Beruflich Dokumente
Kultur Dokumente
(Both more and less than you will ever want to know)
Attorney at Law
Procurement Lore or Procurement Law ?
CONTENTS
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1
The author, John Thos. Brown is an attorney, licensed on Guam, serving as General Counsel for Jones &
Guerrero Co., Inc., its affiliates and subsidiaries. The opinions expressed are his own and do not constitute legal advice.
This paper began as a short outline, prepared for delivery of an introductory procurement seminar to the Guam Chamber
of Commerce Small Business Committee in March 2009. It then took on a half-life of its own. This is Ver 1.6, June 25,
2009. The author expects it to be revised periodically as new cases and issues arise. You may contact him to obtain the
latest version at jngoz@ozemail.com.au .
Guam Procurement Process Primer Ver 1.6 © John Thos. Brown 2009 Page i
K. Policy in favor of local procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
M. The Procurement Act applies to almost all GovGuam purchases. . . . . . . 14
V. “BID BONDING”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Guam Procurement Process Primer Ver 1.6 © John Thos. Brown 2009 Page ii
K. Wage Determination issues.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
X. SOLE SOURCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
XIV. SPECIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
A. SPECIFICATIONS ARE THE BEDROCK OF PROCUREMENT. . . . . . . . . . 55
C. MINIMUM NEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
D. UNDULY RESTRICTIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
F. NON-PROPRIETARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
I. BRAND NAMES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
J. BRAND NAME OR EQUAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
K. The Who and How of specification preparation and use.. . . . . . . . . . . . 57
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6. Procedures for Development of Specifications. . . . . . . . . . . . . . . 58
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3. Second Step, the Procurement Record. . . . . . . . . . . . . . . . . . . . . 83
a. Within five (5) days from filing the Notice of Appeal. . . . 83
4. Objections to OPA jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5. Third Step, the Agency Report. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
b. The Agency Report is meant to be filed ten (10) days after
receiving the Notice of Appeal. . . . . . . . . . . . . . . . . . . . . 85
6. Fourth Step, the Appellant’s Comments on Agency Report. . . . . 85
c. Comments on the Agency Report must be filed within ten
(10) days of the filing of the Agency Report. . . . . . . . . . . 86
7. Fifth Step, the agency’s Rebuttal to Appellant’s Comments on
Agency Report... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
b. Rebuttals are meant to be filed within five (5) days of filing
the Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9. Discovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10. Role of the Hearing Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11. The Hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12. The Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
E. Dateline flow of simple, ideal appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
1. Filing of Notice of Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
3. Agency must file Procurement Record. . . . . . . . . . . . . . . . . . . . . 91
4. Any party must file objections to qualification (recusal) of Public
Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
5. Agency must file Agency Report. . . . . . . . . . . . . . . . . . . . . . . . . . 91
6. Appellant’s or any Interested Party’s Comments. . . . . . . . . . . . . . 91
8. Notice of Hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9. Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
F. Appeal Remedies:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
2. Money.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
3. Other remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
a. Prior to award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
b. Remedies after award.. . . . . . . . . . . . . . . . . . . . . . . . . . . 93
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2. Who hears contract disputes?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
XXIII. A review (with commentary and full disclaimer) of some of the OPA Decisions. . . . . 104
1. OPA-PA-06-001, In the Appeal of the Debarment of Rex. . . . . . 104
2. OPA-PA-06-002, In the Appeal of Far East Equipment. . . . . . . . 104
3. OPA-PA-06-003, In the Appeal of RadioCom. . . . . . . . . . . . . . . 104
4. OPA-PA-07-002, In the Appeal of Emission Technologies. . . . . 105
5. OPA-PA-07-006, In the Appeal of Great West Retirement Services
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
6. OPA-PA-07-007, In the Appeal of Dick Pacific. . . . . . . . . . . . . . 106
8. OPA-PA-07-009, In the Appeal of Pacific Security Alarm. . . . . . 109
9. OPA-PA-07-010, In the Appeal of Far East Equipment . . . . . . . . 109
10. OPA-PA-07-011, In the Appeal of JMI Medical . . . . . . . . . . . . . 110
11. OPA-PA-08-009, In the Appeal of Captain, Hutapea. . . . . . . . . 112
12. OPA-PA-08-008, In the Appeal of Latte Treatment Center. . . . . 112
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Procurement Lore or Procurement Law ?
A GUAM PROCUREMENT PROCESS PRIMER
(Both more and less than you will ever want to know)
INTRODUCTION:
According to the Spanish historian Carlos Madrid, in his book Beyond Distances (Saipan, Northern
Mariana Islands Council for Humanities, 2006), there was an uncommon distress in the Marianas
Islands in 1876, brought about by a combination of factors, chiefly Spain’s forcible introduction
into the Islands of hundreds of political and other criminal deportees from Spain, but also typhoon
and drought. The situation on Saipan had become particularly dire. As he tells the story (pp. 173-
175),
“Chamorros and Carolinians together with the deportees were facing a famine
without precedent that could bring the island to catastrophe. Martín [the Saipan
Spanish authority] wrote Governor Brabo [the Guam-based Governor of the Marianas]
with an urgent request for provisions, since in a few days they would literally have nothing
to eat. In Guam this request would have been received with great concern as resources in
Agaña were also extremely limited. But the situation in Saipan was nevertheless so
pressing that Governor Brabo authorized, on his account, the purchase of all the
necessary rice, which was to be sent in the launch San José as soon as possible.
“The auction was held in the government offices on the ground floor of the
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Palace, at ten o’clock in the morning of Monday, July 26, 1876. To speed up the
process, bids were submitted not in writing but vocally. All the bidders must have agreed
on a price among themselves before the auction, as everyone offered the same bid of two
pesos per cavan.
“The names of the contractors and the amounts they agreed to supply were:
“What was the social background of these people? How the principalía of the
villages and the capital had the right to use the title “Don” was earlier discussed, but in
actual fact many individuals not belong[ing] to the principalía were also referred to as
“Don” or “Doña” probably because [of] their social or economic ascendancy. In this
case, the fact that three of the five successful bidders were termed “Don” does not
establish that Marcelino Sy-Pingco, a Christian Chinese, and Demetrio Quitugua, a
Chamorro like the rest, were members of the principalía, but that among the major
producers of rice in Guam were Chamorros of different social backgrounds, as well as
some non-Chamorros such as Sy-Pingco.”
Emergency, competitive and sole source procurement, specifications, delivery terms, public notice,
collusion, responsive and responsible bidders, law (“obligatory legal procedures”) and lore
(“according to custom”): all have long been part of Guam daily life and procurement history.
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I. SOURCES of Guam Procurement Law
A. The Law – (Guam Procurement Act: 5 GCA Div. 1, Chpt 5, §§ 5001 et seq.
http://www.justice.gov.gu/CompilerofLaws/GCA/05gca/5gc005.PDF) . Codes are
cited as “[Title number] G.C.A. [Section number]”, e.g., 5 GCA § 5210.
C. Decisions
1. Courts http://www.guamsupremecourt.com/
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2. Public Auditor http://www.guamopa.org/
2. Note difference between detail and General Principles, with guidance from
e.g., Federal Acquisition Regulations (FARs),
http://www.arnet.gov/far/90-36/pdf/toc.html
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The best and worst of explanation often offered in defense of questioned
procurement practice is, “but that’s how we do it”. It is the best explanation
because, at least someone is paying some attention and to some extent there is
some consistency, if nothing else. It is the worst because, when everyone falls off
the same page, is blind to what the law requires, and starts making things up as they
go or have gone, procurement becomes arbitrary, inconsistent and obtuse, if not
slipshod and detrimental to government and private contractors alike.
The Guam Procurement Act has, with some exception, pretty much been intact now
for well over twenty years. Still, the law is only now really being discovered and,
sadly, some very fundamental aspects are only now being acknowledged. For
instance, for years GovGuam GSA has directly purchased directly from the Federal
Supply Schedules in disregard of any local procurement laws or regulation, but with
full support of a series of legal opinions from the Attorneys General past and
present. This has seen an expenditure of hugely significant sums of public funds
without the usual accountability and competition required by law.
Another example: everyone knows the lowest responsive and responsible bidder is
meant to win a bid award, yet we have only recently had a Decision of the Public
Auditor, acknowledged as a case of first impression, that pointed out “responsive” is
not “responsible” and determinations of responsibility cannot be transformed into
issues of non-responsiveness merely by the “mandate” of an Invitation for Bids.
Guam procurement lore had long taught us, and wrongly, just the opposite.
The purpose of this paper is to, hopefully, share with you that Eureka moment. It is
only an outline and will not cover every topic of Guam procurement law and
regulation. It will not unlock all the secrets of the Guam Procurement Law but will
hopefully provide a handy reference to some of them. Law is a dynamic thing, and
what we know today will not necessarily be true tomorrow. No one should rely on
the statements in this paper as legal advice.
The hope is that this paper will help contribute to a unified knowledge, or debate,
to regularize Guam procurement practice, and achieve the worthy procurement
policy objectives, in the rational way the Guam Procurement Act contemplates.
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II. PURPOSES AND POLICIES of Guam Procurement Law
A. The law and regulations specify certain purposes or policies of procurement law.
These are not mere platitudes and ideals. They are intended to fill in the blanks and
provide direction when the law or regulations have holes or are in need of
clarification or direction. In procurement law, they have particular importance
because the Public Auditor is charged with the broad duty to promote “the
purposes” of the Procurement Act, not simply its black letter strictures.
E. to ensure the fair and equitable treatment of all persons who deal with the
procurement system of this Territory (5 GCA § 5001(b)(4)).
2. A Member will conduct its business fairly, honestly and with integrity.
(Guam Chamber of Commerce Code of Ethics, Principle I.)
3. A Member should conduct its business within the spirit as well as the letter
of the law. (Guam Chamber Ethics, Ethical Commentary IV-1.)
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a. “Written determinations required by this Chapter [the Procurement
Act] shall be retained in the appropriate official file of the Chief
Procurement Officer or the purchasing agency.” (5 GCA § 5020.)
(1) That code is adopted verbatim from MPC §1-301. There are
Model Regulations intended to implement that code, which
do not seem to have made their way into the Guam
Procurement Regulations, notwithstanding the Comment to
the Guam Procurement Act, which says “[b]ecause this Act
intends that the Policy Office adopt implementing
regulations, Model Regulations are also available, and must
be examined and changed to coincide with the version of
this Act actually adopted by the Legislature.” (See, 5 GCA §
5030.)
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arbitrary, capricious or contrary to law.” (5 GCA § 5425.) Under
revisions allowing appeals to and oversight of the Public Auditor,
“[n]otwithstanding § 5425 of this Chapter, no prior determination
shall be final or conclusive on the Public Auditor or upon any
appeal from the Public Auditor.” (5 GCA § 5703.)
1. All specifications shall seek to promote overall economy for the purposes
intended.... (5 GCA § 5265.)
7. All unsolicited offers [any offer to the government other than one submitted
in response to a solicitation] considered as being desirable shall be
subjected to the Competitive Sealed Bidding process.... (5 GCA § 5219(e).)
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competition reduces the opportunity for favoritism and inspires public
confidence that contracts are awarded equitably and economically.” (MPC
Official Commentary, # 3, §3-201, which is the same as 5 GCA § 5210(a).)
9. A Member should engage in fair, free and open competition with its
competitors (Guam Chamber Ethics, Ethical Commentary III-2.)
