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Using Prevent Defense: Mitigating Legal Risk in Procurements Presented by Richard Pennington John Westrick.

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Presentation on theme: "Using Prevent Defense: Mitigating Legal Risk in Procurements Presented by Richard Pennington John Westrick."— Presentation transcript:

1 Using Prevent Defense: Mitigating Legal Risk in Procurements Presented by Richard Pennington John Westrick

2 Roles of Attorneys “... Procurement professionals must not abdicate their discretion and authority to the legal officer. The role of the legal officer is to advise and counsel; it is not to take over the procurement operation... Attorneys tend to research issues without worrying about deadlines, split very fine legal hairs... and propose courses of action that frequently are impractical...” -- McCue and Pitzer, Fundamentals of Leadership and Management in Public Procurement, p. 101 (NIGP 2005)

3 Objectives Familiarity with vendor perspectives on risk Know key areas of legal risk in a procurement Know basic approaches and resources for mitigating risk Understand impact of judicial process on you

4 Vendor’s First Thoughts... Some companies will not propose without some informal market communication Industry sees executive level client contact as a key business strategy: clarify rules governing blackout periods Concerns about exceptions to terms and conditions, IP rights, confidentiality

5 Confidential Information Follow solicitation instructions, i.e. segregate confidential information Be judicious: governments have transparency obligations, e.g. price/scope of work disclosure In a dispute: consider offering to indemnify for litigation costs Typical general advice to vendors

6 The Commonwealth’s Approach Va. Code § F: Vendor must invoke protection before submittal, identify the info, and state reason why protection needed Problems: Vendor mistake; Vendor over-reaching Getting caught between duty to protect and duty to disclose Effect of standard RFP instruction

7 Vendor Risks in Contracting Contract changes Changes in law: Price and schedule adjustments Intellectual property rights Nonappropriatio n Liability allocation

8 Common Approach to Limitation of Liability by Vendors Neither party shall be liable for indirect, special, consequential, or incidental damages. Vendor’s liability for claims or damages arising under or relating to performance of this contract shall be limited to the amount paid by the Commonwealth to the vendor under the contract.

9 Vendors are... Using proposal assumptions on level of effort as a way of setting baselines, e.g. number of reports Focusing on price even in best value RFPs Sometimes basing proposal strategy on negotiation models, e.g. use of reservation prices (Consider use of BAFOs...)

10 Protests and Debriefings The value of protests Protests will happen: would you rather they be political? They affirm the validity of your process Federal Common Rule requires a protest process To debrief or not to debrief? Careers can be on the line when companies lose awards Do you owe it to them to explain why? If you debrief, be professional and prepared!

11 Bid Protests and Appeals Vendors’ attorneys often start with open records/freedom of information act requests: make files professional! Some possible issues: Responsibility determination relying on historical performance issues Intemperate evaluator comments Widely varying/wrong evaluation scores References required: not checked Significant post-award negotiation or changes to bids/offers

12 Risk to Vendors from... Low estimates of numbers of tailored reports & scope of end-user “discovery” meetings in IT contracts Governance boards that delay decisions Contractor accommodation of client requests sets early expectations/blurs scope boundaries Not adequately defining performance requirements, e.g. “desirable” features: “we can” versus “we shall”

13 Rules of Evidence and You “The documents speak for themselves” -- U.S. District Court Judge in 1994 Business records: “A memorandum, report, record... if kept in the course of a regularly conducted business activity...” Admission: “Statement offered against a party and is (A) the party's own statement in either an individual or a representative capacity...” Habit: Evidence of the... the routine practice of an organization...is relevant to prove that the conduct was in conformity...”

14 Attorneys and Clients Typically the attorney is an advisor, not the decider Attorney-client privilege is personal to the relationship: use caution with third party communications Should you invite your attorney to a negotiation?

15 15 Remember Use attorneys to identify and help mitigate risks Keep your procurement files professional and consistent Monitor the “story” told by your procurement file Discuss with your attorney when confidentiality rules become important

16 John Westrick Senior Assistant Attorney General Richard Pennington NIGP Instructor


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