency boards of contract appeals should stay the course and, if necessary, distinguish Maropakis. And, if the Federal Circuit fails to remedy the situation, Congress should craft and enact a legislative solution.
ABOLISHING THE PROHIBITION ON PERSONAL SERVICE CONTRACTS | Isenberg Institute of Strategic Satire, Journal of Legislation
2012, by Michael K. Grimaldi
From the Introduction:President Clinton used to say that the “era of big government is over.” Yet, nothing could be further from the truth. The government is bigger than ever, and growing. n2 One reason for this trend is the growth in the service contractor industry. Service contractors perform services and do jobs on behalf of the federal government. The services that contractors perform run the gamut from low-level janitorial work to background checks, and classified intelligence work. Service contractors are doing the exact same work as federal employees; so although the size of the federal civil service n3 has been reduced, the number of contractors working on behalf of the government has skyrocketed.
Rethinking Federal Circuit Jurisdiction, Paul R. Gugliuzza, University of Florida - Fredric G. Levin College of Law, June 13, 2012, Georgetown Law Journal, Vol. 100, p. 1437, 2012
Abstract: Thirty years ago, Congress created the Federal Circuit for the overriding purpose of bringing uniformity to patent law. Yet less than half of the court’s cases are patent cases. Most Federal Circuit cases involve veterans benefits, government-employment actions, government contracts, and other matters. Although existing literature purports to study the Federal Circuit as an institution, these projects focus largely on the court’s patent cases. This Article, by contrast, considers whether the court’s nonpatent docket might affect the development of patent law and whether the court’s specialization in patent law has consequences for how it decides nonpatent cases.
These inquiries result in two primary contributions. First, drawing on institutional-choice theory, this Article suggests that certain litigants—particularly military veterans but also government employees and government contractors—should not be forced to litigate appeals in a specialized court in Washington, D.C. Second, the Article offers a structural remedy that might help cure a frequently discussed problem with Federal Circuit patent law: that it is not sufficiently sensitive to innovation policy. By replacing some of the court’s current nonpatent docket with a variety of commercial disputes (over which the Federal Circuit would not have exclusive jurisdiction), the court might better understand the role that patents play in stimulating (or impeding) innovation in different industries.
Procurement Markets Internationally: An Update, and the Road Ahead, by
Christopher R. Yukins George Washington University - Law School, Robert D.
Anderson World Trade Organization, 2012, West Government Contracts Year in
Review Conference (Covering 2011), Thomson Reuters, 2012, GWU Legal Studies
Research Paper No. 2012-32, GWU Law School Public Law Research Paper No. 2012-32
Abstract: , These papers, presented by Christopher Yukins and Robert Anderson at the West Government Contracts Year in Review Conference (covering 2011), attempt to identify the key trends and issues for 2011 in U.S. federal procurement. The papers, given as part of the "international" session at the conference, discuss key developments in the WTO Government Procurement Agreement and in the evolution of trade policy under that agreement. The papers discuss recent amendments to the WTO, and the pending accessions of a number of nations (including China and, potentially, India) to the agreement.
(MYP) and Block Buy Contracting in Defense Acquisition: Background and Issues
for Congress by Ronald O'Rourke Specialist in Naval Affairs, Moshe Schwartz
Specialist in Defense Acquisition, Congressional Research Service, June 13, 2012
Introduction This report provides background information and issues for Congress on multiyear procurement (MYP) and block buy contracting (BBC), which are special contracting mechanisms that Congress permits the Department of Defense (DOD) to use for a limited number of defense acquisition programs. Compared to the standard or default approach of annual contracting, MYP and BBC have the potential for reducing weapon procurement costs by several percent.
Potential issues for Congress concerning MYP and BBC include whether to use MYP and BBC in the future more frequently, less frequently, or about as frequently as they are currently used, and whether to create a permanent statute to govern the use of BBC, analogous to the permanent statute (10 U.S.C. 2306b) that governs the use of MYP. Congress’s decisions on these issues could affect defense acquisition practices, defense funding requirements, and the defense industrial base.
Logistics Civil Augmentation Program (LOGCAP) Legal Reviews, Major Theodore T. Richard, The Army Lawyer, January 2012
Introduction You are assigned as a contract/fiscal law attorney in Afghanistan and you are handed a file to review marked “LOGCAP.” You are told that this is merely a project validation, and not a final contract—no prices have yet been finalized. What information is necessary for you to complete a review of this file? This article will help you understand the LOGCAP validation process and the role of the legal advisor in that process.
Affirmatively Inefficient Jurisprudence?: Confusing Contractors’ Rights to Raise Affirmative Defenses with Sovereign Immunity by Steven L. Schooner
George Washington University - Law School, Pamela Kovacs
George Washington University - Law School, 2012, 21 Federal Circuit Bar Journal 686 (2012), GWU Legal Studies Research Paper No. 2012-51, GWU Law School Public Law Research Paper No. 2012-51
Abstract: In M. Maropakis Carpentry v. United States, the U.S. Court of Appeals for the Federal Circuit upset the commonly understood rules of practice and procedure for government contracts dispute litigation. In what the Supreme Court might view as a drive-by jurisdictional ruling, the court held that a contractor must file its own claim for time extensions before it can defend against a government claim for liquidated damages. Two Court of Federal Claims cases then confirmed fears that the decision would create a significant, disruptive, and disadvantageous change in procedural posture for a large number of contractors defending against government claims. If unchecked, Maropakis may reflect one of the most significant changes in government-contracts litigation posture since the flurry of jurisdictional litigation following the late-1970s enactment of the Contract Disputes Act.
Courts make mistakes, but such errors need not indefinitely lead to inefficient, ineffective, or unfair results. The Federal Circuit should revisit the substance of Maropakis, en banc, at the first opportunity. Until then, contractor counsel should seek en banc review in any related cases or, where appropriate, consider amicus briefing. The Justice Department’s attorneys should exercise their discretion and refrain from exploiting Maropakis. Contractor counsel should craft arguments that persuade individual COFC judges to avoid the harsh and inefficient application of Maropakis. Administrative judges on the agency boards of contract appeals should stay the course and, if necessary, distinguish Maropakis. And, if the Federal Circuit fails to remedy the situation, Congress should craft and enact a legislative solution.
DCAA-Is Anyone Home? By Richard C. Loeb, Government Contract Costs, Pricing & Accounting Report,Volume 7, Issue 3, May 2012. (From POGO site.)
From the paperThis article follows up on my earlier article, “GAO vs. DCAA—And The Winner Is? ... Contractors!” 5 CP&A Rep. ¶ 15. In that article, I explored the findings from two Government Accountability Office reports that had a profound impact on the Defense Contract Audit Agency. Little did I know just how profound that impact would be to the contracting community and taxpayers.
Towards the end of the earlier article, I posed the question of whether DCAA’s initiatives for improved working paper documentation and improved sampling of low-risk transactions, as recommended by GAO, would result in improvements in DCAA audits. I ended with a comment that only time will tell whether the impact of the GAO reports on DCAA would result in greater audit findings. Now I am back two years later to answer that question-and the answer is a very sad no. In many practical ways, DCAA has, in essence, stopped performing audits.
Communicating Governance: Will Plain English Drafting Improve Regulation?, by Steven L. Schooner, George Washington University - Law School, George Washington Law, Review, Vol. 70, No. 1, 2002 ,GWU Law School Public Law Research Paper No. 031
Abstract: It should come as no surprise that the Bush administration showed little interest in adopting Vice President Gore's ambitious, high profile National Performance Review (NPR) agenda. One area, however, where the Bush administration would do well to embrace the NPR’s efforts is the plain language initiative. While it would be hyperbole to suggest that the NPR's efforts dramatically improved the clarity of the government's written communication (including statutes, regulations, policies, instructions, etc.), some progress was made. Yet it will take some time before a commitment to writing in plain, clear, precise English becomes a cultural (or governmental) norm. Even though the plain language movement lost its most well-placed executive branch advocate, champions outside the government may fill the void. In that context, Thomas A. Murawski’s WRITING READABLE REGULATIONS is poised to make a valuable contribution. In addition to discussing the roots of the plain language movement and summarizing Murawski’s approach to making governmental writing more accessible, this paper advocates for governmental investment in clarity in communication. To the extent that cost-benefit analysis only recently achieved prominence in our administrative state, it seems disingenuous to argue that the marginal cost of clear communication is not worth the investment. In a democracy, it is a shame that clear communication remains an aspiration, rather than a norm.
Prevention and Deterrence of Bid Rigging: A Look from the 2011 Proposal for a New EU Directive on Public Procurement, Albert Snchez Graells, Comillas Pontifical University, May 7, 2012, Presented to: Integrity and Efficiency in Sustainable Public Contracts Turin (Italy), June 8, 2012
Abstract: The relevance of preventing and deterring instances of bidders’ collusion or bid rigging in public procurement has gained notorious attention in recent years, both due to the evident pressure on the public buyer to maximise value for money in times of crisis, and to the increased efforts and advocacy papers published by international organisations such as the OECD. Developing effective tools to prevent and deter collusion in public procurement can generate very relevant savings for the public purse and boost expenditure capabilities, as well as make a significant contribution to the promotion of effective market competition in sectors where procurement accumulates a significant volume of total purchases—to the indirect benefit of private buyers of the same or similar goods or services.
This paper describes the current situation, where bid rigging seems pervasive in public-buyer dominated industries (at least in the European Union) and then focuses on some of the instruments and provisions designed to prevent and deter bid rigging that have been included in the December 2011 European Commission proposal for a new Directive on public procurement (replacing current Directive 2004/18). The paper particularly focuses on the issues of contract division into lots and the rules controlling disqualification, suspension and debarment of competition law infringers, as two of the main tools that could effectively help prevent and deter collusion in the public procurement setting.
TREATING THE SYMPTOMS BUT NOT THE DISEASE: A
CALL TO REFORM FALSE CLAIMS ACT ENFORCEMENT by Lieutenant Colonel Charles T.
Kirchmaier, 209 MIL. L. REV. 186
From the Introduction: This article outlines the problems underlying the government’s current FCA enforcement practices and recommends a model for reforming how qui tam lawsuits are regulated by the Department of Justice (DoJ) before turning them over for private prosecution.
Government Personal Services Contracting and Antidiscrimination Laws: Tenure for Contractors?
, Theodore T. Richard, United States Air Force, Journal of Contract Management, Summer 2009
Abstract: Civil service employees are thought to enjoy “tenure,” or job protection, which does not necessarily extend to personal services contract employees. Antidiscrimination laws, however, can be used to extend job protection to personal services contract employees. While contracting for personal services is generally prohibited, exceptions to the prohibition exist. As the federal government considers liberalizing the rules governing personal services contracts, policy makers must be aware of potential tangential effects, such as increased liability, that may nullify the benefits of these types of contracts. This paper discusses the prohibitions on personal services contracts and the applicability of antidiscrimination laws to the federal government when using personal services contract employees.
Opening Procurement Markets Internationally: An Update, and the Road
Ahead, Christopher R. Yukins, George Washington University - Law School, Robert D. Anderson,
World Trade Organization, West Government Contracts Year in Review Conference (Covering 2011), Thomson Reuters, 2012
GWU Legal Studies Research Paper No. 2012-32,
GWU Law School Public Law Research Paper No. 2012-32
Abstract: These papers, presented by Christopher Yukins and Robert Anderson at the West Government Contracts Year in Review Conference (covering 2011), attempt to identify the key trends and issues for 2011 in U.S. federal procurement. The papers, given as part of the “international” session at the conference, discuss key developments in the WTO Government Procurement Agreement and in the evolution of trade policy under that agreement. The papers discuss recent amendments to the WTO, and the pending accessions of a number of nations (including China and, potentially, India) to the agreement.
FCPA Settlement, Internal Strife, and the 'Culture of Compliance', Joseph W. Yockey, University of Iowa College of Law Wisconsin Law Review, Forthcoming U Iowa Legal Studies Research Paper No. 12-08
Abstract: Most enforcement actions brought against firms under the U.S. Foreign Corrupt Practices Act (FCPA) are resolved via a deferred prosecution agreement (DPA) or non-prosecution agreement (NPA). But before federal regulators will consider negotiating over these types of settlement vehicles, they typically weigh a firm’s willingness to cooperate with the underlying investigation and whether it promoted a “culture of compliance.” As this paper shows, these two factors do not always intersect in ways that serve the best interests of firms at risk for FCPA scrutiny. Cooperation often means asking company counsel to identify individual agents responsible for the alleged wrongdoing. If these agents are then disciplined or prosecuted in separate actions, the resulting dynamic can lead to distrust between agents and counsel, a breakdown in internal communications, feelings of unfair treatment, and inappropriate levels of risk aversion - all of which are undesirable from a firm’s perspective and can hinder efforts to maintain a law-abiding culture. These issues are not all new, but they take on particular significance in the FCPA context due to the often expansive way regulators interpret the FCPA, the complexities associated with the transnational nature of the underlying conduct, and the frequently blurry lines between permissible competitive activity and impermissible bribery. Though many firms may ultimately decide that the potentially negative effects of cooperation are worth the upside of settlement, it is essential that they and their counsel remain cognizant of these issues when designing internal compliance programs. Regulators, too, need to be aware of how their enforcement policies could hinder efforts at corporate self-policing.
IMPLICIT VERSUS EXPLICIT REQUIREMENTS AND INDEPENDENT RESEARCH AND DEVELOPMENT COSTS UNDER ATK THIOKOL: SECURING THE FUTURE OF U.S. TECHNOLOGY INVESTMENT, Mark J. Nackman, Public Contract Law Journal •Vol. 41, No. 2 • Winter 2012
Abstract: The article is concerned with research and development and how the rules governing its reimbursement in the form of Independent Research and Development (IR&D) impact the defense industrial base and greater U.S. economy. The article proceeds from a survey of the relevant regulations, statutes, and case law, culminating in a discussion of the ATK Thiokol decision and the meaning of FAR 31.205-18’s “required in the performance of a contract” language. After tracing the development of the law and policy surrounding IR&D, the article asserts that the Court of Appeals for the Federal Circuit’s decision in ATK Thiokol was properly decided, and should remain the governing law for IR&D.
The article then transitions into a discussion of the greater research and development policy implications of the decision, discussing several recent statutory and regulatory attempts to circumvent or otherwise weaken the ATK Thiokol decision. The article explains why such measures would have negative economic and policy impacts. It then recommends alternative approaches the U.S. Government could take instead of changing the rules surrounding IR&D and cautions that policy makers should not forget the underlying reasons why IR&D is reimbursed by the Government in the first place.
Reflections on the Federal Procurement Landscape Daniel I. Gordon, George Washington University - Law School, The Government Contractor, Vol. 54, No. 7, p.51, February 2012, GWU Legal Studies Research Paper No. 2012-19, GWU Law School Public Law Research Paper No. 2012-19
Abstract: This paper, published in the Government Contractor, presents the reflections on the author’s service as the Administrator for Federal Procurement Policy from 2009 through 2011. The author identifies his three goals for his tenure as Administrator: strengthening the federal acquisition workforce, driving fiscal responsibility in federal acquisition, and rebalancing the relationship with contractors. The author points to reversal of several negative trends, in particular, decline in the size of the federal acquisition workforce during the years 1992-2009, unsustainable annual increases in procurement spending during those years, and an unhealthy overreliance on contractors in performance of key government functions. In each of those key areas, the author reports on the progress made - increasing the size of the federal acquisition workforce, buying less and buying smarter (particularly through the strategic sourcing initiative), and a better balance in relations with contractors, with more clarity about the proper role of contractors and improved oversight, as well as efforts to increase communication with vendors.
Appropriations Law Forum 2012
GAO held its Annual Appropriations Law Forum on March 8, 2012 to coincide with the publication of the annual update of the Third Edition of Principles of Federal Appropriations Law. The session included an overview of significant decisions issued in 2011, with separate discussions of a case study of the impact of appropriations prohibitions, a different perspective on appropriations law, and responding to an Antideficiency Act violation. Material handed out at the Forum is available here.
2012 Appropriations Law Forum Materials, March 8, 2012.
Annual Update of the Third Edition of the Principles of Federal Appropriations Law GAO-12-413SP, March 8, 2012
“Better Acquisition Management through Alternative Dispute Resolution (ADR) and Other Best Practices for Preventing and Resolving Bid Protests”
24 January 2012
LCDR Paul R. Benishek, MBA, LCDR Benjamin L. Sheinman, MBA, Max V. Kidalov, J.D., LL.M., Assistant Professor, and Diana I. Angelis, Ph.D., Associate Professor
Naval Postgraduate School
Abstract This project examines bid protest prevention and resolution strategies to shed light on ways to save the government money and time. Successful resolution of protests depends on a number of factors, including government and private sector protest management and litigation strategies; Alternate Dispute Resolution (ADR) policies of federal agencies; legal and regulatory requirements; and remedies available to contractors. Our research identified and analyzed best ADR practices and other remedies and preventive methods for resolving bid protests. Areas examined include processes and remedies utilized by selected federal agencies and obstacles to fomenting improved cooperation between industry and government, which may preclude win-win resolutions to bid protests. Insights regarding the validity of our entering hypotheses about ADR were obtained from a survey of acquisition and legal professionals regarding their perceptions, opinions, and recommendations on bid protest practices and the use of ADR procedures. Our objectives were to identify ADR and other process improvement recommendations that are crucial to effective contracting and support the government’s efforts to improve adjudicative forums for resolution of contract disputes and bid protests. Our research suggests that agencies can mitigate protest expenses and interruptions by managing the protest process in a systematic, business-like way. At the present time, agencies rarely use most procedural tools that are required or authorized under federal laws and regulations to reduce time delays and costs from bid protests. Among other things, we recommend energetic agency approaches to preventing disputes (e.g., quality debriefings) and dealing with disputes (e.g., formal cost-benefit analysis of agency defense strategies, strong defense of agency actions, and full use of ADR methods). We also recommend ADR as the default method for settling bid protests.
The Impact of the National Defense Authorization Act for Fiscal Year 2012 on Federal Procurement -The Government Contractor, February 2012, Schaengold, Michael J., Patton Boggs, From the Patton Boggs LLP web site.
On New Year’s Eve of last year, with only a few hours remaining in Calendar Year 2011, President Obama signed into law the National Defense Authorization Act (“NDAA”) for Fiscal Year (“FY”) 2012.2 As with the FY 2011 NDAA, the FY 2012 NDAA was stalled for many months and was passed three months after the start of the fiscal year. Most of the controversy about the FY 2012 NDAA related to that Act’s “Title X, Subtitle D-Counterterrorism,” which includes provisions concerning military detention of terrorism suspects and the interrelationship between such military detention and the operation of the U.S. criminal justice system.
Emerging Policy and Practice Issues (2011), Steven L. Schooner. George Washington University - Law School and David J. Berteau
Center for Strategic and International Studies, Defense - Industrial Initiatives Group, WEST GOVERNMENT CONTRACTS YEAR IN REVIEW CONFERENCE COVERING 2011 CONFERENCE BRIEFS, Thomas Reuters, 2012
GWU Legal Studies Research Paper No. 2012-13
GWU Law School Public Law Research Paper No. 2012-13
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2011), attempts to identify the key trends and issues for 2012 in U.S. federal procurement. It begins from the premise that the most significant emerging issue in government contracting, looking ahead, is the money (or lack of it). As the fiscal belt tightens, the procurement landscape - what the government buys, from whom, and how - will necessarily change. Consistent with prior practice, this chapter offers extensive coverage of the federal procurement spending trend and attempts to predict what lies ahead. It also discusses the proliferation of policy guidance on information technology (IT) procurement, cloud computing, and cyber-security. In addition, among other things, it addresses the Defense Department’s initiatives to squeeze savings, efficiencies, and productivity out of the acquisition regime and how this may affect the defense industrial base.
Outsourcing Covert Activities, Laura Dickinson, February 09, 2012, George Washington University - Law School, Journal of National Security Law &Policy, Vol. 5, No. 2, 2012
GWU Legal Studies Research Paper No. 2012-9, GWU Law School Public Law Research Paper No. 2012-9
Abstract: Over the past decade, the United States has radically shifted the way it projects its power overseas. Instead of using full-time employees of foreign affairs agencies to implement its policies, the government now deploys a wide range of contractors and grantees, hired by both for-profit and nonprofit entities. Thus, while traditionally we relied on diplomats, spies, and soldiers to protect and promote our interests abroad, increasingly we have turned to hired guns. Contrast the first Gulf War to later conflicts in Iraq and Afghanistan. During the Gulf War the ratio of contractors to troops was 1 to 100; now, with approximately 260,000 contractors working for the State Department, Department of Defense (DoD), and the U.S. Agency for International Development (USAID) in Iraq and Afghanistan, that ratio has often exceeded 1 to 1. To be sure, U.S. history is rich with examples of contractors; the privateers of the Revolutionary period are a case in point. But our current turn to privatized labor does reflect a new trend, spurred by the post-Cold War decline of the standing military and the elimination of the draft, supported by the public’s faith (not always backed up by data) that the private sector can perform work more efficiently than government employees, and fueled by the exigencies of the war on terror in the aftermath of the attacks of September 11, 2001. Many of these modern contractors perform logistics functions, such as delivering meals to troops or cleaning latrines on the battlefield. Others guard diplomats, convoys, and military bases. But contractors have also gathered intelligence, interrogated detainees, and engaged in tactical maneuvers, sometimes under circumstances involving hostile fire.
ETHICS, EMPLOYEES AND CONTRACTORS: FINANCIAL CONFLICTS OF INTEREST IN AND OUT OF GOVERNMENT, Kathleen Clark, Alabama Law Review, 62 Ala. L. Rev. 961-1004 (2011).
ABSTRACT In recent decades, the federal government has greatly expanded its use of contractors to perform services and now purchases more than $260 billion in services every year. The government has increasingly turned to contractors to accomplish its programmatic goals, and contractor personnel are now performing tasks that in the past had been performed by government employees.
While government employees are subject to strict ethical standards, most of these standards do not apply to contractor personnel. If a federal employee makes a recommendation on a matter that could affect her financial interest, she could be subject not only to administrative discipline, but also to criminal prosecution. In most cases, a contractor employee who has that same financial interest and makes the same recommendation is not subject to any consequences. In fact, the government does not have any systematic way of even finding out when contractor personnel have such conflicts of interest. The personal conflicts of interest of contractor personnel are largely unregulated.
This Article discusses the disparity between the strict regulation of employees and the lax regulation of contractor personnel, explores possible explanations for the wide disparity in standards for these two groups, and suggests several research questions that should be answered prior to deciding whether to impose strict financial conflict standards on contractor personnel.
A House of Cards Falls: Why “Too Big to Debar” is All Slogan and Little Substance
by Jessica Tillipman, Assistant Dean for Outside Placement at The George Washington University Law School, Jan 13, 2012, 80 Fordham Law Review Res Gestae 49 (2012), GWU Legal Studies Research Paper No. 2012-8, GWU Law School Public Law Research Paper No. 2012-8
Abstract A House of Cards Falls: Why “Too Big to Debar” is All Slogan and Little Substance is a critical response to the article, FCPA Sanctions: Too Big to Debar" by Drury D. Stevenson and Nicholas J. Wagoner, which aptly demonstrates a common, yet fundamentally flawed, understanding of the FAR 9.4 suspension and debarment regime. "Too Big to Debar" asserts that when large government contractors violate the Foreign Corrupt Practices Act (FCPA), they should be “punished” by being debarred from the procurement system. Indeed, despite FAR 9.4’s clear directive to use debarment only for the purpose of protecting the government, not to punish past misconduct, "Too Big to Debar" completely disregards this fundamental tenet of the suspension and debarment regime (and the regulation’s plain language) by repeatedly referring to debarment as punishment. "Too Big to Debar" also misrepresents the true consequences of debarment the corporate death penalty. By discounting the reality of debarment, while artificially amplifying its impact on FCPA deterrence, the authors make clear that they are wedded to their own ideas of what the debarment regime should be, than to what it actually is.
