AMERICAN BAR ASSOCIATION
SECTION OF PUBLIC CONRACT LAW
SPRING COUNCIL MEETING MINUTES
MAY 2, 2003
Meeting called to order at 8:50 a.m. by Section Chair Mary Ellen Coster Williams.
Motion: Minutes of the March 1, 2003 Midyear Council Meeting be approved, seconded, and passed by acclamation, without dissent.
[Agenda Item 1]
Section Resolution Recognizing the Life and Significant Contributions of Deceased Member Thomas B. Treacy - Paul Dauer
[Agenda Item 2, Reference Biography at Tab 2 of the Agenda Book]
Mr. Dauer noted that Tom Treacy was the first recipient of Davidson award. He had practiced law for 41 years and had been a stalwart in the Section, especially active in the affairs of state and local government.
Motion: Mr. Dauer moved that the Section adopt a Resolution commemorating the life and contributions of Tom Treacy to the Section and the legal profession. The motion passed unanimously by acclamation.
Ruth Burg asked that a copy of the resolution be provided to Tom's widow and family. Chair Williams said it would be done.
Marcia Madsen Brought to the Attention of the Council the recent death of Thomas F. Williamson. She will provide a tribute to Mr. Williamson at the Section business meeting in San Francisco.
Section History
[Off Agenda Item]
Chair Williams announced that Chris Yukins has encouraged one of his LLM students at The George Washington University to create an oral/video history of the Section. She asked that persons interested in this project volunteer or nominate members to participate in this project.
Proposal to Consider Formally Recognizing Members Who Have Made Significant Contributions to the Section - Dan Gordon
[Agenda Item 4
Dan Gordon reported for his committee that it recommended amending the charter of the Section's Education Fund (Peterson Fund) to allow donations to be made in memory of a deceased member of the Section and the contribution to be designated as having been made in memory of that person.
The committee solicits recommendations on how the recognition process should work. The committee has asked the Section Fellows for recommendations on how living members of the Section might be recognized for their contributions to the Section.
Marshall Doke suggested that when contributions to the Education Fund are made in recognition of deceased members of the Section, the family members of those being honored should be promptly informed of the contribution.
Motion was made by Pat Wittie to approve the Committee's report, seconded, and unanimously approved by acclamation.
Section's Submission for ABA Review of the Blanket Authority Process, and the Section's FAR Comment Authority - Allan Joseph
[Agenda Item 10]
Allan has been told that blanket authority process used the Section to obtain FAR comment blanket authority is likely to be the template that will be adopted by the ABA Board of Governors for all Sections seeking such authority. Greg Smith and Pat Meagher were recognized for their contribution to the process of seeking to have the Section's special FAR comment authority renewed.
[Agenda Item 15]
ABA is just beginning to become involved in the legal processes in Iraq. A committee has been formed to provide this assistance. With his insight as ABA Treasurer, Allan predicted tough times ahead with increased pension costs and section funding support will be reduced. However, section funding support will remain level next year.
The ABA Technology Project has experienced a $9.5 M over-run. The original project was for $12.1M. Marshall Doke and Allan Joseph are on the ABA committee reviewing the project and this significant over-run. Allan reported that all of the money for the project, including the over-run was spent on the project and that the project should be valuable to the operation of the ABA. The over-run will be amortized over 8 years and will not affect the ABA's overall financial viability. The ABA CIO, Controller, and CFO have resigned as a result of the problems on this project. The report on this project is to be published in August.
[Agenda Item 5 - Reference Report at Tab 5 of the Agenda Book]
The Minority Judicial Intern Program, sponsored by the Litigation and Antitrust Section seeks to provide an annual stipend of $1,500 per participant. As budget officer, Pat recommends that we participate, the question is in what amount. Pat sees potential budget problems for the Section and recommends that we participate with a contribution in an amount between $500 and $750 and tell the Sections of Litigation and Antitrust that we may be willing to increase our contribution once the program is expanded to the D.C. area.
DISCUSSION:
In response to a question by Norm Thorpe, Pat responded that this would be a continuing obligation. Mark Colley remarked that we should support this project on the high side of the recommendation because it would provide some needed support for minority participation in the Section. Dave Churchill asked if we could get the Litigation Section to extend the program to the Federal Circuit and Court of Federal Claims. Pat noted that the letter from the Litigation Section provides for pilot programs only in Chicago and Houston. Mark Langevin recommends that we contribute $500, as we will likely be asked to contribute more in the future as the program gets under way.
