American Bar Association                                                                          

Section of Public Contract Law

Minutes of August 10, 2002 Council Meeting

 

The meeting was called to order by the Chair, Mr. Thorpe, at 8:45 a.m.

 

The minutes of the May 4, 2002 meeting in Savannah were approved.

 

Chair Thorpe introduced Maury Poscover, who is retiring as the Section's Liaison to the Board of Governors. Mr. Poscover thanked the leadership of the Section for its support during his tenure, and introduced Ms. Pamela Roberts, who will succeed him as Liaison. He then briefly summarized activities of the Board's Dues Cycle Committee, and explained both the projected budgetary shortfall for the ABA and the combination of expense reductions and recommended dues increases which are intended to eliminate the shortfall. Mr. Joseph provided some additional background on that subject.

 

Mr. Poscover then discussed the ABA's Amicus Curiae policy, which is currently under review by the Section Officers' Conference. The SOC will submit, in the near future, a proposed new policy addressing the ability of individual Sections to file Amicus briefs in their specialized areas. The proposed policy will permit such filings subject to a revised process that is similar to the current blanket authority process.

 

Finally, Mr. Poscover discussed a task force recently formed by the ABA on corporate responsibility. The task force is expected to submit a preliminary report to the House of Delegates, which may include recommended changes to the Model Rules as well as some recommendations on the role of independent directors. Individual sections will be given an opportunity to participate in the discussion of these issues, through three public hearings.

 

Chair Thorpe thanked Mr. Poscover for his service to the Chair personally and to the Section over the years, and presented him with a plaque to commemorate his years as the Section's Liaison to the Board of Governors.

 

The Chair recognized Mr. Hordell, who pointed out a recent article in The Washington Lawyer in which Section Member Paul Khoury's work on a death penalty case is prominently discussed. Mr. Khoury was successful in avoiding the death penalty for his client, after years of pro bono effort. The Section honored Mr. Khoury with a sustained round of applause.

 

Mr. Madden moved the approval of the proposed revised Model Procurement Regulations that were provided to Council members at the Spring Meeting, with Mr. Hirsch seconding the motion. The Chair opened the floor to discussion. Mr. Miller explained the process used by the Reporters in developing the proposed new regulations, and noted that the State and Local Government Section will be considering the regulations on August 11. He then began a discussion of the recommended changes to the proposed revised regulations which resulted from comments from Council members and other organizations since they were distributed at the Spring Council meeting. These additional changes were listed in Tab 2 of the Agenda Book.

Mr. Miller explained that the proposed additional changes could be categorized into three groups:

 

Group One. Additional changes on pages 90 and 116, which the Reporters recommended should not be accepted.

Group Two. Additional changes on pages 32, 108, 113 and 233, as to which the Reporters took no position and/or recommended no change, but asked for Council discussion.

Group Three. The remaining additional changes, all of which the Reporters recommended should be accepted.

Mr. Miller then explained that the Reporters would recommend acceptance of the additional changes to R3-501.03.1 and R3-501.03.2 at pages 90-91 of the proposed revised regulations with modifications that resulted from discussions between himself and Ms. Wittie at the Council breakfast; and he reported those modifications (see Attachment A to these Minutes). Following discussion, Mr. Doke moved to amend the pending motion to accept the additional change, as modified, to R3-501.01.1 and R3-501.03.2, but to retain all of the original commentary after R3-501.03.1 on page 91. The motion was not seconded and was not voted upon. Mr. Madden then provided a clarification of his motion, so that it should be deemed to include the additional changes listed in Tab 2, as they were recommended by the Reporters and agreed to during discussion by the Council.

 

Discussion by the Council of the other proposed additional changes listed in Tab 2 followed. The consensus of the Council was as follows:

 

Group One. Acceptance of the additional changes on pages 90-91, as amended (Attachment A) and as recommended by the Reporters, but with inclusion of all original commentary under R3-501.03.1; and acceptance of the Reporters' recommendation on page 116, pertaining to R5-202.02.

Group Two. Acceptance of the Reporters' recommendations with respect to additional changes on pages 32, 108 and 233.

Group Three. Acceptance of all of the Reporters' recommendations.

 

In connection with comments received from the Construction Industry Roundtable on Group Two, R5-201.01 at page 113 of the proposed revised regulation, Mr. Love questioned the second sentence of R5-201.01.2 pertaining to the creation of third-party rights. There followed a short discussion of the Model Code's treatment of organizational conflicts of interest. Mr. Miller then moved to table Mr. Madden's motion while he and others addressed the OCI issues in R5-201.01.2; Ms. Wittie seconded the motion and it was approved on a voice vote.

