American Bar Association

Section of Public Contract Law

Minutes of Council Meeting; August 4, 1998

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The first meeting of the newly elected PCL Section Council for the 1998-99 year was held at the Raddison Plaza Hotel Toronto, during the ABA Annual Meeting, on August 4, 1998. A quorum question was raised and it was determined that a quorum was present. It was noted that some members of the Section leadership were attending the House of Delegates to urge approval of the Section’s proposed Principles of Competition, an effort which was successful during the afternoon. A list of attendees at the council meeting is attached.

The meeting was called to order by the Chair, David Churchill at 2:35 P.M. EDT. The Chair welcomed the new members of the council.

The first action item considered by the new council was consideration of the Section Budget for 1998-1999. Chairman Churchill noted that the Section budget reflects a modest imbalance, and explained that the small projected deficit is considered manageable. He also noted that current ABA budgets are generally showing small deficits, in part due to the strong investment income currently being experienced and anticipated to continue. However, it was noted that this income is not reliable, and therefore the Section leadership will have to monitor the situation to insure that priority programs such as the publication of the Section Journal are provided the necessary resources during the coming year.

Michael Hordell, Co-Chair of the Annual and Quarterly Programs Committee reported on the plans for the coming year. For the Section’s November 5/6 meeting in Colorado Springs, Program Co-Chairs Al Purdue and Alan Gourley are planning an emphasis on the 20th Anniversary of the Contract Disputes Act. For the Annual Federal Procurement Institute, scheduled for Feb. 25/26 in Baltimore, Co-Chairs John Pachter, Linda Miramba, and Gena Cadieux are considering a variety of timely substantive issues, including fiscal law issues, commercial purchasing, procurement integrity, and procurement law reform efforts. Co-Chairs Agnes Dover and Maryanne Lavan are planning an Information Technology focus for the May 20/21 meetings in Scottscade, Arizona, with likely program segments on Technology Transfer, Y2K issues, and licensing concerns. For the ABA Annual Meeting in Atlanta, Co-Chairs Hubert Bell, Mark Langevin, and William Stoughton are working toward three substantive panel presentations, one of which is expected to focus on the Model Procurement Code Revision effort.

In addition to these regular Section meetings, the Section is sponsoring four regional information programs this fall, in Atlanta, St. Louis, Philadelphia, and Salt Lake City, to examine issues and provide CLE credit for a review of Critical Contract Issues in Medicaid Managed Care. The Chair commended the Co-Chairs of the Health Care Committee, Stephanie Pontzer Gilson and Frank Rapoport, for the major effort required to launch this ambitious program series, which has a potential to publicize the work of the section throughout the country and to attract attention from many potential new Section members. It was also noted that the Committee had made an innovative use of e-mail to publicize the programs.

The Chair stated his hope that the Section would continue to make progress in joining with other ABA and outside entities to sponsor programs jointly, where that activity would improve the quality or audience exposure of the program. He noted that the next Annual Procurement Institute will be co-sponsored by the 30,000 member National Contract Management Association and the Information Technology program in Colorado Springs will be co-sponsored by the Intellectual Property Section of the ABA. The Dispute Resolution Section has suggested a possible joint program on Alternate Dispute Resolution where one party is the sovereign. Recent movements in the positions taken on this issue by the Department of Justice and the Attorney General suggest such a program would be useful and timely.

John Miller reported on the progress of the Model Procurement Code revision effort. The revision committee’s website is up and running (http://mpcserver.mit.edu). Mr. Miller noted that visitors to the site are required to register, after which they may see the proposed revisions and comments of others, and may record their own views and comments for inclusion in the ultimate consensus. The revision process is broadly based, being sponsored not only by ABA Sections of Public Contract Law and State and Local Government, but also non-lawyer groups with expertise and a stake in the purchasing process, such as NIGP and NASPO. The schedule for announcing the results is one year hence, and therefore the work must proceed on time and must be finished on schedule. Mr. Miller offered to make available after the meeting a demonstration of the activities on the website.

The Chair noted with regret the death of former section leader Fred Sass, as well as Harold Laskey who had been mentioned in an earlier meeting.

Richard Rector reported (in the absence of Judge Burg, who was at the House of Delegates to support the Section’s proposed Principles of Competition) on the effort to revise the proposed Controversies Principles. It was noted that the Controversies Principles had been approved in a prior Council Meeting, with direction from the Council to the Chair to modify the report, and direction to the drafting committee to revise Section 5, both to conform to the discussion at the prior meeting. Accordingly, Mr. Rector offered the following revision to item 5 of the resolution [add the underlined words, and delete the<bracketed> words]:

"5. The parties must have available adequate administrative and judicial processes and remedies that provide for the independent, impartial, <inexpensive, and expeditious> efficient, and just resolution of controversies."

The concern addressed by the proposed revision was that the prior language could suggest that economy was given a priority over due process. The suggested revision was designed to eliminate this interpretation and clarify that the section was not supporting efficiency at the expense of justice, but considered both to be characteristics of an adequate disputes process. The approval of the Controversies Principles with the recommended change to Art. 5 was moved by Patricia Wittie and seconded by Hubert Bell. The Chair conducted a voice vote and announced that the motion was approved and the proposed resolution and report would be submitted for approval by the House of Delegates.

In the absence of Mike Mutek, Chair of the International Procurement Committee, who had been forced to leave for the airport, Chairman Churchill, with the assistance of King Culp, reported on the joint meeting of the committee with the government procurement committee of the International Law Section on Aug. 3. The combined committees received a briefing and presentation by the staff of the Central and Eastern European Law Initiative (CEELI), an ABA operated, US/AID funded organization which makes available legal advice and lawyers to assist states of central and eastern Europe to create and maintain the institutional structures necessary for their new status as free market economies and political democracies operating under the Rule of Law. It was noted by Jerry Walz that the Department of Commerce has assisted Moldova in the drafting of new public procurement laws, but it was generally agreed by Mr. Walz and the CEELI staff that there has been comparatively little attention to public contract law in the CEELI activity, given the importance of the subject in the circumstances. The two committee Chairs agreed that they would receive and act on requests for reviews of proposed legislation or other CEELI requests, and look for other ways to support the activities of this important ABA effort.

Another subject which was reviewed at the joint international committee meeting is the current review which has been undertaken by the Defense Security Assistance Agency of the procedures, regulations, and perhaps statutes governing Foreign Military Sales. Concerns by FMS customer countries about the statutory surcharge and other perceived disadvantages of doing business through the FMS process are threatening to harm important national interests served by the FMS process and to damage the market for FMS goods and services previously provided by United States industry. Accordingly, DSAA has engaged a consultant to review the situation and make recommendations. Within the two committees of the two ABA Sections there is considerable expertise in the subject matter and it was agreed that the two committees will undertake a joint project to offer assistance to the DSAA and/or the DSAA consultant. A working group consisting of members from both committees was established to complete the joint project.

Chairman Churchill invited the attendees to bring forth any new business. There being none, the meeting was adjourned at 3:15 PM.

Norman Thorpe

Secretary