If FCPA enforcement has touched every industry, why do the authors single out large government contractors? Because they can large government contractors are not sympathetic. Even though nearly all companies, regardless of their size or line of business are exposed to the potential misconduct of rogue employees, the authors expect government contractors to defy the statistically impossible. In addition to glaring factual errors, selective quotes, and incorrect assumptions, Too Big to Debar appears to assert that it is morally wrong to “reward” government contractors that have misbehaved. By injecting theories of morality and punishment into an administrative regime, the article elevates the simple, almost visceral desire for large-scale retribution over the more nuanced best interests of the government. “A House of Cards Falls” exposes “Too Big to Debar” for what it is: a populist sound bite used to vilify and bash contractors without regard for nuance or reality.
McKenna Long &Aldridge LLP Government Contracts Team Publishes A Comprehensive Government Contractor Business Systems Compliance Guide, WASHINGTON, DC (December 13, 2011)
The law firm of McKenna Long and Aldridge LLP (MLA) announces the publication of the MLA Government Contract Business Systems Compliance Guide, the first comprehensive guide designed to assist DOD contractors, as well as any contractor selling to the government, in their assessment of the acceptability of their business systems under the U.S. Department of Defense (DoD) Business Systems Interim Rule, effective on May 18, 2011. The MLA Government Contract Business Systems Compliance Guide provides comprehensive guidance for contractors to assess, based on their circumstances, the adequacy of each of the six covered business systems: accounting and billing, purchasing, estimating, material management and accounting, government property, and earned value.
“The DoD Rule represents a very significant government effort to regulate contractor business practices. For contractors doing business with the DoD, either directly or indirectly as a subcontractor, the rule is now a critical element of both a contractor’s competitive position in the government contracts marketplace and its risk management,” said MLA Government Contracts Partner Tom Lemmer, one of the guide’s authors. “Compliance avoids substantial billing withholds and other restrictions on a contractor’s cash flow, exclusion from or evaluation down-scoring in competitive procurements, and negotiation difficulties when the government seeks to mitigate its risk from what it believes is an inadequate business system. Contractors doing business with other than DoD should anticipate that these same requirements will be imposed on their business systems. This guide should serve as a government contractor’s first resource when assessing compliance with this significant rule,” added Lemmer.
In addition to Lemmer, authors of the MLA Government Contract Business Systems Guide include MLA Government Contracts partners Jay Gallagher, Steven Masiello and Kevin Slattum.
The MLA Government Contract Business Systems Compliance Guide makes use of MLA's substantial experience to provide knowledgeable contractor personnel with the necessary information needed to make an appropriate assessment. The guide is available here and on request by contacting Nicole Campbell at email@example.com.
’s Revised Government Procurement Agreement - An Important Milestone
Toward Greater Market Access and Transparency in Global Public Procurement
Markets, by Robert D. Anderson World Trade Organization, Steven L. Schooner
George Washington University - Law School, Collin D. Swan, George Washington
University - Law School GWU Legal Studies Research Paper No. 2012-7, GWU Law
School Public Law Research Paper No. 2012-7, The Government Contractor, Vol. 54,
No. 1, p. 1, January 2012
Abstract: In December of 2011, the Parties to the World Trade Organization Government Procurement Agreement (GPA) adopted significant revisions to the Agreement. The revised Agreement comprises (a) a much-needed modernization of the text of the Agreement, (b) an expansion of related market-access commitments by the Parties, and (c) a set of Future Work Programs intended to enhance transparency among the Parties and improve the administration of the Agreement. In these unstable economic times, the importance of the GPA and its improvements cannot be overstated.
This article also bemoans the media’s misrepresentation of the ongoing process of China's negotiated accession into the GPA. China continues to invest resources in upgrading its public procurement regime as it negotiates with the GPA Parties to open its government purchasing markets to systematic international competition.
Prohibitions and Policy Failures: Applying Government Ethics Standards to
Personal Services Contractors, by Collin D. Swan George Washington
University - Law School, George Washington Law Review, Vol. 80, No. 2,
February-March 2012, GWU Legal Studies Research Paper No. 2012-3 GWU Law School
Public Law Research Paper No. 2012-3
Abstract: The last two decades have been marked by numerous political efforts to reduce the size of the federal workforce and declare the end of the “era of big government.” These efforts left the federal government strapped for personnel and resources and have forced many agencies to increasingly rely on service contractors in general, and personal services contractors in particular, to fulfill their mandates. According to the Federal Acquisition Regulations, a personal services contract is a contract that creates an employer-employee relationship between the contractor and the federal government. Despite a longstanding—and, arguably, outdated—regulatory prohibition on the use of personal services contracts, many agencies are increasingly employing personal services contractors in positions traditionally reserved for government employees. The result is an absurd situation in which government ethics laws apply differently to service contractors and federal employees who work alongside each other, perform similar discretionary tasks, and have the same potential to engage in corrupt practices.
This Note argues that the personal services prohibition represents an outdated and inefficient method of protecting the government’s interest and should be abolished. Given the government’s current reliance on service contractors, procurement officials should not be concerned with whether a contract creates an employment relationship with the government, but instead with whether contractor personnel are being properly managed and supervised. Congress should thus explicitly abolish the personal services prohibition and apply government ethics laws to personal services contractors. This would reduce the ability of personal services contractors, who often perform discretionary functions on the government’s behalf, to act in their own personal interest to the detriment of the government’s mission.
Beyond Ex Post
Expediency An Ex Ante View of Rescission and Restitution, Richard R. W.
Brooks Yale University - Law School, Alexander Stremitzer, UCLA School of Law,
Washington and Lee Law Review, Vol. 68, No. 3, p. 1171, 2011 Yale Law &
Economics Research Paper UCLA School of Law, Law-Econ Research Paper
Abstract: It is commonly held that if getting a contractual remedy was costless and fully compensatory, rescission followed by restitution would not exist as a remedy for breach of contract. This claim, we will demonstrate, is not correct. Rescission and restitution offer more than remedial convenience. Rational parties, we argue, would often desire a right of rescission followed by restitution even if damages were fully compensatory and costless to enforce. The mere presence of a threat to rescind, even if not carried out, exerts an effect on the behavior of parties. Parties can enlist this effect to increase the value of contracting.
Interpretation: What is it About?, David McLauchlan, Victoria University of
Wellington - Faculty of Law, October 5, 2009
Abstract: In recent times contract interpretation has become one of the most contentious areas of the law of contract. There are fundamental divisions among commentators, practitioners and judges (often writing extra-judicially) as to the nature of the task and the permissible aids to interpretation. This article highlights the reasons for these divisions and suggests that the position of those who advocate a liberal approach to the latter issue is sometimes misunderstood. The author argues that there are no convincing reasons of principle, policy or convenience for refusing to receive evidence of prior negotiations and subsequent conduct: in particular, admitting such evidence is not, as commonly thought, inconsistent with the objective approach to interpretation. However, at the same time it is stressed that it will only be in relatively exceptional cases that the evidence will provide a helpful or reliable guide to the true intention of the parties.
Jurisdiction of the Court of Federal Claims and Forum-Shopping in Money Claims
Against the Federal Government, by Gregory C. Sisk University of St. Thomas
School of Law (Minnesota), November 21, 2011, U of St. Thomas Legal Studies
Research Paper No. 11-39
Abstract: Over the past decade, the United States Court of Appeals for the Federal Circuit has issued a series of opinions clarifying the jurisdictional priority of the Court of Federal Claims (CFC) under the Tucker Act over claims against the United States that are means to a monetary end, even if cleverly or mistakenly drafted as suits for injunctive or declaratory relief under the Administrative Procedure Act (APA) that could be filed in District Court. Because the APA expressly excludes judicial review in District Court when an “adequate remedy” lies in another court, the CFC retains its traditional and exclusive jurisdiction to hear claims against the Federal Government that are adequately remedied by a money judgment.
This venerable understanding was disturbed by an aberrational decision a decade ago in the United States District Court for the District of Columbia. In Cobell v. Babbitt, the District Court assumed authority under the APA to adjudicate claims for mis-management of government-established financial accounts for the distribution of profits derived from Native American resources held in trust by the United States. The District Court aggressively extended the Supreme Court’s 1988 decision in Bowen v. Massachusetts a unique case arising from the Federal-State administration of the Medicaid health care program that the Supreme Court had found unsuited for review in the CFC. To add to the jurisdictional chaos, several tribes then filed breach of trust claims in the District Court seeking an accounting and restitution, while simultaneously filing parallel breach of trust lawsuits in the CFC that forthrightly sought money damages.
In early 2011, in United States v. Tohono O’odham Nation, the Supreme Court held that money judgment lawsuits filed in the CFC must be dismissed if parallel litigation for specific relief is pending in the District Court. Reading 28 U.S.C. § 1500 as “a robust response” to the burdens of duplicative litigation against the United States, the Court held that a plaintiff may not maintain one lawsuit in the CFC while a second lawsuit is proceeding in another court that arises out of the same operative facts, even if the two lawsuits seek wholly different relief. In rejecting the plaintiff’s claim of hardship in that case, the Tohono Court observed that the plaintiff “could have filed in the CFC alone and if successful obtained monetary relief to compensate for any losses caused by the Government’s breach of duty.” In the aftermath of Tohono, attempted detours from the CFC in what essentially are money claims should be coming to an end. Recent rulings in both the Supreme Court and the Federal Circuit confirm that, when “[a]t bottom it is a suit for money,” then “the Court of Federal Claims can provide an adequate remedy, and it therefore belongs in that court.”
the Value of Future Accessions to the WTO Agreement on Government Procurement
(GPA): Some New Data Sources, Provisional Estimates, and an Evaluative Framework
for Individual WTO Members Considering Accession, by Robert D. Anderson,
World Trade Organization, Phlippe Pelletier World Trade Organization (WTO),
Kodjo Osei-Lah affiliation not provided to SSRN, Anna Caroline Müller World
Trade Organization (WTO), October 06, 2011
Abstract: The WTO Agreement on Government Procurement (GPA) is a plurilateral Agreement, meaning that it comprises only a subset of the full Membership of the WTO. Currently, a number of WTO Members that are not Parties to the Agreement either are actively seeking accession to it, have commitments to accede to the GPA in their respective WTO accession protocols or are, on their own initiative, looking at the potential pros and cons of accession. In this context, there is a need for factual information concerning the potential consequences of GPA accession, and a framework to assess related benefits and costs. Of interest is both the systemic value of such accessions — i.e. the value they will add to the extent of market access commitments under the Agreement — and their potential benefits and costs for individual acceding Parties.
This Working Paper introduces new sources of information relevant to these topics (principally, the statistical reports that have been circulated recently by GPA Parties) and shows their relevance to and usefulness in assessing the above-noted matters. The Paper presents estimates of the size of potential market access gains from pending and possible future GPA accessions, based on simple extrapolations from the data sources identified. Next, the Paper shows how the same data sources can assist in throwing light on the potential benefits and costs of GPA accession for individual WTO Members/countries contemplating accession. The latter use of the data is developed in the context of a more general discussion of the benefits and costs of GPA accession for individual WTO Members, also drawing on existing literature, qualitative aspects and 'insights from the field' (i.e. our own work in advising and conducting seminars for such countries and other WTO Members).
THE ABSENCE OF JUSTICE:
PRIVATE MILITARY CONTRACTORS, SEXUAL ASSAULT, AND THE U.S. GOVERNMENT'S POLICY
OF INDIFFERENCE Angela Snell, University of Illinois Law Review 2011, Note
Partial Abstract As the United States remains in Iraq and Afghanistan, stories of abuse by private military contractors (PMCs) have flooded the news. This Note focuses on an area of PMC crime that has garnered less public attention and censure: sexual crimes against civilians in nonwar zones. Emphasizing the lack of legal recourse for victims of sexual crime by PMCs and the systematic failure of the United States to punish sexual crime perpetrated by its own PMCs, the author argues that the United States should be held liable for the sexual crimes that its contractors commit, including those that occur outside of war zones.
Generalized System of Preferences after Four Decades: Conditionality and the
Shrinking Margin of Preference by Kevin C. Kennedy Michigan State University
College of Law, Michigan State University College of Law Journal of
International Law, Forthcoming MSU Legal Studies Research Paper No. 09-21
Abstract: The legal cornerstone of special and differential treatment in favor of developing countries is the Generalized System of Preferences. Since 1971 — the year in which the Generalized System of Preferences (GSP) was first authorized under GATT auspices — GSP has become a fixture in the trade policies of developed countries. The GSP marked its 40th anniversary in 2011, an appropriate occasion to ask whether or not GSP remains relevant. This article examines two sets of questions. First, are the conditions that are an intrinsic part of the U.S. and EU GSP programs WTO-legal? Do the preconditions and conditions to being designated as a GSP beneficiary under both the U.S. and EU trade preference programs bear a rational relationship to the overarching goal of economic development within beneficiary countries? Besides examining the conditionality that is an inherent feature of the U.S. and EU GSP programs, the second overarching question that this article addresses is whether GSP remains economically relevant or whether instead the shrinking margin of preference between the most-favored-nation (MFN) duty rate and the preferential duty rate has reduced the efficacy of national GSP programs to the vanishing point.
Assuming that these programs remain economically relevant, do the conditions and limitations that are an integral part of them suffer from a lack of coherency? Is it time to overhaul trade and development policy, at least with respect to GSP programs? The author’s answers to the first set of questions on the legality of conditionality is a qualified “no” and to the second set of questions on whether the GSP remains economically relevant is a qualified “yes.” The author recommends reforming the GSP program and moving beyond the GSP as a key piece of preference-granting countries’ trade and development policy for developing countries. His prescription is fourfold: (1) integrate and expand the four U.S. trade preference programs, (2) revisit and substantially revise conditionality, (3) harmonize preferential rules of origin at the international level, and (4) provide better focused and coordinated aid for trade.
Considers Procurement Preferences for Medium- Sized Businesses, Though Concerns
Persist Regarding International Trade Obligations, Christopher R. Yukins
George Washington University - Law School, Avi M. Baldinger, Arnold &Porter,
The Government Contractor, Vol. 53, No. 37, 2011, GWU Legal Studies Research
Paper No. 587, GWU Law School Public Law Research Paper No. 587
Abstract: Historically, the U.S. has made sweeping efforts to assist small and disadvantaged businesses in federal procurement. Now, the U.S. Congress is considering ways to extend similar assistance to medium-sized businesses. Legislation currently before the House Small Business Committee, H.R. 1812, would lend a special preference to medium-sized businesses that participated in the General Services Administration mentor-protégé program. Others have proposed simply extending existing small business preferences to medium-sized businesses, and the Obama Administration has launched a program to facilitate medium-sized businesses’ participation in the $500 billion federal procurement market. All of these approaches must, however, be assessed against U.S. obligations under international trade agreements, for some initiatives may trigger concerns—or even retaliation—among major U.S. trading partners. This article reviews the current initiatives in this area and the three basic options currently open to policymakers seeking to assist medium-sized businesses.
Civil-Military Interface in 21st Century Armed Conflict - Private Military
Contractors and the Principle of Distinction, Emily Crawford University of
Sydney - Faculty of Law, August 14, 2011, Sydney Law School Research Paper No.
Abstract: Private military and security contractors have been the focus of international attention in recent years, largely due to their prominent role in the conflicts in Iraq and Afghanistan. Given the increased public scrutiny of private military and security contractors (PMSCs), there have been numerous academic articles, newspaper articles, books, and other public commentary, written on the phenomenon. A common theme underpinning nearly all these approaches is the question ‘how does one classify the contractor?’ Are they civilians, are they State agents, are they soldiers? For the law of armed conflict (or international humanitarian law (IHL) as it is also known), such classification is important because important consequences flow from such classification. The law of armed conflict outlines very specific rules regarding who may legitimately participate in armed conflict, and who may not. The law divides the population into two basic categories—combatants and civilians. Depending on one’s classification, specific rules regarding permissible conduct follow. Designation as a combatant brings with it immunity from the operation of certain domestic laws, provided the combatant obeys the international laws of armed conflict. Combatants may target other combatants, and be targeted themselves. Conversely, civilians are not to be made the subject of attack, nor may they take direct part in hostilities. This is known as ‘distinction’—the principle that attempts to keep civilians safe from the effects of the conflict, and provides instruction to combatants regarding permissible targeting practices. The use of PMSCs complicates the application of the principle of distinction - are they civilians, combatants or mercenaries? Can they be targeted, and can they target other legitimate objects and objectives themselves? Are there laws that deal with PMSCs or do they exist in some legal grey-zone, leaving lawmakers and commentators scrambling to bring the law in line with reality? This paper will look at the issue of private military and security contractors under the law of armed conflict, and will look at recent attempts to better deal with PMSCs, assessing whether such recent attempts are adequate, inadequate or indeed necessary at all.
Fog of War Reform: Change and Structure in the Law of Armed Conflict after
September 11 by Peter Margulies, Roger Williams University School of Law,
Roger Williams Univ. Legal Studies Paper No. 110
Abstract: Since the attacks of September 11, 2001, the law of armed conflict (LOAC) has been locked in a bitter conflict between utilitarians, who generally defer to state power, and protective theorists, who seek to shield civilians by curbing official discretion. Consider Salim Hamdan’s conviction in a military commission for material support of Al Qaeda, recently upheld by the Court of Military Commission Review. Utilitarians view military commissions as efficient means for trying suspected terrorists. Protective theorists, in contrast, criticize the amorphous nature of material support charges.
The clash between utilitarians and protective theorists colors other issues, including “enhanced” interrogation and limits on targeting. Protective theorists merit praise for their scrutiny of interrogation, while utilitarians have trivialized interrogation abuses. However, protective theorists’ scrutiny of states is burdened by hindsight bias. Failing to recognize the challenges faced by states, protective theorists have ignored the risk to civilians posed by violent non-state actors such as terrorist networks. Because of this blind spot, protective theorists have embraced changes such as the ICRC’s Guidance on Direct Participation in Hostilities that exacerbate LOAC’s asymmetries, creating a “revolving door” that shields terrorist bomb makers while permitting continuous targeting of state forces.
To move beyond the utilitarian/protective debate, this piece advances a structural approach informed by two values: a linear time horizon and holistic signaling. Drawing on cognitive studies of humans’ flawed temporal judgment and the Framers’ work on institutional design, a linear time horizon curbs both myopia that infects officials and hindsight bias that plagues the protective model. Holistic signaling requires the United States to support the law of armed conflict, even when adversaries such as Al Qaeda reject that framework. Applying the structural test, a state can use a sliding scale of imminence and necessity to justify targeting Al Qaeda-affiliated terrorists in states unwilling or unable to apprehend those operatives. However, the material support charges against Hamdan signal a troubling turn to victors’ justice that will ultimately harm counterterrorism efforts. Stressing a linear time horizon and holistic signaling defuses rhetoric and sharpens deliberation about post-9/11 LOAC changes.
Contracting by Ralph C. Nash George Washington University - Law School,
Government Contracts Monograph No. 7, 1963, GWU Legal Studies Research Paper No.
587, GWU Law School Public Law Research Paper No. 587
Abstract: As Vern Edwards’ Foreward explains: The Department of Defense recently directed the military services to use Fixed-Price Incentive (Firm Target) FPI(F) contracts instead of cost-reimbursement contracts when it makes sense to do so, and we can expect a surge in their use in the near future. The FPI(F) contract is the most complex of all of the standard pricing arrangements described in FAR Part 16, “Types of Contracts,” and the people who will have to negotiate and administer them are going to need all of the guidance that they can get. Professor Nash’s valuable monograph went out of print long ago, but it is now being republished in its original form and made freely available online. Except for a few references to old regulations, the monograph is just as useful today as it was in 1963. The most useful parts are Chapters I through V. The material contained in those chapters is practical guidance about how to think about, negotiate, and administer all three of the formula-type incentive arrangements.
Contract incentives have an intuitive appeal, and enthusiasm for them has been fed by countless undocumented claims of success, including some tall tales and phony “success stories.” Interest, if not enthusiasm, is on the rise again. That being the case, Professor Nash’s treatise is a good starting place for those without much experience in this intriguing, if troublesome and dubious, approach to contract pricing.
Corrupt Practices Act &Government Contractors: Compliance Trends &Collateral
Consequences, Jessica Tillipman, The George Washington University Law
School, Briefing Papers, No. 11-9, August 2011, GWU Legal Studies Research Paper
No. 586, GWU Law School Public Law Research Paper No. 586
Abstract: As Government contractors expand their business overseas, they expose themselves to the risk of violating the Foreign Corrupt Practices Act (FCPA) and the high sanctions that accompany those violations. Given the nature of a Government contractor’s business, they are naturally at greater risk of violating the FCPA than those companies that do not interact with Government officials on a regular basis. Indeed, the top 10 most expensive settlements in FCPA history include eight large U.S. government contractors. For contractors that do business with the Federal Government, these record-shattering FCPA fines are levied in the shadow of the U.S. Government’s purchasing power. For example, the companies that settled the three most expensive FCPA enforcement actions to date, and together paid approximately $1.8 billion in fines (Siemens AG, $800 million; Halliburton/KBR, $579 million; BAE Systems, $400 million), also obtained over $10 billion dollars in U.S. Government contracts in FY 2010.
This article begins by providing an overview of the FCPA and a review of recent FCPA enforcement trends, and then considers the collateral consequences of a violation of the FCPA by Government contractors. In addition to fines, penalties, and possible incarceration, Government contractors have additional concerns, including the risk of suspension or debarment from the U.S. procurement regime. Exclusion from contracting with foreign governments and international organizations, including the World Bank and EU member states, is also an increasing risk. This article is an essential primer for any Government contractor that may be exposed to FCPA liability and seeks to avoid or limit the potential collateral consequences.
Corrupt Practices Act Fundamentals, by Jessica Tillipman, The George
Washington University Law School, Briefing Papers, No. 08-10, September 2008,
GWU Legal Studies Research Paper No. 585 GWU Law School Public Law Research
Paper No. 585
Abstract: Foreign Corrupt Practices Act (FCPA) enforcement activity is currently at its highest level since enactment of the statute in 1977. There were more enforcement actions brought in 2007 than in the years from 2004 to 2006 combined. The message is clear-the U.S. Government is committed to FCPA compliance and there is no evidence enforcement activity will slow any time soon. This article provides a general overview of the FCPA, including a primer on the legislation’s core components: the antibribery prohibitions and the books and records provisions. The article also provides practical guidance with respect to the more challenging provisions of the Act, including the two affirmative defenses and the legislation’s exception for “grease” or “facilitating” payments. The article also examines recent trends in FCPA enforcement, such as the increased prosecution of foreign companies and voluntary disclosures by corporate entities. This broad and practical overview of the FCPA is an excellent resource for anyone interested in learning more about this robust anticorruption regime.