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4. Ethical Standards
I. to require public access to all aspects of procurement consistent with the sealed
bid procedure and the integrity of the procurement process.
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a public record and, subject to rules promulgated by the Public Auditor,
any person may inspect and copy any portion of the record. (5 GCA §
5251.)
a. To date, the Public Auditor has not promulgated any such rules.
2. Consider more broadly, the Freedom of Information Act, known also as the
Sunshine Act 5 GCA, Div. 1, Chpt 10, § 10101 et seq.
a. The author is of the view that the FOI content and process rules is
not adequately responsive to the needs of the procurement process.
Rules from the Public Auditor to facilitate and enforce access to the
procurement record would be in keeping with the spirit “to provide
for the expeditious resolution of controversies”, as mentioned in 2
GAR § 12101.
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Contracts Program, p. 41, cited hereafter as “Nash,
Cibinic and O’Brien.)
a. 41 USC §253 and 10 USC § 2304 (f) : “In no case may the head of
an agency ... (5) enter into a contract for property or services using
procedures other than competitive procedures on the basis of lack of
advance planning.”
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Decision was vacated by Writ of Mandate issued by the Guam Superior
Court, on other issues: TRC Environmental Corporation vs. Office of the
Public Auditor, SP 160-07.)
6. The Federal government (Buy American Act; see FAR Part 25.000,
http://www.acquisition.gov/far/current/html/Subpart%2025_1.html), as well
as State and municipal governments across the US and abroad have various
forms of local preference provisions. (Just search online and see, e.g.,
http://www.oregon.gov/DAS/SSD/SPO/reciprocal_detail.shtml.)
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preference provision is an unconstitutional and inorganic violation of its
right to equal protection. The author has sympathy for the agency's position
that it is its duty to apply the law, not determine it, and suspects the Public
Auditor would reach the same result; that issue is for a court to determine.
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a. Pre-emptive federal government funding regulations, if any.
2. The author does not doubt that many efficiencies could be had in the
procurement “system”, but would prefer that we all first try to make it work
effectively by making it work the way it is designed to work, before
tinkering too much with the “system”. The author believes the most obvious
failures and burdens of the Guam “procurement system” of recent times are
due to dysfunctions in operating the system, not the system itself. The first
step to making it function properly is to understand and experience how it is
meant to work under the existing law, and then make that process function
professionally, consistently and routinely.
a. Along with the MPC, the Guam Procurement Act has a Part entitled
“Coordination, Training and Education” (Part E, Article 2 of the
Guam Procurement Act.)
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all. Guam law does NOT address “training and education”.
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(2) “Generating competition is time consuming and labor
intensive. The government needs experienced professionals
to, among other things, understand agencies’ requirements to
fulfill their diverse missions, plan contracting solutions to
fulfill those requirements, conduct market research to
identify the best contractors, solicit those contractors to
assure competition and that the government get a good deal,
draft and negotiate contracts, manage relationships during
contract performance, and perform quality assurance to
ensure the government obtains the value it paid for and high
levels of customer satisfaction. Proper staffing will contribute
more toward responsible fiscal stewardship than another
round of studies, legislation or policymaking.”
2. This has led to such Agencies often adopting their own procurement
regulations, with their own numbering/classification systems, even though
the general Guam procurement regulations preempt anything substantively
inconsistent (5 GCA § 5131; Guam Imaging Consultants, Inc., v. Guam
Memorial Hospital Authority, Guam Supreme Court, 2004 Guam 15 at ¶¶
22, 41).
3. The author believes this is not a satisfactory development and efforts should
be made to identify the “core” procurement regulations that are intended to
apply uniformly throughout GovGuam, allowing Agencies to then only
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adopt such additional regulations as are necessary to conduct their direct
procurements. This will have the added benefit of focusing agency
procurement practice on the standardized general procurement regulations
and away from any notion they may be a law unto themselves.
B. Policy Office: The Policy Office is meant to be established under the Office of the
Governor. It is meant to consist of five members, three government employees
selected by the Governor plus the Directors of Administration and DPW; the DPW
Director is the chair. (5 GCA § 5101.)
b. The Attorney General has issued an opinion that GSA has the power
to adopt alternative methods of source selection and procurement
procedures to implement the alternate method. (Legal
Memorandum (GSA 07-1084, June 16, 2008.) It based this power
on the authority given GSA to adopt internal operational procedures,
5 GCA § 5113(b) and 2 GAR § 2104(b). The Public Auditor has
decided that this legal opinion is “incorrect”, and GSA does not have
such broad authority. (In the Appeal of Town House Dept. Stores,
Inc. dba Island Business Systems and Supplies [IBSS vs GSA], OPA-
PA-08-012 (decided February 10, 2009).)
C. GSA: The CPO of GSA shall serve as the central procurement officer “with respect
to supplies and services.” (5 GCA § 5113(a).) The CPO’s duties include:
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2. Exercise general supervision and control over all inventories of supplies.
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purchasing agencies to ensure they will result in a
procurement that maximizes the purchasing value of public
funds and amend such specifications to ensure that purpose
is achieved.” ( In the Appeal of Guam Publications, Inc.,
OPA-PA-08-007, p 12.)
D. DPW: The Director of DPW shall serve as the central procurement officer with
respect to construction.
E. Public Auditor
1. The Office of the Public Auditor has had a name makeover and, as a result
of PL 30-27, signed into law June 16, 2009, is now to be known as the
Office of Public Accountability, but can still be called “OPA”.
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b. The Public Auditor is still the Public Auditor; only the name of the
office has changed. (1 GCA §§ 1903, 1906, etc.)
2. The Public Auditor has the power and jurisdiction to hear any appeal of a
procurement protest, as well as appeals from contract disputes and
debarment or suspension actions. She also has the power to make certain
determinations and adopt certain regulations within the context of the
procurement laws.
3. It must be remembered the Public Auditor also has the power and duty to
conduct financial and management audits, program evaluation and review,
and to inquire into any person having any official relations with any officer
in any matter relating to the expenditures of government funds and property,
and to report offenses for prosecution to the AG, and to conduct other
investigations and render other reports as required. (1 GCA Chpt 19, §
1900 et seq.)
F. Attorney General
A. Generally speaking, there are only six main means of allowed procurement
methods, which the Procurement Act speaks of as “methods of source selection” (5
GCA § 5210(a)):
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5. Emergency (2 GAR § 3113)
B. Of these, only the competitive sealed bid method can be used for all solicitations, in
all circumstances, though it is not always ideal, which is why there are other
approved methods. All other methods are restricted to particular conditions of use;
any use of a method that does not comply with its particular conditions of use
violates the procurement system and is grounds for protest.
C. “The exceptions to the sealed bid process are delineated by statute.... The
exceptions ... are limited, and Guam law no longer provides for an alternative to
sealed bidding except as provided above.” (Fleet Services, Inc. v. Dept. of
Administration, 2006 Guam 6, ¶¶ 14,15.)
a. Direct purchases from the United States (5 GCA § 5122) are not
“otherwise authorized” – see section below on Federal Supply
Schedule purchases.
E. Contract renewals.
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language of § 5210(a), and creating an extension of an existing
contract after award, when that was not within the contemplation of
the specifications of the original bid, violates the notion that awards
can only be made consistent with the solicitation criteria (see, e.g., 5
GCA §§ 5211(g) and 5201(d) and (f), 2 GAR § 3114(f)(2)).
3. In L.P. Ganacias Enterprises, Inc., dba Radiocom vs. GIAA and Guam Cell
Communications, CV 1787-00, (at page 17) the Judge said, “[i]t is the
opinion of this Court that to allow Defendant [GIAA] to automatically renew
its contract with Guam Cell at the end of the one year period would clearly
side step the purpose and the protections of the open bidding process for
government contracts. Thus, to allow the Defendant to renew its contract
with Guam Cell at the end of the contract term, for a price that is to be
negotiated between them, circumvents the entire bidding process, and this
is not proper.... Rather, GIAA will again have to open the bid ... and will
once again have to go through the entire bidding process before awarding
the contract ....”
V. “BID BONDING”
A. Actually, “bond” is the common word used, but “security” is more technically apt
and specified in the law (see, 5 GCA § 5212). Security includes a bond, but also
can include other forms of security such as cash or other form satisfactory to
GovGuam: a cashier’s check or standby letter of credit might be alternatives (see, 2
GAR § 3109(c)(4)(D).
1. Bid security for competitive sealed bids for supplies or services is required
when the total price estimated to be bid exceeds $25,000, and may be
required when under that amount, by a written determination (“and
justification”) included in the IFB. (5 GCA § 5212(a).)
2. The amount of bid security is fifteen percent (15%) of the amount bid. (5
GCA § 5212(b).)
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3. Release of bid security. The law here is probably broader than intended. As
written, the “bid security required under any applicable [IFB] shall not be
released upon award of the bid, but instead shall continue in full force and
effect until delivery of the supplies or services....” (5 GCA § 5212(c).) This
does not by its terms limit the application of the continued effectiveness to
the successful bid and literally applies to the security of all bids, including
rejected or high bids. The apparent intent, however, is to have only the
successful bid security convert to and replace the need for a separate
performance security; all others should be released upon withdrawal or
rejection of the bid. (See, 5 GCA § 5212(f).)
4. Failure to provide required bid security may cause the bid to be rejected as
non-responsive; see section on materiality and responsiveness below.
2. Other provisions for bid security for construction contracts also parallel
those for supplies or services, including the amount of the security and the
possibility of rejection for noncompliance, the main significant difference
being there is no provision intended to extend the bid security into the
performance period, as there is with the supplies or services provision.
3. As with supplies and services, failure to provide required bid security may
cause the bid to be rejected as non-responsive, but the situations in which
such failure may be considered to be “non-substantial” are more limited: see
2 GAR § 5103(d).
D. There does not appear to be any requirement for security for any bid or offer under
any of the other methods of source selection for construction projects (besides
competitive sealed bid), nor any prohibition against any such security, if required in
any such solicitation.
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B. The form is always by Invitation for Bids (IFB), which should contain the following
(2 GAR § 3109(c)(2)):
5. Remember that by signing a bid, you are making a legally enforceable offer
to contract, so all essential legal requirements of offer and acceptance are
met when the government “awards” the contract by accepting the bid.
2. In contrast to the minimum publication time, and lore about when to start
measuring the bidding time, the minimum bidding time is fifteen (15) days
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from “the date of distribution” to the “time and date set for receipt of
bids”. (2 GAR § 3109(d).)
1. A bidder can modify or “withdraw” a bid by written notice prior to the time
set for bid opening. (2 GAR 3109(j) and (k).)
4. After bid opening and prior to award, the solicitation cannot be ‘cancelled’
but all bids may be "rejected" in whole or part (2 GAR 3115(d)(2)(A) IF in
the Territory’s “best interests”, including:
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(2) “prices exceed available funds and it would not be
appropriate to adjust quantities to come within available
funds” [note this condition is not applicable to cancellations
prior to opening due to lack of funding]
(4) the solicitation did not provide for consideration of all factors
of significance to the territory
E. Bid “mistakes” (discovered after opening, before award) generally are closely
scrutinized. If the error was one of judgment rather than, for instance, a clerical
mistake, the bidder is stuck with his original judgment. Minor bid “mistakes” which
are not contrary to the interest of the Government or prejudicial to other bidders
may be corrected. (2 GAR § 3109(m).)
