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Sunday, August 24, 2014

Can we talk?

Guam will likely soon enter the realm of negotiated contracting by re-adoption of the "Competitive Sealed Proposal" source selection method. This method was adopted with the first legislated comprehensive procurement law on Guam in P.L 16-124 in 1983, but was repealed not long thereafter, without any extant legislative history I have found discussing why. 

Senate Bill 32-246, currently before the Guam Legislature, will bring back that method of source selection, modified as informed by the year 2000 amendments to the ABA Model Procurement Code to facilitate Private Public Partnership models for Public Infrastructure Procurement, if adopted in current form.

Under this method, which will be called RFCP on Guam ("Request for Competitive Proposals", to distinguish it from the "RFP" method authorized to acquire professional services), discussions are allowed with the various offerors, a feature not allowed in any other existing method on Guam. Clarifications are allowed in bidding by IFB as well as RFPS, and negotiations are allowed, but only with the "best qualified" offeror, to arrive at a fair and reasonable price under the RFP, and bid conferences are also common features, but the one-on-one discussion between an offeror or bidder with the government purchasing officer are (supposed to be) taboo under the existing regime.

The ABA Model Procurement Code specifically contemplates "discussions" with offerors, but it is a rather open-ended treatment of the subject. We MPC § 3-203(6), and Regulation § R3-203.14.

I suspect, without any evidence to support it, that the RFCP first enacted on Guam was repealed so long ago because the parties, both government and private participants, could not cope with the definition of what is a "discussion", and the discretion, and limitations, required in conducting the discussion contemplated.

And, as the following article just hints at, the topic is still rife with problematic issues for those jurisdictions that have long labored in hope of finding a "business-like" means of contracting that retains ways and means for maintaining the principles of fairness, competition and accountability.

I am happy to read in the foreword to the article that it is intended to be the first of several in a series dealing with this topic. I believe we will all look forward to the education.

This article is written by Attorney Michelle E. Litteken, of the law firm Mayer Brown, and appears on the helpful Mondaq website. Below is a teaser; you ought to read the whole piece at the link. Note that the article discusses discussions in the federal contracting context; Guam's law, and your jurisdictional law, will likely vary in practice if not principle.

When Does an Agency Cross the Line from Clarifications to Discussions?
In a bid protest, the disappointed offeror often alleges that the agency failed to conduct meaningful discussions or engaged in unequal discussions. A threshold inquiry is whether the agency engaged in discussions. The CFC (Court of Federal Claims) and GAO (Government Accounting Office) approach the question of whether agency communications constitute discussions differently, and a protester may want to consider that difference when selecting a protest forum.

FAR 15.306 defines clarifications as "limited exchanges, between the Government and offerors, that may occur when award without discussions is contemplated." The FAR does not expressly define "discussions," but it explains that "discussions" include negotiations that "are undertaken with the intent of allowing the offeror to revise its proposal." The FAR used to limit clarifications to communications about relatively small matters, such as eliminating clerical mistakes or minor irregularities. However, the rules were revised in 1997 to allow a free exchange of information without requiring discussions. Decisions from the GAO and CFC reveal that the two protest forums apply the FAR provisions differently, with the CFC appearing to embrace a more substantial exchange of information that can still be characterized as clarifications.

Both GAO and the CFC recognize that, if an offeror is given an opportunity to revise its proposal, the agency has engaged in discussions. Several GAO and CFC cases refer to this as the "acid test." The tough cases come when either (i) questions (often called "clarifications" by the agency) seek information that is necessary to determine technical acceptability of the proposal, or (2) the agency seeks a substantial amount of "clarify[ing]" information and an offeror's response approaches (or crosses) the line of changing the proposal.

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