Opportunism and the Theory of Public Contracts: Operationalization and
Applications, by Pablo T. Spiller, University of California, Berkeley -
Business &Public Policy Group and Marian Moszoro-IESE Business School;
University of California, Berkeley - Haas School of Business, July 24, 2011
Abstract: Public contracts seem to be “expensive” and “inefficient” compared to pure private contracts. Higher prices and inefficiencies in the implementation of public contracts result from their specificity and rigidity, which is how public agents limit hazards from third-party opportunism. We present a comprehensible and testable theory of third-party opportunism and its effects on public contracts. We show that, in the presence of third-party opportunism, there exists an equilibrium in which public contracts are specific and rigid, and thus more expensive in their design, implementation, and control than the theoretical first-best in a non-opportunistic world. We use case examples to extend the theory into practical settings and derive empirical implications.
POSTSCRIPT: TERMINATION FOR CONVENIENCE OF FAR PART 12 COMMERCIAL ITEM CONTRACTS by Ralph C. Nash and Paul J. Seidman, 25 NO. 8 Nash &Cibinic Rep. ¶ 37, August 2011, Posted with permission of Thomson Reuters
White Paper-The Consequences of the Debt Ceiling Impasse for Government Contractors, Centre Consulting, July 27, 2011. Centre Consulting is holding an audio seminar on July 28, 2011 at 12 on this issue. It is free for current clients and only $25 for others. Current clients, call or e-mail (firstname.lastname@example.org) to register. Others can register by going here: http://va.eftsecure.net/eftcart/additem.asp?M_id=503340174233&P_id= 160529
of Interest Program at Sandia National Laboratories, U.S. Department of Energy
Office of Inspector General Office of Audits and Inspections, July 13,
RESULTS OF INSPECTION:
Our inspection revealed a number of areas where Sandia could improve its OCI process to prevent potential or actual organizational conflicts of interest. Although specifically required by Federal Regulation and contractual provisions, Sandia had not completed a number of OCI- related activities. In particular, Sandia had not:
•Conducted OCI reviews of all Technology Transfer License Agreements (License Agreements) between Sandia and its parent, Lockheed Martin, nor had it provided all License Agreements to NNSA for review and approval prior to the release of technology to Lockheed Martin;
•Ensured that OCI reviews were completed on Work for Others (WFO) projects that were initiated between Sandia and Lockheed prior to sending them to NNSA for review and approval;
•Performed adequate reviews on Cooperative Research and Development Agreements (CRADAs) with Lockheed to identify actual or potential OCI issues; and
•Notified NNSA or completed OCI reviews when subcontracts were initiated with Lockheed Martin, when Lockheed acquired Sandia subcontractors, or when the period of performance and dollar amount of a sole-source contract with Lockheed materially exceeded the original award.
The Costs of War, Eisenhower Study Group
Eisenhower Research Project, June 2011
Background on the Project- A comprehensive accounting of the costs of war must add them all up - the human, economic, social, political, and the lost opportunities in the U.S. and abroad. The Eisenhower Research Project at Brown University's Watson Institute for International Studies was founded with the mission to do research on the issues of war and the costs of war. The Eisenhower Study Group, experts on aspects of the current wars’ economists, anthropologists, political scientists, lawyers, historians, and humanitarian field personnel was assembled by the project directors, Neta Crawford of Boston University and Catherine Lutz of Brown University. The economist Anita Dancs of Western New England College helped put the economic team together, working to coordinate their efforts. Andrea Mazzarino worked as project coordinator.
The Myth of
Efficient Breach: New Defenses of the Expectation Interest, Daniel
Markovits, Yale Law School, Alan Schwartz, Yale Law School, Virginia Law Review,
Forthcoming, Yale Law &Economics Research Paper No. 431
Abstract: We defend contract law’s preference to protect the expectation with a liability rule against prominent doctrinal and moral critics who argue that a promisee should have a right to specific performance or to a restitutionary remedy. These critics argue that liability rule protection limited to contractual expectations unjustifiably favors promisors, by allowing a promisor to capture the entire gain from unilaterally exiting a contract as long as she compensates her promisee for the profit he would have realized had he received the goods or services the contract described. The critics prefer to vindicate contractual expectations with a property rule or restitution.
We show that a promisee’s gross payoff under the typical contract is invariant to the remedy the law accords him. Current defenders and critics focus on gross payoffs. In this analytic universe, no remedy can be shown to be superior to any other remedy. We argue below that the promisee’s net payoff, for transaction cost reasons, is higher under a contract that protects his expectation with a liability rule. This claim supports the dual performance hypothesis, which holds that promisees typically give their promisors discretion either to trade the goods or services at issue or to make a transfer to the promisee in lieu of trade. A promisor who transfers rather than trades therefore does not breach; rather, she breaches only when she rejects both trade and transfer. On this view of the law, a promisee’s suit to recover his expectation is a specific performance action to enforce the contract’s transfer term. We further explain that this approach renders contract law coherent; it is consistent with the law’s immanent normativity; and it is consistent also with the morality of promising.
Legislative History Research:
A Basic Guide, Julia Taylor Section Head - ALD Section and Information
Research Specialist, Congressional Research Service, June 15, 2011.
Summary: This report provides an overview of federal legislative history research, the legislative process, and where to find congressional documents. The report also summarizes some of the reasons researchers are interested in legislative history, briefly describes the actions a piece of legislation might undergo during the legislative process, and provides a list of easily accessible print and electronic resources. This report will be updated as needed.
Department of Defense Trends
in Overseas Contract Obligations, Moshe Schwartz Specialist in Defense
Acquisition, Joyprada Swain Research Associate May 16, 2011.
Summary The Department of Defense (DOD) has long relied on contractors to support military operations. Contractors provide the U.S. military with weapons, food, uniforms, and logistic services, and without contractor support, the U.S. would currently be unable to arm and field an effective fighting force. DOD spends more on federal contracts than all other federal agencies combined.
Understanding the costs associated with contractor support of overseas military operations could provide Congress more data upon which to weigh the relative costs and benefits of different military operations, including contingency operations and maintaining bases around the world.
The federal government tracks contract obligations through the Federal Procurement Data System-Next Generation. Obligations occur when agencies enter into contracts, employ personnel, or otherwise legally commit to spending money. Outlays occur when obligations are liquidated. This report examines (1) DOD’s overseas contract obligations in the larger context of U.S. government and DOD contract spending, and (2) how those contract obligations are used to support DOD operations in different regions.
Ownership in Government Contracting, Melissa Thomas Johns Hopkins University
- Paul H. Nitze School of Advanced International Studies (SAIS), May 15, 2011,
Abstract: As the volume of government contracting increases, so does the importance of monitoring government contractors to guard against market concentration, rent seeking and conflict of interest. Doing so, however, is impossible without knowing the identity and organizational structure of contractors. At present the government does not collect information on organizational structure. Using STATA to analyze data from a new government database, this paper takes a first look at contractor organizational structure. The complexity of the structures makes clear that better data are needed if the government and the public are to be able to hold contractors accountable.
Impact of the 2% Excise Tax: The Congressional Budget Office Estimates Relating
to the James Zadroga 9/11 Health and Compensation Act by Nicole R. Best,
Abstract: This paper examines the revenue effect of the Excise Tax imposed on foreign contractors by the James Zadroga 9/11 Health and Compensation Act of 2010. Sponsors of the Act suggested that placing a 2 percent tax on payments made to certain foreign contractors would not only pay for the fund to support World Trade Center victims, but would net $450 million in extra revenue. However, many doubt the revenue raising capabilities of the tax. Hypothesizing that the predictions were based on a FY 2009 Buy American Report submitted to Congress by the United State Department of Defense, this paper identifies the assumptions of the predictive model used to predict expected revenues of the 2 percent tax. This paper examines how these predictions are changed by altering the assumptions of the model to better reflect a more realistic implementation of the tax. Altering these assumptions reveals a serious decrease of the revenue effect of the tax. The CBO Report presented in conjunction with the excise tax language predicted $305 million in revenue for FY 2011 alone. However, adjusting the model reveals expected revenue to be closer to $122 million, only 40% of the original prediction.
A CRITICAL EXAMINATION OF
OFFSETS IN INTERNATIONAL DEFENSE PROCUREMENTS: POLICY OPTIONS FOR THE UNITED
STATES Mark J. Nackman, Public Contract Law Journal Vol. 40, No. 2
Abstract: The article is concerned with defense trade offsets and how they threaten U.S. national security by undermining the U.S. defense industrial base. The article proceeds from an overview of definitions and transitions into a brief discussion of the wide range of practices in the international defense procurement market.
The article asserts that the negative U.S. national security impact from offsets is most severe when major U.S. prime defense contractors replace existing U.S. subcontractors with foreign ones on fully developed, heritage U.S. major defense programs as they are brought to the international market. Given the Obama administration’s focus on exports as an engine for U.S. job creation and the push to revamp the U.S. export controls regime, the article also emphasizes the merit of additional focused attention on defense trade offsets for U.S. employment and export policy.
The article analyzes the problem of conflicting U.S. policies regarding defense trade offsets. It then recommends two initial steps that should be taken before the U.S. can formulate more substantive policy adjustments, with additional discussion of options for substantive follow-on policies.
The Article was selected as the Division II second-place winner of the American Bar Association Section of Public Contract Law 2010 Writing Competition. (Posted with the permission of the author)
The Draft OCI
Rule-New Directions and the History of Fear, Christopher R. Yukins, George
Washington University - Law School, The Government Contractor Vol. 53, No. 18
May 4, 2011 GWU Legal Studies Research Paper No. 557, GWU, Law School Public Law
Research Paper No. 557
Abstract: After years of rancor and debate, the Office of Federal Procurement Policy and the FAR Councils in April 2011 finally issued a proposed revision to the regulations governing organizational conflict of interests (OCIs) in federal procurement. The proposed rule marked an extraordinary change of direction in some ways, it would reorder policy priorities built up over years of case law -- but also may have reflected the drafters’ nagging ambivalence about the new direction. The proposed OCI rule marked a significant change in direction in part because policymakers’ core concerns—their core fears concerning conflicts of interest— have themselves shifted over time. Because new means of addressing those concerns are constantly emerging and evolving, we know that the rules will continue to evolve. The article argues, however, that as the OCI rules advance, they should be meshed more seamlessly with other advances in procurement law, such as new initiatives in contractor compliance and efforts abroad, for example through the European procurement directives and the WTO Government Procurement Agreement (GPA), to regulate conflicts of interest in procurement.
Dead Contractors: The Un-Examined Effect of Surrogates on the
Public’s Casualty Sensitivity Steven L. Schooner, George Washington
University - Law School, Collin D. Swan, George Washington University - Law
School, Journal of National Security Law &Policy, 2011 GWU Law School Public
Law Research Paper No. 555, GWU Legal Studies Research Paper No. 555,
Abstract: Once the nation commits to engage in heavy, sustained military action abroad, particularly including the deployment of ground forces, political support is scrupulously observed and dissected. One of the most graphic factors influencing that support is the number of military soldiers who have made the ultimate sacrifice on the nation’s behalf. In the modern era, most studies suggest that the public considers the potential and actual casualties in U.S. wars to be an important factor, and an inverse relationship exists between the number of military deaths and public support. Economists have dubbed this the “casualty sensitivity” effect.
This article asserts that this stark and monolithic metric requires re-examination in light of a little-known phenomenon: on the modern battlefield, contractor personnel are dying at rates similar to—and at times in excess of—soldiers. The increased risk to contractors’ health and well-being logically follows the expanded role of contractors in modern governance and defense. For the most part, this “substitution” has taken place outside of the cognizance of the public and, potentially, Congress. This article explains the phenomenon, identifies some of the challenges and complexities associated with quantifying and qualifying the real price of combat in a modern outsourced military, and encourages greater transparency so that the public can more meaningfully participate in “the great American experiment.”
The Boards of
Contract Appeals: A Historical Perspective, Jeri Kaylene Somers, George
Washington University - Law School; U.S. Civilian Board of Contract Appeals,
American University Law Review, Vol. 60, No. 745, 2011, GWU Legal Studies
Research Paper No. 550, GWU Law School Public Law Research Paper No. 550
Abstract: This article - introducing the journal's special issue discussing the U.S. Court of Appeals for the Federal Circuit - traces the historical evolution of the agency boards of contract appeals to meet the changing dispute resolution needs of the Government in its procurement activities. It discusses the boards of contract appeals and their relationship to the Federal Circuit, focusing more on the factual background rather than the theoretical.
Sanctions: Too Big to Debar?, Drury D. Stevenson, South Texas College of
Law, Nicholas J. Wagoner, South Texas College of Law, April 15, 2011
Abstract: The Foreign Corrupt Practices Act (FCPA) criminalizes bribery of foreign government officials; the frequency of enforcement actions and severity of fines levied against corporations under the FCPA have significantly increased in the last few years. There is an ongoing problem, however, with the sanctions for FCPA violations: enforcement authorities (DOJ and SEC) and contracting officials have limited themselves to fines, civil penalties, and occasional imprisonment of individual violators. Debarment from future federal government contracts, even temporarily, is an unused sanction for FCPA violations, even though Congress provided for this punishment by statute. Debarment offers a far more potent deterrent than fines and penalties, as multinational contractors that conduct business with the U.S. are much less likely to view the sanction as merely a cost of doing business. If ridding foreign markets of corruption truly is a top priority of the U.S., it seems both unfair and imprudent for federal agencies to continue awarding lucrative, multibillion-dollar contracts to firms recently prosecuted for fraudulently obtaining such contracts overseas.
Enforcement officials shy away from debarring entities that violate the FCPA due to the short-term inconvenience of an agency’s inability to transact business with its favorite contractor, its inability to demand favorable bids from contractors when the field of potential bidders has thinned, the resulting job loss, and the risk of overdeterring companies that might otherwise pursue lucrative opportunities in emerging markets. This is the “too big to debar” problem - the federal government is too dependent on a particular set of large, private-sector corporations for equipment and services. In addition to the virtual immunity from debarment enjoyed by these firms when they violate the FCPA, the fines imposed for engaging in foreign corrupt practices comprise a tiny fraction of the potential revenue generated by lucrative contracts with the U.S. and foreign states. When discounted by the low probability of detection, these sanctions are far too low to deter unlawful activity.
Debarment would deter potential wrongdoers and incapacitate actual offenders. The deterrent would induce more firms to comply with the law, which would allow the “too big to debar” problem to diminish over time. To help illuminate these concerns and lend support to the thesis, this Article will examine the third largest FCPA-related enforcement action to date: the BAE Systems case. On March 1, 2010, BAE Systems paid approximately $400 million in fines for its corrupt practices abroad. In the 365 days that followed however, the federal government awarded BAE contracts in excess of $58 billion dollars. The U.S.’s refusal to debar BAE because of the potential “collateral consequences” provides a case study on the benefits and drawbacks of deterring foreign corruption through suspension and debarment. This Article concludes that the U.S. must begin to diversify its portfolio of federal contractors so that prosecutors may leverage the legitimate threat of suspension and debarment to more effectively deter foreign corruption.
A Random Walk:
The Federal Circuit’s 2010 Government Contracts Decisions. Steven L.
Schooner, George Washington University - Law School, American University Law
Review, Vol. 60, No. 1067, 2011 GWU Legal Studies Research Paper No. 549 GWU Law
School Public Law Research Paper No. 549
Abstract: This Article discusses the Federal Circuit's 2010 government contracts cases. It begins with some perspective on, and empirical quantification of, the Federal Circuit’s level of specialization and evolving jurisprudence in the field of government contracts. It eventually turns to analysis of a hodge-podge of unrelated cases: three award controversies (or bid protests), a handful of post award performance disputes, a few selections from the ongoing behemoths of litigation in the U.S. Court of Federal Claims - Winstar and Spent Nuclear Fuel, and a potentially analogous implied warranty case. Overall, the article suggests that the Federal Circuit's 2010 government contracts cases appear to lack significant volume, thematic coherence, or dramatic impact. It also reinforces the perception that the court does not, and does not desire to, embrace the unique nature of the federal government contract regime as an analytical premise or predicate. Rather, the court increasingly appears to prefer a more consistent, streamlined, simplified, or even formalistic approach to its highly varied docket.
The Foreign Contractor Tax: A New Development in Trade and Procurement-Program materials from the March 30, 2011 Colloquium at GWU Law School
Criminal Prosecution?: The Limits of Criminal Justice Privatization, Roger
Fairfax, George Washington University - Law School. University of Chicago Legal
Forum, Vol. 2010, No. 265, 2010, GWU Legal Studies Research Paper No. 541, GWU
Law School Public Law Research Paper No. 541
Abstract: In an era of scarce public resources, many jurisdictions are being forced to take drastic measures to address severe budgetary constraints on the administration of criminal justice. As prosecutors’ offices around the nation are being scaled back and enforcement priorities are being narrowed, one conceivable response is the outsourcing of the criminal prosecution function to private lawyers. Indeed, prosecution outsourcing currently is utilized in surprising measure by jurisdictions in the United States. This Article, prepared for the University of Chicago Legal Forum Symposium on Crime, Criminal Law, and the Recession, argues that the outsourcing trend in criminal justice—seen most prominently in the area of private prisons and policing—should not extend to criminal prosecution because such outsourcing is in tension with the constitutional and positive law norms regulating the public-private distinction. Furthermore, concerns about ethics, fairness, transparency, accountability, performance, and the important values advanced by the public prosecution norm all militate against the outsourcing of the criminal prosecution function to private lawyers.
Not Promise; Contract is Consent, Randy E. Barnett, Georgetown University
Law Center, Suffolk University Law Review, Forthcoming, Georgetown Public Law
Research Paper No. 11-29
Abstract: In the 1980s, Charles Fried was right to focus on what was missing from both the “death of contract” and “law and economics” approaches to contract law: the internal morality of contract. But he focused on the wrong morality. Rather than embodying the morality of promise-keeping, the enforcement of contracts can best be explained and justified as a product of the parties’ consent to be legally bound. In this essay, I observe that, in Contract as Promise, Fried himself admits that the “promise principle” cannot explain or justify two features that are at the core of contract law: the objective theory of assent and the content of most “gap fillers” or default rules of contract law. After summarizing how consent to contract accounts for both, I explain that, whereas the morality of promise-keeping is best considered within the realm of ethics— or private morality—legally enforcing the consent of the parties is a requirement of justice or public morality.
PCL State and Local Procurement Law News, Vol 1, Issue 1, March 2011
Possibilities and Limitations of Privatization Edward L. Rubin Vanderbilt
Law School, Harvard Law Review, Vol. 123, No. 890, 2010 Vanderbilt Public Law
Research Paper No. 11-09, Vanderbilt Law and Economics Research Paper No. 11-14
Abstract: This is a review of Jody Freeman &Martha Minow, eds., Government By Contract: Outsourcing and American Democracy (Harvard Univ., 2009). After summarizing and analyzing the individual contributions to the volume, and delineating their disagreements, the review proceeds to identify areas of common ground among them: that policy should continue to be set by government authorities, that privatization is presumptively superior when the policy goal is efficiency, and that the presumptive efficiency of privatization depends on the existence of a competitive market for the goods or services being privatized. It suggests that the absence of genuine competition in many areas of government contracting cast grave doubts on the effectiveness of privatization, particularly as it was championed (although not implemented) by the second Bush Administration. The review then goes on to explore other reasons for privatization beyond efficiency, such as the possibility that private firms could be guided by, or even aid in articulating, public values. It concludes by arguing that the subject is too complex for any sweeping generalizations, and proposes that decisions in this area should be based on a micro-analysis of the government function involved.
SMALL BUSINESS CONTRACTING IN THE UNITED STATES AND EUROPE: A COMPARATIVE ASSESSMENT by Max V. Kidalov, Public Contract Law Journal, Vol. 40, No. 2, Winter 2011. This material from Public Contract Law Journal of the American Bar Association has been reproduced with the permission of the author and the publisher, the American Bar Association. Further use without the permission of the publisher is prohibited.
Versatile Prism: Assessing Procurement Law Through the Principal-Agent
Model, Christopher R. Yukins, George Washington University - Law School,
Public Contract Law Journal, Vol. 40, No. 1, p. 63, Fall 2010, GWU Legal Studies
Research Paper No. 533, GWU Law School Public Law Research Paper No. 533
Abstract: Over the past several decades, the federal procurement system in the United States has grown remarkably, and now totals over $500 billion annually.
Over that same period, the rules governing federal procurement have been buffeted by broad efforts at reform. At no point, however, have we ever had an overarching theory - a model or prism - through which to assess the procurement system or its reform. Agency theory provides one such theoretical model. Long established in economics and the other social sciences, the principal-agent model (agency theory) provides a model to explain successes (and failures) in organizational structures, and also to understand the procurement system and its rules. The theory builds upon the classic principal-agent model. A principal enlists an agent to carry out the principal’s goals, presumably because the agent enjoys some comparative advantage in performing the goals. Inevitably, however, the agent’s interests diverge from the principal’s; if the agent’s goals diverge sufficiently, the agent may be said to have a conflict of interest . This article employs agency theory to assess classic constructs of procurement law, such as Steven Schooner's desiderata, and argues that the theory can be used to solve future puzzles in procurement policy, and to predict where procurement policies are likely to fail - and to succeed.
International Trade in Procurement after the Economic Crisis, Part II: Opening
International Procurement Markets: Unfinished Business , Christopher R.
Yukins , George Washington University - Law School, GWU Legal Studies Research,
Paper No. 530, GWU Law School Public Law Research Paper No. 530, West Government
Contracts Year in Review Conference (Covering 2010)
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2010), discusses developing issues in international public procurement. Among other things, the paper suggests that, in 2010, the international procurement market continued to mature, as cross-border barriers to trade continue to fall. Large developing nations - including China and, potentially, India - moved to join the World Trade Organization (WTO) Government Procurement Agreement (GPA), the leading instrument for opening procurement markets. In the United States, while open issues remained regarding how to ensure that the United States meets its own free-trade obligations in procurement, the United States and Canada were able to reach a compromise on U.S. - Canadian procurement purchasing that may open the way for future agreement. That thaw in international procurement markets was in contrast, though, to a new U.S. tax on foreign contractors selling to the U.S. government who fall outside the protection of the GPA and other agreements. More broadly, there was a growing international trend in favor of unified defense-civilian procurement, bolstered by a recent European directive on defense procurement. Freer trade in defense procurement may, however, be affected by efforts to ensure security of supply (including efforts in Europe and the United States) - an area where comparison between the two systems may be useful, as the debate over protecting “critical materials” in the U.S. system is rapidly advancing.
Policy and Practice Issues (2010), Steven L. Schooner, George Washington
University - Law School, David J. Berteau, Center for Strategic and
International Studies, Defense - Industrial Initiatives Group, WEST GOVERNMENT
CONTRACTS YEAR IN REVIEW CONFERENCE COVERING 2010 CONFERENCE BRIEFS, Thomas
Reuters, 2011, GWU Legal Studies Research Paper No. 529, GWU Law School Public
Law Research Paper No. 529
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2010), attempts to identify the key trends and issues for 2011 in U.S. federal procurement. The paper, among other things, focuses on the intense activity that emanated from the Defense Department, primarily through USD(AT&L) Ashton Carter’s Efficiency and Productivity Initiative; summarizes empirical evidence that the federal procurement spending growth cycle finally has run its course; offers a window into the concentration of spending amongst the largest contracting agencies and government contractors; points out that, despite all of the attention focused upon government contracting, over the last decade grant spending outpaced procurement spending by more than sixteen percent; expresses concern that agencies have their work cut out for them in their continuing efforts to fund additional acquisition billets and investing in training and professional development in an era of pay freezes and pressure to reduce government spending; discusses how the government has grown into its permanent and growing reliance on contracts for a wide range of professional and support services; expresses dismay that, for political purposes, the public is not exposed to an objective, even-handed assessment of the roles contractors play and the extent of their contribution to the government’s myriad missions; and highlights the Professional Services Council Acquisition Policy Survey, The Great Divide, which chronicled the marked difference in perceptions between operational acquisition professionals - the people who actually purchase the goods and services necessary for the government to perform its missions - and those whose role is primarily oversight (e.g., legislative staff, GAO, etc.) of the people and firms that do the work.
