In the Best Interests of the Government
The law considers and construes the “best interests” of the government in a variety of contexts, not just procurement law. But, in procurement law generally and Guam particularly, it is not only a broad consideration invoked by courts to defer to sovereign rights, but also is used as a specific condition of law that must be satisfied before certain actions are taken. Certain things are allowed to be done only when in” the best interests of the Territory”.
But isn’t “best interest”, like beauty, in the eye of the beholder? What is meant by it, who determines it, and by what standard, if any? We will explore those questions by looking at some of the instances in which it is used and possibly misused.
By my search, the term “best interest” of the government is used eight times in the whole Procurement Act, thirty-one times in the Regulations. One instance is when the government issues an IFB (or RFP) and then decides to cancel the solicitation. § 5225 of the law allows a solicitation to be cancelled (or all bids to be rejected) only “when it is in the best interests of the Territory in accordance with regulations”. The regulations elaborate the law, with specific reasons for cancellation all premised on a determination, in writing, from the highest procurement authority, that the cancellation “is in the Territory’s best interest”.
A recent Public Auditor’s decision dealt with that situation. The appeal of Joeten Development, Inc. involved an IFB by the Department of Revenue and Taxation for a lease of office space. After bids were solicited and opened, publicly disclosing Joeten’s bid, DRT decided to cancel the bid. DRT claimed it didn’t have sufficient funds to pay the bid price and would later issue a new bid. (In my experience, this is not an isolated practice, and is indeed quite frustrating and troubling.)
On review by the Public Auditor, she held “it was not in the public's interest to cancel the IFB due to insufficient funding.” She analyzed the Departments budget, the amount it was already paying for rent, dismissed DRT’s claim of insufficient funding, and concluded DRT would recognize substantial savings by awarding the contract to Joeten.
Thus we see that DRT (and in this case GSA’s Chief Procurement Officer) made the determination of the government’s “best interests”, in the first instance. But, the Public Auditor did not take DRT’s word for that. She independently scrutinized the situation to see if there were any facts supporting or negating any such conclusion, and came to her own determination that the protestor’s bid was in the Territory’s best interest. How DRT reached its decision is anybody’s guess.
The Public Auditor is given a special power of review, called de novo review, which allows her to disregard the agency determination. Her standard of review allows her to cast her own judgment of what is the Territory’s best interest.
The Public Auditor’s standard of review is broader than the traditional standard of review exercised by courts. There are a number of names to describe the court standard of review (e.g., “substantial evidence rule”) in , all reflecting judicial deference to the agency decision, but the result typically applied in practice is to accept an agency determination unless it is “clearly erroneous, arbitrary, capricious or contrary to law”.
Guam courts use the “clearly erroneous” standard when reviewing all agency determinations. But the Guam procurement law suggests they should not be so deferential to agency determinations in all procurement cases, and the determination of “best interest” in the bid cancellation situation is one of those cases.
§ 5245 of the Guam procurement law is specific about which determinations in procurement law are subject to the deferential “clearly erroneous” standard, and, by implication, which are not. That statute specifies eleven other statutes in the procurement law that are subject to the “clearly erroneous” standard of review.
The statute dealing with cancellation of bids, § 5225, is not on that list. Presumably, a court reviewing whether an agency’s determination that cancellation of a solicitation is in the Territory’s best interest would apply greater scrutiny of the underlying reasons and justifications than the “clearly erroneous” standard would allow.
It is noted that other procurement statutes containing “best interest” conditions are on the list, so a review of an agency’s best interest determination would tend to defer to the agency’s determination, unless “clearly erroneous”. Examples of “best interest” on the clearly erroneous list include § 5212(g), dealing with bid security, and § 5235, dealing with election of contract types)
Similar to “best” interest is “substantial” interest. A bid protest imposes an automatic stay of a solicitation. The stay can be lifted by following certain procedure, including the making of a written determination that lifting the stay is necessary “to protect substantial interests of the Territory”. “Substantial” would not seem to be the same as “best”.
In GCIF’s protest of the JFK High School solicitation, the Public Auditor did not question the detailed determination of substantial interest in that case (but ruled the stay was not necessary in the circumstances). It might be noted that the determination of substantial interest in this instance is also not one of the determinations to be reviewed by the “clearly erroneous” standards identified in § 5425.
The best interest of the Territory is not simply in the eye of the beholder. It is a determination, first of all, and determinations must be objectively based in fact and reason. The absence of articulable fact and reason is evidence that a declaration of best interest is subjective, arbitrary and capricious.
Moreover, whenever weighing the “best” interests of the Territory, it always important to remember that the principles and purposes of the Procurement Act are themselves also important interests of the Territory to be considered. Those principles include properly planned procurement, providing safeguards for a procurement system of quality and integrity, and providing for increased public confidence in the procedures followed by public procurement.
Whatever exigent circumstance may be put forward as a “best interest of the Territory”, it had better be more ”best” than those principles. Too often, close scrutiny will show a “best interest of the Territory” to be the best interest of an agency official or other interested party.
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