Federal Contract Law: U.S. agencies might feel at home with Iraq's old procurement rules

Joseph J. Petrillo

Part of the process of bringing Iraq back into the world community is to revamp its laws, including those governing procurement.

To get started, the State Department asked the American Bar Association to examine the acquisition law left over from the regime of Saddam Hussein. The ABA assembled an ad hoc group from the private sector and government to report on whether the law is sufficient to prevent corruption and meet international standards. State liked the report and sent it on to the Coalition Provisional Authority, which is moving to implement the suggestions.

The ad hoc group leveled several criticisms against Saddam's procurement law:
  • Although the rules said there should usually be competition for contracts, officials apparently could omit it.

  • A 'direct invitation' procedure permitted the government to limit the competition to preselected vendors.

  • Work statements could contain provisions that unnecessarily restricted competition.

  • Solicitations did not have to contain a full description or relative importance of the evaluation criteria for an award.

  • No rule limited evaluations to the announced criteria.

  • The government did not have to notify losing bidders as to why they lost'we call it a debriefing.

  • There was no external system to consider a losing bidder's objection that the procuring body did not follow its own procedures in the award.

  • Although the law clearly permitted the government to recover damages from a contractor, it did not provide a remedy for contractor claims against the government.

Perhaps the ABA evaluators were too quick to criticize the Iraqi law. Many of the same points could be made about post-reform U.S. procurement procedures.

To be sure, U.S. rules for sealed bidding and competitive negotiation include the protections missing from Saddam's rules. But that's not always true of General Services Administration schedule contracts, or task-and-delivery-order contracts, which could account for more contracting dollars than traditional methods. (Stricter rules apply to some Defense Department service buys).

When a U.S. agency buys through a task or delivery order, it limits competition to preselected contractors, or a subset of them. Under the GSA schedule, an agency need not conduct any competition at all, and if it does, it can usually limit it to three invitees.

There are no regulations for these ordering vehicles that require the disclosure of evaluation criteria or limit evaluations to such criteria. The rules for such buys don't prohibit work statements that limit competition unnecessarily. Likewise, there is no requirement to inform the losers or give them a debriefing.

Also like Iraqi law, the awards of U.S. task or delivery orders cannot be protested. With some narrow exceptions, U.S. statute prohibits such protests.

Generally, U.S. contractors can get their day in court for disputes about contract performance. But this isn't the case for most nonappropriated fund activities, such as Federal Prison Industries or the Mint.

They are like Saddam-era Iraqi agencies in that they can sue the contractor but are immune from claims suits by the contractor.

Post-reforms rules have put us in a 'do as we say, not as we do' posture when we seek to counsel other countries. If the new Iraqi government emulates these U.S. procurement innovations, not much will change in procurement law from the days of Saddam Hussein.

Joseph J. Petrillo is a lawyer with the Washington law firm of Petrillo & Powell. E-mail him at jp@petrillopowell.com.

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