Marcia Madsen commented that merely making a contribution means that we get no say in the operation of the program and suggested that we have our own program. Marilyn Neforas said the Section does not have the professional staffing to support such a program. Mike Hordell suggested that we explore what the program is and how it will be run before we make a contribution.
Paul Dauer suggested that we start the Section's contribution at $500 and then condition an increased contribution upon the expansion of the program to the DC area.
MOTION: Mark Langevin moved that the Section contribute $500 to the 2003 Minority Judicial Intern Program. Second by Dan Gordon and passed by acclamation, without dissent.
Proposal to Co-Sponsor With the DC Bar a Government Contracts Program for Summer Associates on June 28, 2003 - Bill Crowley
[Agenda Item 7]
Bill reported the DC Bar Association has been informed that the Section will support their program. Pat Wittie said that we don't need to provide money, as they are merely asking for co-sponsorship of the Program on June 26th . The Section should be able to pass out literature to recruit members.
Discussion of Upcoming Law Student and Young Lawyer Recruitment Initiatives - Bill Crowley
[Agenda Item 13]
The Section is working with our law student liaison, Aaron Drabkin for a program at American University patterned after the GW program last Fall. Bill noted that draft letters have been prepared to go to law firms and agency counsel to and companies to make a commitment to have a junior member of their staff attend a quarterly Section meetings.
Motion: To send letters out to law firms, corporations and agency counsel, seconded and passed by acclamation, without dissent.
[Agenda]
The Committee has prepared a draft of a revised Section brochure, which has been discussed with Marilyn Neforas, and others. This design could be more expensive than some designs because of its nonstandard size and the folding style may create some problem with the postal system. Jennifer asked for the guidance of the Council as to whether the Committee should go to a design firm for assistance and how it feels about the current creative design approach.
DISCUSSION:
Mark Langevin suggested that we consider distributing the brochure by e-mail, as that will appeal to the younger set, with a link to the Section web site. Jerry Walz cautioned that this brochure might be considered SPAM. Jennifer noted that we will still need paper copies of the brochure for distribution at receptions and other recruiting events.
Don Gavin suggested that there should be an e-mail address on the brochure for a Section point of contact. The Section's web site address will be on the final brochure.
Don Kinlin asked for the budget on this project and Marilyn said that there is a $7,200 line item in the budget for brochure development but we need to know how many brochures will be published. Jennifer said that $1,500 is being allotted for the initial design. Paul Dauer questioned whether there would be any value added by hiring a professional designer. We should take advantage of the ABA guidance and get the brochure published.
Don Gavin asked whether we had identified our audience for this brochure. The most likely audience is the younger partners in law firms and people in government that are looking for ways to further their careers.
Pat Meagher suggested that the Committee be allowed to decide how the $7,200 in the budget is best spent, in consultation with Marilyn and the ABA. Mark Colley observed that it looks like we need a discussion on identifying the target audience for the brochure and recommended the Committee come back to the Council at the next meeting with an action plan. Marilyn Neforas distributed a copy of the current brochure to the Council.
.
Action: Chair Williams asked the Membership Committee to consider the comments of the Council and to communicate with the Council by e-mail with its findings and recommendations concerning the issues raised in today's discussion.
Joint Report on Recent Significant Federal Circuit Decisions Addressing Cost Accounting Issues - Karen Manos and Paul Khoury
[Agenda Item 26
Karen and Paul reviewed the cases found in this report.
DISCUSSION:
Ralph Nash observed that the Fed Circuit has essentially agreed with the arguments that he and John Cibinic have been making for the past 25 years and declared Eichleay is dead. Ralph suggested that the Committee put together a solution for the contractor to recover his real damages, using normal accounting principles.
[Agenda Item 14 See Atch 8 & 9; and, Tab 39 of the Agenda Book]
The presentation slides titled Survey: 2002 Past Performance Survey, Atch 9 to these minutes, give some of the basic questions that were asked of all participants. Although the committee is still analyzing the written comments that were received on the surveys, it appears that 75% of those responding feel that the uses of past performance scores have been moderately satisfactory to extremely satisfactory. There have still been some complaints concerning the lack of consistency and uniformity in applying the program, e.g., unique forms are being required for many procurements, instead of using the same forms for all agencies.
Proposal to Allow Sponsorship from Consulting/Accounting Firms of Quarterly and Annual Meeting Receptions - Carol Park-Conroy
[Agenda Item 6]
Marilyn Neforas asked to which organizations was it proper to send letters offering them the opportunity to sponsor Section receptions. It was decided to give the question to the Sponsorship Committee.