 

Ms. Fleming and Mr. Martinez presented the report of the Legislative Coordinating Committee (Tab 7 of the Agenda Book) as well as a Supplemental Report distributed at the Council Meeting (Attachment B to these Minutes). Mr. Bednar announced publication of the Third Edition of the Practitioners Guide to Suspension and Debarment.

 

Ms. O'Sullivan reported on a draft letter to Director of Defense Procurement Deidre A. Lee, prepared by the Accounting, Cost and Pricing Committee, which had previously been circulated to Council members. The letter addresses DOD's January 17, 2002 guidance on cost allocation practices in connection with organizational changes. Following discussion, Mr. Hirsch moved adoption of the recommendations in the letter, subject to minor editorial changes to be approved by the Chair, and Ms. Burg seconded the motion. The motion was approved on a voice vote.

 

Chair Thorpe called on the Program Committee Chairs to summarize their efforts over the past year. Ms. Madsen thanked the Annual Meeting program co-chairs, Mr. Branstetter, Ms. Fensky and Mr. Dowd, whose work this year was made particularly difficult because of the effects of 9/11 and the changes in Annual Meeting format.

 

Mr. Doyle reported on the efforts of the Task Force recently appointed to address issues in the current version of the proposed Services Acquisition Reform Act. The Task Force's recommendations were previously circulated to Council members for comment, and Mr. Doyle reported that he had received several comments. Both he and Chair Thorpe noted that submission of the Section's comments to Congress will require blanket authority from the ABA.

 

Ms. Madsen expressed some concerns with various issues in the draft comments. She then moved to postpone submission of these comments in order to allow Council members more time for review and comment, with the expectation that consensus revisions to the comments would be completed within 30 days and then circulated to the Council for approval. Mr. Brittin seconded the motion, which was approved on a voice vote.

 

Mr. Miller returned to the room, and on a motion to remove Mr. Madden's motion from the table, which was seconded and passed on a voice vote, he recommended on behalf of the Reporters that the second sentence of R5-201.01.2 be deleted, and that a new R5-201.02 be added (Attachment C to these Minutes). Mr. Madden's motion for approval of the proposed revised regulations, with the changes as recommended by the Reporters and discussed by the Council, was passed on a voice vote.

 

Mr. Dauer and Mr. Arnold reported on two recent developments in the State of California. First, they described a controversy regarding a sole source award to a software vendor, which has spawned a review of procurement processes and competition requirements. A task force was appointed by the Governor and its report is expected in the near future. Second, they reported on Senate Bill 1467, which addresses organizational conflicts of interest. The State and Local Legislation and Regulation Coordination Committee has prepared a draft letter for submission to the Governor, describing the Section's expertise in procurement issues including OCI and offering its services.

 

Following a discussion of the limits of the Section's authority to comment on the Model Procurement Code, its regulations, and other non-MPC statutes and regulations, Mr. Hirsch moved that the Section send the draft letter to the Governor of California. The motion was seconded by Mr. Doke. Ms. Meagher suggested that some revisions to the letter may be in order so as to avoid overstepping the Section's existing authority. The Chair asked Ms. Burg, Ms. Meagher and Mr. Langevin to work with Mr. Arnold on revisions to the letter, which could be submitted to the Chair within seven days for his approval and acceptance. Mr. Hirsch's motion was approved on a voice vote.

 

Chair Thorpe directed Mr. Dauer to work with Ms. Neforas in reviewing the extent of the Section's existing authority to advocate adoption of the Model Procurement Code and its regulations.

 

Ms. Meagher presented the Section's proposed budget for 2002-2003 (Attachment D to these Minutes). Following a motion by Mr. Bell, seconded by Ms. Meagher, the budget was adopted.

 

Ms. Doyle summarized the Section's comments on legislative proposals being prepared by the Office of Government Ethics, which were circulated among the Officers and Council members and approved via email, and then provided to OGC in June.

 

Mr. Roberts and Mr. Hoe reported that the Office of Federal Procurement Policy currently has two task forces addressing A-76 issues, in light of the report of the Commercial Activities Panel. One task force is considering how to convert the A-76 process into a more FAR-like process. In that regard, DOD is looking at what statutes and regulations would need to be amended in order to accomplish this goal. The second task force is reviewing bid protest issues in A-76 competitions. The Privatization and Outsourcing Committee intends to prepare a white paper on A-76 issues.