1. If the Procurement Officer opening the bids knows or should know there is
a patent mistake, and the mistake is minor and non-prejudicial, the officer
should ask the bidder to confirm or correct the mistake.
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2. If the mistake is a minor informality of form or otherwise insignificant and
non-prejudicial, the Procurement Officer “shall waive such informalities or
allow the bidder to correct them.” Examples include failure to return
required number of signed bids or failure to sign where required but other
places were signed signifying intent to be bound.
F. The award of the contract is “to the lowest responsible bidder whose bid meets the
requirements and criteria set forth in the” IFB. (5 GCA § 5211(g).)
1. The short hand, but not as precise, version of this general rule is that “the
award goes to the lowest responsible and responsive bidder”. (2 GAR §
3109(n)(1).) There are thus three criteria to separately and independently
assess:
c. “Lowest” price/cost.
2. To discourage collusion among bidders, tie low bids are generally not to be
awarded by drawing lots or dividing the business, but only in such
“permissible manner that will discourage tie bids.” In the case there is no
such method, the award can be made by drawing lots, but not dividing the
business. (2 GAR § 3109(o)(2).)
4. Bids and offers must be evaluated fairly and effectively to make sure they
comply with the criteria of the solicitation. In L.G. Ganacias, CV 1787-00,
supra, the Judge stated (at page 23) that the person charged with evaluating
the bid offerings “should be an individual with some knowledge of the
product which is the subject of the bid”. There, the evaluator who
reviewed the bids testified she did not examine samples submitted because
she “did not know much about” them, which drew an admonishment from
the Court.
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G. What is a Responsive Bid?
b. Any bidder’s offering (that is, product or service) which does not
meet the acceptability requirements shall be rejected as
nonresponsive. (2 GAR § 3109(n)(3).) The IFB shall set forth any
evaluation criteria to be used in determining product acceptability.
(Id.)
(2) Thus, when bids are tied for lowest bid amount, the award is
not given to the one offering the superior product if all tied
bids meet the minimum specifications. (2 GAR § 3109(o).)
e. As a general rule, and contrary to lore, matters that deal with bidder
responsibility cannot be converted into matters of responsiveness
merely by inserting a provision into the IFB requiring production in
the bid envelope of information regarding issues of responsibility,
and rejection of bids that do not comply. (Id.) So, not everything
“mandated” by the IFB can be considered to affect responsiveness.
(Compare the J&G Construction Appeal, with the discussion of
“responsive bidder” in In the Appeal of Guam Publications, Inc.,
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OPA-PA-08-007 (at part III, D of the Decision, beginning p 13; and
note that J&G Construction was decided subsequently to Guam
Publications, and specifically declared its distinctions between
responsive and responsible were matters “of first impression”.)
c. Manifest mistakes are “clearly evident on the face of the bid” and
“shall be corrected to the intended correct bid and may not be
withdrawn”. Examples include “typographical errors, errors in
extending unit prices, transportation errors, and [obvious]
arithmetical errors”.
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the face of the bid or a bid unreasonably lower than the other bids
submitted. The bidder can confirm, correct or withdraw the bid
under the conditions noted above.
b. In support of her authority to cancel the bid in that case, the Public
Auditor referred to her jurisdiction “to promote the integrity of the
procurement process and the purposes of [the Procurement Act],” as
well as other case law she cited as holding “t]he purpose of statues,
charters or ordinances requiring competitive bidding is to ‘guard
against favoritism, improvidence, extravagance, fraud and
corruption, and to secure the best work or supplies at the lowest
price practicable and they are enacted for the benefit of the property
holders and taxpayers, and not for the benefit of enrichment of
bidders, and should be construed and administered as to accomplish
such purpose fairly and reasonably with sole reference to public
interest.” (Id.)
c. The Public Auditor found, “GPA did not engage in the required
determination of materiality,” adding, “the issue is whether O&M
was non-responsive, or whether the irregularities found in their bid
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submission might be determined to be waiverable [sic]
irregularities”. (Id., at p 5.)
(2) The author has the view that the determination of capability
is more objectively determined that integrity, which is a
more subjective judgment.
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the IFB cannot alter this rule of law by requiring (“mandating” is a
word bandied about) information concerning bidder responsibility to
be submitted in the bid envelope.
(1) Hint: The law and authorities generally (not always) use the
term “evaluate” or “evaluation” when discussing issues of
responsiveness, but “determine” or “determination” when
discussing issues of responsibility.
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much an issue of readiness to perform but ability to
perform when required.
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to have a Guam business license and
specialty license at bid opening. The result in
that case can possibly be justified based on
the specialty license matter (though the
author is not convinced; this involved an IFB,
not an RFP – see discussion of RFPs below).
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determination of bidder responsibility is a judgment to be
deliberatively made by a balance of any or all such factors of
responsibility, and that it is a weighing process, not a “tick-the-box”
method of trivia gathering. The judgment to be made is simply, does
the bidder have the capability to perform and the reputation to
reasonably conclude the bidder will perform; any one or
combination of the factors of responsibility could, in any particular
case, justify such a judgment.
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(2) “The inquiry is not required in every case. The extent to
which a review or investigation should be conducted will
depend on the value and size of the procurement, and the
bidder’s or offeror’s past record of contract performance in
the public and private sectors.” Official Commentary No. 2,
MPC § 3-401.)
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who lacked so many qualifications could be found
responsible. But the appeal tribunal there did not
make a finding that the bidder was responsible.
What the appeal tribunal decided was that it would
not sustain the appeal of a higher bidder to overturn
the procurement officer’s determination of
responsibility. Thus, higher bidders have a very
heavy burden to overturn any determination of
responsibility; they, in effect, must prove the
procurement officer’s determination of responsibility
was the result of clearly unreasonable error, fraud or
other serious fault, such as, perhaps, ethical
violations.
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the basis for the nonresponsibility determination is
lack of capability.
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solicitation or prospective bidder qualifications;
indeed, there is much merit in that. But, such
information gatherings are not source selections,
cannot take the place of proper source selection
solicitation, and should not preclude or disadvantage
any potential contractor who did not respond to the
information request from taking part in the
solicitation, nor favor any potential contractor who
did.
1. The standard General Terms and Conditions for GovGuam IFBs has a clause
that reads something like this, taken from a recent GPA bid:
2. The first part of this provision is OK, but the second part in the “Note” is
complete lore. Lore would have it that the government can force a bidder
to bid all items in the solicitation, otherwise the bid is non-responsive, even
if the bidder’s prices on the selected items bid are lowest. This is wrong for
two reasons, at least:
a. First, the referenced regulation (3-301.06) does NOT say that the
government has the power to choose “all or none”, so does not at all
support the proposition made in the “Note”. (See 2 GAR § 3115(f),
the current codification of the regulation.) The regulation expressly
gives the bidder, not the government, the power to make its own
bid “all or none”, unless the IFB specifically disallows that choice. If
the IFB is silent and thereby allows such a bid, the government is
limited to either accepting the bid as a whole or rejecting it. That is
the gist of the first part of the “all or none” clause, and the
referenced regulation makes that part of the clause proper.
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any bid or proposal may be rejected in whole or in part
when in the best interest of the Territory....” (2 GAR §
3115(e)(2); see, 5 GCA § 5225.)
(2) Clearly, the government cannot waive its right to reject in the
part. It is a legal requirement that GovGuam must be able to
“cherry pick” amongst the bids to obtain the best prices for
items, and any “mandated” provision in an IFB which
stymies that requirement is contrary to the law.
(3) Recall also the policy of the law mentioned above, “to
provide increased economy in territorial activities and to
maximize to the fullest extent practicable the purchasing
value of public funds of the Territory”. Any provision
inserted in an IFB which prevents the government from
cherry picking amongst the bids defeats that policy.
B. Multi-Step bidding is not the same thing as competitive sealed bidding and cannot
be used interchangeably with competitive sealed bidding, even though the
regulations – but not the law (5 GCA § 5211(h)) – might imply it is an equal
alternate form of competitive sealed bidding (2 GAR § 3109(a)). This distinction is
important because of the policy preference for competitive sealed bidding.
C. Multi-step bidding “is designed to obtain the benefits of competitive sealed bidding
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... and at the same time [obtain] the benefits of the competitive sealed bid proposals
procedure....” (2 GAR § 3109(r)(1).)
D. The first phase can consist of further multiple steps. See, generally, 2 GAR §
3109(t).
1. The first phase technical offer submissions are unpriced or have sealed
prices and are not publically opened.
b. It follows from this that, during the phase one discussion, where
appropriate, technical offers can be amended and supplemental
information may be provided by the offerors to demonstrate the
acceptability of their offers, and the government may make minor
amendments to the IFB purchase description to reflect a better
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knowledge of what offerors may reasonably be expected to offer. (2
GAR § 3109(r)((2)(b).) Bear in mind that purchase descriptions are
meant to be drafted, and therefore amended, so as to maximize
competition while acquiring the essential functions required to meet
the Territory’s minimum needs, as discussed in the Specifications
section below.
3. The technical offers are evaluated in the first phase “solely in accordance
with the criteria set forth in the” IFB. (Sub§ 3109(t)(4).)
a. The evaluation is not intended to rank the offers in any way (unlike
RFPs for services which do engage in a ranking process). Rather, the
technical offers are only to be categorized as either:
(3) unacceptable.
b. Unacceptable offers are tossed out and not further considered, but
the procurement officer must make a written record of the basis for
the unacceptability. (Sub§3109(t)(4)(c).)
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GAR § 3109(n)(3).)
5. Phase two is initiated once the procurement officer determines “there are
sufficient acceptable unpriced technical offers to assure effective price
competition” without further discussions or amendments to the
specifications. (Sub§ 3109(r)(4).)
a. Bid prices are not to be considered during phase one, only phase
two. (2 GAR § 3109(r)(1).)
(1) The priced bids are submitted sealed, either with the original
technical offers or after phase one, depending on the
requirements of the IFB as originally issued.
1. “The Guam Legislature ... repealed [the prior provision allowing competitive
sealed proposals] when it passed section 8 of Guam Public Law 18-8.... The
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repeal of the statute repealed the corresponding regulation.” (Fleet Services,
Inc. v. Dept. of Administration, 2006 Guam 6, ¶ 15.)
B. Requests for Proposals (RFPs) are only allowed for “professional services”.
C. The procurement process for RFPs is built around a negotiation process, and has its
own procedural requirements. See generally, 2 GAR § 3114.
3. The “need for services” is essentially the RFP, and “adequate public notice”
of it must be given at least 10 days in advance of due date. Public notice is
to be given in the same manner as competitive sealed bids (see above) and,
“additionally shall consist of distributing Requests for Proposals to persons
interested in performing the services”. (§ 3114(e.)
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responsiveness because those services are precisely what is being
sought, whereas, when products and other things are being sought,
such personnel issues are incidental and go to issues of
responsibility.
7. Once ranked, negotiations are begun with the most best qualified offeror
over compensation, that is, the price to be paid for the services sought, and
then on down the list from most best qualified until an agreement is reached
with a qualified offeror. This parallels the multi-step process where prices
are not discussed or considered until acceptability of product is determined.
And, similarly, it would seem to be improper for the government to try to
renegotiate the ranking or qualification of the offerors once the process has
moved to haggling over price.
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(which presumably means to both parties, but the author is not
making that call without further research).
