AMERICAN BAR ASSOCIATION

 Minutes of Council Breakfast and Meeting of November 16, 1996

1. The Fall meeting of the Section Council was held at the Sheraton Crescent Hotel, Phoenix, Arizona on November 16, 1996. Council members and Section members attending the meeting are identified at Attachment 1.
2. The public meeting of the Council was preceded by a Council breakfast at which the following items were discussed:
1. Section budget and finance officer, Ms. OíSullivan, reported on membership, finance and asset allocation issues. She indicated that the proposed policy for allocation of the Sectionís assets would be distributed to the Council for review prior to submission to the ABA. Ms. OíSullivan also noted that the Council had inadvertently failed to vote approval of the proposed 1996-97 budget submitted at the August meeting. Mr. Doke moved, seconded by Mr. Hordell, that the Council ratify the approval of the budget. The motion was unanimously passed.
2. Mr. Vacketta, Editor-in-Chief, of the Public Contract Law Journal, reported that the Journal had incurred a deficit for the year of approximately $7,000. This deficit was largely the result of an oversized, single subject issue and was not expected to be repeated. Mr. Vacketta also reported on the activities of the new student board of the Journal and noted that the Journal expected to publish eight student notes per year (two per issue). He also mentioned the mentoring program to be established for student editors and asked for expressions of interest from Council members in serving as mentors. Section Chair, Mr. Kuelbs, thanked Mr. Vacketta and the Journalís Editorial Board for their excellent work in continuing to publish a first-class Journal.
3. The public meeting of the Council was called to order at approximately 9:30 a.m. The first order of business was approval by the Council of the minutes of August 3, 1996 of the last meeting of the 1995-96 Council and the first meeting of the 1996-97 Council.

FAR Rewrite Project

4. John Pachter reported on the draft Section comments prepared by the FAR Part 15 Project Committee on the proposed changes to FAR Part 15. He summarized the general issues associated with the rewrite and noted that the proposed changes loosened or abandoned many rules contained in the previous version of the FAR, contained a different approach to the concept of "fairness" and provided for somewhat less accountability and visibility into the procurement process. Mr. Pachter then discussed concerns addressed by the draft comments in the areas of competitive range determinations, conduct of discussions, use of low-price/technically acceptable procurements, provision of neutral ratings for contractors without past performance history, multi-phase procurements, oral presentations, and late proposals.

Council member Agnes Dover stated that she was concerned about the overly negative tone of the draft comments. In her view, a "cultural change" was needed to effect the desired reforms of the procurement process. Consequently, she believes that the changed FAR needs to explicitly inform procurement personnel that they have authority to exercise discretion and business judgment. She also took issue with the premise that the proposed changes reflect less accountability for procurement personnel. In this regard, she noted that procurement personnel and the procurement process are still subject to numerous audits, Inspector General reviews, procurement integrity rules and many other checks and balances.

Mr. Pachter responded that the introduction to the Sectionís comments could be rewritten to accommodate some of Ms. Doverís concerns and to make it plain that the Section was not a defender of the status quo or against procurement reform, per se. On the other hand, it was Mr. Pachterís view that the proposed changes eliminated requirements in the existing regulations establishing principles of fundamental fairness and equal treatment which were critical to establishing the credibility of the process. He also noted that the proposed regulations themselves indicate that they represent a radical departure from existing procedures and that, in his view, the associated commentary did not establish the need for such a dramatic change.

Section Vice-Chair David Churchill commended the committee for its efforts in preparing the draft comments. He noted, though, that the Section should not be viewed as guardian of any particular rule; rather, the Section had a role to play as a guardian of "bedrock principles". Mr. Pachter noted in this regard that OFPP Administrator, Steve Kelman, had asked for the Sectionís input on the nature of the bedrock principles that GAO would impose on any set of changed regulations that were promulgated.

Council member Dave Pronchick noted his understanding and concurrence with the fundamental philosophy behind the proposed rewrite: to provide increased flexibility for contracting officers. Consequently, he had some concern that the tone of the draft comments was overly negative.

Council member Ted Collins stated his belief that the proposed rewrite represented a "common sense" approach to procurement and that the procurement community should "give it a try". He acknowledged that some of the proposed changes regarding communications with offerors did create the potential for unfairness, but at the same time, without increased ability to communicate between the government and vendors there is also a risk that contractors will not be able to offer the government what it really needs.

