Failure to award

This story was published today in the Marianas Variety, Guam Edition.

GDOE’s use of emergency power to buy copier machines questioned

A PROTEST has been filed with the Office of Public Accountability against the Guam Department of Education for abusing “emergency declarations” to procure copier machines instead of properly awarding contracts through the normal procurement process.

According to the complaint that Attorney John Thos. Brown, legal counsel for Island Business Systems & Supplies or Town House Department Stores, Inc., filed GDOE issued an invitation for bid in May, but failed to follow through with the rest of the procurement process and award a contract to the lowest bidder, IBSS.

Instead, Brown said GDOE Superintendent Nerissa Bretania Underwood used “emergency declarations” to purchase copiers from Xerox Guam.

There's more to the story, but that is the gist of it.

You can read the Notice of Appeal here.

The interesting aspect of this Appeal is that the Protest alleges that the award of the contract was withheld due to bad faith. Usually appeals are brought alleging a solicitation was conducted wrongly. Here, the allegation is that the solicitation was a good as far as it went, but that it just did not go far enough and award the contract to the low bidder.

There are reasons allowing a government to reject bids or cancel a solicitation, and no bidder has any beneficial or legal right to an award where the government has legitimate rights to end a solicitation. The operative point here is that the action of the government must be legitimate.

In the ABA Model Procurement Code, and Guam Law, there is a right that the bidder can rely on: all parties involved in the negotiation, performance, or administration of territorial contracts have a duty to act in good faith. Moreover, there is an overriding obligation to apply the procurement law "to ensure the fair and equitable treatment of all persons who deal with the procurement system". The government does not act legitimately if it denies a bidder its right to fairness and good faith consideration of contract award.

The Appeal in this case alleges certain facts which specifically draw into question whether the government administered the procurement in this case fairly and in good faith. The Appeal seeks an order that the government award the contract.

This raises an interesting question of remedies. When there is a finding that the solicitation is in violation of the law, the only practicable remedy to a protesting low bidder is to have the solicitation or proposed award "revised to comply with the law". (See 5 GCA § 5451.) In the typical case this would result in a revision of some specification, method of source selection, reconsideration of relevant evaluation criteria or contract term; that is, some error of judgment.

Here, there has been no award or proposed award, and the violation alleged is the failure to judge, not the error of judgment. Thus, the only available "revision" is to require that the decision making process be "revised" by determining the award that should have been made but was not; that is, to exercise the judgment that should have occurred but, for lack of good faith and fairness, was not.

On Guam, the Public Auditor has that authority implicitly by the grant of "the power to review and determine de novo any matter properly submitted". (5 GCA § 5703.)