8. When the dust settles and an award noticed, the agency must prepare a
written memorandum, available for public inspection, including details of
how the evaluation factors were applied to determine the best qualified
offerors and the principal elements of the negotiations, including significant
considerations relating to price and other terms of contract.
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refer to “professional services within the scope of the practice of
architecture, professional engineering, or land surveying”.
A. “An unsolicited offer is any offer other than one submitted in response to a
solicitation.” (5 GCA § 5219.) This would seem to include any “proposal”,
“pitch” or marketing of any item or service to GovGuam which includes price and
other terms capable of being accepted, and likely includes any offer capable of
being negotiated for acceptance.
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Providing a brochure and price schedule could easily be taken to be a
binding offer in any given factual circumstance.
B. Old procurement law allowed unsolicited offers to be evaluated and processed for
procurement as a “sole source”. This was negated and reversed in 1999 by PL
25:31:2, currently codified as 5 GCA §5219. Now, unsolicited offers must be
processed by the competitive sealed bid procurement method.
2. Note that the Regulations (2 GAR § 3104) have not been updated to reflect
the change in law, although, as was held in the Fleet Services, Inc. case,
above, the change in law consequentially voids any inconsistent or
unauthorized regulation.
C. “Notwithstanding any other provision of law, sole source procurement shall not be
permissible in any procurement arising from an unsolicited offer. The criteria set
forth in the [IFB] shall not require the inclusion of any proprietary item proposed in
the unsolicited offer, and the proprietary character of an unsolicited offer or the
inclusion of a proprietary item in the unsolicited offer shall not be used to favor
the offer or any other bid, nor be a determining factor in awarding a bid.” (5
GCA § 5219(e).)
X. SOLE SOURCE
B. “A requirement for a particular proprietary item does not justify a sole source
procurement if there is more than one potential bidder or offeror for that item.” (2
GAR § 3112(b).)
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to meet the need.” (Id.)
D. The CPO, DPW Director or Head of the Purchasing Agency, “or their designee
above the level of Procurement Officer” must determine in writing that there is only
one source for the required supply, service or construction item. (5 GCA § 5214.)
E. A record of all contracts made under the sole source procurement shall be
maintained and a copy of such record shall be submitted to the Legislature
annually. (2 GAR § 3112(d).)
F. When conducting any sole source procurement, the procurement officer shall
conduct negotiations, as appropriate, as to price, delivery and terms. (2 GAR §
3112(c).)
A. Small purchase procedures exist for procurement of less than $15,000 for supplies
or services and less than $50,000 for construction when other methods are not
utilized, but if there is only one source for such procurement, the sole source
method must be used. (2 GAR §§ 3111(a), (3111(b)(4).)
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B. Procurement requirements shall not be artificially divided so as to fall within the
small purchase limits. (5 GCA § 5214.)
C. For really small purchases, there are competition requirements for supplies and
services in the $500 to $15,000 bracket (2 GAR § 3111(c):
D. Really, really small purchases of supplies and services under $500 can be
conducted by operational procedures which “provide for obtaining adequate and
reasonable competition and for making records to properly account for funds and
to facilitate auditing....” (2 GAR § 3111(e).)
E. Procurement of construction is subject to similar rules, with the two brackets being,
(1) between $500 and $50,000, and (2) under $500. (2 GAR § 3111(d).)
2. Individual purchases under BPAs shall not exceed $15,000 for supplies or
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services or $50,000 for construction. (§ 3112.13(b).)
3. The use of a BPA does not authorize purchases that are not otherwise
authorized by law or regulation. (§ 3112.13(a).)
4. The existence of a BPA does not justify purchasing from only one source.
Wherever possible, the purchasing officer must provide for equal
distribution of the blanket purchase to at least three separate vendors. (§
3122.13(c).) Remember, a BPA is essentially an open account with a
vendor. The government is required to spread the business around accounts
and not favor any one (“equal distribution”).
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2008-16 (GPSS) and 2008-17 (DPW).
D. The procurement agent must solicit at least three (3) informal price quotations and,
if time allows, must give notice to all contractors from any qualified bid list.
E. Award goes to the “firm with the best offer, as determined by evaluating cost and
delivery time.” (Query: does this take issues of bidder responsibility out of the
equation?) A written determination of the basis for the selection of the contractor
shall be included in the contract file.
G. The law contemplated that the Policy Office would draft regulations which further
define “emergency conditions”, but they have not done so: the only regulation on
the subject, 2 GAR § 3113, refers to a sub§ 3113(b) for such definition, but it does
not appear in the Guam Compiler of Laws’ regulations.
A. For its own purposes, the US Federal Government has established a specialized
facility that allows government purchasers, pursuant to processes specified in the
FARs, Subpart 8.4 http://www.acquisition.gov/far/current/html/Subpart%208_4.html,
to directly purchase certain supplies and services directly from pre-approved private
contractors/vendors. This facility is known as the GSA Supply Schedule or “FSSP”
(Federal Supply Schedule Program).
B. A review of this program is beyond the scope of this paper, but see
http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentType=GSA_OVERVIEW&
contentId=8106 . “GSA Schedules offer customers direct delivery of millions of
state-of-the-art, high-quality commercial supplies and services at volume discount
pricing.” The FSSP is analogous to buying from an online catalogue of supplies and
services, each offered by different supply contractors at varying prices and upon
varying terms, depending on the contractor chosen.
C. The Federal government has authorized GovGuam to access the Supply Schedule
contractors, which is a discretionary privilege and not a right. To be an approved
Supply Schedule contractor, the Federal government requires certain standards and
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generally extracts the “best customer” price from the contractors with its purchasing
muscle. This has the potential to provide GovGuam cost savings on Supply
Schedule supplies and services. Most US Federal agencies can directly access the
schedule contractors and directly purchase scheduled supplies and services without
normal competitive procedures, although the applicable FARs do have their own
competitive requirements for such purchases. The FARs, however, require other
ordering activities such as GovGuam to make their purchases “consistent with
[their own] statutory and regulatory requirements applicable to the acquisition of
the supply or service” (Subpart 8.404(c)(3).
D. The Guam Procurement Act puts a limit on the privilege granted by the Federal
government to GovGuam to access the FSSP.
1. “The [Guam] General Services Agency shall procure supplies from the
United States when the cost to the [Guam] General Services Agency is less
by ten percent (10%) than from other contractors.” (5 GCA § 5122)
2. The intent and purpose of this clause is vague and without any extant
explanation. Lore has it that the provision is intended to provide a “local
preference” for other bidders, even though there is a separate express “local
preference” provision, discussed above, and even though there is no
mention at all of the word “local” in the provision.
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6. The author concludes that §5122 is intended simply to make sure that,
when GovGuam buys from the Federal Supply Schedule, it must consider
all the supply items available from all the Schedule contractors, and not buy
from a more expensive contractor if there is another contractor on the
Schedule offering a similar item for at least a 10% lower price.
E. Lore has had it that the FSSP is a way to “bypass the bid process”. (See, (In the
Appeal of Town House Dept. Stores, Inc. dba Island Business Systems and Supplies
[IBSS vs. GPSS], OPA-PA-08-011, p 10.) Guam GSA has long purchased directly
from the Federal Supply Schedule contractors according to its own procedures, in
complete disregard of Guam procurement law and regulation. And the Attorney
General has, through more than one opinion, long provided legal cover for GSA to
do so, saying specifically in its Legal Memorandum dated June 16, 2008
(“Purchasing from GSA Federal Supply Schedule Procedure”) that § 5122
authorized another method of source selection beyond those specified in 5 GCA §
5210(a).
F. The Public Auditor has recently ruled that § 5122 does not provide any exception
to the specific methods of source selection specified in §5210(a) and those
methods, such as competitive sealed bid, must be used when making any purchase
from the Federal Supply Schedule contractors. She also ruled that GSA does not
have the authority to adopt any other method of source selection. (Town House
Dept. Stores, Inc. dba Island Business Systems and Supplies [IBSS vs GSA], OPA-PA-
08-012.)
XIV. SPECIFICATIONS
B. “Unless the context requires otherwise, the terms specification and purchase
description are used interchangeably throughout these Regulations”. (2 GAR
§4101(4).) “Purchase description”, simply defined (see 2 GAR §1106(26)), means
“the words used in a solicitation to describe the supplies”.
C. MINIMUM NEEDS: The specifications in the IFB “shall include only the essential
physical characteristics and functions required to meet the Territory’s minimum
needs”. (5 GCA § 5268(a).) Bells and Whistles, status symbols, ego trips, and the
95% of the functions you never use should not be part of specifications.
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1. You can't always get what you want
But if you try sometimes you might find
You get what you need (– The Rolling Stones).
E. “It is the general policy of this territory to procure standard commercial products
whenever practicable. In developing specifications, accepted commercial standards
shall be used and unique requirements shall be avoided to the extent practicable.”
(2 GAR § 4102(a)(3))
G. Purchase descriptions shall not specify a product having features which are peculiar
to the products of one manufacturer unless it has been determined in writing by
the Director of the using agency that those particular features are essential and
specifying the reason that similar products lacking those features would not meet
minimum requirements for the item. (5 GCA § 5268(b).)
1. See, L.P. Ganacias, CV 1787-00, supra, at page 22, where the Court was
observed the agency “undertook no evaluation which lead to the conclusion
that only Motorola pagers would meet the needs of the agency”, and “there
was no written documentation prepared which would support a conclusion
that no other brand of pager would suffice”. The Court stated, “while GIAA
may have had legitimate reasons for focusing its IFB on the Motorala brand
pagers, there is absolutely no documentation to support such decision....
[T]his violation by Defendant GIAA is duly noted by the Court and the
Defendant is placed on notice that any and all future IFB’s must comply with
Guam’s procurement regulations.”
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2. See, In the Appeal of IBSS [vs GPSS], supra, OPA-PA-08-011, at p 13,
wherein the Public Auditor held procurement of XEROX brand copiers
could not be justified under a brand name specification.
4. The brand name or equal specification must explain that the use of a brand
name is for the purpose of describing the standard of quality, performance
and characteristics desired and is not intended to limit or restrict
competition to the brand name product.
2. The CPO shall prepare, issue, revise, maintain and monitor the use of
specifications for the supplies and services required by the Territory. (5
GCA § 5262(a).)
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one bidder over another are not used, and that any specifications
provided [by the using agency] are properly screened and amended
when necessary to prevent such restrictive specifications from
appearing in future IFBs.” ( In the Appeal of Guam Publications,
Inc., OPA-PA-08-007, p 13.)
3. The Director DPW shall prepare, issue, revise, maintain and monitor the
use of specifications for construction required by the Territory.. (5 GCA §
5262(b).)
4. The duty of the CPO and Director DPW to prepare and utilize
specifications may be delegated to the Using Agencies. (2 GAR §
4103(a)(1).)
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a. Specifications may provide for alternate descriptions “where two or
more design, functional, or performance criteria will satisfactorily
meet the territory’s requirements.” (Sub§ (b))
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requirements of this Chapter regarding the purposes and
nonrestrictiveness of specifications shall apply to all specifications,
including, but not limited to, those prepared by architects,
engineers, designers, and draftsmen for public contracts.”)
B. Note that while there is flexibility in selecting amongst contract types, different
contract types have conditions and limitations for their usage. Contract types can
only be used as appropriate.