Centre White Paper-Implications and Consequences of a Government Shutdown. Centre Consulting is offering an audio seminar on this topic on March 01, 2011 from 12:00 p.m. to 1:30 p.m. If interested in attending e-mail Nicole Snyder (email@example.com) or call her at 703-288-2800 x233
Impact of Using Public Procurement to Promote Better Labour in Corporate Supply
Chains by John Howe University of Melbourne Law School,
Abstract: This chapter examines the potential of government procurement as a mechanism for improving job quality and alleviating poverty and proposes ways in which these mechanisms can be strengthened so as to make them more effective. The promotion of higher labour standards through government procurement is a ’soft law mechanism that may appeal to governments at a time when economic globalization has, among other things, reduced the political willingness and ability of governments to safeguard the welfare of workers and communities through the maintenance of conventional labour law systems. In many developed economies, governments have reduced their traditional legal protection of labour rights and standards. Many developing countries maintain strong labour laws ‘on paper’ but lack resources, adequate institutional frameworks and, at times, the will to properly enforce labour standards. This chapter assumes, however, that governments have a crucial role to play in promoting and enforcing labour standards. The difficulties of enforcement and the high disincentives to compliance with labour laws for businesses mean that governments must find innovative ways to create inducements for more widespread compliance with labour standards. It is the contention of this chapter that promotion of existing labour standards or higher than existing legal standards through government procurement may be effective because it is responsive to existing power and resource distribution among economic and social actors (Ayres and Braithwaite, 1992; Teubner, 1983).
Certification Under the False Claims Act, Gregory Klass, University Law
Center, Michael Holt , Georgetown University Law Center, Georgetown Law and
Economics Research Paper No. 11-03, February 1011.
Abstract: The False Claims Act prohibits fraud by government contractors, including a contractor's false certification of compliance with the contract, statutes or regulations. In the early 1990s, some courts began holding that the mere act of requesting payment from the government implicitly represents such compliance, exposing breaching contractors to the FCA’s penalty regime. Circuits are today split on the implied certification doctrine. This Article provides a theory of the FCA in general, and implied certification in particular, that explains the value of extracompensatory remedies in this area of contract law. There good reasons for the implied certification rule. It is an information-forcing majoritarian default. It tracks the special ethical obligations of government contractors. And it addresses agency lassitude in drafting and monitoring. But implied certification also has its costs. Most importantly, it lowers the bar to frivolous qui tam actions and threatens to impose FCA liability for violations better addressed by more discretionary and nuanced regulatory tools. This Article recommends rule for implied certification that both addresses these considerations and rationalizes case outcomes. It also argues that, by paying attention to the FCA when drafting contracts, agencies can approximate first-best results by requiring express certification of compliance with those duties for which FCA liability makes sense, and contracting-out of implied certification for those duties that are better enforced in other ways. In addition to these practical suggestions, the Article draws some general lessons about contractual duties to cooperate, interpretive defaults in contract and tort, and the special ethical obligations of government contractors.
What is the United States Code and what is in it?, Vern Edwards Blog, August 18, 2010. Current projects of titles to be codified as positive law.
Authorization Act for Fy 2011—A Bounded Step Forward For Acquisition
Reform by Christopher R. Yukins, Kristen Ittig, George Washington University
- Law School, GWU Law School Public Law Research Paper No. 521, GWU Legal
Studies Research Paper No. 521
Abstract: Congress has traditionally passed a defense authorization act every year. Title VIII of the annual bill typically includes a number of important procurement reform measures—indeed, in any given year, Title VIII is often the single most important legislative vehicle for procurement reform. This year, however, the defense authorization bill was stalled for months, in large part because of controversy over the repeal of the “Don’t Ask, Don’t Tell” policy concerning homosexuality in the armed services. Once that controversy was resolved, through separate legislation, House and Senate leaders moved the defense authorization legislation through Congress quickly, in the last days of the 111th Congress. This article reviews the key elements of Title VIII of the defense authorization act for FY2011, with a special focus on those provisions likely of most interest to the procurement law community. [See Act]
No More Nisour
Squares: Legal Control of Private Security Contractors in Iraq and After
Charles Tiefer, 88 Or. L. Rev. 745.
Author’s comment This Article analyzes and builds upon the somewhat successful steps taken by the Department of Defense and the Department of State in 2008-2009 to manage the problem. Analyzing those steps shows a key strand consisting of what may be called the “contract law” approach. In the much-expanded form proposed in this Article, the “contract law” approach would use government contract requirements, contracting tools and sanctions, contract-related claims, and distinctive contract-related suits to both control and remedy private security abuses and injuries. This Article continues my prior studies as a professor of government contracting law with a specific interest in the Iraq war.
The Government Contracts Attorney, Section of Goverment Contracts, Federal Bar Association Newsletter, Volume 1, Number 1, Fall 2010
Government as a ‘Joint Employer’—Evolving Pathologies of the
Blended Workforce, by Steven L. Schooner, George Washington University - Law
School, Collin D. Swan, George Washington University - Law School, Government
Contractor, Vol 52, No. 39, ¶ 341, October 2010, GWU Legal Studies Research
Paper No. 517, GWU Law School Public Law Research Paper No. 517
Abstract: As the ‘blended workforce’ - a realm in which contractors work alongside, and often are indistinguishable from, their Government counterparts - becomes more commonplace, the distinction between civil servants, members of the military and contractor employees increasingly blurs. One intriguing (and, apparently, accelerating), yet little-known trend is that contractor employees are more frequently suing the Government, alleging employment discrimination on the part of Government managers, supervisors or even coworkers. This short piece discusses the evolving ‘joint employer’ liability doctrine. It suggests that The federal courts’ and the EEOC’s willingness to define federal agencies as de facto employers of contractor employees is further evidence that the prohibition on personal service contracts is—or should now be deemed—a dead letter. Ultimately, it concludes that both the Government and its contractors need to understand that, as federal agencies continue to rely on contractors for their staffing needs, the ability to distinguish between civil servants and contractors—in the eyes of the law—will become increasingly more difficult.
Sovereign Performance: Regulating in the “Gap” between Security and Rights?
by Fiona De Londras, University College Dublin-School of Law, Journal of Law and
Abstract: The privatisation of the provision of services has a well-established pedigree at this stage and is normally justified on the basis of ‘efficiency’ concerns. It also has a tendency to give rise to serious questions and concerns around human/civil rights protection and the adequacy or otherwise of ‘state action’ doctrines. While domestic constitutional orders craft different mechanisms to deal with those difficulties, they are replicated - if not exacerbated - in states’ transnational actions, where the privatisation impulse is also in evidence. In the context of the ‘War on Terrorism’ it is estimated that there are almost 2,000 private companies contracted by the United States to engage in different elements of counter-terrorism, intelligence and homeland security. There are also - we know - a number of corporate entities involved activities that are clearly and illegal such as targeted killings/assassinations and extraordinary rendition. This is an example of what I term ‘privatised sovereign performance’, by which I mean the ‘private’ operationalisation of functions that are intimately connected with the sovereign identity of the State such as security and entry to or exit from the territory of the state.
In this paper, which emerges from ongoing research into Transnational Private Regulation and will appear in final form in the Journal of Law &Society in 2011, I take the example of corporate involvement in extraordinary rendition to outline the rights-related difficulties of such privatisation and explore the extents to which transnational private regulatory mechanisms have a role to play in crafting a rights-based response. The thrust of the argument is that (a) the public space is saturated in rights-based regulation which has, in effect, identified the imagined transnational private space as an attractive space for states to engage in unlawful behaviour with a high chance of concealment; (b) the conventional private regulatory mechanism of litigation faces significant obstacles in effectiveness as shown by cases such as Mohammend et al v Jeppesen Dataplan; and (c) transnational private regulation holds potential align structural and legal obstructions to torture between the public and private sphere, closing off (or at least making much more difficult to access) the ‘escape hatch’ seemingly presented by the privatisation of sovereign performance.
Jon D. Michaels, Acting Professor of Law, UCLA School of Law, University of
Chicago Law Review, Vol. 77, Spring 2010.
For decades, policymakers have been privatizing government responsibilities for the customary, and ostensibly exclusive, objective of providing the public with the same goods and services more efficiently. It is becoming increasingly apparent that these policymakers are also doing something different: they are using that purportedly technocratic process to substantively alter the very policies they are supposed to be neutrally administering. And, it is working: these privatization “workarounds” can directly change the content of public education, health, and social welfare programs, the outcome of regulatory enforcement and rulemaking proceedings, and the trajectory of police and national security operations.
Workarounds provide outsourcing agencies with the means of accomplishing distinct policy goals that—but for the pretext of technocratic privatization—would either be legally unattainable or much more difficult to realize. In short, they are executive aggrandizing. They enable Presidents, governors, and mayors to exercise greater unilateral policy discretion—at the expense of legislators, courts, successor administrations, and the people.
Although lively privatization debates abound in the academy and inside the Beltway, both communities have given insufficient attention to this transformative and potentially transgressive practice. This Article tackles workarounds head-on. Specifically, this Article locates the structural process failures in government contracting that enable workarounds; develops an overarching conceptual framework and typology of workarounds; and prescribes a protocol for analytical and regulatory intervention.
and the Ultimate Sacrifice by Steven L. Schooner George Washington
University - Law School. Collin D. Swan George Washington University - Law
School, Service Contractor, p.16, September 2010., GWU Legal Studies Research
Paper No. 512, GWU Law School Public Law Research Paper No. 5
Abstract: This brief article quantifies how, in Iraq and Afghanistan, contractor personnel increasingly have made the ultimate sacrifice alongside, or in lieu of, service members. The enormity of the contractor sacrifice gives pause - more than 2,000 contractors have been killed in Iraq and Afghanistan. But what is more striking is that contractors are bearing an increasing proportion of the annual death toll. In the first half of 2010, more contractors died in Iraq and Afghanistan supporting the war effort than members of the U.S. military waging these wars.
Obligations in Public-Private Partnership Contracts by Sandeep Verma
Government of Rajasthan, Journal of Public Procurement, Volume 10 Issue 4,
Abstract: Traditional models of full and open competition are generally applied for ordinary public procurement contracts, whereas special competitive procedures (such as unsolicited proposals) are permissible under various international and domestic frameworks for “Public-Private Partnership”(PPP) contracts. In case of the latter category of contracts, some concerns about relative lack of transparency and competition in the award process have begun to surface, while they are being increasingly relied upon for development of public infrastructure and services. This paper focuses on certain aspects of competition and transparency in the award of PPP contracts, vis-à-vis normal public procurement contracts. To facilitate a sharper identification of legal issues, it compares the relevant regulations and case law in India applicable to unsolicited proposals (UNPs) with that in the United States and those under available international frameworks. It concludes with recommendations on identified legal dimensions of UNPs with reference to government obligations on transparency and competition, so as to adequately preserve these elements in procurement of PPP infrastructure projects.
Penitent: Disproportionate Fines in Recent FCPA Enforcements and Suggested
Improvements, July 15, 2010, by Bruce Hinchey an attorney completing an
LL.M. degree in Government Procurement Law at The George Washington University
Law School. He is currently looking for employment in FCPA defense and
government contracts practices. He can be reached at firstname.lastname@example.org, July 15, 2010
Abstract: The Department of Justice has long promised tangible benefits to companies that voluntarily disclose Foreign Corrupt Practices Act (FCPA) violations. Justice Department officials have promised that the enforcement of the FCPA is both fair and consistent. Despite these promises, critics question the benefits of voluntary disclosure based on the outcome of a few, isolated cases. In this thesis, forty FCPA cases from 2002 through 2009 are compiled, comparing the ratio between bribes and fines for companies that do and do not voluntarily disclose. The results side with the critics and reveal that there does not appear to be a benefit to voluntary disclosure. The data from these cases is then used to identify how the FCPA can be honed to encourage compliance and deter violations in a fairer and more efficient manner. Next, comparisons are made between the FCPA and other anti-corruption organizations and entities, with the intent of incorporating refinements to the voluntary disclosure enforcement process. These comparisons consider not only the legal framework for preventing bribery but also how those laws are enforced. Finally, recent FCPA developments are considered along with some suggested actions to bring more fairness and efficiency to voluntary disclosures under the FCPA.
Pacts and Public Procurement Reform in India: From Incremental Steps to a
Rigorous Bid-Protest System, by Sandeep Verma, IAS, Area Development
Commissioner, Indira Gandhi Canal Project, Bikaner, Rajasthan- 334 001, INDIA,
August 9, 2010
Abstract Integrity Pacts (IPs) have been adopted in a number of countries as an instrument for greater public oversight over possible corruption in government organisations, with application both in defence as well as in civilian purchases. In addition to their anti-corruption objectives, these pacts could also potentially enhance citizen participation in government contracting activities, while allowing dissatisfied bidders a forum in which to protest seemingly arbitrary and unfair agency actions. India has witnessed the introduction of these pacts in its public procurement regulations right since 2006; and with her joining recently as an observer to the plurilateral Agreement on Government Procurement, the need for a robust domestic review procedure for bidder grievances assumes an even greater importance. An in-depth examination of Integrity Pacts as legal tools for ensuring greater transparency and competition in the award of government contracts is yet to be conducted in India; and this paper aims to reduce the gap in academic research by undertaking a detailed examination of important dimensions of IPs as implemented in India. After a short analysis, it concludes with suggestions for strengthening and for transforming the IP mechanism into a tool for effective, comprehensive and independent oversight of domestic public contract-award decisions.
From GATS to
APEC: The Impact of Trade Agreements on Legal Services, Laurel S. Terry,
Penn State Dickinson School of Law, Akron Law Review, Vol. 43, p. 875, 2010,
Penn State Legal Studies Research Paper No. 21-2010
Abstract: This article provides a comprehensive overview of the treatment of legal services in the United States’ international trade agreements. Although many individuals are now familiar with the General Agreement on Trade in Services (GATS), far fewer realize that legal services are included in at least fifteen international trade agreements to which the United States is a party. This article begins by identifying those trade agreements and other developments including the 2009 Legal Services Initiative of the Asia Pacific Economic Cooperation (APEC). The article continues by explaining the structure of the GATS and comparing its provisions to the provisions found in the NAFTA and in other international trade agreements. The article includes several tables that compare the structure and content of the fifteen trade agreements applicable to legal services. The fourth section of the article reviews legal services-related implementation efforts, including GATS Track #1 developments related to the Doha Round negotiations, GATS Track #2 developments regarding the development of “any necessary disciplines,” implementation efforts for other trade agreements, and developments that are indirectly related to these trade agreements. The final section of the article addresses the impact of trade agreements on U.S. lawyer regulation. It concludes that these trade agreements, which reflect larger developments in our society, have affected the vocabulary, landscape and stakeholders involved in U.S. lawyer regulation.
24 N&CR ¶ 37 TERMINATION FOR CONVENIENCE OF FAR PART 12 COMMERCIAL ITEM CONTRACTS: Is Fair Compensation Required?, A special column by Paul J. Seidman, Seidman &Associates, P.C. Washington, D.C.,This material from The Nash &Cibinic Report has been reproduced with the permission of the publisher, Thomson Reuters. Further use without the permission of the publisher is prohibited. For additional information or to subscribe, call 1-800-344-5009 or visit west.thomson. com/fedpub. The Nash &Cibinic Report is now available on Westlaw. Visit http://www.westlaw.com
Principle and the Pathology of Administrative Appeals: A Chiropractic Approach
to Improving DOD Acquisitions by Steven Maser Willamette University -
Atkinson Graduate School of Management, July 15, 2010,
Abstract: What do appeals of administrative decisions tell us about the processes that give rise to them? Bid protests of Department of Defense source selections are illustrative. Rejected bidders can appeal to the Government Accountability Office. GAO sustains protests - few, but costly and growing - on grounds of procedural irregularity. Applying concepts from organizational economics, conflict management, and dispute systems design, we explore misalignments among management practices within agencies that can contribute to procedural errors and, thereby, to appeals. A conflict management audit, including interviews with participants in the process and analysis of GAO’s bid protest decisions, identifies sources of conflict in misalignments among strategy, structure, human resources, policies and procedures, and monitoring. Strategically adjusting the decisions to contract out, expanding authority and responsibility for risk management, creating professional development opportunities, revisiting policies on bundling and duration of contracts, and using performance information to incentivize the workforce can mitigate bid protests.
Loathing in Government Contracting: Unwinding Spirals of Conflict in DoD Source
Selections, Steven Maser, Willamette University - Atkinson Graduate School
of Management, July 7, 2010,
Abstract: Government contracting is rife with opportunities for miscommunication and misperception, sometimes unavoidably. This can undermine trust and fuel spirals of unmanaged conflict. We interviewed participants and analyzed GAO bid protest decisions involving Department of Defense source selections. We found agency, vendor, and GAO practices that trigger and fuel these spirals. Contracting agencies and GAO can take steps to build and maintain trust, mitigating costly bid protests.
Center for a New
CONTRACTING IN CONFLICTS: THE PATH TO REFORM, by Richard Fontaine, John Nagl, 06/07/2010
Abstract: In both Iraq and Afghanistan today there are more private contractors than U.S. troops on the ground. This exploding reliance on contractors costs U.S. taxpayers tens of billions of dollars and has grown with inadequate government oversight. This report - authored by Richard Fontaine and John Nagl - details the urgent need for comprehensive reform. The United States must embark on a path of ambitious reform that will require: new laws and regulations; an expansion of the government’s contracting workforce; a coordination mechanism within the executive branch; greater scrutiny, more transparency and clearer standards for private contractors; a strategic view of the roles contractors play in American operations; and a change in culture within the government.
World Bank’s Proposed Revision of its Procurement Guidelines, Eli
Whitney Debevoise, affiliation not provided to SSRN, Christopher R. Yukins,
George Washington University - Law School, The Governement Contractor Vol. 52,
No. 21, GWU Legal Studies Research Paper No. 507, GWU Law School Public Law
Research Paper No. 507,
Abstract: The World Bank Group, which commits tens of billions of dollars to funding projects in the developing world every year, is revising its procurement guidelines. The Bank’s procurement guidelines are intended to ensure that procurements on Bank-financed projects are carried out efficiently and without corruption. As a practical matter, because of the billions of dollars in projects supported by the Bank’s financing, the Bank’s guidelines help shape procurement practices across the developing world, and their revision marks an important opportunity to improve procurement practices worldwide. In this article, the authors recommend changes to the guidelines to improve procurement, and reduce corruption, in projects funded by the World Bank.
Largest Force: Private Military Contractors &State Responsibility, Markus
Wagner, University of Miami School of Law, April 12, 2010, University of
Miami Legal Studies Research Paper No. 2010-10
Abstract: The paper is concerned with private military contractors, their expanding use and the challenges this poses to a system in which private actors - at least so far - have been considered to be acting outside of existing international accountability structures.
The paper proceeds from a brief historical overview of the use of non-state military forces to a delineation of what private military forces are (and what they are not), what distinguishes them from mercenaries (and what does not). This is followed by an analysis of how private military forces conduct can be attributed to the states employing them, thereby contributing to the debate over the advantages and disadvantages of their proliferating use in recent conflicts.
The article proposes a range of legal and policy rationales to reassess the arguments that are being advanced for the use of private military forces in today’s conflicts with respect to their legal status, their political utility and their impact on democratic accountability mechanisms.
Bid-Protest Mechanism: Effectiveness and Fairness in Defense Acquisitions?,
Maser, Willamette University - Atkinson Graduate School of Management, Vladimir
Subbotin, affiliation not provided to SSRN, Fred Thompson, Willamette University
- Atkinson Graduate School of Management, May 10, 2010
Abstract: We studied bid protests to identify procedural changes that might make them more effective or mitigate the burdens they impose upon government’s suppliers, public contracting officials, and, ultimately, taxpayers. Participants perceive the protest process to be essentially fair with errors resulting from inexperience in the acquisition workforce and from challenges inherent in contracting for complex products and services. The process is prone to frivolous protests that arise more from market competition rather than a desire to correct errors. Analyzing DOD contracts and Government Accountability Office protest decisions reveals that contracts with more and smaller bidders and with international winners are more likely to be protested. Protests by large companies where there have been many bidders on complex projects are more likely to be sustained. We also found a relationship between the protest decisions and congressional constituency interests, which interview respondents perceive but GAO denies: GAO decisions appear to favor domestic producers and a fortiori the constituents of pertinent congressional leaders in a way that the decisions of the courts do not. We conjecture that Congress designated the GAO, a congressionally affiliated agency, to execute the bid-protest process not because Congress trusted the executive branch or even the courts to avoid conflicts of interest but because Congress distrusted them to attend to the right interests.
Private Force/Public Goods, by Scott M.Sullivan,
Connecticut Law Review, Volume 42, Number 3, February 2010.
Description This Article rethinks the benefits and dangers of private force in war. It shows that privatization must be viewed within the special requirements and confines of national security policy making and weighed against available alternatives. Contrary to academic and mainstream conventional wisdom, this Article concludes that national security privatization comports well with core constitutional and democratic principles and offers greater transparency and democratic control than commonly understood. Moreover, this Article argues that the American use of privatized force reflects and accomplishes normative and democratic commitments of international and domestic law that would be impossible to replicate through other policy avenues.
the Letter of Marque: Utilizing Private Security Providers Against Piracy
,Theodore Richard, Public Contract Law Journal, Vol. 39, No. 3, pp. 411-464,
Abstract: This article examines how letters of marque could be revived to effectively empower the private sector to assist governments in dealing with modern piracy. It examines Somali piracy, the development and different uses of letters of marque and privateers, the current legal framework relating to piracy, Somalia’s decade-long experience with maritime security contractors, the use of maritime contractors outside of Somalia, and addresses concerns involving private maritime security. The article concludes that unless governments provide security everywhere and all the time, the market will demand private security. Governments can effectively manage and control this security in the maritime environment without inventing a new legal scheme out of whole cloth: letters of marque can provide authorization, regulation, and accountability.
Quasi War Cases-And Their Relevance to Whether Letters of Marque and Reprisal
Constrain Presidential War Powers,J. Gregory Sidak, Tilburg Law &Economics
Center (TILEC), Tilburg University; Criterion Economics, L.L.C.; The Coase
Foundation for Law &Economics, Harvard Journal of Law &Public Policy, Vol. 28,
No. 2, pp. 465-500, Spring 2005
Abstract: Constitutional scholars cite three Supreme Court decisions arising from the undeclared Quasi War with France in 1798-1800 as support for the proposition that Congress may authorize war of any magnitude, and that, except in case of sudden or imminent attack on the United States, this congressional authority displaces any right of the President to use military force of even modest magnitude without prior congressional authorization. The textual hook claimed by these scholars for so reading Bas v. Tingy, Talbot v. Seeman, and Little v. Bareme is the phrase in Article I, section 8 of the Constitution that immediately follows the grant to Congress of the power To declare War - namely, the power to grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water. These additional words, it is argued, enable Congress to regulate the President's ability to use military force in a manner short of full-scale war. This prevailing interpretation of the Quasi War cases is incorrect and has special significance because the U.S. Court of Appeals for the District of Columbia Circuit gave it credence in 2000 in the war powers case Campbell v. Clinton and because one or more of the cases continues to be cited in litigation concerning the current war on terror.
