Protest halts $100M borrowing plan
GEDA issued a press release yesterday afternoon that said a procurement protest had forced the agency to delay the pricing phase of the bond-borrowing.
The protest is challenging GEDA's decision to hire Wells Fargo Corporate Trust Service as the agency's bond trustee, but it's unclear who protested and what the basis of the protest is.
A Pacific Daily News reporter went to the GEDA office to pick up a copy of the protest, but office staff refused to release it.
Deputy Administrator Christina Garcia confirmed that GEDA would not release protest documents or name the protester.
Garcia said procurement policies require this information to stay private.
"We'd like to say more, but we have to respect the procurement process," Garcia said.
So, what does the Guam Procurement Act say about public access to the procurement process?
First, and most fundamentally, there is the bottom line, default requirement, specified as one of the principle purposes and policies of the Act:
"to require public access to all aspects of procurement consistent with the sealed bid procedure and the integrity of the procurement process." (5 GCA § 5001(b)(8).)
The entire procurement law and its regulations are required to be "construed and applied to promote" this fundamental policy. (5 GCA § 5001(a).)
Thus, unless there is an express requirement clearly prohibiting disclosure of protests, the protest should be available to public access.
So, what relevant restrictions do we find? Only one in the procurement law and another one or two in the Sunshine Law (Freedom of Information), and neither of them are on point. Let's first examine the Procurement Act for any prohibition on disclosure of protests.
This solicitation appears (based also on past practice) to be an RFP and not an IFB. It appears from the article that a selection of offeror has already been determined and award has already been made. After award, the accepted offer is supposed to be made public (2 GAR § 3114(h)(1)) as is the entire public record of the solicitation (5 GCA § 5251).
The only express exception is in the case of certain "proprietary data" and "trade secrets" that has been designated by an offeror, prior to negotiations, and independently confirmed by the agency, to be bona fide proprietary data or trade secret:
"If the offeror selected for award has requested in writing the nondisclosure of trade secrets and other proprietary data so identified, the head of the agency conducting the procurement or a designee of such office shall examine the request in the proposal to determine its validity prior to entering negotiations. If the parties do not agree as to the disclosure of data in the contract, the head of the agency conducting the procurement or a designee of such officer shall inform the offeror in writing what portion of the proposal will be disclosed and that, unless the offeror withdraws the proposals or protests under 5 GCA Chapter 5 Article 9 (Legal and Contractual Remedies) of the Guam Procurement Act, the proposal will be so disclosed." (2 GAR § 3114(h)(2).)Since the "public access" policy must be "consistent with the sealed bid procedure and the integrity of the procurement process", it is also instructive to look to the same trade secret protection offered under competitive sealed bidding.
There, we find a similar regime in place, namely a burden on a party claiming non-disclosure to make that claim in the bid, and a confirmation process by the agency to verify the secrecy of the information. After designated information is confirmed to be non-public, the regulation specifically requires the bids to be opened to public inspections subject only to any continuing prohibition on the confidential data. (2 GAR § 3109(l)(3).) Similarly, information in RFPs, unless confirmed non-public, should be disclosed after award.
But we have so far looked to bid information only. Does the protest process change the character of what is public and what is not? I don't think so.
First, note that there is nothing specific in the law that either mandates public disclosure of the protest, or protects it from public disclosure. In that case, I believe you must "default" to the fundamental policy "to require public access". You should not infer any right in derogation of the express policy, to be construed and applied, to promote public access.
Looking to the regulatory scheme of protests, the consideration and resolution of protests is broadly sketched by requirements of the procurement regulations. (See 2 GAR § 9101, generally.)
The regulations allow an interested party, but pointedly do not prohibit anyone else, to obtain, by written request, "information submitted that bears on the substance of the protest except where information is proprietary, confidential, or otherwise permitted or required to be withheld by law or regulation." (2 GAR § 9101(f).) Again, it should not be inferred that others are denied that right given the express policy of public access.
It provides a similar regime to that noted above requiring designation and confirmation of non-public information: "Persons who wish to keep such information submitted by them confidential should so request by specifically identifying such information within documents submitted, and indicating on the front page of each document that it contains such information." (Id.)
Based on this, there is no prohibition of protest information other than designated and confirmed proprietary data and trade secrets (the only information the procurement law protects). It would certainly seem that letters or other notices of protests would not be protected information, even if other deliberative information might be.
It is also instructive, when asking whether the protest itself should be public or non-public, to look to other review analogues. For instance, under 5 GCA § 5480(a), it is technically feasible to bring a protest straight to the Superior Court rather than an agency. That action would be a civil or writ action, but in either case would be filed with the public files of the court. If court actions are public, what makes the administrative process so special?