DISCUSSION:
At the present time, there is no distinction between consulting firms and law firms under the guidelines, although there is a distinction made as to corporate sponsors. This distinction is drawn to prevent problems with government members receiving a benefit from corporations. Pat Meagher said the question is whether the Section could send invitations to other than law firms to sponsor the Annual Section Reception. It was decided to have the Sponsorship Committee to review the issue.
Hill International has been a sponsor for a number of years of the Reception and the Construction Luncheon. Mark Langevin observed that corporations and consultant firms are the same for this purpose and the Section needs to announce ahead of time who is sponsoring the reception, so people can make individual decisions on whether to attend. Pat Meagher said this discussion is to give the Council the opportunity to decide if the corporate donations are a problem.
Dan Gordon sees no problem with corporate sponsorship, while Pat Wittie suggested that the more corporations that participate the less important the problem, as it diffuses the perception of influence by particular corporations.
The overriding concern is one of the appearance of impropriety. The Committee believes it is acceptable for consulting firms to sponsor Section functions but the issue of whether corporations can provide such support is still before the Committee.
Proposal of Outside Funding Committee to Make Annual "Women in the Section" Luncheon an Official, Sponsored, and Ticketed Section Event - Jennifer McCready
[Agenda Item 8 - Reference Proposal at Tab 8]
Historically this luncheon has been an informal event and invitations have been by word of mouth, with Marilyn handling the logistics. The proposal is to open the luncheon to all Section members, thereby supporting our diverse membership. The Corporate Sponsorship Committee (Dave Hirsch) has considered corporate sponsorship for the luncheon, and the Committee's response was an immediate approval. Dave Hirsch offered to be the first sponsor of the luncheon.
The proposal is that a sponsoring organization would get two tickets in recognition of a $250 donation. Pat Meagher suggested that we should use the organizational contributions to keep the individual ticket prices reasonable. Jerry Walz suggested that we also have such luncheons to recruit target groups, like government employees, for membership in the Section.
Motion: That the Section sponsor the Women in the Section Luncheon. Seconded and passed by acclamation, without dissent.
Marshall is tendering his resignation as Section delegate to the ABA after over 30 years in the position. He had informed the Council and Officers that he would be resigning at the end of the Annual Meeting in San Francisco.
Marshall said he will miss some of the activities but, as a former Chair of the Section, he will continue to participate. He will provide advice and counsel to his successor for a few years.
Ruth Burg asked that the Section recognize Marshall's many years of dedicated service as Section Delegate for the past 30 years. The Council and Section members gave Marshall a rousing, heart felt, standing ovation.
Continuing with his Item of Personal Privilege, Marshall recommended, once again that the Section have an archivist for the Section and that this person collect his 30 years of Section documents, otherwise they are likely to be destroyed. Hugh Bell will address having a Section Archivist during his term as Section Chair.
Section Resolution Recognizing the Life and Significant Contributions of Deceased Member Austin G. Roe- Ruth Burg
[Agenda Item 3, Reference "In Memoriam"]
Summer issue of the Section News letter has a eulogy of Austin Roe, written by John Pachter. Ruth gave a summary of Austin's history with the Section and some personal observations of his contributions to the Section and the legal profession . Austin was an active member of the Section over many years and one of the very few to be elected a Fellow of the Section who had not served s Chair.
Ruth proposed a resolution by the Section that Austin Roe be recognized for his many years of dedicated support to the Section and to the legal profession and that this recognition be shared with his family. The Resolution was soundly confirmed by the Council, without dissent. Chair Williams acknowledged his contributions to the Section and said she would contact the family.
[Agenda Item 9]
Chair Williams wrote a letter to the California Governor's Commission on Contracting and Procurement Review offering the Section's services relating to the Model Procurement Code. We have received a response from the Department of General Services (DGS) requesting that we send a delegation. The California Department of General Service has taken the initiative to decide whether to align its processes and separate its oversight from its operational responsibilities. The DGS is also looking at information technology procurement.
Norm Thorpe, Maggie McConnell, and Pat Meagher will be giving the DGS a visit later this month. Procurement law, conflicts of interest, and oversight will be the general subjects of the conversation. Norm will have a meeting with all parties interested in discussing this visit after lunch today.
Motion: Norm moved that the Council authorize payment of reasonable expenses for the delegation to Sacramento, California. There was a second and the motion passed unanimously by acclamation.
Paul Dauer commented that a new acting director has been appointed to the California Department of General Services. This is the first lawyer in this position and is likely to be receptive to the issues we are going to discuss with them.
