Handling Procurement Complaints: Issues & Challenges

Handling Procurement Complaints:Issues & Challenges Regional Public Procurement Forum Tirana, Albania May 2012 Daniel I. Gordon Associate Dean for Government Procurement Law The George Washington University Law School Washington, DC

Names for Procurement Complaints • Domestic review procedures (WTO) • Challenges (UN Commission on Int’l Trade Law, UNCITRAL) • Remedies (EU Directive) • Protests (or bid protests) (US) • Complaints (generic)

Complaints During theThree Phases of a Procurement • Pre-award: Protests include allegations that a solicitation is defective (for example, that it improperly restricts competition) • Award: Protests include allegations that a contract award is improper (for example, that selection was unreasonable or inconsistent with the solicitation award criteria) • Post-award: Complaints in this phase are generally between the government and the firm that has won the contract – these are not protests

Competing Demands on Protest System • Provide a forum to hear complaints by, and grant relief to, interested parties • Enhance accountability of procurement officials and government agencies • Promote transparency into how the procurement system works • Protect integrity of procurement system • Avoid unnecessary cost and delay & disruption of procurements during protest process

Handling Competing Demands • There will always be tension between protecting the interests of the disappointed bidder (who would like unlimited process at any time) and avoiding undue disruptionto the procurement system (which needs closure) • The relative importance a state gives to the competing demands will drive the trade-offs made in defining the structure of a bid protest system • Choices about the priority given to the competing demands must consider a state’s values and the nature of the challenges its procurement system faces

Key DecisionsRegarding a Protest Forum • Where is the forum located? • How broad is the forum’s jurisdiction? • Who is allowed to protest? • How is the issue of the finality of signed contracts handled? • How strict are time limits for protesting to the forum? • Is the procurement put “on hold” while the protest is pending? • How is abuse of protest process avoided or dealt with? • How long does the forum have to decide the case? • What evidence does the forum have before it in reaching its decisions? • How difficult is it for a protester to win a protest? • What power does the forum have to offer (and enforce) meaningful relief?

Locating the Protest Forum • 3 options: • Court • Independent administrative forum • Contracting agency • Each has advantages & disadvantages • “Exhaustion” issue

Possibilities RegardingBreadth of Jurisdiction • Jurisdiction over which agencies? • Exemption for national security agencies? • Exemption for entities below national level? • Jurisdiction over which decisions? • Use of contractors (vs. gov’t staff)? • Details of procurement (method, specifications)? • Subcontracting decisions?

Possibilities Regarding Parties • Before award, is the right to protest limited to firms that show they would win? • After award, is the right to protest limited to the next-highest-ranked competitor? • Is the successful competitor (the “awardee”) permitted to participate? Is it required to participate?

Possibilities RegardingExpertise of Forum & Representatives • Is the protest forum composed of judges, attorneys, or experts? • Must protesters be represented by an attorney? • Will the agency represent itself, or be represented by a government-wide office of counsel?

Dealing with Signed Contracts • If the system precludes cancellation of signed contracts, is there a way to preserve the possibility of review prior to signature? • If the system allows cancellation of signed contracts, is there a way to ensure that signed contracts are, at some point, final?

Implications of Timeliness Rules • Strict timeliness rules for filing can allow significant problems to escape oversight . . . but generous timeliness rules may delay procurements and/or make finding a meaningful remedy later difficult and expensive • Uniformity in timeliness rules has benefits . . . but there are benefits in having different time limits for solicitation & award challenges . . . and should timeliness be stricter if interim relief is sought?

Possibilities for Interim Relief • Does the filing of a protest stop some/all progress in the procurement while the protest is pending? • Does this depend on which phase is being challenged? • Does the right to interim relief turn on a preliminary assessment of the merits? on timing? • May the agency invoke particular needs to justify going forward? • What deterrent, if any, is there to prevent agencies from going forward?

Avoiding Abuse • Danger of abuse of the protest process: • Excessive protests can disrupt procurements • Can serve as improper leverage against gov’t or other contractors • Steps to avoid or counter use: • Filing fees (but note risk) • Prompt dismissal of frivolous protests • Penalty/fine for frivolous protests (but note risk)

Implications of Time for Decision • A longer time for decision allows for more meaningful review, but disrupts procurements longer • A shorter time for decision may preclude meaningful review, but disrupts procurements less

Possibilities Regarding Evidence (I): Agency Documents • What documentation must the contracting agency furnish to the protest forum? • What are the consequences of failing to document events on which the protest turns? • Does the contracting agency have the opportunity (or the obligation?) to explain its position in post-protest documents?

Possibilities Regarding Evidence (II): Beyond Documents • Are agency officials subject to in-person interview, deposition, or testimony before the protest forum? • Can appearance of a specific official be compelled? • May the protester participate in witness examination? • Are hearings or trials allowed? If so, how common are they?

Other Procedural Possibilities • May the agency request dismissal prior to producing documents? • May agency render the protest moot by offering to reconsider the award or take other corrective action? • Does the forum offer alternative dispute resolution?

Questions about Standard of Proof • What standard of evidence must be shown before relief is granted? • How much deference is shown to agency judgments on technical evaluations? • Is more deference shown when national defense or life/safety equipment is at issue? • May agency substitute/supplement new or alternative rationale for award during protest?

Possibilities RegardingProtection of Confidential Information • Is the protester allowed to review all/some/none of the agency documents? • Is the protester’s outside attorney (and outside experts) allowed to review documents confidentially? • How is confidentiality of sensitive documents protected?

Possibilities for Final Relief • How often does the forum rule in favor of the protesting firm? • How much power does the forum have to provide meaningful final relief? • What forms of final relief are available? • Are the costs of litigation shifted to the unsuccessful party?

Issues Related to Decisions • Can decisions be made public? • How is sensitive information in decisions handled? • Are decisions subject to an appeal?

Handling Procurement Complaints: Issues & Challenges