Council member Marshall Doke commented that he believed the thrust of the proposed rewrite was a mistake from the governmentís perspective. In his view, the basis for the proposed changes consisted largely of antecdotal evidence and examples. However, the "horror story" examples relied upon more often related to what things were purchased rather than how they were purchased. He strongly believes that the proposed changes provide no real accountability, for example, the provisions regarding oral solicitations, oral proposals and the new definition of "fairness".

Mr. Pachter noted that the draft comments tried to include alternative courses to follow where the Section took issue with a particular change. Ms. Dover commented that those who are opposed to the proposed changes tend to assume that unequal treatment of contractors will automatically result if contracting officers are given more flexibility. However, it was her belief that given the tremendous budget pressure that now exists, contracting officials have more than ample motivation to make smart purchases. Council member Pat Wittie noted that the need for cultural change identified by Ms. Dover also applied to the culture of contractors. She believes it is important to assure that any changes that are ultimately made do not adversely affect the perception of the vendor community that the system is fair and impartial. In the same vein, Mr. Gavin brought to the Councilís attention a situation involving the removal from the prequalified list of a contractor who had done business with an agency for 25 years as an example of a circumstance where reduction of the requirements for fundamental fairness may serve to reduce credibility of the system.

Section Chair John Kuelbs thanked Mr. Pachter and his Committee for the tremendous effort involved in preparing draft comments. He cited Congressman Clinger, a leading advocate of procurement reform, for the proposition that the ultimate goal of the reform effort is to strike an appropriate balance between "affordability, accountability, and accessibility," and stated that the Sectionís comments should keep that goal in mind. Mr. Pachter undertook to revise the draft to reflect the discussion by the Council and to provide a revised draft for review by Council members. Regulatory Coordinating Committee Chair Alex Britton was asked to contact the FAR Council to seek an extension to ensure that our Comments would be appropriately reviewed.

Model Procurement Code Update Project

5. John Miller and Maggie McConnell reported on a further development of the Model Procurement Code 2 (MPC2) update concept presented at the Annual Meeting in Orlando. The overall goal of the project is to update the MPC and distribute it more broadly, for example, electronically through Web pages or home pages on the Internet. Former Congressman Mineta has agreed to assume the role of Honorary Chair of an Advisory Committee in support of the project and the Section has already received numerous expressions of interest in the project.

A key issue which was discussed involved coordinating the MPC2 update project with the Section of State and Local government. Council member Frank Menaker asked John Miller to expand on how that coordination would be achieved. Mr. Miller noted that the original project had been managed through a coordinating committee which had been established by the ABA Board and approved by the House of Delegates. As a result of the discussion regarding the coordination with the State and Local Government Section, a motion was made by Marshall Doke, seconded by John Miller and amended by Frank Menaker as follows:

"WHEREAS, the Model Procurement Code for state and local government was the work product of the Section of Public Contract Law and the Urban, State and Local Government Section; and

WHEREAS, the Code has been used by numerous state and local government agencies over a period of some 18 years; and

WHEREAS, a study of the code would be appropriate to evaluate its use, strengths, weaknesses, coverage, effectiveness and adoption by other government agencies.

NOW, THEREFORE, the Section of Public Contract Law endorses a study of the Model Procurement Code and invites the Section of Urban, State and Local Government to join with the Section of Public Contract Law to establish and participate in a process, and the scope, for such a study."

The motion was approved by the Council.

The Council then discussed further the budget for the project. Messrs. Collins, Frazier and Gavin contributed their views with respect to the scope of the budget and how matching funds from other groups might be obtained. In response to questions from Ms. OíSullivan, John Miller indicated that other sources of funding had been identified as set forth in the November 8, 1996 memorandum provided to the Council in support of the MPC2 presentation. Council member Craig Othmer concluded the discussion by noting that MPC project provided a good vehicle for the Sectionís outreach efforts to state and local government contract lawyers.

6. Chairman John Kuelbs introduced to the Section the Law Sudent Liaison, Richard J. Ike, Jr.

NASA FAR Rewrite

7. Council member Mike Love presented proposed Section comments on the NASA FAR Supplement rewrite, as set forth in the draft letter presented to the Council dated November 12, 1996. Mr. Love noted that thanks were due to Section members Dick Oliver, Dave Christensen, Ralph White and Bill Bierbower for their contribution to preparing the draft letter. He then proceeded to summarize the issues addressed by the draft. Ms. OíSullivan raised a question regarding the draftís treatment of the issue of discussions and the extent to which discussions should address all weaknesses in an offerorís proposal. She also suggested that the letterís treatment of the fee on facilities cost of capital be reexamined. Following further comments by Messrs. Collins, Allen and Dover on various aspects of the draft, Council member Frank Menaker moved (with appropriate second) that the draft be approved for submission with the proviso that the Section Chair had the discretion to approve the incorporation of Council comments. The motion was approved.