 

Mr. Vacketta reported that the next single-subject issue of the Public Contract Law Journal will address intellectual property issues in government contracting.

 

Ms. McCready reported that the Membership Committee has designed two potential brochures for use in recruiting new members. The Chair complimented the Committee on its efforts this year, which included a well-attended cocktail party for young lawyers in Washington, D.C.

 

Mr. Dees asked that the Council adopt a resolution recognizing the great contribution made to the Section this year by Chair Thorpe, noting the depth and breadth of the efforts he has made on the Section's behalf, including the quality of the publications and programs that the Section has created during his tenure. The resolution was unanimously adopted and Chair Thorpe's services to the Section were acknowledged with a standing ovation.

 

There being no further business, the meeting was adjourned at 12:00 noon.

 

 

                                                                                    Respectfully submitted,

 

 

 

 

 

                                                                                    Patricia H. Wittie, Secretary

 

 

Attachments:

            A         Revised proposed changes to R3-501.03

            B         Supplemental Report of the Legislative Coordinating Committee (not available in electronic format for posting to Section website)

            C         New proposed R5-201.02

            D         Budget for 2002-2003

ATTACHMENT A

 

Further amendments recommended by the Reporters for the Model Procurement Code Regulations revisions at the August 10, 2002 Council meeting:

 

Following discussion with Ms. Wittie, the Reporters recommended inclusion of R3-501.03.1 and R3-501.03.2 with the following amendments:

 

R3-501.03.1. General. The selection of an appropriate contract type depends on factors such as the nature of the supplies and services or construction to be procured, the uncertainties which may be involved in contract performance, and the extent to which the [State] or the contractor is to assume the risk of the cost of performance of the contract. Contract types differ in the degree of responsibility assumed by the contractor.

 

The objective when selecting a contract 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 [State]. In order to achieve this objective, the Procurement Officer, before choosing a contract type, should review those elements of the Procurement which directly affect the cost, time, risk, and profit incentive, bearing on the performance.

 

Among the factors that may be to be considered in selecting any type of contract are:

 

(a) the type and complexity of the supply or service or construction item being procured;

(b) the difficulty of estimating performance costs such as the inability of the [State] to develop definitive specifications, to identify the risks to contractor inherent in the nature of the work to be performed, or otherwise to establish clearly the requirements of the contract;

(c) the administrative costs to both parties;

(d) the degree to which the [State] must provide technical coordination during the performance of the contract;

(e) the effect of the choice of the type of contract on the amount of competition to be expected;

(f) the stability of material or commodity market prices or wage levels;

(g) the urgency of the requirement; and

(h) the length of contract performance.

 

            Commentary:

It is self-defeating for the [State] to select a type of contract that would place an unreasonable economic risk on the contractor, since such action may tend to jeopardize satisfactory performance of the contract.. See, Regulation 5-203.-01 for the application of project delivery methods to procurement of infrastructure facilities and services.

 

R3-501.03.2. Deleted in its entirety.

 

(a)                         R5-201.01.2 Use of Regulation. This Regulation is intended to guide [State] personnel in selecting an appropriate project delivery method.

(ii)                          R5-201.02 Participation in Prior Reports or Studies.

(a)                         R5-201.02.1 Before awarding a contract for a report or study that could subsequently be used in the creation of design requirements for an infrastructure facility or service, the Procurement Official should address, to the extent practical, the contractor's ability to compete for follow-on work.

(b)                         R5-201.02.2 Before issuing a request for proposals for an infrastructure facility or service, the Procurement Official should take reasonable steps to determine if prior participation in a report or study could provide a firm with a substantial competitive advantage, and, if so, the Procurement Officer should take appropriate steps to eliminate or mitigate that advantage.

