Judges shouldn't oversee procurement

Robert J. Sherry

This month I want to examine what appears to be the end chapter in the story about a contract to automate Hawaii's library system. The state's Supreme Court recently issued a final decision on this project that provides some valuable insights.

The story so far: In 1998, a state protest officer held hearings on a protest in which a vendor claimed the contract award resulted from an improper evaluation of proposals. The protest officer agreed, concluding that the evaluations had been irretrievably flawed.

Although the officer found in favor of the protester, he left it to state library officials to determine whether the protested contract should be terminated or left in force.

In its first decision about the contract, the Supreme Court determined both that the library made the contract award in bad faith and also that the protest hearing officer improperly left the decision of whether to terminate the contract to the library.

The court instructed the protest officer to make that decision while considering the best interests of the state.

But the library system acted first. It terminated the winning vendor's contract, then entered into an interim arrangement'with the same vendor.

In light of the agency's action, the hearing officer decided that he no longer had to determine whether to terminate the contract to automate Hawaii's state library system or ratify the contract.

The protester filed yet another set of protests over the execution and performance of the interim contract. The hearing officer dismissed these protests. It was left to the court to sort out the resulting mess.

The court upheld the dismissal of the fresh protests. The justices determined that the hearing officer had acted properly in concluding that he did not need to make a determination concerning whether the initial contract should be terminated or upheld. After all, the court noted, the state library had terminated that contract voluntarily.

But the court went further. It added that it did not need to consider evidence that the state library and the contractor entered into the interim arrangement following the termination with the intent of continuing the original arrangement and to evade the effect of the prior decision.

In that final decision, the court took a rather narrow view of the proceedings and of its own authority to oversee the state's procurement process.

The more important lesson learned here may be one of accountability. Judges clearly are not suited to supervise the procurement process, and neither are protest hearing officers. Two years of litigation led to two seemingly contradictory conclusions. One wonders just what the right method of procurement supervision should be.

Robert J. Sherry is a partner in the San Francisco law office of Kirkpatrick & Lockhart, representing information technology clients in dealings with federal, state and local governments.

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