GAO vs. DCAA-And the Winner Is? —Contractors! by Richard C. Loeb, From the March 2010 Issue of West’s “Costs, Pricing &Accounting Report”Posted on the POGO’s Contract Oversight Related Resources site.
Unconscionability More Muscle: Attorney’s Fees As a Remedy for Contractual
Overreaching, Stephen E. Friedman Widener University - School of Law,
Georgia Law Review, Vol. 44, No. 2, 2010 Widener Law School Legal Studies
Research Paper No. 10-15
Abstract: This Article seeks to broaden the conversation about unconscionability. While most of the discussion has focused on the appropriate standard for determining unconscionability, this Article focuses on the appropriate remedy to be imposed when unconscionability is found. The current remedy for unconscionability is non-enforcement or limited enforcement of unconscionable contracts or contract terms. This remedy is inadequate and seriously undermines unconscionability’s effectiveness as a tool for policing against contractual overreaching. The Article proposes that courts be given discretion to award attorney’s fees to consumers who successfully establish the unconscionability of a standard form contract. Such a remedy would enable unconscionability to meet the challenges posed by standard form contracts and would be fully consistent with unconscionability’s nature and history.
Federal Contracting and Acquisition: Progress, Challenges, and
the Road Ahead by Steven L. Schooner, George Washington University - Law
School, Chapter in FRAMING A PUBLIC MANAGEMENT RESEARCH AGENDA, p. 30, IBM
Center for the Business of Government, 2010, GWU Legal Studies Research Paper
No. 483, GWU Law School Public Law Research Paper No. 483
Abstract: This brief paper discusses the Obama administration’s public procurement agenda, major trends that influence the acquisition regime (that now encompasses $500B annually), and significant challenges the administration faces in improving the value it receives for the money it spends. It concludes with a group of research questions suggested by participants at the November IBM forum on Framing a Public Management Research Agenda.
Emerging Policy and Practice Issues (2009) David J. Berteau
Center for Strategic and International Studies, Defense-Industrial Initiatives
Group, Steven L. Schooner George Washington University - Law School, West
Government Contracts Year in Review Conference (Covering 2009), GWU Legal
Studies Research Paper No. 491, GWU Law School Public Law Research Paper No. 491
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2009), attempts to identify the key trends and issues for 2010 in U.S. federal procurement. In large part, the paper focuses upon the challenges inherited by the Obama administration and its efforts during its first year in office. Among other things, the paper suggests that the administration charted a course of what it perceived as bold action - most dramatically, touting “savings” and accountability, while permitting special interests to distract focus from value for money and customer satisfaction. Accordingly, at least to date, the Obama administration’s procurement policies lack a cohesive theme, suggest a reactive rather than proactive approach, strongly indicate a special interest bias, and, at best, have sent mixed messages at a critical juncture.
Late is Late:
Should the GAO Continue to Employ GAO-Created Exceptions to the FAR? by Major
Robert E. Samuelsen II, and
Command Authority over Contractors Serving with or Accompanying the Force, by Lieutenant Colonel Charles T. Kirchmaier, The Army Lawyer, December 2009.
Contracting and Acquisition: Progress, Challenges, and the Road Ahead,
Steven L. Schooner, George Washington University - Law School, Chapter in
Framing A Public Management Research Agenda, p. 30, IBM Center for the Business
of Government, 2010, GWU Legal Studies Research Paper No. 483, GWU Law School
Public Law Research Paper No. 483
Abstract: This brief paper discusses the Obama administration’s public procurement agenda, major trends that influence the acquisition regime (that now encompasses $500B annually), and significant challenges the administration faces in improving the value it receives for the money it spends. It concludes with a group of research questions suggested by participants at the November IBM forum on Framing a Public Management Research Agenda.
HALLIBURTON HEARS A WHO? POLITICAL QUESTION DOCTRINE DEVELOPMENTS IN THE GLOBAL WAR ON TERROR AND THEIR IMPACT ON GOVERNMENT CONTINGENCY CONTRACTING by MAJOR CHAD C. CARTER, Volume 201 Military Law Review, Fall 2009.
Defense Procurement Directive: An American Perspective, Christopher R.
Yukins George Washington University - Law School, The Government Contractor,
Vol. 51, No. 41, November 2009, GWU Legal Studies Research Paper No. 480, GWU
Law School Public Law Research Paper No. 480
Abstract: On August 21, the new European directive on defense and security procurement, Directive 2009/81/EC, entered into force. See, e.g.,EU Adopts New Defense and Security Procurement Directive, 6 IGC ¶ 65. Previously, most European defense procurement was considered exempt from the European procurement directives that have harmonized procurement, with greater transparency and competition, across Europe. Under the new defense directive, all but the most sensitive defense and security procurements in Europe will have to be conducted under rules consistent with the new directive.
From an American vantage point, however, it is not yet clear how the new directive will be implemented. If the defense directive merely brings new competition and transparency to the European procurement markets, the directive will be a welcome improvement in what was traditionally a closed and uncompetitive market. But if, in practice, the directive is used as an excuse to discriminate against U.S. exporters - or if it is perceived as a tool of discrimination - the directive threatens to trigger serious trade frictions in the transatlantic defense markets.
Interpretation: What is it About?, David McLauchlan, Victoria University of
Wellington - Faculty of Law, October 5, 2009
Abstract: In recent times contract interpretation has become one of the most contentious areas of the law of contract. There are fundamental divisions among commentators, practitioners and judges (often writing extra-judicially) as to the nature of the task and the permissible aids to interpretation. This article highlights the reasons for these divisions and suggests that the position of those who advocate a liberal approach to the latter issue is sometimes misunderstood. The author argues that there are no convincing reasons of principle, policy or convenience for refusing to receive evidence of prior negotiations and subsequent conduct: in particular, admitting such evidence is not, as commonly thought, inconsistent with the objective approach to interpretation. However, at the same time it is stressed that it will only be in relatively exceptional cases that the evidence will provide a helpful or reliable guide to the true intention of the parties.
The Department of Defense’s Use of Private Security Contractors
in Iraq and Afghanistan: Background, Analysis, and Options for Congress,
Moshe Schwartz Specialist in Defense Acquisition, Congressional Research
Service, September 29, 2009.
From the Introduction: The 111th Congress is grappling with a broad range of issues regarding the use of private security contractors (PSCs) to provide security for people and property in Iraq and Afghanistan. The United States has gradually increased the types of tasks and roles for which it contracts with private companies in military operations. Congress has generally accepted the concept of using unarmed contractors to carry out support functions in military operations, such as providing food and laundry services, although not without concerns regarding the costs of contracts and alleged favoritism in issuing them. But for the Department of Defense (DOD), Iraq and Afghanistan present new challenges. The United States is relying heavily, apparently for the first time during combat or stability operations, on private firms to supply a wide variety of security services. Given the shortage of U.S. troops, PSCs are widely viewed as being vital to U.S. efforts in the region. Many Members are concerned about transparency, accountability, and legal and symbolic issues raised by the use of armed civilians to perform security tasks formerly performed primarily by military personnel, as well as the negative effect that PSCs may be having on U.S. counter-insurgency efforts.
This report discusses the type of work performed by PSCs, why DOD uses PSCs, and the number of armed security contractors working in Iraq and Afghanistan. The report also examines whether the use of PSCs could undermine U.S. efforts in the region.
DOJ OFFICE OF
LEGAL COUNSEL, MEMORANDUM OPINION FOR SARA D. LIPSCOMB GENERAL COUNSEL, SMALL
BUSINESS ADMINISTRATION, August 21, 2009.
Re: Permissibility of Small Business Administration Regulations Implementing the Historically Underutilized Business Zone, 8(a) Business Development, and Service-Disabled Veteran-Owned Small Business Concern Programs
Disputes: It’s Not All About the Money,Major Scott E. Hutmacher, The Army
Lawyer, August 2009.
From the Intoduction: Money isn’t everything. This cliché is not only true in life; it is also true in the world of government contract appeals. Nonmonetary remedies are available and viable alternatives to monetary relief. Parties in the government contracting process, at some time or another, find themselves in a dispute and one party wants a specific type of relief . . . this is disputes 101. The relief sought in most contract disputes is monetary. However, monetary relief does not always make the allegedly wronged party “whole.” Sometimes, what the party seeks is nonmonetary relief.
This article serves as a practical guide to contract litigators. The article first identifies the forums available for disputes in government contracting and the particular authorities creating the forum. The article then outlines the nonmonetary remedies available in those forums. The article goes on to identify and address the limitations of nonmonetary relief available to the forums. Finally, the article provides litigators the ability to understand what contractors may ask for and some instances of what they received.
Less is More: Encouraging Greater Competition in Computer
Software Procurement by Simplifying the DFARS Licensing Scheme, C. Peter
Dungan, United States Army, March 16, 2009
Abstract: "Unduly confusing," "daunting," "onerous," and "counter-intuitive" are all terms that describe the Department of Defense's (DoD) regulations regarding intellectual property (IP) rights in computer software. Practitioners and academics have assailed the Defense Federal Acquisition Regulations Supplement (DFARS) provisions regarding IP rights in software as being too difficult for contractors to understand and being too protective of government interests. This confusing maze of regulations has discouraged small, non-traditional companies - the type of companies that generate the groundbreaking technology most sought after by the DoD - from entering the federal marketplace.
This paper examines the current DFARS software IP rights scheme and provides a roadmap for further reform. Part II analyzes the history of software development and the historical regulations governing DoD's procurement of software. Part III examines the current DFARS provisions governing rights in software. Even after two congressionally mandated rewrites, the DFARS retains the protectionist character of Cold War era IP regulations. Part IV examines the viewpoints of the stakeholders in government-procured software. Contractors view intellectual property as the "crown jewel" of corporate assets. Moreover, DoD often does not need the extensive rights that these regulations confer. Finally, Part V suggests a way to encourage non-traditional firms to enter the government marketplace. The current standard licenses for software are are too broad and grant the Government rights that it does not need. Reformed DFARS clauses should confer rights through negotiation and establish, as the maximum the Government can demand, a level of rights equal to the current government purpose rights license. Such a reform would alleviate the fears many companies have that the Government will pawn off their "crown jewels."
The Future Use of Corporate Warriors with the U.S. Armed Forces:
Legal, Policy, and Practical Considerations and Concerns , COL David
“Dave” A. Wallace, USA
The privatization of warfare has led to many interesting and complex issues. Among the myriad of issues is what role, if any, private security contractors should play in augmenting the U.S. armed forces future force structure. Against this backdrop, the article highlights certain considerations policymakers, military leaders, and force planners should balance when analyzing the future use of private security contractors. To make a proper determination on the future use of private security contractors, decision makers must weigh the benefits associated with the capabilities and characteristics of private security contractors with the costs of using such private actors. In that context, the article addresses several overarching legal policies, practical concerns, and risks associated with their future use.
Contracts under Defence Procurement Regulations in India: Evolution, Challenges
and Prospects, ©2009, Sandeep Verma. Further use without the
permission of author is prohibited. This paper won NCMA’s “The W.
Gregor Macfarlan Excellence in Contract Management Research and Writing Program
2008 Award” as best graduate research paper on contract management. This
paper represents author’s work-in-progress, and observations and comments
for its improvement are solicited.
Abstract The practice of countries demanding discharge of offset obligations as a prerequisite to foreign firms’ participation in major civilian or defence contracts is not new, and recent years in particular have seen a number of countries, both developed and developing, apply offsets and industrial participation measures at an ever-growing scale and complexity, as governments worldwide use their purchasing power to develop local capacities and channelize investments and technology to favored domestic sectors. This paper traces the history of offset regulations in defence procurement in India, together with a legal analysis of this evolutionary path over the last four years. It then identifies challenges and areas of concern in the existing regulatory framework, and comes up with suggestions on the way forward to address the identified areas of concern keeping in view two primary objectives of procurement reform, namely, enhancing efficiency and uniformity in the administration of offset contracts in India.
Contesting Task And Delivery Order Awards At The COFC—Policy Implications Of A Choice Federal Courts May Soon Have To Make, by Sandeep Verma, a senior member of the Indian Administrative Service, 51 Government Contractor No. 20, May 20, 2009. Reprinted from The Government Contractor, with permission of Thomson Reuters. Copyright © 2009. Further use without the permission of West is prohibited. For further information about this publication, please visit www.west.thomson.com/store, or call 800.328.9352.
Suing the Hired Guns: An Analysis of Two Federal Defenses to
Tort Lawsuits Against Military Contractors, Andrew Finkleman, Brooklyn
Journal of International Law, VOLUME XXXIV, NUMBER 2, 2009.
From the Introduction As the U.S. military decreased in size following the Cold War, the role of government contractors in combat zones grew ever larger. The military-contractor phenomenon has mushroomed in recent years, and private contractors now play pivotal roles in U.S. military and reconstruction operations in Iraq and Afghanistan. The government’s use of contractors to perform military and foreign affairs-related functions raises a host of political, moral, and legal questions. While the U.S. intervention in Iraq and Afghanistan continues with no apparent end in sight, these questions justifiably remain at the forefront of the national debate.
This Article addresses a narrow aspect of the nation's use of private contractors in Iraq and Afghanistan. While the lack of criminal accountability for contractors has received much critical commentary, scholars have paid comparatively little attention to the possible civil liabilities they face. This Article attempts to shine some light on this topic by addressing the defenses and immunities that might protect private military contractors from civil liability.
The George Washington University Law School Government Procurement Law Program and the Boards of Contract Appeals Bar Association are pleased to present a special colloquium on: Contractor Compliance: Next Steps in Anti-Corruption, June 09, 2009. Papers from the program.
Why Breach of Contract May Not Be Immoral Given the
Incompleteness of Contracts, Steven Shavell, Harvard Law School; National
Bureau of Economic Research (NBER), March 1, 2009, Harvard Law and Economics
Discussion Paper No. 631
Abstract: There is a widely held view that breach of contract is immoral. I suggest here that breach may often be seen as moral, once one appreciates that contracts are incompletely detailed agreements and that breach may be committed in problematic contingencies that were not explicitly addressed by the governing contracts. In other words, it is a mistake generally to treat a breach as a violation of a promise that was intended to cover the particular contingency that eventuated.
Modification of a Government Contract Awarded Following a
Competitive Procedure, Omer Dekel, Academic Center of Law and Business,
Public Contract Law Journal, Vol. 38, No. 2, 2009
Abstract: The issue of whether and to what extent a government authority may introduce subsequent changes into a procurement contract signed following a competitive procedure is one of the more practical and problematic questions in the area of procurement law. The article points out the difficulty inherent in this type of change, even if it is made upon mutual consent of the parties.
The article discusses the regulatory regime reached by the courts, under which a later change to a procurement contract is permissible and left to the discretion of the contracting officer (CO). As part of this discretion, the CO can take into account a number of considerations, the main ones being: the extent to which the requested change materially alters the original contract and the extent to which the requested modification could have been anticipated by a reasonable bidder. The article proposes to change this regime on two fronts: first, to adopt a rule by which a change to a contract would be impermissible unless special exceptions exist; second, to allow the CO to take into account a wider variety of considerations in deciding whether or not to permit such change.
Private Military and Security Companies: A
Framework for Regulation, by James Cockayne and Emily Speers Mears, March
2009, International Peace Institute.
Cockayne and Speers Mears examine the shortcomings of existing state, industry, intergovernmental, and civil society mechanisms for global security industry regulation, and put forward five possible regulatory frameworks for the global security industry. The report is based on a six-month study of approaches to regulation in other global industries, and extensive consultation with security industry stakeholders. The full, book-length study Beyond Market Forces: Regulating the Global Security Industry, will be published by IPI later in 2009
Playing By The Numbers: Recalculating How Many Employees Equal A Small Business, by Ralph C. Thomas III, February 2009. “SBA’s proposed new standard for determining small business status has been soundly criticized. However, with just a few adjustments, SBA’s new standard can obtain the necessary buy-in of small businesses.”
Rothe Development Corporation
v. Department of Defense: The Constitutionality of Federal Contracting Programs
for Minority-Owned and Other Small Businesses, by Jody Feder and Kate M.
Manuel, March 16, 2009. Congressional Research Service, Federation of American
Scientists web site.
Summary This report discusses Rothe Development Corporation v. Department of Defense, a case involving a constitutional challenge to a minority contracting program authorized under Section 1207 of the Department of Defense (DOD) Authorization Act of 1987. This program allowed DOD to take 10% off the price of bids or offers submitted by “small disadvantaged businesses” in determining which bid or offer had the lowest price or represented the best value for the government. Section 1207 also incorporated a presumption that minorities are socially and economically disadvantaged.
In Rothe, the U.S. Court of Appeals for the Federal Circuit struck down the DOD preference program, holding that Section 1207 was facially unconstitutional because Congress did not have sufficient evidence to conclude that there was racial discrimination in defense contracting when it reauthorized the program in 2006. This report examines the Rothe decision in detail; describes existing contracting programs for minority-owned and women-owned small businesses; and analyzes Rothe’s potential effect on these programs, including the Business Development Program under Section 8(a) of the Small Business Act.
Public Procurement Developments in 2008; Public Procurement in a World Economic
Crisis, Robert D. Anderson, World Trade Organization, Christopher R. Yukins,
George Washington University - Law School, West Government Contracts Year in
Review Conference (Covering 2008), GWU Legal Studies Research Paper No. 458, GWU
Law School Public Law Research Paper No. 458
Abstract: These two papers, presented at the West Government Contracts Year in Review Conference (covering 2008), discuss developing issues in international public procurement. Among other things, the Anderson paper addresses the role of the World Trade Organization in public procurement; other organizations -- such as the World Bank, the UN, and the OECD -- that play increasingly important roles; the role of competition or antitrust policy vis-a-vis procurement; and discrete issues such as public-private partnerships and framework agreements. The Yukins paper addresses, among other things, protectionist pressures that are being applied to the crisis-generated stimulus spending packages. The Yukins paper recommends that the Obama administration should tailor any fiscal stimulus procurements to comply with existing international free-trade agreements, and continue to advocate, quite forcefully, for building capacity and reform in procurement around the world.
Tempering 'Buy American' in the Recovery Act - Steering Clear of a
Trade War, Steven L. Schooner, George Washington University - Law School,
Christopher R. Yukins, George Washington University - Law School, Government
Contractor, Vol. 51, No. 10, 2009, GWU Legal Studies Research Paper No. 462, GWU
Law School Public Law Research Paper No. 462,
Abstract: The controversial 'Buy American requirements in Section 1605 of the American Recovery and Reinvestment Act of 2009 threaten to stir protectionism leading to an outright trade war. This could be catastrophic in the current economic crisis, particularly since the Obama administration does not appear to believe that additional domestic preferences are needed for U.S. procurement. The pending challenge for federal regulators, therefore, will be to craft a rule that contains the Recovery Act's international impact, while implementing Congress' intent. The authors suggest that the optimal approach seems to be the most simple: to fold new procurement under the Recovery Act into the existing FAR regulatory structure, which accommodates the U.S.' many trade agreements. This would ensure that federal agencies' procurements adhere to those trade agreements (and also increases the likelihood that an already over-taxed acquisition workforce can consistently apply the new rules.) This simple, quick and elegant approach would be the least likely to generate new, potentially disastrous waves of protectionism in the critical, but treacherous, waters of global commerce.
Emerging Policy and Practice Issues (2008), Steven L. Schooner
George Washington University - Law School, David J. Berteau, Center for
Strategic and International Studies, Defense-Industrial Initiatives Group, West
Government Contracts Year in Review Conference (Covering 2008), GWU Legal
Studies Research Paper No. 459, GWU Law School Public Law Research Paper No. 459
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2008), attempts to identify the key trends and issues for 2009 in U.S. federal procurement. In large part, the paper focuses upon the challenges facing the incoming Obama administration, which faces a number of interrelated, critical, systemic challenges that pervade the acquisition landscape. Federal procurement spending has exploded in this decade. As a result - and, in addition to decisions made during the 1990's - the Government is heavily outsourced, dependent upon contractors to an extent - in degree and in type - that makes many uncomfortable. To exacerbate matters, the Government lacks a sufficient acquisition workforce to responsibly manage its cadre of contractors (including an increasingly blended-military-contractor, civil servant-contractor, and/or military-civil servant-contractor-workforce). The failure to plan and staff the acquisition function in Iraq and Afghanistan, particularly, the ill-conceived and poorly-orchestrated reliance on arms-bearing (or private security) contractors in the battle area, will continue to generate bad procurement news and erode confidence. Thus, the foreseeable future will be dominated by a deeply ingrained, broad-based anti-contractor sentiment, which will manifest in the form of initiatives intended to achieve greater (pick your label) accountability, compliance, corruption control, ethics, integrity, transparency, etc. All of which signals turbulent times ahead, whether or not the new administration embarks upon an epochal public works program that would continue to fuel the breathtaking increases in procurement spending that have spanned this new century.
Public Procurement: Focus on People, Value for Money and Systemic
Integrity, Not Protectionism, Steven L. Schooner George Washington
University - Law School Christopher R. Yukins George Washington University - Law
School, THE COLLAPSE OF GLOBAL TRADE, MURKY PROTECTIONISM, AND THE CRISIS:
RECOMMENDATIONS FOR THE G20, Chapter 17, Richard Baldwin and Simon Evenett,
eds., A VoxEU.org Publication GWU Legal Studies Research Paper No. 460 GWU Law
School Public Law Research Paper No. 460
Abstract: The authors assert that, in the face of severe economic challenges, efficient and effective public purchasing is critical. Governments should focus on obtaining the greatest possible value for money expended and minimizing corruption, while eschewing counter-productive and inefficient protectionist constraints on procurement regimes. Stimulus investments in strengthening the acquisition workforce - the officials responsible for spending the government's money honestly and consistent with sound, business-based, transparent practices - will pay both short- and long-term dividends.
IMPOSSIBILITY, IMPRACTICABILITY, AND FRUSTRATION, Melvin A.
Eisenberg, The Journal of Legal Analysis, Vol 1, No 1 (2009), Harvard
Abstract: Three fundamental concepts underlie the principles that should govern unexpected-circumstances cases. (1) A contract consists not only of the writing in which it is partly embodied, but also includes, among other things, certain kinds of tacit assumptions. (2) These assumptions may be either event-centered or magnitude-centered. (3) The problems presented by unexpected-circumstances cases should be viewed in significant part through a remedial lens. The principles that rest on these concepts can be broadly summarized as follows. A shared nonevaluative tacit assumption that a given circumstance will persist, occur, or not occur during the contract time should provide a basis for judicial relief where the assumption would have affected the promisor's obligations had it been made explicit. If the promisor was neither at fault for the occurrence of the unexpected circumstance, nor in control of the conditions that led to the occurrence, she should not be liable for expectation damages. The promisor should, however, be liable for restitutionary damages, because it would be unjust to allow the promisor to both be excused from performance and retain any benefits that she received under the contract. Alternatively, the promisor should be liable for reliance damages where she is at fault for the creation of the unexpected circumstance, but the fault is minor; where the promisor is in control of the conditions that led to the occurrence of the unexpected circumstances; or where an objective of the contract was to reserve for the promisor the promisee's time, labor, or productive capacity. A seller should also be entitled to judicial relief if as a result of a dramatic and unexpected rise in her costs, performance would result in a financial loss that is significantly greater than the risk of loss that the parties would reasonably have expected that the seller had undertaken. If, under such circumstances, the market value of the contracted-for commodity has risen in tandem with the seller's costs, the buyer should be entitled to the profit he would have made if a reasonably foreseeable increase in the seller's cost of performance, and a corresponding increase in the market value of the commodity, had occurred. In appropriate cases, courts should take into account gains and losses to both parties that proximately resulted from, or were made possible by, the occurrence of the unexpected circumstance.