D. This is not a thorough review of the various contracts types or their requirements, as
it would detract from the primary focus of this paper, to introduce the procurement
process. For a more in-depth study, refer to 2 GAR § 3119, and to 2 GAR § 5102 et
seq. for contract considerations for determining different methods of management
for construction contracts.
E. Note, also, that the regulations also deal particularly with clauses within contracts,
and that such clauses are mainly not discussed in this paper. (See, e.g., 2 GAR §§
5106 and 6101.)
F. “Subject to the limitations of this Section, any type of contract which will promote
the best interests of the Territory may be used”. (5 GCA § 5235.)
3. Except for a fixed-price contract, no contract type shall be used unless there
is a determination that the contractor’s accounting system permits timely
and adequate collection and allocation of cost data. (5 GCA § 5236.)
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G. Policy Regarding Selection of Contract Types (2 GAR § 3119(c):
1. “The objective when selecting a contact type is to obtain the best value in
needed supplies, services, or construction in the time required and at the
lowest cost or price to the territory.”
H. Multi-term contracts: A contract may be entered into for any period of time
“deemed to be in the best interests of the Territory” (5 GCA § 5237) provided:
1. the term of the contract and any conditions of renewal or extension are
included in the solicitation
2. funds are available for the first fiscal period at the time of contracting
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adds, “Multi-year procurements should attract more competitors to
submit bids or offers for the larger contract awards and thereby
provide the jurisdiction with the benefits of increased competition.”
c. Are not applicable to any other contract type, including but not
limited to contracts for construction or leases (of all property, real
and otherwise). (Sub§ 3121(c).)
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may specify a minimum or maximum amount.
d. To preserve competition, they shall not be used more than twice per
fiscal year for the same supplies or services.
L. Leases must be in the best interests of the territory and “not used to circumvent
normal procurement procedures.” (2 GAR § 3119(j)
a. Options must only be for the benefit of the territory, not the
contractor.
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c. Before any option to renew, extend or purchase is exercised
(including an option in a lease):
b. Can be justified only when necessary to obtain the total quantity the
government needs, such as when no single contractor has sufficient
capacity to meet the needs.
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d. Multiple awards must be allocated to the least number of contractors
capable of meeting all government requirements.
O. Construction contracts
A. The first key take-away here is that, if you are entitled to protest the solicitation or
award, you MUST FIRST protest to the agency BEFORE you take your complaint to
the Public Auditor or to court. (See, Order of Dismissal, In the Appeal of Mega
United Corp., OPA-PA-09-001.) This is part of the notion of exhaustion of
administrative remedies.
2. GovGuam, when rendering a Protest Decision, can impose costs (but not
attorneys fees) on any protester who files a protest “fraudulently, frivolously
or solely to disrupt the procurement process “. (2 GAR § 9101(g)(2).)
a. Costs were applied for but rejected by the Public Auditor in In the
Appeal of Guam Publications, Inc., OPA-PA-08-007 (beginning at p
17.). The Public Auditor noted that a bidder’s right to seek
clarification and further inquiry regarding an IFB, and the right to
protest, absent any other evidence of wrongdoing, do not “disrupt
the procurement process.”
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C. “Protestors may file a protest on any phase of solicitation or award including, but
not limited to, specifications preparation, bid solicitation, award, or disclosure of
information marked confidential in the bid or offer.” (2 GAR § 9103(c)(2).)
Incorrect use or execution of a method of source selection is a ground for protest.
(5 GCA § 5425(a).)
2. If your protest is not filed within the time required, you cannot appeal to
the Public Auditor. (In the Appeal of IBSS [vs GPSS(2)], cited above, OPA-
PA-08-011, p 6: “The threshold issue in this matter is whether IBSS’
December 4, 2007, protest was timely.”)
3. That IBSS case is one example of the protest condition that the protestant
must “know or should know of the facts giving rise” to being aggrieved. In
that case, IBSS knew for at least 2 years that GPSS was purchasing copiers
from a competitor, but it alleged that it did not know, and GPSS would not
disclose despite request, whether there was any legal basis for the purchase,
despite suspicions it was improper. The Public Auditor held that IBSS did
not know, and could not know, it was aggrieved until it was finally given the
procurement file, which revealed the purchases were not conducted in
accordance with the law and regulation. IBSS had filed its protest within the
time limits of revelation of those facts, so the appeal was upheld.
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take-away is that if you have a complaint about the method of source
selection or its implementation or the form or substance or anything else
connected with the form or conduct of the solicitation occurring or
revealed up to the time set for submission of bids or proposals (which
includes issues regarding specifications), you should, if at all possible,
protest BEFORE the time set for opening the bids.
a. IF you cannot submit the protest before bid opening, you probably
should not submit a bid or proposal if you want to pursue your
protest.
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formal rules”, Cibinic and Nash say, “[p]rotests based on alleged
improprieties in a solicitation that are apparent prior to bid opening
or the closing date for receipt of proposals must be filed prior to bid
opening or the closing date for receipt of proposals. In all other
cases, protest must be filed not later than 10 days [the FAR
requirement] after the basis of the protest is known or should have
been known, whichever is earlier.” (At p 1485-86.) Cibinic and
Nash also note that Federal agencies have some leeway for
considering protest filed after the 10 [14] day filing limit. (P 1486.)
d. So, if you have the case and have not been able to file a protest
before bid opening, you should be encouraged to proceed with a
protest, even if you have submitted a bid but especially if you have
not, so long as you have met the 14 day limit. Still, if you can avoid
the issue, do so.
5. You can protest issues revealed at or after bid opening, including rejection
of bids or proposals, matters of responsiveness and responsibility, and the
like, after the bid opening, within the 14 day general rule.
E. The third key take-away is that if you miss a deadline to file a protest (or appeal),
absent extreme and unjust circumstances, you will have a snowball’s chance on
Guam of ever getting it heard.
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c. A similar requirement for a record (but no notice) justifying the
selection of the “best qualified” offeror must also be made for RFPs
(2 GAR § 3114(m)) and for justifying a finding of “unacceptability” in
the first phase of multi-step sealed bids (2 GAR § 3109(t)(4)(c).
3. 2 GAR § 3115(e)(3) sets out, broadly, the legal bases for rejecting a bid or a
proposal/offer.
4. The three legal bases specifically (but not exclusively) allowed to reject a
bid are:
5. The three legal bases specifically (but not exclusively) allowed to reject a
proposal (offer) are:
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6. Although sub§ (e)(3) calls these “reasons” and not “legal bases”, the author
is of the view that sub§(e)(4), which allows parties to request and be
“advised of the reasons” for rejection, requires some advisement of the facts
upon which the rejection is based, particularly when the party requesting
had an apparent good shot at the award, and especially since the
government is supposed to make a record of that.
7. The regulations speak of no time limit within which to lodge your Request
for Reasons.
8. The statement is often heard that an agency need only provide minimal
justification in its notice of award rejecting other bidders, and that is
consistent with the requirement regarding mere notice of the award.
However, the author would argue that this specific provision allowing a
rejected bidder to request reasons necessarily implies an obligation to
provide more substantive detail for the rejection, when requested. Such a
rule would be consistent with the polices to provide increased public
confidence, ensure fair and equitable treatment of all persons who deal with
the procurement system, to provide safeguards, and to require public access
to all aspects of procurement. It would also further the goal of exhaustion of
administrative remedies by disclosing facts at the agency level upon which a
protest can be substantively heard, so as to alleviate the burden on the
appeals process.
9. A Request for Reasons would not usually constitute a Bid Protest, since if
you know the facts by reason of which you may be aggrieved, you should
protest. When in doubt as to whether you are or should be protesting,
submit your Protest within the 14 day protest filing period even if you have
a pending Request for Reasons. You can always withdraw a protest filed in
good faith, but cannot belatedly file a protest when you knew or should
have known of the facts, and are merely using the Request for Reasons to try
to get the government to acknowledge its error.
10. Even if your Request for Reasons does not claim expressly to be a “protest”,
the government may respond to your request as though it were a “protest”.
A good indication the agency believes your Request is a Protest is if, in their
response, they notify you that you have “a right to administrative and
judicial review”. You should carefully review the response for just such a
determination, because your protest filing period starts from the decision on
a protest. That is why it is good practice to specifically state in your Request
that it is not meant to be a Protest.
G. FORMAT OF PROTEST
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verbally, but a “protest” is more formal and must be in writing. (2 GAR §§
9101(b) and (c).)
2. The precise form of the bid protest is not defined and can be in a simple
letter format, but must be in writing, should positively declare it is a
“protest”, and include, at a minimum (2 GAR § 9101(c)(3).):
3. Bear in mind that you must protest every issue you know about (or should
know about) because you cannot add additional issues later (unless, of
course, you do not discover the facts upon which the additional protest is
based until later, in which case you should bring a separate protest on those
matters). (See arguments rejected in In the Appeal of Guam Publications,
Inc., OPA-PA-08-007 (at III, A, beginning p 6.)
2. In the author’s experience, it is rare for there to be any procedure other than
a written response; and, often, not even that. In the cases where the
Government has instigated a discussion to resolve the protest, issues have
been narrowed or avoided altogether.
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3. Any “interested party” is entitled to receive from the Agency any information
bearing on the protest, unless proprietary or otherwise confidential. For this
purpose, it appears an “interested party” is more restricted than usually
thought, including only persons aggrieved who’ve filed a protest (2 GAR §
9101(a)(1)(a)).
(2) It must state the reason for the action taken, and
2
This Ap peal and Decision brings to mind another incident reported by Carlos Madrid’s
Beyond Distances, p 199: ”the repatriation of the deportees served to call the attention of the central
government in Madrid to the administration of Tinian, which had been leased under very obscure terms
under Governor Moscoso. Having made continual requests for information and transmittal of the original
documents, Madrid finally found it necessary to issue a Royal Decree, signed June 15, 1877 to have the
documents sent to Spain. Once this was done, the conclusions were clear: ‘The leasing of Tinian was
made without the knowledge of the government’. The private lease of the island ‘is anomalous and ill-
founded in the legal prescriptions ...’.”
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I. Requests for Reconsideration of Protest Decision
A. Once a protest is filed, the government can take no further action on the solicitation
or award of contract (unless the stay is lifted as mentioned below). This is called the
“automatic stay”, and is essentially an injunction.
1. “In the event of a timely protest ... the Territory shall not proceed further
with the solicitation or with the award of the contract prior to final
resolution of such protest ....” (5 GCA § 5425(g).)
a. Note that the stay only covers solicitation and award. It does not
apply to stay performance of a contract that has already been
entered into.
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b. In L.P. Ganacias, CV 1787-00, supra, (at page 25) the Judge found
“most troubling” the fact that the agency awarded a contract prior to
receipt by the other bidders of the notice of award, which precluded
the possibility of protesting, and thereby staying, the award. The
Judge stated, “[c]ertainly a party cannot protest a bid award unless or
until that party has been informed that the contract was awarded to
another bidder. For an agency to attempt to circumvent this process
by first awarding the contract, and then later informing the other
bidders that their respective bids were rejected is highly improper.
The parties should be informed in writing that their respective bids
were rejected and the basis for such rejection.... The agency should
then proceed to award the contract.”