Administrative Dispute Resolution Act (ADRA)

8. Mary Ellen Coster Williams, Chair of the Judicial Remedies Committee, along with Kent Morrison and Glen Wolcott, Chairs of the Contract Claims and Bid Protest Committees, respectively, discussed the key elements of the ADRA and its granting of concurrent "Scanwell" jurisdiction to the Court of Federal Claims (COFC).

 The Committees have identified issues raised by the ADRA and are working with the judges of the COFC to assist the court in responding to its new jurisdiction. The Bid Protest Committee met on November 1 with Judge Turner of the COFC to discuss the procedural aspects of the new jurisdiction including issues involving the scope of the administrative record, the extent of discovery permitted, the timetable for resolution of bid protest matters, standards to be applied for TROs and the content of protective orders.

 The Section under the leadership of Legislative Coordinating Committee Chair, Alan Chvotkin, will be presenting a half-day program on December 11, 1996, examining the new COFC jurisdiction and issues raised by the statute.

 Vice Chair David Churchill commented that the Section had a significant opportunity to be helpful to the COFC in determining the processes to be used in exercising the new jurisdiction. The court judges appear to be very receptive to input and have been in touch with our Section as well as the FBA and GAO to get guidance as to how other forums handle procedural aspects of bid protests. Further discussion ensued with contributions by Marsha Madsen, Mike Hordell, Marshall Doke, Linda OíSullivan, and Tony Gamboa. At the conclusion of the discussion, Chairman John Kuelbs appointed Section member Stu Nibley to coordinate a joint subcommittee to work with the COFC judges to provide the requested input from the Section. It was also decided that the issue of whether "Blanket Authority" was needed for this effort would be investigated.

9. Program Chair and Council member Laura Kennedy next reported on the status of Section programs. Ms. Kennedy first thanked Ty Hughes for his work on the successful November 15 program on Information Technology. She then noted that the Section was sponsoring two mini-programs for the month of December. The first involves the new bid protest jurisdiction of the COFC. The second is scheduled for December 16 and is a breakfast program addressing new developments in claims issues in the context of the Court of Appeals for the Federal Circuitís decision in Ellet Construction. She also noted that a health care fraud program was being planned for the January/February timeframe, and, of course, the Third Annual Federal Procurement Institute is scheduled to be held in Washington, D.C. on February 27-28. Chairman John Kuelbs thanked Ms. Kennedy for her efforts on Section programs and also noted that the Section had contributed to the 1996 Construction Law Summit held October 17-18 under the leadership of Tom Abernathy. The Summit drew some 300 attendees.
10. Chairman Kuelbs referred the Council to the report of the Regulatory Coordinating Committee at Tab 6 of the Agenda materials.
11. Chairman Kuelbs also stated that the committee descriptions for the new Section directory were in the process of being updated, and he asked all Chairs and Vice Chairs to see Section Manager, Marilyn Neforas, to provide updated descriptions of their Committeeís activities.
12. Section Chair-Elect Marsha Madsen and Vice Chair David Churchill reported on the Committee Officer Leadership Program. The first session was held at the end of September in the Washington, D.C. area. Some 70 Section Committee Officers attended, and the program was excellent. The program in particular benefitted from contributions from the representative from Endispute.
13. Regional Vice Chair Don Featherstun reported on the Program planned for Monday, November 18 in Sacramento, California addressing state bid protest issues. At the time of the report, some 92 attendees had signed up for the Program. Special thanks are due to Jose Aquire, Chairty Kenyon, Paul Dauer, Allen Samuelson, Maggie McConnell and GAO representatives, Jim Henchman, Tony Gamboa and Glen Wolcott.
14. Linda Maramba, Vice Chair, Region VII, (Southern California) reported that the Section was sponsoring a program on "The New World of Federal Bid Protests" scheduled for December 10, 1996. Panelists will include representatives from the GAO, government agencies and private practice, and the program will be followed by a reception hosted in downtown Los Angeles by the firm of McKenna & Cuneo. 
15. Chairman John Kuelbs discussed the membership initiative suggested by Linda OíSullivan. This initiative would encourage each Section member to recruit a new member. A plan for this initiative will be developed and presented at the next Section meeting.

 A Motion for adjournment was made by Frank Menaker and seconded by Mike Hordell. The motion was approved and the Council meeting adjourned at approximately 11:35 a.m.

Respectfully submitted,

Rand L. Allen

Secretary