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Monday, June 10, 2013

India tells prospective contractors, "Let's Talk"

Govt bodies to give reasons for rejecting procurement tenders
The government awards public contracts worth lakhs of crores each year, but the process is fraught with delays as losing bidders often seek to stall their execution by filing vigilance complaints and mounting multiple legal challenges. Congress president Sonia Gandhi has identified public procurement as the biggest source of corruption along with the allocation of natural resources.

Finance Minister P Chidambaram had told Parliament in 2011 that even buying a pencil is a painstaking process in government. "Every time you go for procurement, on the day you are going to place the order, you will have a complaint on your table," he had said in his earlier avatar as home minister.

"It has been observed that there are many instances of a tender being rejected or tender documents not being issued and when the party enquires reasons, the same are not communicated," the procurement division in the expenditure department has said in a memo sent to government departments last month. "In such cases, the first round of litigation is to find out the reasons and the second round is to challenge the reasons," it noted.

The finance ministry has asked all government bodies to disclose the reasons for rejecting or excluding bidders from contracts awarded by them in order to bring more transparency into public procurement and avoid litigations from losing bidders.

Procurements made by the central government are currently regulated by the General Financial Rules of 2005, which only have the status of a subordinate legislation and are generic guidelines on government expenditure. Violations of these rules seldom attract penalties, noted a recent report on probity in India's public procurement by the United Nations Office on Drugs and Crime. The finance ministry has, however, pointed out that the rules clearly require that "every authority delegated with the financial powers of procuring goods in public interest" shall be responsible for bringing transparency in such procurements and ensuring "fair and equitable treatment of suppliers and promotion of competition." The rules also stipulate that suitable provisions be made in the bidding document "to enable a bidder to question the bidding conditions, process and/or rejection" of its bid. "The reasons for rejecting a tender or non-issuing a tender document to a prospective bidder must be disclosed where enquiries are made by the bidder," the finance ministry has said.

The ministry has pointed departments to a recent order on the issue by the Delhi High Court and said that importance of complying with it 'in letter and spirit cannot be over-emphasised.' Adjudging a case filed by a contractor who was not being issued tender documents by a government department, the court had said: "We have repeatedly emphasised in various orders that whenever a tender is rejected or tender documents are not issued and a party enquires reasons, it is necessary that the reasons be communicated to avoid unnecessary litigation...Despite this, the authorities persist in keeping silent over such representations, which we strongly deprecate."
In the US federal government contracting system, this is called "debriefing". It is a process that has been adopted in the last decade or so.

Contract Debriefings
Debriefings instill confidence in the contracting process by affirming that proposals were treated fairly. Statutory and regulatory changes to the debriefing rules better establish the debriefing as an offeror right that can reduce the number of protest filings, and strengthens the Government’s relationship with industry.

Debriefing means informing unsuccessful offerors of the basis of the selection decision and contract award. This information includes the Government’s evaluation of the significant weaknesses or deficiencies in the offeror’s proposal. Debriefings provide offerors to a competitive solicitation with an explanation of the evaluation process, an assessment of their proposal in relation to the evaluation criteria, a general understanding of the basis of the award decision, and the rationale for their exclusion from the competition.

Debriefings are different than notifications to unsuccessful offerors. The contracting officer must notify the offerors promptly in writing when their proposals are excluded from the competitive range or otherwise eliminated from the competition. See FAR 15.503for detailed coverage of notifications.
Legal and Practical Aspects of Debriefings: Adding Value to the Procurement Process (You may have to "trust" the site and click through a series of alerts. I do.)
Properly conducted, debriefings can greatly aid offerors, who can obtain insights for improving their proposals in future procurements. A skillfully performed debriefing also can ward off a potential protest by an unsuccessful offeror to the agency, the General Accounting Office (GAO), or the United States Court of Federal Claims whereby the agency allays the debriefed offeror’s concerns about possible prejudicial error in the evaluation or selection decision.