ADAPTING U.C.C. § 2-615 EXCUSE FOR CIVILIAN-MILITARY
CONTRACTORS IN WARTIME, Jennifer S. Martin, Florida Law Review, January
2009, Vol. 61 No. 1
Abstract: When should a civilian seller of goods who delays delivery or cancels altogether under a wartime contract be able to claim excuse under U.C.C. Article 2? The unprecedented extent of the U.S. military’s use of contractors abroad calls for a rethinking of U.C.C. impracticability, as private parties face wartime risks once encountered solely by the government. The traditional approach typically denies the seller the right to excuse the failure of delivery in instances where the wartime risk might be categorized as foreseeable or is expressly or impliedly allocated to the seller. This analysis forces a dilemma upon the seller facing threats of serious injury or death. At the same time, the civilian seller typically does not enjoy the same privileges regarding use of force that government provisioners once exercised. This Article proposes a new paradigm-one that would hold sellers to deliver goods in most circumstances, but would make excuse available to sellers through an analysis of functions that are inherently governmental. This analysis grants excuse where the risks associated with wartime contingencies requiring a military response are inherently governmental and, therefore, remain with the government. The rationale balances the interests of civilians performing wartime contracts and the military’s need for goods and control of the wartime theater that would warrant excusing contractors during wartime from performance in cases of extreme hazard to a contractor’s employees.
Street FOIA 101: Nuts, Bolts, and
Loose Change, Lieutenant Colonel Craig E. Merutka, The Army Lawyer, December
Introduction This article is written for members of the “street FOIA Teams” at various levels. It provides up to date information on recent changes and some practical nuts and bolts information on a number of FOIA topics. The issues raised are those that have impact at the installation and lower level, those that have been the subject of inquiry here at the Judge Advocate General’s Legal Center and School, or are details the author did not necessarily know about when he was practicing out on the street but wishes he did.
The New Text of the Agreement on Government Procurement: An
Analysis and Assessment, Arie Reich, Bar-Ilan University - Faculty of Law,
January 12, 2009
Abstract: This article describes and analyzes the new, tentatively agreed text of the WTO Agreement on Government Procurement. It compares it to the existing agreement of 1995, offers interpretation of its provisions and discusses its potential implications for the regulation of international government purchasing. The objective of the article is to examine whether it has indeed delivered on its promise, namely to improve the existing agreement and to eliminate any remaining discriminatory measures and practices. To that aim it presents the critique that has been leveled against the provisions of the existing GPA and examines to what extent the flaws detected by this critique have been rectified in the new text. The paper concludes with a scorecard of the new text assessing its allover strengths and weaknesses.
Training the Military to Manage Contractors During Expeditionary
Operations: Overview and Options for Congress, Moshe Schwartz, Congressional
Research Service, December 17 , 2008.
SUMMARY: The Department of Defense (DOD) is responsible for performing a wide range of expeditionary missions, including domestic emergency operations and military operations outside of the continental United States. DOD increasingly relies on contractors during expeditionary operations to perform a wide range of services. For example, more contractors are working for DOD in Iraq and Afghanistan than are U.S. military personnel. As a result, military personnel in the field are increasingly interacting with and responsible for managing contractors. Yet many observers argue that the military is not sufficiently prepared to manage contractors during expeditionary missions. The National Defense Authorization Act of FY2008 (H.R. 4986/P.L. 110-181) required DOD, and especially the Army, to train military personnel who are outside the acquisition workforce but are expected to have acquisition responsibility , and to incorporate contractors and contract operations into mission exercises.
DOD, including the Army, are taking a number of steps to comply with Congressional legislation to better prepare the operational force—including servicemen and women conducting military operations on the battlefield—to work with contractors. These steps include developing doctrine for integrating contract support into expeditionary operations, introducing courses on contract support into the curriculum for non-acquisition personnel, and incorporating contract operations into mission readiness exercises. This report examines these steps being taken by DOD and options for Congress to monitor DOD’s efforts to comply with P.L. 110-181. Options include requiring military departments to report on acquisition education courses available for operational personnel. This report will be updated as events warrant.
“The Hidden Costs of
Contracting: Private Law, Commercial Imperatives and the Privatized Military
Industry” Paper, International Security Program, Belfer Center for
Science and international Affairs December 2008, Author: Rebecca Ulam Weiner,
Former Research Fellow, International Security Program, 2005-2007
From the paper: On September 16, 2007, a group of contractors working for the firm Blackwater USA engaged in a chaotic and bloody firefight in Baghdad's Nisoour Square that left 17 Iraqi civilians dead, Blackwater's $500 million in government contracts in jeopardy and the future of the privatized security industry in question. What exactly happened in Nisoour Square remains in dispute. Blackwater alleges that its contractors came under small arms fire and lawfully engaged to stop the threat. The Iraqi government and the US military both argue that Blackwater opened fire unprovoked and used excessive force - including machine guns, grenade launchers and helicopter fire. The FBI, which is conducting a formal investigation into the shootings on behalf of the Department of Justice, argues that 14 of the 17 deaths were unjustified killings and finds no evidence, thus far, that Blackwater was justified in shooting at civilians.
The Nisoour Square incident was broadly proclaimed to be the final straw that would force the White House, Congress and the courts to come to terms with the complex and often fraught relationship between the U.S. military and the increasingly ubiquitous, increasingly interoperable private military contractors that it hires. The FBI investigation marks the first time since the end of the Cold War that the US government is attempting to hold a private security company criminally liable for extraterritorial crimes committed in the course of a government contract.
However, while the episode has subjected the privatized military industry to heightened scrutiny from the Iraqi government, the US military, Congress, and the public, the Department of State and the Department of Justice contend that despite recent efforts to the close the legal loopholes through which private military contractors have slipped in the past, there remain considerable, perhaps insurmountable, hurdles to prosecution.
“Contractor Compliance: New Rules in a Global Market”, Materials from the December 10, 2008, GWU law School special colloquium.
How to Reduce Corruption in Public Procurement: The
Fundamentals, Juanita Olaya, Transparency International; University of Bonn
- Faculty of Law &Economics, Michael Wiehen, Transparency International
HANDBOOK FOR CUBING(sic) CORRUPTION IN PUBLIC PROCUREMENT, PART I, pp. 13-105,
Transparency International, 2006
Abstract: Procurement of goods, works and other services by public bodies alone amounts on average to between 15% and 30% of Gross Domestic Product (GDP), in some countries even more. Few activities create greater temptations or offer more opportunities for corruption than public sector procurement. Damage from corruption is estimated at normally between 10% and 25%, and in some cases as high as 40 to 50%, of the contract value.
Public procurement procedures often are complex. Transparency of the processes is limited, and manipulation is hard to detect. Few people becoming aware of corruption complain publicly, since it is not their own, but government money, which is being wasted.
This document is Part I of the Handbook for Curbing Corruption in Public Procurement published by Transparency International in 2006 and its purpose is to provide an overview of the problem of corruption in public contracting. Sections 2 and 3 of the Handbook, written by other authors, offer suggestions and experiences of how this problem can be addressed. The full text of the Handbook has been made available.
Essay—After Blackwater: A Mission-Focused Jurisdictional Regime for Private Military Contractors During Contingency Operations, by Michael Hurst, GWU Law Review, VOLUME 76 NUMBER 5 AUGUST 2008.
Why Contractor Fatalities Matter, Steven L. Schooner, George
Washington University - Law School, Parameters, Volume 38, No. 3, Page 78
Abstract: At the end of July 2008, the media reported that 4,600 service members have died in Operations Iraqi Freedom and Enduring Freedom. But reporting only military fatalities understates the human cost of America's engagements in these regions by nearly a fourth. On the modern, outsourced battlefield, the U.S. government increasingly has delegated to the private sector the responsibility to stand in harm's way and, if required, die for America. As of 30 June 2008, more than 1,350 civilian contractor personnel had died in Iraq and Afghanistan, while another 29,000 contractors have been injured; more than 8,300 seriously. Nonetheless, contractor fatalities (and injuries) remain generally outside the public's consciousness. This article asserts that, in a representative democracy, public awareness of the human cost of our nation's security and foreign policies is critical.
After the Battle of the Forms: Commercial Contracting in the
Electronic Age, Francis Joseph Mootz III William S. Boyd School of Law,
UNLV, I/S: A Journal of Law and Policy for the Information Society, Vol. 4, p.
271, 2008 , UNLV William S. Boyd School of Law Legal Studies Research Paper No.
Abstract: This is a substantially expanded and revised version of a paper posted earlier, which will appear in the peer-review journal, I/S: A Journal of law and Policy for the Information Society.
Commercial parties continue to fight the battle of the forms, but electronic contracting is quickly rendering this practice obsolete. In this article I assess the legal landscape for commercial parties after the battle of the forms. In Part One, I briefly describe the (relatively) settled law under U.C.C. 2-207, describe how these rules permit commercial parties to erect a force-field to protect themselves from being subjected to unwanted terms, describe the developments in web-based contracting and recent case law applying contract formation principles to electronic contracting, and then discuss how the growth of electronic contracting will eliminate the battle of the forms that triggers the application of U.C.C. 2-207 and also will make it difficult for commercial parties to replicate the force-field protection to which they have grown accustomed.
In Part Two, I discuss the two primary doctrinal options available to address contracting realities for commercial parties once the electronic age of contracting has eliminated the battle of the forms. The debacle surrounding Revised Article 2 suggests that the only plausible response as the theater of operations shifts from the battle of the forms to the world of electronic contracting will be judicial rather than legislative. Although unconscionability analysis might be a plausible doctrine to address egregious cases, I conclude that the doctrine is too closely aligned with consumer protection to make it a viable theory for commercial parties. Instead, I argue that rehabilitating the doctrine of reasonable expectations holds the most promise for addressing the commercial contracting world after the battle of the forms. This approach enjoys the benefit of being grounded in Karl Llewellyn's theory of the validity of standard form contracts, is consonant with one of the important guiding principles of Article 2, and will be sufficiently defined by the commercial context to permit consistent application by courts policing the margins of acceptable contracting practices.
All papers presented at the 3rd International Public Procurement Conference have been posted on the IPPC website (www.ippa.ws under “Publications”).
The Legal Challenges of Implementing Electronic Transactions,
Thomas J. Smedinghoff Wildman Harrold, Uniform Commercial Code Law Journal, Vol.
41, No. 3, 2008
Abstract: This article analyzes the law governing electronic transactions, and the legal requirements for creating enforceable electronic transactions of any type. It focuses on the fundamental issues that must be addressed by any business seeking to ensure that the processes it uses for its electronic transactions are legally valid and enforceable. To do so, the article examines the law with respect to the following three general questions:
* Authorization-Can this transaction be done in electronic form? Does existing law in the relevant jurisdictions allow the parties to conduct the proposed transaction in electronic form, or does existing law either prohibit doing the transaction electronically or present legal barriers that make its enforceability uncertain?
* Electronic Requirements-What are the electronic-specific rules? What electronic-specific rules apply, and what requirements must be satisfied to ensure that the transaction is legally valid and enforceable? The focus here is on electronic procedural requirements applicable to all transactions, not on the substantive legal requirements for a particular transaction.
* Security-Is the transaction trustworthy? What is required before the parties will be comfortable relying on the transaction? How can the parties be sure who sent an electronic message or who signed an electronic record? How can the parties be sure that the record has not been altered since it was created? Are the electronic records sufficiently trustworthy such that it will be enforced by a court?
Trade and Competition Policy in the Developing World: Is There a
Role for the WTO?, Daniel J. Gifford University of Minnesota - Law School,
Robert T. Kudrle University of Minnesota, Twin Cities, August 13, 2008,
Minnesota Legal Studies Research Paper No. 08-27
Abstract: This paper considers the possibilities that the member states of the WTO would adopt some kind of antitrust provision. Initially, the paper reviews the historical relation of competition policy to trade policy, from the Havana Conference to the present. It then reviews the conflicts between the developing and developed countries in the GATT. The paper explores the differences between the mind-set of legislators adopting a competition law and trade negotiators bargaining for a multilateral reduction in tariffs. It also identifies the influence of private interests in both situations. The paper considers competing roles played by competition laws and industrial policy, especially (but not exclusively) in developing countries. It identifies the differing benefits that developed and developing countries once perceived in a competition-law component to the WTO, and it discusses how the realization of both sets of goals is proving increasingly difficult. Finally, the paper shows that the dominant private interests of developed and developing countries diverge. As a result a global competition-law regime, whether under the WTO or not has become increasingly unlikely.
Last Shall Be First: The Use Of Localized Socio-Economic Policies In Contingency
Contracting Operations, Major Bradley A. Cleveland, Military Law Review - Volume 197 - Fall
From the Introduction This article critically examines the Federal Acquisition Regulation’s competition rules and the Competition in Contracting Act (CICA), including the act’s legislative history. Next, the article will discuss the current rebuilding efforts in Afghanistan and Iraq and compare them to the United States’ rebuilding efforts in post World War II Europe. The article will then explore the history, goals, application, and impacts of the Afghan First and Iraqi First programs and explain why the programs violated the full and open competition requirement. The article will then discuss why, despite their shortcomings, the programs are vitally important to the United States’ efforts in the regions of Afghanistan and Iraq. Finally, the article will explain why congressionally authorized ”enhanced contingency contracting authority” is vitally important for both today’s contingency efforts and those that may arise in the future.
ABA SIL International Procurement Committee Year in Review
2007, Paul Lalonde affiliation not provided to SSRN. Christopher R. Yukins
George Washington University - Law School, Don Wallace Jr., Georgetown
University - Law Center, Jason Matechak, Reed Smith LLP, International Lawyer,
Vol. 42, No. 2, Summer 2008 GWU Legal Studies Research Paper No. 439 GWU Law
School Public Law Research Paper No. 439
Abstract: This year, the International Procurement Committee's YIR contribution is divided into two sections. Section I reports on the important work being carried out on, among other things, framework contracting and electronic procurement by Working Group I of the United Nations Commission on International Trade Law (UNCITRAL). Section II deals with the World Bank's continued campaign to eliminate corruption in procurement through reform of the Bank's sanctions process, which complements its Voluntary Disclosure Program.
Drowning in Blackwater: How Weak
Accountability over Private Security Contractors Significantly Undermines
Counterinsurgency Efforts, Major Jeffrey S. Thurnher, The Army Lawyer, July
From the Introduction- Drastic measures need to be taken to improve the overall United States policy for controlling PSCs and holding those contractors accountable for their actions. Part II of this article provides an overview of the history of PSCs on the battlefield and explains how the United States got itself into such a precarious position in Iraq. Part III addresses the law of war implications of using PSCs while comparing the methods and approaches of the various governmental agencies who hired PSCs in Iraq before the September 2007 Blackwater incident. Part IV examines in depth the changes made in the wake of the Blackwater incident to better control PSCs. Finally, Part V proposes the additional accountability measures over PSCs necessary to ensure American success in future counterinsurgency campaigns.
Veteran-Owned Small Business in the Federal Marketplace, Lieutenant
Commander Theron R. Korsak, The Army Lawyer, July 2008.
From the Introduction- This article will introduce agency heads, contracting officers, Judge Advocates, and veterans to the laws and programs designed to assist service-disabled veteran-owned small businesses in federal contracting. To accomplish this goal, the first section of this article presents a summary of the laws intended to assist service-disabled veteran-owned small businesses. Following that discussion, section two focuses on socio-economic programs and eligibility requirements. Section three is a review of common procedural issues affecting service-disabled veteran-owned businesses. Section four explores policy conflicts that may impact contract awards to a service-disabled veteran-owned small business. Section five summarizes the role that federal agencies, quasi-government organizations, and industries play to meet the 3% goal. Finally, this article concludes with recommendations to increase contract awards to service-disabled veteran-owned small businesses.
Too Dependent on Contractors? Minimum Standards for Responsible
Governance Steven L. Schooner, George Washington, University - Law School,
Daniel S. Greenspahn affiliation not provided to SSRN, Journal of Contract
Management, Summer 2008 GWU Law School Public Law Research Paper No. 435, GWU
Legal Studies Research Paper No. 435.
Abstract: While acknowledging that there are many benefits, challenges, and risks involved in outsourcing, this article asserts that failed implementation, rather than outsourcing policy, explains the government's current (mis)management of its contractors. This article explores the minimum standards for responsible governance following more than 15 years of ill-conceived and inadequate investment in the federal government's acquisition workforce, followed by a governmentwide failure to respond to a dramatic increase in procurement activity. These trends have led to a buying and contract management regime animated by triage, with insufficient resources available for contract administration, management, and oversight. The old adage “an ounce of prevention is worth a pound of cure” rings true. Accordingly, a prospective investment in upgrading the number, skills, incentives, and morale of government purchasing officials would reap huge long-term dividends for the taxpayers.
FOR CONVENIENCE SETTLEMENTS/EDITION II, Part I
and Part II (first pages). by By Paul J. Seidman
and David J. Seidman. Thomson West recently published Part II of the Termination
Briefing Paper. The papers are coauthored by the father and son Paul and
David. Paul states that to the best of his knowledge it is the first father son
Government contracts publication.
An interesting side note is that Carl Vacketta taught Paul in his Government Contracts class at Georgetown Law in 1973 and recently taught David at GWU Law.
Both Briefing Papers are available form Thomson West.
Frameworks for Opening the Chinese Procurement Markets, Christopher R.
Yukins. George Washington University - Law School, Robert D. Anderson, World
Trade Organization, West Government Contracts Year in Review Conference -
Covering 2007, GWU Law School Public Law Research Paper No. 407
Abstract: These papers, presented at the West Government Contracts Year in Review Conference (covering 2007), discuss the policy and legal frameworks for opening the Chinese procurement markets. The first paper discusses the process for accession to the World Trade Organization (WTO) Agreement on Government Procurement (GPA) and explores some related issues and developments. The author concludes that China’s initiation of its GPA accession process may mark a watershed in the evolution of international regulation of public procurement markets. The latter paper focuses upon challenge mechanisms or bid protests in the context of the WTO GPA. While China's membership in the GPA will open the U.S. procurement market to China, Professor Yukins suggests that what will likely remained unresolved is how vendors offering goods from China will enforce the GPA's market-opening provision in the U.S. federal procurement system.
Public Procurement Systems: Unpacking Stakeholder Aspirations and Expectations, Steven L. Schooner George Washington University - Law School, Daniel I. Gordon Government Accountability Office Washington, D.C.; The George Washington University Law School. Jessica Clark George Washington University - Law School, May 8, 2008, GWU Law School Public Law Research Paper . GWU Legal Studies Research Paper
|This project is very much a work in progress, and we
posted the draft at this point because are actively seeking comments, reactions,
suggestions, examples, and anecdotes. (The version posted is a significantly
condensed version.) |
Readers should not hesitate to correspond directly with Steve Schooner at email@example.com or, of course, with the other authors.
Affirmative Action or Passive Participation in
Perpetuating Discrimination? The Future of Race-Based Preferences in Government
Contracting, The Army Lawyer, February, 2008, Major (U.S. Army Retired)
Patricia C. Bradley, Affirmative action should not be regarded as nihilistic.
We should not abandon all attempts to set standards, nor should we hire and
promote unqualified individuals over qualified ones. But the inconsistencies
cast doubt on how well opponents of affirmative action adhere to the principles
of color blindness and meritocracy, hinting that the standards we choose may be
arbitrary. They oblige us to ask how to offer expanded opportunities.
From the Introduction: This article discusses the history of race-conscious legislation in government procurement, highlighting the Adarand Constructors Inc. v. Pena string of cases and discusses how the government changed the contracting rules following Adarand. It will further analyze whether the current rules as implemented effectively end SDBs preferences, despite the plan to “amend it, not end it.” Finally, this article will argue that the government should be required to try race-neutral measures before allowing race-based preferences. However, due to the unpleasant reality that race still matters, where evidence of the effects of current and past discrimination linger, race-based preferences should be allowed in order to ensure that disadvantaged businesses are afforded the opportunity to compete in the government contracting enterprise. [Alternate link to article]
Comment: U.S. Contractor Compliance Rules are Likely to Expand, Christopher R.
Yukins, George Washington University - Law School, Government Contractor,
Vol. 50, para. 147, April 23, 2008,
Abstract: In response to recommendations and developments in the U.S. procurement community, the U.S. Government is expected soon to issue revised standards for contractor compliance systems. Those standards will likely require more contractors - including contractors working abroad, and perhaps commercial-item contractors - to establish more comprehensive compliance systems to ensure their adherence to the many laws and rules that govern federal procurement. In this brief essay, Christopher Yukins reviews the history of contractor compliance systems, assesses the likely elements of the revised standards, and suggests ways to weigh some of the costs and benefits of new compliance requirements.
Defense Acquisition, Fred Thompson, Willamette University - Atkinson
Graduate School of Management, Political Science Quarterly, Vol. 107, No. 4, pp.
Abstract: What we really need is a careful program of experimentation to determine how acquisition life-cycle costs vary with alternative acquisition-process designs and whether short lines of communication, clear responsibility, accelerated schedules, and a modicum of congressional neglect will produce the benefits touted by the experts. Not only is this information needed by program managers, it is also needed to help persuade Congress to back away from its direct supervision of the systems acquisition process, something that neither theory nor hearsay can accomplish.
Policy and Practice Issues, Steven L. Schooner and Danielle Conway-Jones,
George Washington University - Law School,
West Government Contracts Year in Review Conference - Covering 2007
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2007), attempts to identify the key trends and issues for 2008 in U.S. federal procurement. We bemoan the absence of attention to significant issues by the current Presidential candidates, critique the leadership vacuum that sustains the longstanding and increasingly critical acquisition workforce shortage, and discuss the potentially active legislative agenda in light of the now-Final Report of the Acquisition Advisory Panel (AAP), a blue-ribbon commission mandated by Section 1423 of the Services Acquisition Reform Act (SARA). We also discuss the dramatic post-2000 trend in increased federal procurement spending, increased transparency due to the Federal Procurement Data System and new online vehicles, increased attention to contractor compliance systems, continuing problems with contracting in Iraq, and the application of certain social policies to the procurement process.
Connections and the Allocation of Procurement Contracts - Eitan Goldman,
Indiana University Bloomington - Department Of Finance, Jorg Rocholl, ESMT
European School Of Management And Technology, Jongil So, University Of North
Carolina At Chapel Hill - Finance Area, August 2007, EFA 2007 Ljubljana Meetings
Abstract: This paper analyzes whether political connections of public corporations in the United States affect the allocation of government procurement contracts. The paper classifies the political affiliation of S&P 500 companies using hand-collected data that detail the past political position of each of their board members. Using this classification, the study focuses on the change in control of both House and Senate following the 1994 midterm election and on the change in the Presidency following the 2000 election. An analysis of the change in the value of the procurement contracts awarded to these companies before and after 1994 and 2000, respectively, indicates that companies that are connected to the winning (losing) party are significantly more likely to experience an increase (decrease) in procurement contracts. The results remain significant after controlling for industry classifications as well as for several firm characteristics. In total, these findings suggest that the allocation of procurement contracts is influenced, at least in part, by political connections. Thus, our study provides one of the first pieces of evidence showing a direct avenue through which political connections add value to U.S. companies.