Likewise, appeals of protests to OPA are immediately posted on the public website. If the appeal of a protest is public, why would the protest itself be less so?
Finally, we must consider the Sunshine Law. As with the Procurement Law, its starting point is full disclosure: Every person has the right to inspect and take a copy of any public document on Guam, except as otherwise expressly prohibited in aw, and except as provided in § 10108 of this Chapter. ... Any segregable portion of a record shall be available for inspection by any person requesting the record after deletion of the portions that are exempted by law." (5 GCA § 10103(a) and (b).)
The Sunshine Law has provision requiring agencies to specify certain types of information they want to keep private, so the the Legislature can first vet it and approve or disapprove any such designated information. These exceptions are important because the law says "Such approved list shall be used as a guide for determination of non-disclosable records by agency employees". (5 GCA § 10106(b).)
In this case, the agency is GEDA. For GEDA, the Legislature has only allowed these additional exceptions: "For the Guam Economic Development Authority: (i) delinquency reports of loans issued by GEDA; (ii) credit reports on loan applications filed with GEDA." (5 GCA § 10108(r).)
Given that this involves an protest, mention must be made of one other exception in the Sunshine Law, for "pending litigation to which the agency is a party, until the pending litigation has been finally adjudicated or otherwise settled." (5 GCA § 10108.)
The pending litigation exception does not apply because the protest is a simple administrative dispute resolution proceeding. My very old Black's Law Dictionary defines "litigation" to mean "contest in a court of justice", and "a judicial controversy, a suit at law". Litigation is something altogether different from the protest proceeding.
If there is some other exception, I am not aware of it, and would welcome any comment to the contrary. So far as I can tell, if GEDA does indeed desire to respect the procurement process, it will disclose the protest, at the very least.
So what can be done when an agency withholds procurement information arguably intended for public access? There are at least two avenues of redress.
In the Procurement Act, 5 GCA § 5485 allows "any member of the public" to bring a court action to compel production of data wrongfully withheld. The public member is entitled to legal fees, if successful, and if the agency defies the Court, contempt charges may be applied.
The Sunshine Law also allows court action to obtain withheld information, and offers similar remedies. (5 GCA § 10111 and 10112.)
THE STORY CONTINUES ...
I see another article on this story in today's (April 7th) PDN, GEDA board to meet on procurement protest. The article clarifies the posture of the solicitation: it is still pre-award. As my original analysis indicated, I was under the impression the solicitation was at the post-award stage.
The pre-award posture has effect on information that should be withheld, but only insofar as it concerns information submitted in offers and proposals and the Register of Proposals. If the contents of any protest reveal that information, then of course that particular information must not be disclosed because the law very clearly requires nondisclosure of such information prior to award.
The article also said GEDA Director Karl Pangelinan sent PDN an email saying "... There is no law specific enough to address our exact situation, but to protect the integrity of the process, it is prudent for GEDA to interpret the law conservatively and not disclose any information in the record at the pre-award stage."
That statement is a very tempered stance, and not without some merit.
Taking a closer look at the regulation now, with knowledge that this is pre-award, the regulations for RFPs do differ from IFBs in one critical aspect: the bidders names in an IFB are disclosed at bid opening (that is, prior to award) on the Bid Abstract; however, the names of offerors in an RFP, which are kept on a Register of Proposals, are not not disclosed until after award. (2 GAR § 3114(h)(1).)
Still, the decision to indiscriminately withhold all information about the protest simply on the basis that it is in some unexplained way necessary "to protect the integrity of the process" is, I think, a close but debatable subject. The fact that both court protest actions and protest appeal actions are made public weighs, I think, against any absolute precious protection of protests at the agency level.
The demand that public access be available "consistent with ... the integrity of the procurement process" requires examination of what is meant by "the integrity of the procurement process".
To maintain integrity means to uphold all that is right and proper. It does not mean sweeping things that are not right and proper under the rug. Protecting the integrity of the procurement process is not intended to give cover to wrongdoing.
To the extent the protest raises issues in the procurement process that are not right and proper, to me, to be consistent with the integrity of the procurement process, those allegations (redacted for nondisclosable information) should be made public, otherwise you are only impugning the integrity of the procurement process.
Yes, information required to be withheld and agency deliberative matter should be withheld for so long as required. But other information is not so preciously secret. Any statement refusing any disclosure of information in a protest should identify the particular character of the particular information that gives it cover. And it should disclose all other information not specifically protected by nondisclosure law and regulation.
There are penalties for wrongful withholding of information, and there are procedures for redacting and segregating information not intended for public disclosure, so there is no excuse to withhold information without particular justification. A blanket statement that no information can be disclosed because of the integrity of the procurement process is simply a conclusion, one that begs supporting justification.
Time will tell whether information here is properly being withheld. It will be a learning process for all of us.
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