Poorly conducted, debriefings can decrease an offeror’s confidence in the agency’s evaluation practices, and can discourage that offeror from pursuing future business with that agency, thereby decreasing competition. A confusing or poorly executed debriefing also can spark a protest when the offeror was not otherwise so inclined. Most protests consume extensive agency resources in defending the procurement before the protest decision maker.5

In a debriefing, which can occur before or after contract award, agency representatives inform the offeror, commonly face to face, of the proposal’s weaknesses and deficiencies. The procuring agency in a postaward debriefing will further disclose limited information relating to the awardee’s proposal, such as the awardee’s overall evaluated cost or price, and the rationale for the source selection. The debriefed offeror either before or after award is entitled to receive certain other information, such as whether the agency followed the applicable source selection procedures. Debriefings are closely regulated by statute3 and the FAR,4 which identify appropriate topics for further discussion in this article.
Of course, the legal eagles do not warm easily to commercial realism, because they know how to make the worm turn.

Should government attorneys attend debriefings?
At the Nash & Cibinic Roundtable this past December 2 and 3 in Washington, DC, an issue came up that has bothered me for many years. The issue is the role of the government contract lawyer in the contracting process. Specifically, what role does the government contract lawyer play in debriefings of unsuccessful offerors? During a discussion of debriefings, one of the attendees identified herself as a government attorney and said that she always made a point of attending debriefings given by the contracting officers of her agency. I don't remember the entire comment, but the impression that I got was that she did so in order to ensure that all went well.

The comment made my contracting officer blood boil. I oppose the practice of having government lawyers attend debriefings. The main reason is that it sends the wrong signal to the company that is being debriefed. If I go to a meeting with someone who is unhappy with me and bring my lawyer, it sends a signal (whether accurate or not) that I expect trouble and feel the need to have a counselor present. Another reason is that I don't want any interruptions, interjections, note passing, whispering in my ear, or requests to caucus. Those things look bad. A debriefing is not supposed to be an interrogation, a negotiation, a debate, or an adversarial proceeding.

Of course, I am assuming that the CO is competent, that he or she understands the rules of the source selection process, understands how the source selection in question was conducted, knows the facts of the evaluation of the proposal in question, can explain the findings and conclusions of the evaluation team, and understands the basis for the source selection decision. If that is not the case, it raises the question of whether the CO should provide a face-to-face or telephonic debriefing. If the person responsible for the debriefing, the CO, cannot be trusted to do a good job, then perhaps a written debriefing, prepared or reviewed by an attorney, is the thing to do. But to send an incompetent CO into a debriefing armed with his or her lawyer does not strike me as a particularly intelligent course of action.

At one point during the Roundtable discussion, someone in the audience shouted out, "What if the offeror brings an attorney?" So what? As a CO, I asked offerors on more than one occasion if they had an attorney and, if so, would they please bring him or her to the debriefing. Why? I respect attorneys for their ability to think clearly and be dispassionate. An attorney is likely to recognize and acknowledge that a source selection was conducted properly even when their client is climbing the walls. If we did a good job and if I could explain the job that we did, then there was nothing to worry about. In my last source selection as a government CO, the loser filed a protest with the GAO right away. I called the protester, asked them to attend a debriefing, and asked them to bring their lawyer. They brought Professor Gilbert J. Ginsburg of The George Washington University Law School, a renowned government contracts expert. At the debriefing I handed them a copy of our request for proposals, a copy of their proposal, our complete source selection file for their proposal, including the write-ups by the individual evaluators and the scores, and told them to go through the material and to ask any questions they had. I left them in the conference room. They called me about an hour later, thanked me, and said goodbye. The next day I received a copy of their communication with the GAO withdrawing their protest.

Would I meet with my attorney before a debriefing? Not unless I had a legal question. As a CO, I would not need advice about what to say and what not to say. I believe in full disclosure debriefings. I believe in giving the loser everything. If a protest is filed, the protester?s lawyer is going to get everything anyway, including the proposals of the other offerors, so why withhold? While as a CO I cannot release the proposals of the other offerors, I see no reason to withhold anything else. if we made a mistake I would rather be told and be given a chance to take corrective action before a protest is filed. Full disclosure shows no fear.

Don't take this as dislike of attorneys. I work with them all the time and both like and admire most of the ones I meet. I have deep respect for the profession, which I consider to be admirable. But as I see it they and the CO have different roles to play in acquisition. If the attorney reviewed the source selection decision and found it to be legally sufficient, then he or she has played their part. Debriefing the losers is the CO?s role. If the CO is competent, then he or she will not need an attorney's services during the debriefings. If the CO is not competent, then a face-to-face or telephonic debriefing should be avoided at all costs. Having an attorney present will not make things go better.

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