B. Any further action to proceed with a solicitation or award during the period of the
automatic stay is void UNLESS all of the following approvals are given (5 GCA §
5425(g) :
1. The CPO or Director DPW “after consultation with and written concurrence
of the head of the using or purchasing agency and the Attorney General or
designated Deputy Attorney General, makes a written determination that the
award of the contract without delay is necessary to protect the substantial
interests of the Territory”;
a. But note: “the Public Auditor shall review and confirm or reject any
determination by the Chief Procurement Officer or the Director of
Public Works that award of a contract without delay pending Appeal
is necessary to protect the interests of the government.” (2 GAR §
12501(b).) It is unclear whether this express directive is intended to
be self-enforcing or only applicable in the event of a timely protest
of the decision to lift the stay, as next mentioned.
3. And, either:
C. The general provisions of Guam Procurement Law regarding the automatic stay –
and by extension, anything else – override any inconsistent provisions of an
Agency’s own regulations. (Guam Imaging Consultants, Inc., v. Guam Memorial
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Hospital Authority, Guam Supreme Court, 2004 Guam 15 at ¶¶ 24, 41.)
1. First, a protest to the Agency (see, Request for Dismissal of Appeal, In the
Appeal of [IBSS], OPA-PA-06-004, based on IBSS’ failure to protest, and In
the Appeal of Mega United, supra), and
c. By the same reasoning, a request for reasons for rejection of the bid,
mentioned above, would not necessarily constitute a “protest”, thus
would not normally serve as the basis for an Appeal.
B. 15 Day Filing Deadline: The Appeal must be filed within 15 days of receipt of the
decision on the protest. The filing deadlines for Appeals (and protests) tend to be
strictly enforced. (The appeals board lacks authority to waive a late filing even
where no party would be prejudiced by the waiver: Appeal of Acme Market #6762
and #6845, No. 1763, (MSBCA) Dec. 23, 1993. See, TRC Environmental
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Corporation SP 160-07, at page 5.)
b. In the Teal Pacific appeal (09-002), the Appellant has argued that an
agency response to protest which does not include a notice of right
to review, tolls the filing period because such a failure is a denial of
due process. The Appellant claims it received notice of the decision
on April 7th and filed its appeal April 28th, 21 days later. It may be
noted the Appellant and its attorney had previously brought a protest
appeal (Teal Pacific (08-010), which was, as this case ultimately was,
dismissed due to the recusal of the Public Auditor), thus could not
be characterized as unacquainted with procurement processes. The
Appellant relied on two Guam Superior Court cases to support its
claim.
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failure to promptly raise the issue until just before trial was
“prejudicial” to the petitioner. The Court observed it was
misleading to notify the protestor that it had a right to
administrative review, given there was no administrative
review then possible . Those issues are no longer
problematic, given the full possibility of review to OPA. The
author believes this case was decided on broad equitable
tolling notions and the specific facts of this case, and that it
did not establish any bright line, ipso facto, due process rule.
2. Recall the trap for the unwary presented by the Request for Reconsideration.
Hint: If the original protest decision (or even if the answer to a request for
reasons) contains a statement informing “the protestant of its right to
administrative and judicial review” (see 5 GCA § 5425(c)(2)), the protester
must not dilly-dally around with any request for reconsideration, otherwise
the time for filing any appeal is jeopardized. While the equities would favor
allowing time for the reconsideration process to take its course, the law
fairly clearly indicates the Appeals process is triggered by the initial
decision, and the author is aware of no case which holds otherwise.
Takeaway: when in reasonable doubt, file an appeal to preserve your rights.
3. Recall that a rejected bidder can request the Agency to provide reasons for
its bid rejection (2 GAR § 3115(e). In this case, assuming the bidder had no
reason to know it may be aggrieved, the 15 day period to appeal would not
begin to run until the reasons were disclosed, assuming the reasons given
form the basis of a grievance.
4. The takeaway here is, if you have or suspect you have a grievance but are
engaged in discussions with the government about it, file the Appeal
anyway within the 15 days to preserve your claim.
1. The time limit for filing an Appeal is strictly enforced but not jurisdictional
and is subject to equitable tolling. (See, Pacific Security Alarm, Inc. v
DPW, supra.)
2. The Public Auditor has the power to review and determine “any matter
properly submitted” in connection with the protest or solicitation. (5 GCA
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§ 5703.)
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the original decision maker and comes to an original
decision. Under a deferential review standard, the original
decision must be accepted unless it is clearly illegal,
erroneous, capricious or arbitrary. See, L.P. Ganancias, CV
1787-00, supra, at page 11 et seq.
d. The author takes the view that the Public Auditor must be
considered to be a functional part of the Executive Branch of
government, not subject to the control of the Governor, in the same
way that the Attorney General is a functional part of the Executive
Branch, and notwithstanding legislative language at face value
setting OPA apart as an equal and independent branch of
government: “There is an instrumentality of the government of
Guam, independent of the executive, legislative and judicial
branches, known as the Office of the Public Auditor.” (1 GCA §
1900.)
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(1) “The government of Guam shall consist of three branches,
executive, legislative and judicial....” (Organic Act of Guam,
48 USC 1421a.)
(2) Thus, the duty of the Public Auditor to use her jurisdiction to
promote the integrity of the procurement process and the
purposes of [the Guam Procurement Act] represents the last
line of Executive Will to get its procurement right.
c. The Public Auditor cannot adjudicate ethical violations and will only
consider complaints of ethical violations (by government and,
perhaps, non-government parties) when raised in connection with
an appeal from a protest of a particular solicitation or award. (In the
Appeal of Latte Treatment Centers, OPA-PA-08-008.) Not seeing
any such connection to the appealed solicitation in that case, and
while noting that payment of a government employee’s
accommodation in a matter unconnected to the particular
solicitation on appeal was “not proper and has created the
appearance of impropriety”, the Public Auditor ‘found’ there was no
breach of ethical standards in that case. Presumably, the
jurisdictional basis for even considering and making any finding of
such ethical violations arises under the Public Auditor’s duty to
promote the overall integrity of the procurement process.
D. OUTLINE OF AN APPEAL:
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1. “Island Formal”: Appeals to the OPA are intended to be more “user
friendly”, casual and informal than, for instance, court cases, but at the same
time they are structured to find and extricate fact from perception, reality
from paranoia, law from lore. They are formal, but not too formal; legalistic,
but in a “small claims court” sort of a way. That said, OPA staff do have
higher expectations from lawyers than lay persons, so do not be
overwhelmed by the legalese in the form or format you find from
information or actions by lawyers. The OPA will not protect you from your
own folly, but they will help cushion you from the folly of any lawyers you
may bump up against.
a. The OPA staff is very helpful in guiding novices through the process
(as opposed to the substance or merits) of your claim, within the
bounds of their obligation to remain neutral and bureaucratic.
(a) At a hearing; or
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regulations governing Procurement Appeals are mainly found in
Title 2, Division 4, Chapter 12 of the Guam Administrative Rules
and Regulations, 2 GAR § 12101 et seq.
(4) A statement of what ruling you want from the Public Auditor
(the “relief requested”).
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(9) Plus a statement that there is no pending court action in the
matter (the OPA has a form for this).
(10) Plus you are expected to file with the Appeal, or soon
thereafter (by the time required for filing Comments on the
Agency Report, which is about 20 days), an election whether
you want your case decided by a hearing (and there’s a form
for this, too). If you do not timely file this election, you
waive your right to a hearing. Generally, the more your case
turns on disputes of facts rather than disputes of law, the
more helpful it is for you to have a hearing.
d. Once filed, the OPA must notify the affected GovGuam agency
within 24 hours and deliver a copy of the Notice of Appeal. It is up
to the agency to notify any counsel, including the Attorney General.
a. Within five (5) days from filing the Notice of Appeal, (excludes
weekends, holidays), the agency must file (and deliver copy to
Appellant) the Procurement Record. (2 GAR § 12104(c)(3).)
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concerning small purchase procurement;
iv) brochures and submittals of potential
vendors, manufacturers or contractors, and all
drafts, signed and dated by the draftsman,
and other papers or materials used in the
development of specifications; and
v) the requesting agency’s determination of
need.
(3) There are many other requirements throughout the law and
regulations of determinations, certifications and reports and
other detail that must be made in connection with
solicitations, and these should also be included as part of the
record. Feel free to request them if not produced.
b. The Public Auditor shall have the right at any time to raise (or
consider) the issue of her jurisdiction. Jurisdiction is always a deal
breaker. Jurisdiction is what provides authority, so without any
jurisdiction, whenever that is discovered, there is no authority to
hear or decide.
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notice provision sows more confusion than necessary and
should be repealed).
a. The guts of the Agency Report is the agency’s answer to the merits of
the complaints raised in the Appeal, including law and fact. This is
where the agency gets to tell how the Appellant got everything so
horribly wrong.
b. The Agency Report is meant to be filed ten (10) days after receiving
the Notice of Appeal, except in cases of an appeal of a Contract
Dispute, when there is a twenty (20) day response time.
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a. This is were the Appellant gets to tell the agency, “Did not”.
c. Comments on the Agency Report must be filed within ten (10) days
of the filing of the Agency Report.
a. This is where the agency gets to tell the Appellant, “Did too”.
b. Rebuttals are meant to be filed within five (5) days of filing the
Comments to which the rebuttal is addressed.
9. Discovery
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direct a response.
(2) may require parties to state their positions with respect to the
various issues.
(7) may regulate the course of the hearing and the conduct of
the participants.
(9) may receive, rule on, exclude, or limit evidence, and limit
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lines of questioning or testimony which are irrelevant,
immaterial, or unduly repetitious.
c. Lawyers are not turned away, indeed may attend without the
principals, but, especially when there are factual disputes or issues
of evidence, the real parties are encouraged to attend and
participate, subject to rulings about what a witness or potential
witness can hear in any particular instance. Except for witnesses as
noted, hearings are open to the public.
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(2) Each party is then allowed to make their opening arguments,
specifying the legal points they need to make to raise their
claim and generally discuss the facts that will support their
case. Rebuttals of the legal issues by opposing parties are
then allowed.
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a. This is where the Public Auditor gets to tell both the Appellant and
the agency where they each got things so horribly wrong.
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d. Agency notifies counsel, including AG
a. Agency must file the Procurement Record within five (5) work days
of receipt of the Notice of Appeal
a. If known, must be filed within seven (7) days after the Notice of
Appeal is filed
a. Agency must file the Agency Report (which includes the answer to
the claims in the Notice of Appeal) within ten (10) ”working days” of
receipt by the agency of the Notice of Appeal.
a. No requirement to file
(1) If filed, must be filed at OPA within ten (10) days after OPA’s
receipt of the Agency Report, with copy delivered to the
Agency.
a. No requirement to file
(1) If filed, within five (5) work days after receipt by OPA of the
Comments to which rebuttal is directed, with copy delivered
to Appellant (and, presumably, to the Interested Parties).
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9. Decision
a. Within thirty (30) days of the hearing, a Decision and Findings shall
be prepared.
F. Appeal Remedies:
1. One major reason there is not much literature about procurement issues is
that the remedies available rarely make anyone whole. There just isn’t
much money in it for most vendors, even when vendors are vindicated, and
the public purse always picks up the costs regardless who wins the protests,
so lawyers don’t tend to spend much time pursuing procurement matters;
principle is one of the last considerations, and principal one of the first.
2. Money:
(1) For the put-upon (that is, should have got the award but
didn’t) Protestant, “Reasonable Costs” at the Protest level
includes bid preparation costs BUT NOT attorney’s fees nor
lost profits or other such damages. (2 GAR § 9101(g)(2).)