A CRITICAL REASSESSMENT OF THE GAO BID-PROTEST MECHANISM
by Robert S. Metzger and Daniel A. Lyons, January 26,2008. Wisconsin Law Review,
Volume 2007, Issue 6.
From the Introduction This Article focuses on the relationship between the COFC and the GAO and questions whether the GAO should continue to serve as the forum of choice for complex and high-value procurement-award controversies. As a corollary, this Article suggests that decisions of the GAO need not receive the deference that agencies have historically afforded them. The Article recognizes that the GAO bid-protest mechanism succeeds in resolving thousands of government-contracts disputes each year. This convenience and efficiency, however, is not without cost, as the GAO operates without many of the safeguards of traditional judicial process. The GAO owes its record of deference not necessarily to the quality of its decisions but also to its relationship with Congress. In contrast, the COFC has developed as a judicial forum with specialized procurement-law expertise. It has procedural strengths that contrast favorably with the GAO’s more informal adjudicative mechanism. These and other considerations suggest that federal agencies (and the COFC) reconsider the deference they traditionally pay to GAO bid-protest decisions. Moreover, as informed by a close examination of the GAO process, this Article’s view is that the GAO should consider changes to its bid-protest regulations to improve the efficacy of the Comptroller General’s decisions while maintaining the efficiency of the GAO bid-protest process.
of State Administrative Services Drury D. Stevenson , South Texas College of
Law, Louisiana Law Review, Forthcoming
Abstract: Privatization of government services has been touted as a cost-savings approach for state agencies, promising to harness the efficiencies of market forces to overcome the perceived inefficiencies of bureaucracies. Empirical and anecdotal evidence indicates that such savings rarely materialize, and instead outsourcing is often a bad deal for taxpayers. This paper explores the inherent problems in the contractual arrangements for these attempts at government outsourcing. Perverse incentives, transaction costs, non-competitive bidding, the nature of government services handled on the state level, and conflicting legal rules regarding interpretation all contribute to the failure of privatization for the states.
Good Faith and
Contract Interpretation: A Law and Economics Perspective, Simone M Sepe,
Yale Law School; University of Siena, February 2006. SIena Memos and Papers in
Law &Economics - SIMPLE Paper No. 42/06
Abstract: The widespread acknowledgement of the implied contractual obligation of good faith is a relatively recent phenomenon in the American legal landscape. In the paper, I claim that the obligation of good faith in a contract should be a default rule that parties should include in their agreement only when it maximizes the ex-ante value of their contractual relationship. I discuss under what conditions the requirement of good faith proves efficient and propose a basic framework of reference for the parties' decision to include or exclude good faith in their contract. In this framework, the obligation of good faith is conceived as the rule of law that prohibits each contracting party from taking advantage of the contract's incompleteness to expropriate her counterparty's expected contractual benefits. However, I challenge the law-and-economics argument supporting the efficiency of good faith, claiming that parties themselves should decide whether to include or exclude good faith in their agreements. From a practical viewpoint, this means that the interpretative regime should be determined by private autonomy, rather than be a judicial decision based on a-priori assumptions.
In the good-faith regime I propose, therefore, parties are free to choose whether (i) to exclude good faith from their contracts and, thereby, opt for a literal interpretative regime in which the contract is the only evidentiary base courts should use in enforcing their agreement; or (ii) to include good faith and opt for a good-faith interpretative regime, giving courts indications on the evidentiary base that should be used to
Responding to National
Disasters and Emergencies: A Contract and Fiscal Law Primer Major
Christopher B. Walters, The Army Lawyer - October 2007.
From the Introduction: Since the beginning of our Nation, the U.S. military has been called upon to respond to all manner of domestic disasters and emergencies. Such disasters, natural and man-made, have included hurricanes, typhoons, fires, floods, earthquakes, tornados, massive explosions, and terrorist attacks. Other types of domestic disasters and national emergencies that may require military deployment and support include disease pandemics, major power blackouts, nuclear, biological, or chemical releases, and civil disturbances and insurrections, to name a few. As in all legal areas, including the fiscal and contracting realm, judge advocates deploying in support of a domestic disaster or emergency must be keenly aware of the types of support the military will be asked to provide and the legal factors that will affect the response. Despite the severity or catastrophic nature of a disaster, military support to civilian authorities must always remain within the fiscal and contracting laws and regulations that govern such assistance. While there are emergency acquisition rules to add flexibility in these situations, fiscal and contracting rules remain in effect as in all other military operations. Proactive coordination and close cooperation by judge advocates with all fiscal and contracting offices involved in the mission will ensure that standard procedures and rules are followed and that military funds and resources are not misapplied.
The purpose of this primer is to provide the judge advocate deploying in support of a domestic disaster or emergency a quick overview of the federal response scheme, highlight some lessons learned and unusual issues that arose in the past, and identify a recent addition to the Federal Acquisition Regulation (FAR) resulting from Hurricane Katrina. Note that a detailed discussion of government fiscal and contracting law procedures and regulations is beyond the scope of this primer. Judge advocates should closely review applicable references.
Ipse Dixit: The Restatement (Second) of Contracts and the Modern
Development of Contract Law, Gregory E. Maggs, George Washington University
Law School, George Washington Law Review, Vol. 66, No. 508, 1998 GWU Legal
Studies Research Paper No. 387, GWU Law School Public Law Research Paper No. 387
Abstract: This article considers how courts have responded to the inclusion of six innovative rules in the Restatement (Second) of the Law of Contracts. It observes that most courts simply have deferred to the new rules. In the vast majority of cases, courts gave no reasons for their decisions to embrace the six rules. They simply cited them as they would cite a statute or code and did not question their authority. This practice raises an important normative question: Should courts follow the Restatement (Second) as readily as they currently do? The article concludes that, although some arguments counsel against deference to an academic work such as the Restatement (Second), on balance, the practice does more good than harm. By deferring to the Restatement (Second), courts have tended to promote uniformity and certainty in the law of contracts and to conserve judicial resources. Although deference to the Restatement (Second) may alter the substance of the law in some jurisdictions, such changes generally do not have deleterious consequences.
Reframing The Defense
Outsourcing Debate: Merging Government Oversight With Industry Partnership,
Patrick Cullen Peter Ezra Weinberger Peace Operations Institute (Published with
permission of the author)
Executive Summary(partial) This report shifts the discussion of the government’s role in defense contract oversight away from an exclusive focus on guarding against contractor malpractice—an important issue that has nevertheless been exaggerated in the media—towards an understanding of contract oversight as a process of government-industry partnership. Here, contract oversight is understood in terms of specific technical problems that can be resolved or ameliorated by proactive cooperation between government and industry partners. In addition to, and in accordance with this pragmatic vision of government oversight, the report seeks to achieve the following:
Outsourcing Sovereignty: Why Privatization Threatens Democracy, Richard J.
Pierce Jr., George Washington University Law School, George Washington Law
Review, Forthcoming, GWU Legal Studies Research Paper No. 360, GWU Law School
Public Law Research Paper No. 360
Abstract: This is a review of Paul Verkuil's new book: Outsourcing Sovereignty: Why Privatization Threatens Democracy and What we Can Do About It. The book consists of a wide-ranging and well-documented critique of what Verkuil views as excessive reliance on private contractors to perform a variety of inherently governmental tasks, with particular emphasis on military and other national security functions. Verkuil discusses in detail numerous ways in which the U.S. might reduce the scope and severity of the severe problems that excessive reliance on poorly-supervised contractors is now having.
Pierce praises Verkuil's description and documentation of the problem he addresses in the book, but he expresses skepticism with respect to the likely efficacy of the remedies Verkuil discusses. Pierce proposes two other remedies that he believes would at least enhance the efficacy of the remedies Verkuil proposes - election of a President with better judgment than George W. Bush and congressional refusal to immunize private contractors from potential civil and criminal liability. Pierce also suggests, however, that downsizing and outsourcing military functions has had an important beneficial effect - it has limited the ability of the U.S. to invade and to occupy countries that displease the U.S., thereby reducing to two the five or six countries the U.S. might have attempted to invade and to occupy if it had a more robust military capability.
The Effect of
Information on the Bidding and Survival of Entrants in Procurement Auctions,
Dakshina G. De Silva, Texas Tech University - Department Of Economics, Georgia
Kosmopoulou, University Of Oklahoma - Department Of Economics, Carlos Lamarche
Department of Economics,June 8, 2007.
Abstract: In government procurement auctions of construction contracts, entrants are typically less informed and bid more aggressively than incumbent firms. This bidding behavior makes them more susceptible to losses affecting their prospect of survival. In April of 2000, the Oklahoma Department of Transportation started releasing the internal cost estimates to complete highway construction projects. Using newly developed quantile regression approaches, this paper examines the impact of the policy change on aggressive entrants. First, we find that the information release eliminates the bidding differential between entrants and incumbents attributed to informational asymmetries. Second, we argue that the policy change affects the prospects of survival of entrants in the market. We find that those who used to exit the market relatively soon are now staying 37 percent longer, while at the median level bidding duration increased by roughly 68 percent. The policy has the potential to encourage entry in government procurement auctions and thus increase competition.
for Wartime Actors: The Limits of the Contract Paradigm. Jennifer S. Martin,
University of Pittsburgh School of Law, August 26, 2007.
Abstract: Much can be (and has been) said about the war in Iraq. This essay explores the role of contract in wartime and (particularly) reconstruction. First, it considers the use of government contracts to privatize numerous government functions during the reconstruction and conflict in Iraq. Second, it considers the private ordering by contract done by government contractors to obtain security and related services from third parties. Both types of contracting raise complicated issues including: the proper use of force; to what extent the contracts should have government oversight; to what extent contractors should be accountable for crimes; and whether contractors qualify as noncombatants in case of capture. The special issues of contracting in a warzone are not best addressed primarily by common law doctrine. Additional rules and regulations are necessary to address the special issues of non-state actors who contract with the U.S. government.
Contract, Alan M. White, Valparaiso University School Of Law, Cathy Mansfield,
Stanford Law &Policy Review, Vol. 13, No. 2, 2002
Abstract: Contract law imposes on consumers a “duty to read”, shorthand for a set of related doctrines including the statute of frauds, the parol evidence rule, and the reasonable reliance element of fraud as a contractual excuse. Moreover, consumer protection statutes have placed heavy emphasis on information disclosure, usually provided on additional documents, as the preferred method to deter abuses in the marketplace. The duty to read and the myriad of disclosure laws rely on unfounded assumptions about the ability of ordinary consumers to read and use written documents.
The National Adult Literacy Survey (NALS) provides sobering data on the document literacy and quantitative skills of the American public. A surprisingly small percentage of the adult population has the ability to extract key information from lengthy and complex consumer contract documents and disclosure forms. Contracts and disclosures for mortgage loans, automobile leases, and other modern transactions are accessible to fewer than 10% of the consumers for whom they are intended.
The present state of the law, regarding contract formation and enforceability, and the various disclosure statutes, take no account of the literacy problem. New approaches are needed to protect consumers and police the marketplace, using means other than the doctrines of fraud, unconscionability, and technical disclosure statutes, and based on the reality of the gap between adult literacy and the readability of contract forms.
and Contract Default Rules: An Essay on Lieber and Corbin Lawrence A.
Cunningham, George Washington University Law School, Cardozo Law Review, Vol.
16, No. 2225, 1995 GWU Law School Public Law Research Paper No. 330, GWU Legal
Studies Research Paper No. 330
Abstract: The most provocative debate in contemporary contract law scholarship concerns default rule analysis or the manner in which courts fill gaps in incomplete contracts. The nineteenth-century scholar Francis Lieber elaborated a comprehensive solution to the default rules puzzle by first distinguishing the judicial acts of contract interpretation and construction, and then by developing principles of construction with which to choose default rules. Arthur Corbin knew about Lieber's enterprise, but, in his treatise on contracts, dismissed Lieber's distinction and never explored the rest of Lieber's hermeneutics. Had Corbin addressed Lieber, much of the professorial energy expended in the prevailing default rules debate might have been conserved.
Although Lieber’s work was rather limited with respect to the law of contracts, his principles of construction provide an analytical framework with which to understand and guide the way judges choose rules that conflict with the intentions of parties in contract disputes. Because Lieber's principles constitute foundational ideas, a return to them may be both efficient in conserving intellectual energy and profitable in providing fresh insights into the problems to which the ideas apply. By reviewing the distinction between interpretation and construction as Corbin adapted it from Lieber in Part I and then showing how Lieber's principles of construction bear directly on the prevailing default rules debate in Part II, this Essay invites a return to those foundational ideas and the addition of hermeneutics to the default rules debate. This essay's discussion of Lieber's hermeneutics - adapted for contract law according to Corbin's distinction between interpretation and construction - is tentative and general. It recognizes a potential intellectual debt owed to Lieber, who has been a neglected figure in contemporary American legal thought. And while Corbin has been treated as the legal academy's equivalent of royalty, even his distinction between interpretation and construction has been underappreciated.
: Eroding the Impediments to a Global Public Procurement Market by
Christopher R. Yukins, Steven L. Schooner, George Washington University - Law
School Georgetown Journal of International Law, Vol. 38, No. 529, 2007 GWU Legal
Studies Research Paper No. 320 GWU Law School Public Law Research Paper No. 320
Abstract: Following decades of international negotiations and agreements, the world's multi-trillion-dollar public procurement market appears to be maturing into a free, open international market. To reach that point, nations must lower a broad array of barriers to trade in procurement. As the U.S. experience demonstrates, purchasing agencies, laboring under the constraints of domestic preferences, may effectively seek to promote free trade. At the same time, a variety of international organizations, from the World Trade Organization to Transparency International, have developed tools and instruments - including model codes and explicit nondiscrimination agreements - that ease barriers to trade in procurement. To accelerate the erosion of these barriers, this Article suggests assessing progress in four potentially overlapping steps: nondiscrimination, a political decision; harmonization, an effort to coordinate the international instruments; rationalization, an effort to enhance the efficiency of regimes launched under the international instruments; and, institutionalization, an integration of the evolving international procurement norms into the legal fabric of the nations entering the international free market in procurement.
Integrity and Procurement: The United Nations Convention Against Corruption and
the UNCITRAL Model Procurement Law, Christopher R. Yukins, George Washington
University - Law School GWU Legal Studies Research Paper No. 282, GWU Law School
Public Law Research Paper No. 282, Public Contract Law Journal, Vol. 36, No. 3,
Abstract: Traditionally, procurement reform and anti-corruption initiatives have followed separate tracks, although they share a common purpose: a sound government, supported by a robust and politically legitimate procurement system. Now two initiatives at the United Nations may integrate those disparate strands. The United Nations Commission on International Trade Law (UNCITRAL) is working to reform the UNCITRAL Model Law on Procurement of Goods, Construction and Services(the UNCITRAL Model Procurement Law), an important instrument for harmonizing, and strengthening, procurement systems throughout the developing world. At the same time, the U.N. Convention Against Corruption, a sweeping commitment to fight corruption internationally, has been signed by 140 countries. This paper reviews how the two U.N. initiatives can work together, and concludes that the UNCITRAL Model Procurement Law provides precisely the sort of structured system of rules called for by the Convention. Moreover, by containing corruption, the U.N. Convention could make it possible to loosen at least some of the cautious constraints that confine most procurement systems, including those under the UNCITRAL Model Procurement Law. Ultimately, therefore, the U.N. Convention Against Corruption, if prudently implemented, could serve as a catalyst for procurement reform around the world. More broadly, the two U.N. initiatives show the powerful synergies that can be gained by carefully coordinating procurement reform and anticorruption efforts.
Discretionary Function Exception and Accounting Malpractice Steven L.
Schooner George Washington University - Law School GWU Law School Public Law
Research Paper No. 302 GWU Legal Studies Research Paper No. 302 The Army Lawyer,
March 1999 and September 1996
Abstract: These two short pieces discuss General Dynamics Corp. v. United States, in which the Ninth Circuit reversed what appeared to be the first successful use of the Federal Torts Claims Act (FTCA) by a government contractor to pursue a professional malpractice claim against a federal agency, awarding more than $25 million in damages due to professional malpractice committed by the Defense Contract Audit Agency (DCAA). The latter piece: (1) briefly summarizes the history of the case, explaining how a routine contractual compliance audit lead to a $25 million malpractice award; (2) introduces the discretionary function exception to the FTCA; (3) examines the application of the discretionary function exception in the context of prosecutorial discretion; (4) discusses two significant cases that demonstrate the fragile boundaries of the discretionary function exception; (5) describes guidance from the Department of Justice for government counsel faced with raising the discretionary function exception to dismiss FTCA actions; and (6) concludes by acknowledging that efforts to reign in the scope of the discretionary function exception to the FTCA are sure to continue. The earlier piece discusses the district court decision.
What Next? A
Heuristic Approach to Revitalizing the Contract Disputes Act of 1978 Steven
L. Schooner George Washington University - Law School GWU Law School Public Law
Research Paper No. 298 GWU Legal Studies Research Paper No. 298 Public Contract
Law Journal, Vol. 28, p. 635, 1999
Abstract: This essay, included in a 1999 special issue examining the Contract Disputes Act (CDA) of 1978 at its twentieth anniversary, begins from the premise that the statute's critics have valid reason to perceive that the CDA fails to provide a "fair and balanced system of administrative and judicial procedures for the settlement of claims and disputes." The essay suggests a framework for a meaningful debate over what an improved and invigorated CDA should look like but, in the end, raises more questions than it answers. Its purpose is heuristic; to frame a debate (which many feel is long overdue) as to what the CDA should do and how it should do so. It introduces a then-recent effort to articulate core principles for government procurement dispute resolution, then deems the effort an unsatisfactory platform for heuristic analysis. It attempts to determine the necessity for a dispute resolution statute and suggests that the fundamental purpose for such legislation is no more than to waive the Federal Government's immunity from suit. The essay then turns to the breadth of an appropriate waiver. Finally, it examines a number of issues, such as the nature of judicial and administrative fora and the certification requirement, that permeate our present system. The essay concludes by suggesting, at very least, that we should ask the difficult questions
Framework for Choice of Form for Acquisition Contracts, Paul Eremenko
Booz-Allen-Hamilton, Inc.; Georgetown University - Law Center; California
Institute of Technology; Massachusetts Institute of Technology (MIT), April
Abstract: The objective of this work is to create a comprehensive conceptual framework for informing the choice between firm-fixed price and cost-plus contract forms in acquisition or procurement contracts. The effects and relative magnitudes of quality and productivity incentives, economic profit, allocation of risk, and the option value of contract changes between the two contractual forms is discussed.
Private Security Contractors in
Iraq: Background, Legal Status, and Other Issues June 21, 2007, Jennifer K.
Elsea Legislative Attorney American Law Division, Nina M. Serafino Specialist in
International Security Affairs Foreign Affairs, Defense, and Trade Division,
Congressional Research Service.
From the Summary The United States is relying heavily on private firms to supply a wide variety of services in Iraq, including security. From the information available in published sources, this apparently is the first time that the United States has depended on contractors to provide such extensive security in a hostile environment, although it has previously contracted for more limited security services in Afghanistan, Bosnia, and elsewhere. In Iraq, private firms known as Private Security Companies (PSC) are currently providing security services such as the protection of individuals, nonmilitary transport convoys, buildings and other economic infrastructure, as well as the training of Iraqi police and military personnel.
GOVERNMENT’S COFFERS: THE NEED FOR COMPETITION REQUIREMENTS TO SAFEGUARD
FEDERAL GOVERNMENT PROCUREMENT, Lani A. Perlman, 75 Fordham Law Review 3817,
From the author’s introduction This Note examines the results of DHS’s exemption from competitive contracting requirements and argues that open competition, as enshrined in the Competition in Contracting Act (CICA),19 is the best means to safeguard government procurement from waste, fraud, and abuse. Part I of this Note describes the history of competitive contracting requirements in federal government procurement. While there is universal agreement that government procurement must be timely, cost-effective, and fair, there is a deep divide over the best means to reach those end goals. Part II of this Note examines the conflict between the rule-based competition requirements embodied in CICA and the discretionary decision-making scheme implemented by the Reinventing Government reform movement. This Part also examines the effort to rebuild after Hurricane Katrina, as a case study in the dangers of noncompetitive contracting. Finally, Part III of this Note proposes that the best means to ensure the fundamental goals of timeliness, cost-effectiveness, and fairness is a return to statutory competition requirements, with only specific and limited exemptions for national security.
Overview, Issues, and Options for Congress June 4, 2007, Congressional Research
Service-Report to Congress,
SUMMARY: Department of Defense (DOD) activities to provide military capabilities for the defense of the nation are usually controversial and always complex. Those activities are generally referred to as defense acquisition. The structure DOD utilizes to plan, execute and oversee those activities is a highly intricate and multi-variate “system of systems” composed of the requirements, resource allocation and acquisition systems. This system of systems has evolved over time, its foundation being the report published by the Packard Commission in 1986, with many of those recommendations becoming part of the Goldwater-Nichols Department of Defense Reorganization Act of 1986. This evolution continued after the Goldwater-Nichols Act as the requirements system changed from a threat-based to a capabilities-based system; the resource allocation system added execution reviews and concurrent program and budget reviews; and the acquisition system changed from a structured, rigid process to a flexible, tailored process.(From the website of the Federation of American Scientists www.fas.org)
Public Procurement: GOOD PRACTICE FROM A TO Z, ELODIE BETH Organization for
Economic Co-Operation and Development (OECD), 2007.
Abstract Lack of transparency and accountability were recognised as a major threat to integrity in public procurement at the 2004 OECD Global Forum on Governance: Fighting Corruption and Promoting Integrity in Public Procurement. To verify this hypothesis, the OECD Public Governance Committee launched a survey primarily targeted at procurement practitioners in charge of designing, supervising and managing procurement processes in central governments. Auditors, members of competition authorities and anticorruption specialists have also been involved. On the basis of the information collected, good practices were identified by government officials, representatives from civil society and private sector at the OECD Symposium: Mapping out Good Practices for Integrity and Corruption Resistance in Public Procurement in November 2006.
This project maps out good practices, that is, successful measures for enhancing integrity in public procurement. It is a complementary part of multidisciplinary efforts in the OECD to improve public procurement systems, in particular: (1) Assessments of public procurement systems in developing countries by the Aid Effectiveness and Donor Practices Working Party of the Development Assistance Committee; (2) Analysis of bribery in public procurement by the Working Group on Bribery in International Business Transactions; and (3) Studies of the central procurement structure and capacity as well as review and remedies systems of the European Union Member States bythe Support for Improvement in Governance and Management Programme (SIGMA).
Enhancing - Aligning Proposed Contractor Compliance Requirements With Broader
Advances in Corporate Compliance, Christopher R. Yukins, George Washington
University - Law School GWU Law School Public Law Research Paper No. 264 GWU
Legal Studies Research Paper No. 264 Government Contractor, Vol. 49, p. 166,
April 25, 2007.