 

American Bar Association

Section of Public Contract Law

 

2002-2003 PROPOSED BUDGET

 

Income        Expense

 

Dues - Regular                                          $ 132,390      $

Dues - Associate                                        9,000

Dues - Law Student                                      2,100

Investment Income                                       20,000

Hotel Commissions/Other Income                          4,100

Package Plan Allocation                                 2,800

2002 Annual Meeting/Washington                                         200

2003 Annual Meeting/San Francisco (A)                   47,000      56,200

Council Meetings

Fall (Asheville)                                                    12,300

Midyear (Annapolis)                                                 13,800

Spring (Scottsdale)                                                 11,800

Publications

Public Contract Law Journal                          31,800      55,175

The Procurement Lawyer                               400      41,700

Alternative Dispute Resolution                       500      50

Qui Tam, 2^nd Ed.                                     800      160

Suspension and Debarment, 3^rd Ed. (B)                6,000      1,300

Guide to Fixed-Price Supply, 3^rd Ed.                 1,000      150

Dispute Avoidance                                    3,000      800

Alternative Dispute Resolution, 2^nd Ed. (B)          15,000      8,050

Government Contract Law Deskbook, 2^nd Ed.            5,000      1,950

Service Contracting                                  1,000      425

Recommended Regulations 2000 MPC (B)                 25,000      14,200

Previous Monographs (C)                              1,000      -0-

Washington/San Francisco Meeting Papers              500      5,500

2000 Model Procurement Code                          5,000      2,735

Others (D)                                           700      6,150

Programs

Fall                                                 17,900      14,700

Midyear Federal Procurement Institute                50,900      36,450

Spring                                               15,100      13,850

Fall Joint Construction Program                         -0-        -0-

Health Care Program                                     -0-       -0-

Advocacy Course                                         -0-       -0-

State and Local Procurement Division Programs           4,000      4,000

Mini-Programs                                           4,750      4,650

Membership Development                                                 7,200

Officers and Council                                                   40,100

Committees and Projects                                                1,550

Administrative

Printing, Duplicating                                               1,900

Postage, Express, Freight                                           3,450

Stationery, Supplies, Sundries                                      3,200

Telephone and Fax                                                   2,000

Administrative Support                                              18,200

Support Service Costs                                      3,200

 

                                                        $ 406,740      $ 387,095

 

Excess Income or (Expense)                                     $ 19,645

Budgeted Fund Balance at August 31, 2002                 $ 382,395

 

Anticipated Fund Balance at August 31, 2003                    $ 402,040

 

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07/30/02

             Notes to Proposed 2002-2003 Section Budget

 

 

(A)   We will, again this year, ask all sponsoring firms for the San Francisco Cocktail Reception to contribute their pledge amounts in advance.

 

This budgeted income figure also includes ticket sales from the Construction Division Breakfast, Section Luncheon, and Section Reception amounting to $7,000 and the Section's share of CLE Ticket and Passport sales totaling $12,000. The $56,200 in budgeted expenses is for the Reception, Construction Division Breakfast, Section Luncheon, meeting room rental for CLE programs, unticketed meal functions and coffee breaks, plaques, postage, signs, annual meeting brochure, council agenda books, program books, credit card service fees, etc.

 

(B)   Assumes that enough copies of this publication will be printed in time for revenues to be received in the same fiscal year in which it's printed. This publication will be part of the ABA Package Plan and will be priced to cover all production expenses with sales from Package Plan plus another few hundred copies.

 

(C)   This line item covers the following monographs: Department of Defense "Other Transactions": An Analysis of Applicable Laws; Post-Award Bid Protests at the U.S. Court of Federal Claims; Judges of the Court of Federal Claims: The Lawyer's Guide to Procedures and Practices; Health Care Exclusions; Voluntary Disclosure: 1994 Update; Depot Level Maintenance; Use of Expired Appropriations; Antitrust Analysis and Defense Industry Consolidation; The FAR SystemCC1986-1991; Organizational Conflicts of Interest in Government Contracting; Are Subcontractor Quotes Binding?; Architect/Engineer Liability Through the Year 2000 (Is It Absolute???); Contracting for Commercial Products and Services; DCAA's Access to Records; The Protest Experience under the Competition in Contracting Act; Personal Conflicts of Interest in Government Contracting; Recovery of Indirect Costs * Pricing of Equitable Adjustments * Terminations for Convenience; A Current Guide to Recovery Under the Equal Access to Justice Act; The Dollars and "Sense" of Government Contract Funding; The FAR System: Its Critical Formative YearsCC1984-86; The DoD Contracting Officer; The Competition Acts of 1984; Architect/Engineer Liability: A Growth Period; and The Architect/Engineer's Role under Superfund and Selecting a Professional Liability Insurance Policy.

 

(D)   Included in this budgeted expense is $5,400 for printing and mailing the 2002-2003 Section Directory and Handbook. It also includes revenues from sales of the Directory and program materials from previous annual meetings.

 

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07/30/02