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(a) Again, no damages (“costs” but not “damages”), such
as price increases due to delays, expenses incurred to
provide interim needed goods or services, or the like.
3. Other remedies:
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tort of intentional interference with prospective
economic advantage or other unfair competition or
fraud tort.
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improperly, there is no provision penalizing the
government for the improper award of the contract,
no lost profits for the losing vendor, and the losing
vendor has only her pride and principle.
1. Unlike protests, there is no specific regulatory authority for asking the Public
Auditor to reconsider her Decision. 5 GCA § 5425(f) says her decision “is
final unless a person adversely affected” takes appeal to the Superior Court,
but does not expressly prevent her reconsideration and, theoretically, if she
changed her mind she could then issue a final final decision. In In the
Appeal of [IBSS vs GPSS(2)] the Public Auditor did respond to a Request for
Reconsideration, though the Request was pretty much summarily denied
and the response seemed to the author as though she was uncomfortable in
even considering or rendering it.
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1. The purpose of requiring security is generally to provide the government a
source of ready funds if the contractor fails to perform and the government
suffers damages because of that breach. It is not intended to constitute a
penalty nor provide funds where there has been no breach of the contract.
b. Note, again, as with bid bonds, that the regulations have not taken
into account the change in the law, and continue to purport to
allow, a performance bond for contracts for supplies or services.
(See, 2 GAR §§ 3102(f) and 3109(c)(4).) This regulation is nullified
by the changes to the law, however.
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required for all construction contracts in excess of $25,000 in the
amount of 100% of the contract price, but it can be reduced in some
circumstances to as little as 50% of such value, or more as portions
of the work is completed. (§ 5104(1)(a).)
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government to procurement officials. How is that
substantively different from a “claim” based on a contract
within the purview of the Government Claims Act (see, 5
GCA § 6105(a), which for the purposes of the Claims Act,
waives government immunity “for all expenses incurred in
reliance upon a contract to which the Government of Guam
is a party”)?
(5) If, indeed, the Claims Act prevails, only a Claims Officer
could settle and resolve such contract disputes. (See, 5 GCA
§§ 6201 and 6206.)
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a. “It is the territory's policy, consistent with this Act, to try to resolve
all controversies by mutual agreement without litigation. In
appropriate circumstances, informal discussions between the parties
can aid in the resolution of differences by mutual agreement and are
encouraged. If such informal discussions do not resolve the
controversy, individuals who have not participated substantially in
the matter in controversy may be brought in to conduct discussions
if this is feasible. Independent committees and panels which review
controversies expeditiously and informally with a view to fair
settlement possibilities also are encouraged at this stage.” (2 GAR §
9103(a)(1).)
(1) Again, the regulations take an unfounded liberty with the law
here, saying, “the Procurement Officer shall, after written
request by the contractor for a final decision, promptly issue
a written decision.” That is patently wrong and without legal
authority. There is no precondition to a prompt decision.
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procedure and form would substantially mirror solicitation protest
procedure.
A. Prompt Payment Act (5 GCA § 22501, et seq.). That’s the official title, not reality.
1. Interest
2. Discounted settlements
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5 GCA § 22504(a).)
2. This rate is currently 6% and this authority for interest is not limited to one
year.
1. Any creditor of the government of Guam (other than a tort claimant with an
unadjudicated claim) who is not paid within thirty (30) days of filing his
claim may request that the Director of Administration issue a registered,
nontransferable promissory note in the amount of his claim from the
government of Guam, bearing interest at six percent (6%) per annum and
maturing one year from its date of issue.
2. This is another empty remedy, with plenty of limitations and little practical
utility. Promise them anything, but give them a page.
D. Once a contract is fully performed, if the government fails to pay as promised, the
appropriate avenue for direct payment on the contract is by first making a claim
under the Government Claims Act, not the contract dispute mechanism. (5 GCA §
6105(a): “if the contract has been substantially completed, expectation damages
may be awarded”.)
1. A full review of the Government Claims Act is beyond the scope of this
paper. See generally, 5 GCA § 6101, et seq.
2. The claim must first be made to the Claims Officer of the agency involved,
must exceed $1,000 and be made within 18 months from “the date the
claim arose”.
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XXI. Public enforcement of unauthorized procurement spending
B. “Any taxpayer who is a resident of Guam shall have standing to sue the government
of Guam and any officer, agent, contractor, or employee of the Executive Branch of
the government of Guam for the purpose of enjoining any officer, agent, contractor,
or employee of the Executive Branch of the government of Guam from expending
money without proper appropriation, without proper authority, illegally, or contrary
to law, and to obtain a personal judgment in the courts of Guam against such
officers, agents, contractors, or employees of the government of Guam and in favor
of the Government of Guam for the return to the Government of Guam of any
money which has been expended without proper appropriation, without proper
authority, illegally, or contrary to law.” (5 GCA § 7103.)
C. “The Attorney General shall take all steps necessary to collect any judgment
obtained under this Chapter. If no collection on such judgment is made by the
Attorney General within six months of the date of the judgment, then the taxpayer
and resident who originally obtained the judgment shall have standing to pursue
execution and collection on the judgment on behalf of the government of Guam,
under the supervision of the Superior Court.” (5 GCA § 7109.)
D. “The court shall award reasonable costs and attorney’s fees in favor of the taxpayer
and resident who brings suit under this Chapter, against any defendants found liable
under this Chapter.” (5 GCA § 7112.)
E. “The Senators and the Guam Legislature shall have standing to sue under this
Chapter. The Legislative Counsel, or Assistant Legislative Counsel, may, as a part of
his or her duties for the Guam Legislature, represent members of the Guam
Legislature or the Guam Legislature, or both, in bringing suit under this Chapter,
provided that in such cases, attorney=s fees will not be allowed.” (5 GCA § 7115.)
A. This paper will not venture into the bailiwick of the courts, insofar as matters of
procurement are concerned. But, as has already been noted, for the Aggrieved
Person, there are many advantages to be had to taking an Appeal, first, to the Public
Auditor rather than the courts.
B. 5 GCA § 5425(e) indicates protest decisions may be taken to the Public Auditor,
and 5 GCA § 5480 states the Superior Court “shall have jurisdiction over an action
between the Territory and a bidder, offeror, or contractor, either actual or
prospective, to determine whether a solicitation or award of a contract is in
accordance [with the laws and regulations].” This would seem to make it optional
whether to appeal a protest decision to either the OPA or the Superior Court.
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However, 5 GCA § 5481(a) restricts the filing of any such action until 14 days after
receipt of “a final administrative decision”, and 5 GCA § 5425(f) says an OPA
decision is final unless appealed to the Superior Court under § 5480. That
language, and the general notion of exhaustion of administrative remedies, indicates
that no such action should be commenced at the Superior Court unless it has been
first administratively determined by the OPA.
C. It must also be remembered, should any part of the Appeal to OPA be taken up in a
court action (for instance, an injunction action), the OPA matter will be, at best, put
on hold, if not entirely removed to the court, until or unless the court returns the
matter to the Public Auditor.
D. It must also be remembered that Decisions and Rulings of the courts pre-empt or
over-rule the Decisions of the Public Auditor, and provide their own unique
contributions to the body of Guam Procurement Law.
E. At present, there has only been one OPA Decision finally determined by the
Superior Court, and that was taken not by way of appeal of the OPA decision under
the appeal authorized by 5 GCA § 5707(a) of the Procurement Act, but by way of
writ of mandate as contemplated by the Administrative Adjudication Law, 9 GCA §
9241. See, TRC Environmental Corporation SP 160-07, at page 4. Two other
appeals have been taken and are at present pending, as noted in the Public
Auditor’s 2008 Public Report, page 14
(http://www.guamopa.org/docs/2008AnnualReport.pdf ). One of those pending
matters, In the Appeal of Town House Department Stores, Inc., dba Island Business
Systems & Supplies, by Xerox Corporation, Appellant, SP 240-08 (arising from the
OPA Decision in In the Appeal of [IBSS vs GPSS(2)] ), was commenced by action
denominated “Complaint and Appeal of Decision by the Office of the Public
Auditor...”, invoking the jurisdiction of 5 GCA § 5707.
F. The explicit language of 5 GCA § 5707 is a bit confusing to the author, referring to
appeal procedures to be conducted pursuant to chapters and articles of law that are
inconsistent with the Compiler’s codification. It is also permissive, saying an appeal
may be taken to the Superior Court, which does not expressly pre-empt the writ of
mandate procedure under the Administrative Adjudication Law. It will likely be the
case that some guidance will be necessary from the Court to determine the proper
means by which to seek review of an OPA Decision, and whether there are
procedural or substantive advantages to one course of action over another.
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XXIII. A review (with commentary and full disclaimer) of some of the OPA Decisions, or issues
in Decisions, not discussed or only touched upon, in the outline above, with all due
respect. All Decisions of the Public Auditor are found on the OPA website, as mentioned
above. In addition, the Public Auditor has included her own Summary of all OPA appeals
through OPA-PA-08-010 in Appendix 5 to her 2008 Annual Report,
http://www.guamopa.org/docs/2008AnnualReport.pdf .
a. This case is fascinating as being the first case ever heard by the
Public Auditor, but more so because it is the only case to date
dealing with the power of an agency (here, GWA) to debar a
contractor/bidder and the authority of the Public Auditor to hear the
appeal. Appeal and Agency Report were filed. Unfortunately
for students of Guam procurement, the appeal was withdrawn
without explanation and the case dismissed.
a. This case involved an apparent multi-step bid for crane gantry at the
Port of Guam. The issues involved the appropriate amount of
bidding time for a complex bid, and the alleged failure of the agency
to respond timely to questions, and the agency’s material changes to
the bid, and the agency’s failure to communicate answers and
changes to all bidders.
b. The Appeal, Agency Report and other matters were filed and a
hearing date set before the agency cancelled the bids and the appeal
was dismissed.
a. This case went all the way through hearing and Decision, so this is
the Public Auditor’s first Decision.
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(1) the Procurement Act controlled notwithstanding the use of
Federal funds.
a. Discussion of the OPA Decision must begin with the caveat that it
has been vacated by the Guam Superior Court, TRC Environmental
Corporation, SP 160-07. Thus, the OPA Decision is purely
academic and without legal precedent.
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whether that tolled the appeal filing time, but found that the appeal
to OPA was timely anyway, so we didn’t get a firm decision on the
reconsideration tolling question. The Superior Court construed the
communications between the protestor, agency and OPA to the
effect that the initial protest and reply constituted the full protest and
denial, making the “formal” appeal to the OPA untimely.
f. The local preference issue arose because there was only one
apparent supplier of the services sought on-island, and GPA sought
offers for an off-island offeror. The Decision held there could be no
award to an off-island offeror until its offered price is compared to a
local offeror’s price and the 15% local preference differential is
determined.
a. This Appeal is from an RFP. The issue was whether the Retirement
Fund improperly refused to negotiate in good faith. The Decision
held it is improper to discontinue negotiations with a best qualified
offeror (and commence negotiations with the next up the list) before
there has been a determination that its best and final offer is not fair
and reasonable.