Abstract: In this brief comment, Professor Christopher Yukins reviews a proposed rule to require major federal contractors to put corporate compliance systems in place. By shifting more compliance requirements to the Federal Acquisition Regulation itself, and by giving those requirements real force, the proposed rule will enhance integrity in the procurement system. Professor Yukins argues, though, that to improve on the proposed rule, regulators should recognize that the market has moved a step beyond the proposed rule: most contractors already benchmark their compliance systems against the U.S. Sentencing Commission’s more demanding standards, and some contractors have gone even further, to integrate their corporate compliance efforts with broader quality assurance systems. (With permission of the publisher Thomson/West Apr. 25, 2007)
Papers from the April 19, 2007 “Alternative Dispute Resolution in Government Procurement: New Horizons” a GWU and BCABA Program
Contractual Dispute Resolution in International Trade: The
UNCITRAL Arbitration Rules (1976) and the UNCITRAL Conciliation Rules (1980)
Gavan Griffith, Independent, Andrew D. Mitchell, Melbourne Law School, U of
Melbourne Legal Studies Research Paper No. 217 Melbourne Journal of
International Law, Vol. 3, p. 184, 2002
Abstract: Over the past few decades, international commercial dispute resolution has witnessed substantial change and improvement. A notable feature has been a move away from the traditional court-based litigation model, allowing exploration of other methods and techniques. The United Nations Commission on International Trade Law (“UNCITRAL”) has played an important role in this development of alternative dispute resolution. Since its establishment in 1966 UNCITRAL has made improving international commercial dispute resolution one of its priorities. Two important achievements arising from its efforts are the UNCITRAL Arbitration Rules (1976) (“Arbitration Rules”) and the UNCITRAL Conciliation Rules (1980) (“Conciliation Rules”). The products of active participation ofules”). The products of active participation of international experts from various legal, economic and social backgrounds, both have made a significant contribution to the more efficient resolution of international commercial disputes.
Both sets of Rules are based on agreement between the parties, operating on a private contractual rather than public statutory level. This is an important point which distinguishes the Rules from UNCITRAL's other major achievement in dispute resolution: the UNCITRAL Model Law on International Commercial Arbitration ('Model Law'). The Rules are a form of contractual trade law dispute resolution. Since the expectations of the private parties to an arbitration or conciliation under the Rules risk being frustrated by the domestic laws of different countries, the Model Law provides countries with a template that they can adopt for their national laws in order to 'provide a hospitable legal climate for international commercial arbitration.'
This article intends to serve as an introduction to the Rules. We begin by distinguishing conciliation from arbitration and explaining the comparative strengths and weaknesses of these two forms of dispute resolution. We then give an outline of the Arbitration Rules in the context of ad hoc and institutional arbitration generally, followed by an assessment of the influence and acceptance of the Arbitration Rules. We provide a similar analysis of the Conciliation Rules, before concluding with a look at the likely development of the two sets of Rules in the future.
Emerging Policy and Practice Issues (2006), Steven
L. Schooner George Washington University - Law School Christopher R.
Yukins George Washington University Law School, West Government Contracts
Year in Review Conference, 2006
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2006), attempts to identify the key trends and issues for 2007 in U.S. federal procurement. In large part, the paper discusses the "Draft Final" Report of the Acquisition Advisory Panel (AAP), a blue-ribbon commission mandated by Section 1423 of the Services Acquisition Reform Act (SARA). Proceeding from the simple premise that the private sector does a better job with procurement by planning carefully and employing aggressive competition, we discuss, among other things, the inaccuracies that plague the Federal Procurement Data System; the dramatic post-2000 trend in increased procurement spending; the AAP's tame recommendations for commercial purchasing; and efforts to reign in (and responsibly utilize) interagency contracting. We also question the administration's relentless focus on competitive sourcing and critique the leadership vacuum that led to the longstanding and increasingly critical acquisition workforce shortage.
Material from the FBA Program-The Federal Funding Accountability and Transparency Act of 2006, February 01, 2007. Also see Pub Law 109-282 and Senate report.
Current Problems with Multiple Award
Indefinite Delivery/Indefinite Quantity Contracts: A Primer Major
Michael C. Wong, The Army Lawyer, September 2006.
Much of the Department of Defense (DOD) spending is on service contracts through task orders issued under multipleaward contracts, allowing for a streamlined, flexible acquisition process. This primer discusses the fundamentals of multiple award indefinite delivery/indefinite quantity (ID/IQ) contracting and current problems associated with the multiple award ID/IQ system. The article focuses specifically on problems in the area of competition, including the lack of fair opportunity to compete, out of scope orders, lack of adequate supervision, and other miscellaneous problems with the multiple award ID/IQ system. The first section discusses the basic terminology and legal requirements of the multiple award ID/IQ system. The second section deals with additional legal requirements resulting from congressional modifications designed to strengthen and encourage competition within the multiple award system. The third section outlines problems in multiple award ID/IQ contracting. Multiple award ID/IQ contracting has become an increasingly important focus area for the U.S. Army and is a challenging area for acquisition professionals.
Federal Funding Accountability and Transparency Act of 2006 Highlights and Timeframes for Implementation of the Act by Tyson Whitney Office of Federal Financial Management, OMB. A presentation made to the National Grants Management Association. October 2006. Pub. Law 109-282
Procurement Reform in the Defense Authorization Act for Fiscal Year
2007&mdash:A Creature of Compromise, Pointing the Way to Future Debates ,
Christopher R. Yukins, George Washington University Law School The
Government Contractor, Vol. 48, No. 38, October 2006
Abstract: The defense authorization act for fiscal year 2007, the John Warner National Defense Authorization Act for Fiscal Year 2007, H.R. 5122, has been signed into law. This essay reviews some of the key provisions in the act regarding procurement reform, including: (1) a renewed focus on lead systems integrators; (2) new technical data obligations for commercial contractors; (3) waiver procedures for specialty metals under the Berry Amendment; and (4) new integrity initiatives, including a GAO study of revolving door hires at major contractors. The essay notes that the act's many reform measures are likely stepping-stones to broader reforms. With recent scandals and the coming 2006 and 2008 elections, the pace of reform is, if anything, likely to accelerate.
Gathering Winds Of Reform - Congress Mandates Sweeping Transparency for
Federal Grants And Contracts, Christopher R. Yukins, George
Washington University Law School GWU Law School Public Law Research
Paper No. 224 GWU Legal Studies Research Paper No. 224 Government
Contractor, Vol. 48, No. 34, September 20, 2006
Abstract: The U.S. Congress, caught in a wave of scandals that stem, in part, from corrupt contracting, recently passed sweeping legislation to require that all federal awards (including grants, contracts and task orders) be published online. This short essay describes the legislation, the Federal Funding Accountability Transparency Act, and notes that, while Congress' goal may have been generally to disperse a cloud of corruption, in practice the Act may bring badly needed transparency to billions of dollars in task- and delivery-order awards (frameworks contracting, as this form of contracting is called by the European Community Directives). Until now, those billions of dollars in orders under standing contracts have been largely invisible in the U.S. system. Almost inadvertently, therefore, Congress may have advanced procurement reform enormously, and may have set the stage for future reforms after the November 2006 elections.
The Acquisition Advisory Panel And
Performance-Based Contracting: A Wasted Year, by Vernon J. Edwards. 20 NO.
7 NASHCIBINIC ¶ 32 Excerpt:In the more than 15 years since the
Office of Federal Procurement Policy issued its policy making performance-based
contracting the preferred way to buy services, the policy has not caught on.
Working-level resistance to performance-based contracting has withstood pilot
programs, best practices guides, samples, templates, a variety of handbooks, new
regulations, new statutes, annual goals, countless conferences and seminars,
unsubstantiated claims of cost savings and quality improvements, and all manner
This material from THE NASH &CIBINIC REPORT has been reproduced with the permission of the publisher, Thomson West. Further use without the permission of the publisher is prohibited. For additional information or to subscribe, call 1-800-344-5009 or visit west.thomson.com/fedpub. THE NASH &CIBINIC REPORT is now available on Westlaw. Visit westlaw.com
June 2006 edition of DOD Office of General Counsel Standards of Conduct Office's Encylcopedia of Ethical Failure, Courtsey of Alison Doyle,Co-Chair, ABA Public Contract Law Professional Responsibility and Contracting Ethics Committee.
A Case Study In Comparative Procurement Law: Assessing
UNCITRAL's Lessons for U.S. Procurement, CHRISTOPHER R. YUKINS,
George Washington University Law School, GWU Law School Public Law
Research Paper No. 211, GWU Legal Studies Research Paper No. 211, Public
Contract Law Journal, Vol. 35, No. 3, Spring 2006.
Abstract: The United Nations Commission on International Trade Law (UNCITRAL) has commissioned a working group, with delegations from many industrialized and developing nations, to reform and update the UNCITRAL Model Law on Procurement of Goods, Construction and Services. The working group is currently reviewing reforms on a number of fronts. This essay focuses on three areas of reform in particular—electronic communications, electronic reverse auctions, and unrealistically low bidding—to gauge whether lessons from the UNCITRAL debate may be useful for reform in the U.S. procurement system. As the essay reflects, the international debate surrounding UNCITRAL reform does in fact yield many lessons for U.S. policymakers. Indeed, the analysis suggests that the U.S. system may be at a point where it would be irresponsible not to consider comparative lessons from reforms abroad, to ensure that U.S. procurement policy draws thought-fully upon lessons learned from other procurement systems around the world.
International Procurement (On 2005 Developments),
CHRISTOPHER R. YUKINS George Washington University Law School, JASON
MATECHAK Reed Smith LLP, DON WALLACE Georgetown University Law Center,
JEFFREY MARBURG-GOODMAN U.S. Agency for International Development, GWU
Legal Studies Research Paper No. 207, GWU Law School Public Law Research
Paper No. 207, Georgetown Public Law Research Paper No. 903423
International Lawyer, Vol. 40, No. 2, Summer 2006
Abstract: The ABA International Procurement Committee has prepared this update on a number of key international issues in 2005, including: the proceedings at the United Nations Commission on International Trade Law, recent developments involving the Trade Agreements Act in U.S. domestic procurement, and the Organization for Economic Cooperation and Development’s (OECD) work on untying foreign assistance.
Liability: Exposing the Inferior Risk-Bearer, by Steven L. Schooner and Erin
Siuda, George Washington University - Law School
Abstract: This Article describes the doctrinal, functional, and moral flaws inherent in the Gulf Coast Recovery Act (GCRA), a United States Senate bill that would provide liability protection to government contractors engaged in disaster relief work in the areas devastated by Hurricane Katrina, as well as in future disaster areas. First, the Article discusses the history of the government contractor defense and finds that the protection provided by the GCRA is quite unlike the traditional government contractor defense. This Article further argues that this doctrinal departure cannot be justified on grounds of efficiency or fairness, as the GCRA allocates risk away from government contractors and the government and towards the disaster area residents and relief workers who are potential victims. Finally, this Article notes that even if the sort of protection provided by the GCRA may be justified under some conditions of market failure, there is no empirical evidence that government contractors in the Gulf Coast have experienced such conditions, and there are superior alternatives to the GCRA that could provide such protection while preserving a path for victim compensation. This Article concludes that the GCRA is an untenable solution to a problem that has not been proven to exist, and one that violates the basic principles of good government.
“Constructing a Bid
Protest Process: Choices Every Procurement
Challenge System Must Make”, GWU Law School Public Law Research Paper
No. 200, GWU Legal Studies Research Paper No. 200, Public Contract Law Journal,
Vol. 35, No. 3, 2006, Daniel I. Gordon, Government Accountability Office.
Washington, D.C., The George Washington University, Law
Abstract: Many public procurement systems, within the United States and abroad, have established systems for allowing vendors to challenge the conduct of procurement processes. Providing an effective domestic review mechanism for vendors who believe that government procurement officials have not conducted an acquisition lawfully brings an important measure of transparency and accountability to public procurement systems. This brief article discusses the goals of these bid protest systems, and then presents key choices that must be made in crafting such a system. For example: Where in the government is the protest forum located? How broad is the forum’s jurisdiction? Who has standing to protest? What are the time limits at the forum? What evidence does the forum receive? Is the procurement put "on hold" during the protest? How difficult is it for a protester to win? What power does the forum have to provide meaningful relief? The article does not describe an ideal bid protest system, but rather presents the decisions that need to be made when constructing a bid protest system.
“Consolidation of the Civilian Boards of Contract Appeals: New Legislation’s Impact on Practice Before the Boards”, Program materials from the April 21, 2006 GWU special colloquium.
Improving Federal Procurement: The Benefits of Vendor-Neutral Contract
Specifications” (February 2006). McAfee, R.
Abstract: Government procurements that specify brand names can unnecessarily increase the price of purchases. In 2004, approximately 69 percent of the applicable solicitations for computer systems and technology contained language that either required specific name brand microprocessors, usually Intel, or specified that the processor should be equivalent to a particular brand microprocessor. Such exclusionary language could cost hundreds of millions of dollars unnecessarily. For some products, the variety and complexity of items compel contracting agents to use brand names rather than to detail specific technical requirements and product characteristics. In the case of microprocessors, third-party benchmarks represent a solution to such a procurement specification issue.
and Practice Issues (2005), STEVEN L. SCHOONER, CHRISTOPHER R. YUKINS,
The George Washington University Law School GWU Legal Studies Research Paper No.
193, GWU Law School Public Law Research Paper No. 193, West Government Contracts
Year in Review Conference (Covering 2005)
Abstract: This paper, presented at the West Government Contracts Year in Review Conference (covering 2005), attempts to identify the key trends and issues for 2006 in U.S. federal procurement. In an effort to make sense of the current reforms, the paper focuses upon what seems to be the common imperative underlying the various initiatives: the need to bring order to a procurement function as it devolves away from the Government user—what some might call the "devolution" or "outsourcing" of the contracting function. The paper also addresses emerging issues including, among others, the death of competitive sourcing; the acquisition workforce crisis; centralized purchasing; public service ethics in the post-Darleen Druyun era; interagency purchasing and fees; post-Hurricane Katrina procurement; electronic procurement and reverse auctions; and conflicts of interest.
“Electronic Reverse Auctions: Lessons Learned, Here and Abroad”—Papers from the February 21, 2006 program by the Government Procurement Law Program, George Washington University Law School
MISADDRESSED REFORM: THE U.S. POSTAL
SERVICE’S NEW PROCUREMENT
GUIDELINES By David P. Hendel, January 13, 2006. Posted with permission
from the Washington Legal
Relying on the theory if corporations don’t need them, we don’t need them, the U.S. Postal Service recently converted its purchasing regulations into “non-binding” guidelines. 70 Fed. Reg. 20291 (Apr. 19, 2005). What had been 266 pages of far-sighted purchasing rules which had the force and effect of law have been downgraded into non-binding guidelines. This LEGAL BACKGROUNDER examines whether the rationale for taking this action is justified, whether the guidelines really are “non-binding,” and what the likely impact will be.
Recent Federal Grants Law Cases November 2005, A November 17, 2005 presentation to the State Department by Jana Gagner, Senior Counsel Federal Assistance Law Division Office of the General Counsel U.S. Department of Commerce. PowerPoint version. PDF Version
Development of the Contract Clause by JAMES W. ELY Jr.. Vanderbilt
University - School of Law November 1, 2005, Vanderbilt Public Law Research
Paper No. 05-36
Abstract: This essay examines the origins and early construction of the contract clause of the Constitution. It points out that the contract clause must be understood in the context of the troubled economic circumstances of post-Revolutionary America. The clause, which was little debated at the Philadelphia convention, can be traced to language in the Northwest Ordinance of 1787. This paper focuses on the contested issue of whether the framers intended the g to cover only contracts between private parties or to extend to public contracts between states and individuals. As asserted by the Progressive historians, it has long been the dominant position among scholars that Chief Justice John Marshall expanded the meaning of the contract clause when he ruled that the provision governed private contracts. This paper disputes that conventional wisdom and argues that the clause could fairly be construed to safeguard both public and private contracts from state abridgement. It gives attention to discussion at the state ratifying conventions as well as to the views of prominent members of the constitutional convention. The paper also considers pre-Marshall court cases that examined the meaning of the contract clause and the famous 1796 opinion letter by Alexander Hamilton. Although recognizing that it is difficult to establish a collective state of mind concerning the scope of the ban against contractual impairments, the paper concludes that there was ample support for the views later endorsed by the Marshall Court concerning the reach of this provision.
In Memoriam, John Cibinic,
RALPH C NASH George Washington University - Law School, JOSEPH A. VERGILIO
Government of the United States of America - Agricultural Research Service
GILBERT J. GINSBURG A-76 Institute, MARY ANNE Q. WOOD Wood Crapo, LLC, JOHN
S. PACHTER Smith, Pachter, McWhorter &Allen, P.L.C., DOUGLAS L. PATIN
Bradley Arant Rose &White LLP, JAMES F. NAGLE Oles Morrison Rinker &Baker,
CLARENCE T. KIPPS Jr. Miller &Chevalier - General STEVEN L. SCHOONER The
George Washington University Law School GWU Law School Public Law Research
Paper No. 169 Public Contract Law Journal, Vol. 35, No. 1, 2005
Abstract: Professor Emeritus John Cibinic, Jr. died on August 1, 2005. For three decades, he taught at the George Washington University Law School. Throughout that period, and until his passing, John made a huge and lasting contribution to the literature and practice of government contracting. These short pieces, authored by colleagues, students, and friends, offer a glimpse into the impact of John’s full and productive life.
Hurricane Katrina’s Tangled Impact on U.S. Procurement,
YUKINS The George Washington University Law School GWU Law School Public
Law Research Paper No. 161 GWU Legal Studies Research Paper No. 161,
also published in West Group’s “The Government Contractor”, ,
Vol. 47, No. 34, September 14, 2005
Abstract: In the wake of Hurricane Katrina, the U.S. Congress passed new exceptions to U.S. procurement rules. The most important new exception, passed at the recommendation of the Bush administration, raised the limit for micro-purchases - essentially unregulated purchases - from $2,500 to $250,000. In practice, this will mean that Katrina relief purchases may be made, up to $250,000 per order, without any effective transparency or competition, and without honoring the many socioeconomic requirements that are an important part of the U.S. procurement system. This comment reviews that emergency legislation, and suggests that the new law, by abandoning basic principles of sound procurement, raises real risks in the post-Katrina relief effort, including risks of corruption and risks of gross failures in best value procurement.
Materials from the George Washington University Law School Program on September 28, 2005. “Framework Agreements and Task-Order (IDIQ) Contracting: Successes and Failures) in Europe and the United States” A 3 meg pdf file.Katrina’s Continuing Impact on Procurement - Emergency Procurement Powers in H.R. 3766 by CHRISTOPHER R. YUKINS and JOSHUA I. SCHWARTZ, The George Washington University Law School,GWU Law School Public Law Research Paper No. 162 GWU Legal Studies Research Paper No. 162, also published in West Group’s “The Government Contractor”, Vol. 47, No. 35, September 21, 2005.
Uses and Abuses of O&M Funded
Construction: Never Build on a Foundation of Sand, Army Law., August 2005,
at 1, by Major Brian A. Hughes, Administrative Law Attorney, Personnel
Law Branch, Office of the Judge Advocate General, U.S. Army.
Introduction The Global War on Terror (GWOT) has required U.S. forces to re-deploy from their Cold War garrisons to new battlefields throughout the world. Commanders have quickly built small, temporary bases to support military forces in underdeveloped countries worldwide. Some of these bases are required for staging, logistics, and training, while others directly support joint and combined combat operations. While U.S. forces have had great tactical success in meeting new threats, the legal framework for funding military construction has not adapted to the new security environment. Maintaining the initiative in the GWOT requires agile forces able to deploy, operate, and sustain themselves on short notice anywhere in the world. Military construction funding, however, remains mired in a multi-year budgeting cycle, with appropriations geared toward maintaining the existing Cold War infrastructure.
Suspension and Debarment of Soldiers: Can We Do It? Yes, We
Can, Army Law., June 2005, at 33, by Captain Scott N. Flesch, Trial
Attorney, Contract Appeals Division.
Chief Warrant Officer Two (CW2) Sticky Fingers, an aviation maintenance officer, is the approving official for all government purchase card (IMPAC)2 transactions by his department at Fort Irvine, California.3 Essentially, anything sought to be purchased or procured using the IMPAC goes through CW2 Fingers for review and approval. Due in part to the operational tempo at Fort Irvine, compliance and oversight of the IMPAC program are lacking. Sensing an opportunity for supplemental income, CW2 Fingers met individually with three cardholders whom he trusted. Chief Warrant Officer Two Fingers contrived a scheme for each cardholder to purchase electronic items for personal use from stores that accepted the IMPAC. Chief Warrant Officer Two Fingers collects the items (e.g., cell phones, PDAs, digital cameras) and auctions them over the Internet. In exchange for their assistance, CW2 Fingers kicks back fifty percent of the proceeds from the sale of the goods. Before submitting a certified consolidated bill for the purchases to the Defense Finance and Accounting Service, CW2 Fingers alters and/or creates receipts to reflect otherwise legitimate purchases and prevent detection. In the two years of this ongoing conspiracy, CW2 Fingers makes $356,000 for himself and his co-conspirators.
After an investigation by Fort Irvine’s Criminal Investigation Command (CID), the government prefers charges against CW2 Fingers to include: conspiracy, failure to obey an order, larceny, and bribery. Chief Warrant Officer Two Fingers has eighteen years of active duty service and plans to work for one of several commercial vendors he established a relationship with as an approval official when he retires.
FEDERAL SUPPLY SCHEDULES COMPETITION—“COMPETITIVE QUOTES ON FSS BUYS: HOLD THE PICKLE, HOLD THE MAYO-CAN YOU HAVE IT YOUR WAY AND STILL HAVE COMPETITION?”, by MAJOR DANA J. CHASE, 184 Mil. L. Rev. 129, (2005).Understanding the Current Wave of Procurement Reform - Devolution of the Contracting Function, CHRISTOPHER R. YUKINS, The George Washington University Law School GWU Law School Public Law Research Paper No. 150; GWU Legal Studies Research Paper No. 150, The Government Contractor, Vol 47, No. 22, June 2005. A Thomson West Publication
BEYOND ACCOUNTABILITY: THE
CONSTITUTIONAL, DEMOCRATIC, AND STRATEGIC PROBLEMS WITH PRIVATIZING WAR, by
JON D. MICHAELS, Washington
University School of Law, Washington University Law Quarterly, Vol. 82, No.3,
Fall 2004. A 127 page article discussing the contractors in the battlespace.
From the Table of Contents
II. THE MODERN AMERICAN EXPERIENCE WITH MILITARY PRIVATIZATION
III. THREATENING THE NATIONAL SECURITY CONSTITUTION
IV. UNDERMINING THE INSTITUTIONAL INTEGRITY AND STRATEGIC COMPETENCE OF THE U.S. MILITARY
V. INTERNATIONAL LAW/DIPLOMACY HARMS
Removing Federal Services Acquisition Barriers And Balancing Public and Private Interest—Task Force on Service Contracting, May 17, 2005. Established by Contract Services Association In Conjunction With Professional Services Council National Defense Industrial Association Information Technology Association of America. Also available on the Contract Services Association website at http://www.csa-dc.org.
the Acquisition Workforce, STEVEN L. SCHOONER, CHRISTOPHER R. YUKINS,
The George Washington University Law School
GWU Law School Public Law Research Paper No. 147; GWU Legal Studies Research
Paper No. 147
Government Contractor, Vol. 47, Nos. 203 &204, 2005
Abstract: Recognizing the need to focus on the strategic management of the federal acquisition workforce, the Office of Federal Procurement Policy (OFPP) promulgated Policy Letter 05-01, Developing and Managing the Acquisition Workforce. These two brief pieces discuss the policy letter and what it signals to the acquisition community.