Letter from EFFORT (Equal Footing For Owners Round Table) to Marilyn Neforas dated 4/29/03
[Off Agenda Item]
The Council discussed the above captioned letter. Norm Thorpe recommends the Section cooperate with them, but that we not give them any money. Norm will make contact with EFFORT and get some more information. One of EFFORT's goals is passage of the Model Procurement Code.
Norm will make contact with EFFORT and report on his findings at the next Council meeting.
Update from Emerging Issues Committee on Homeland Security Task Force- M. Madsen
[Agenda Item 11]
A procurement director has yet to be appointed for the Department of Homeland Security. The Task Force is following the technical corrections to the Homeland Security legislation and Project BioShield. A more complete report will be given at the Council meeting in San Francisco.
OMB General Counsel Perry attended a Committee meeting and discussed Homeland Security and other issues. Various members of the Committee are tracking different areas of Homeland Security. Hugh Bell is trying to get the General Counsel of Homeland Security to talk with the Section General Counsel's Committee, maybe in June. Bob Easton has offered to come and talk with the Homeland Security Committee.
Status of A-76 - Dan Gordon
[Agenda Item 21
OMB has received a large number of comments on the proposed A-76 changes. The Government is planning a massive effort throughout the government to implement public-private competitions. The effort impacts hundreds of thousands of federal jobs, and there are a large number of high dollar contracts to be awarded.
It is more likely that the civilian agencies will be using the new rules than the old. Dan expects the 12 month implementation window to be substantially extended because of the scope of the effort.
[Agenda Item 24 See Tab 24 for Report]
SARA II (HR 1837) was introduced this last week. The Section's comments on SARA II were considered and they were glad to get the comments. Further study is necessary to determine how many of the Section's comments were incorporated in the final bill. Of interest to the Section are some preliminary comments on provisions in the bill:
At the last Council meeting the Task Force was asked to create a white paper discussing how T&M and Labor Hour contracting became prohibited in government contracting and, if they are to be permitted, what safeguards might be appropriate. Gerry talked to Phil Harrington of the Section's Commercial Products Committee. Phil has surveyed his committee membership to discover the prevailing usage of T&M and Labor hour contracting in commercial arena, from firms that also do government contracting. The responses received were consistent, although not large in numbers. These companies sell commercial services using T&M and Labor hour contracts. In some cases these contracts were a large part of their sales and purchases. Although fixed price contracts would be more desirable in some cases, they are not the norm. Sometimes there were caps on the T&M and Labor Hour contracts.
Firms were asked if they had concerns with the use of T&M and Labor Hour contracting in the government, if they had to contend with CAS and other regulations. The firms said that they would not like these requirements. If audit rights were not too burdensome the firms could live with these government rights, but if excessive, would cause many of them to decline to do business with the government. The Professional Services Council is doing the same kind of survey and is getting similar results.
The Task Force has discussed the White Paper. It has been noted that FAR Part 16 does address Labor hours and T&M contracting, but they will be used only when it is determined that no other contract type is suitable and other safeguards are in place, e.g., price ceilings. FASA did not prohibit T&M and Labor Hour contracts because they appear to be a separate entity from cost type contracts and places cost contracts as least desirable. There may be more "dangers" with T&M and Labor Hour than cost contracts.
The OMB Federal Register notice of March 18, 2003 seems to anticipate legislation that will permit T&M and Labor Hour contracting for commercial services. The Task Force will have a better update on SARA II at the Annual meeting, now that we have the Act.
The results of the survey on use of T&M and Labor Hour have been tallied, but if there were companies that wanted to respond the responses would be considered. Gerry will check with the Section R&D Committee to see if they are looking at the T&M and Labor Hour Contracting.
Report of Health Care Contracting Committee; Up Coming Program on the Veterans Health Care Act - Mary Beth Lowe
[Agenda Item 34]
Health Care contracting committee will hold a program to cover the Veterans Health Care Act of 1992 in the Fall of 2003. The seminar will cover the pricing schemes under the Act and related issues.
[Agenda Item 36 See Atch 11]
Intellectual Property: Balancing Government and Contractor Interests is the proposed program for the Fall Section meeting in New Orleans. Lannie Elderkin and Bill Crowley will be the Program Co-Chairs. Lynda also reviewed the programs and CLE opportunities for the Annual Meeting in Atlanta.
Greg Smith reviewed the business and CLE schedule for the Annual Meeting in San Francisco.
There being no further business, the Meeting was adjourned, without protest, at 12:04.
Respectfully Submitted,
Robert L. Schaefer
Secretary