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bidder’s subcontractor, have a specialty reinforced steel license,
although the main part of the construction work solicited was to
improve airport utilities infrastructure. In the outline above, the
author made the argument that, although usually an issue of
responsibility, issues of speciality licensure can be considered an
issue of responsiveness where the licensed work is the thing which
the government desires. In this case, it is arguable that the licensed
work is only incidental to the broader solicitation for whole
infrastructure, so the specialty steel reinforcement license should be
considered an issue of bidder responsibility, not responsiveness.
c. Cibinic and Nash (at p 414) admit that decisions concerning the
requirement of licenses, as an issue of responsibility, “have been
somewhat confusing”. They distill two rules:
a. This appeal was dismissed, but raised the interesting issue whether
the OPA has jurisdiction to hear issues of Wage Determination
compliance. The case was dismissed on the jurisdictional ground
that there had been no protest to or decision from the agency.
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d. The Notice of Appeal did not clearly specify the ground for protest,
alleging merely “a serious defect in the bid and award process”, but
the gist of the complaint seemed to be that the winning bidder was
non-responsive or non-responsible because its pricing revealed it
most likely would not comply with the Wage Determination
requirement, and the agency should have realized that and was
somehow “complicit” in the Wage Determination violation by
making the award.
(2) Note also that § 5211 deals specifically and only with
Competitive Sealed Bidding. Thus, § 5211(g) only applies to
award by Competitive Sealed Bids, so this wage limitation on
awards would not appear to apply to other methods of
source selection, the most obvious one being RFPs for
professional services.
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soliciting agency and the contractor.
a. This involved an IFB. The agency chose to cancel the bids after the
bids were opened and the bid prices made known.
b. The Decision held an agency can only “cancel” a bid prior to bid
opening. After bid opening, an agency may only “reject” all bids (as
a means of disposing of the solicitation).
c. The Decision then held the cancellation was void, and it was up to
the agency as to how to proceed with dealing with the bids.
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negligible so does not prejudice other bidders.).
c. It is true that as between responsive bids, the lowest price wins even
if another bid offers a product with superior specifications. “The
acceptability evaluation is not conducted for the purpose of
determining whether one bidder’s item is superior to another, but
only to determine that a bidder’s offering is acceptable as set forth in
the [IFB].” (2 GAR § 3109(n)(3).)
e. The author observes that where a bidder has a product that is close
but not up to specifications, the better time to protest is as soon as
the specifications are known, not after the bid is opened. This
observation is coupled with a caveat that the usual course is for a
party to seek clarification, but if that is not forthcoming, or coming to
your satisfaction, be mindful of the calendar and timely file your
protest on the IFB on the basis of unduly restrictive specifications. If
the specifications truly are only minimally different from another
product, and particularly where the products wanted are standard,
commercially available ones, the agency should show reasonable
acceptance of enough flexibility in the specifications to encourage
competition, so long as its minimum requirements can be met. But,
once the bids are submitted and opened, it is too late to make that
argument.
10. OPA-PA-07-011, In the Appeal of JMI Medical Systems, Inc. (vs GMHA)
a. This was an Appeal involving an IFB. The Appellant was not the low
bidder; indeed, the low bid was so low that the agency decided
during the course of events to award a contract for double the
quantity of product specified in the IFB. There was much confusion
on Appellant’s part whether the bid was for equipment and supplies
or for the equipment alone. The Appellant protested that the low
bid was non-responsive because it did not include a bid for both
supplies and equipment, although the Appellant had bid both.
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b. The agency issued its final decision on the protest after a request for
reconsideration and the next day awarded the contract to the low
bidder, issuing two purchase orders for two pieces of the same
equipment.
c. The Public Auditor found the bid clearly only sought equipment (not
equipment and supplies), so the low bid was responsive.
e. The Decision puzzled over a legal reason to find that an award for 2
pieces of equipment when only one was solicited was improper,
drifting off into discussions of indefinite quantity contracts (this
wasn’t one) and general policy statements.
f. For the author, the most significant holding of this Decision is its
statement that agencies cannot evaluate an IFB using the evaluation
process (negotiations) and standards (selecting “best qualified” rather
than lowest responsive bid) of an RFP, citing the Fleet Services
Guam Supreme Court Decision discussed above. As it was, the best
qualified was also the low bidder in this case, so that was not an
issue, but the Decision did refute the use of negotiations in this case.
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g. The result, correctly reached, was to award the IFB for one piece of
equipment and require a new solicitation if the agency remained
intent on purchasing a second piece of equipment.
12. OPA-PA-08-008, In the Appeal of Latte Treatment Center, Inc. (vs DMHSA)
a. This is the most recent Decision by OPA since this paper last
published, decided February 26, 2009. This was an appeal of an
RFP issued for professional care services for children with severe
emotional conditions and related such. The Decision cancelled the
RFP altogether, principally because the agency failed to properly
document the procurement record. The author supports the result,
but respectfully quibbles with some of the statements made in
reaching the Decision.
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carabao before the cart because that was a contested issue, and the
Decision correctly found Appellant was an “aggrieved offeror”
because the Appellant alleged other “violations of Guam’s
Procurement Laws and Regulations relating to DMHSA’s solicitation
and award”.
(1) But in doing so, the statements were made in the Decision
that “a losing bidder is an aggrieved bidder”, and, “LTC is an
aggrieved offeror because it was not selected for the award.”
The author is concerned those statements venture too far
afield. All that is required to bring an appeal is that the
bidder “may be” aggrieved. If all losing bidders were
aggrieved by definition, as the statements suggest, then every
award is subject to appeal even if the bidder may not be
“aggrieved” by any error or wrongdoing. In Latte Treatment
Center, the Appellant raised several issues by which it may
be aggrieved, and it was on that basis that the OPA had
jurisdiction, not on the basis simply that the Appellant is
aggrieved because it was not selected.
(3) Bear in mind that delay in bringing a protest until after facts
of aggrievement are discovered does not mean the
procurement process grinds to a halt. First, the automatic
stay can be lifted. Second, the contract, if already awarded,
is not subject to any automatic stay, nor is any award
necessarily cancelled by the protest because it can be
affirmed even if the person awarded the contract engaged in
fraud. These matters have been discussed above.
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protest must have been filed within 10 days of receipt of
notice of intent to award to another bidder, even though the
Protestant did not have, and could not have, any knowledge,
at that time, of facts giving rise to the Appellant’s claim to
being aggrieved. The Protestant discovered, after documents
were later disclosed by the agency, facts indicating it may
have been aggrieved by alleged errors in the evaluation
process, and filed its protest within 10 days of that discovery.
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(b) The CNMI regulation (NMIAC § 70-30.3-501(a)(1)),
substantively identical to Guam, only allows protests
to be filed by parties “who may be aggrieved in
connection with” the bid, and the protest must be
filed “within ten days after such aggrieved person
knows or should have known of the facts giving rise
thereto”, which, to the author would mean the
parties cannot protest until they have knowledge or
should have knowledge of a factual basis for the
protest. But that would not appear to be the CNMI
case, based on this decision, which now seems to
require rejected bidders and proposers to protest first,
in order to secure their filing deadline, and seek to
find a basis for the protest afterwards.
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protests that Guam does (2 GAR § 9101(g)(2)), so
filing protests when there is no knowledge of the
facts by which a person may be aggrieved may not
be so perilous a proposition in the CNMI. But
beware the CNMI does have the broad right to disbar
or suspend for any cause determined “to be so
serious and compelling as to affect responsibility as a
government contractor” (NMIAC § 70-30.3-
760(b)(5)). Presumably, following the Public
Auditor’s advice that a bidder is, ipso facto,
aggrieved when notified of award to another would
constitute a defense to any sanction for filing
factually baseless protests in the CNMI; but, beware
of the dilemma.
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INDEX OF PERTINENT DECISIONS, APPEALS and AUTHORITIES
Appeal of Island Business Systems & Supplies (v NMC), CNMI OPA, Appeal No. BP-A057,
Decision on Request for Reconsideration dated March 11, 2009. . . . . . . . . . . . . . . . . . . . . 66, 114
Competitive Negotiation, Second Edition, Ralph C. Nash, Jr., John Cibinic, Jr., and Karen R.
O’Brien, The George Washington University, Law School Government Contracts Program.. 11, 12,
29, 34, 43, 46
Executive Order 2000-25, Relative to Obtaining On-Island Professional Consulting, Education and
Training Services before Off-Island Professional Consulting, Education and Training Services... . 13,
17
Fleet Services, Inc. v. Dept. of Administration, 2006 Guam 6. . . . . . . . . . . . . . 22, 42, 45, 49, 111
Formation of Government Contracts, Third Edition, John Cibinic, Jr., and Ralph C. Nash, Jr., CCH/
Wolters Kluwer, The George Washington University Law School Government Contracts Program
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 68, 107
Guam Imaging Consultants, Inc., v. Guam Memorial Hospital Authority, 2004 Guam 15 . . 17, 23,
66, 74
In the Appeal of Dick Pacific Construction Company, Ltd., OPA-PA-07-007. . . . . . . . . . . . 34, 106
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In the Appeal of Guam Publications, Inc., OPA-PA-08-007 .. . . . 20, 29, 36, 58, 63, 65, 71, 73, 94,
95
In the Appeal of J&G Construction, OPA-PA-07-005. . . . . . . . . . . . . . . 29, 32, 34, 36, 75, 79, 106
In the Appeal of Latte Treatment Center, Inc., OPA-PA-08-008.. . 9, 10, 32, 37, 66, 69, 80, 83, 93,
112
In the Appeal of Teal Pacific, LLC, OPA-PA-09-002. . . . . . . . . . . . . . . . . . . . . . 13, 75, 76, 85, 116
In the Appeal of Town House Dept. Stores, Inc. dba Island Business Systems and Supplies [IBSS vs
GSA], OPA-PA-08-012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 55, 67, 73
In the Appeal of Town House Dept. Stores, Inc., dba Island Business Systems and Supplies [IBSS vs
GPSS (2)], OPA-PA-08-011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50, 55, 57, 66, 76, 95, 103
In the Appeal of Town House Dept. Stores, Inc., dba Island Business Systems and Supplies [IBSS vs
GPSS (1)], OPA-PA-08-003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72, 75, 78
In the Appeal of Town House Dept. Stores, Inc., dba Island Business Systems and Supplies [IBSS vs
UOG], OPA-PA-06-004.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
J&B Modern Tech v. GIAA, Guam Superior Court, CV 0732-06 (Findings of Fact and Conclusions of
Law, Elizabeth Barrett-Anderson, June 25, 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 27, 80
L.P. Ganacias Enterprises, Inc., dba Radiocom vs. GIAA and Guam Cell Communications, Guam
Superior Court, CV 1787-00 (Decision and Order, Joaquin V. E. Manibusan, Jr., November 13,
2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 28, 56, 67, 68, 74, 79
Pacific Security Alarm, Inc. v DPW, Guam Superior Court CV 0591 - 05 (Decision and Order,
Stephen Unpingco, August 14, 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76, 77
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Pacific Security Alarm, Inc., v. GPA, Guam Superior Court, CV 1304-04 (Findings of Fact and
Conclusions of Law, Arthur R. Barcinas, August 15, 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Sumitomo Construction, Co., vs. Government of Guam, Guam Superior Court CV 1589-99
(Decision and Order, Michael J. Bordallo, May 18, 2000). . . . . . . . . . . . . . . . . . . . . . . . . . 97, 101
TRC Environmental Corporation vs. Office of the Public Auditor, Guam Superior Court SP 160-07
(Decision and Order on Petition for Writ of Mandate, Alberto C. Lamorena III, November 21, 2008)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 34, 73, 75, 76, 103, 105
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