MARCH 3, 2001

Chair Greg Smith called the meeting of the Council of the Section of Public Contract Law to order at 9:15 on March 3, 2001 in Annapolis, Maryland. Section Delegate and Past Chair Marshall Doke reported that Past Chair Allan Joseph has been nominated for election as Treasurer elect of the American Bar Association. Allan is unopposed so the nomination is tantamount to election to a three-year term.

Chair Smith thanked Past Chair David Churchill and past Council member Pat Wittie for their leadership in presenting a very well received Federal Procurement Institute program on March 1 and 2, 2001.

The Council approved the minutes of the November 4, 2000 Council meeting.

Chair recognized John Burkholder who proposed that the Council approve publication of the third edition of the Fixed Price Supply Subcontract Terms and Conditions. He reported that the second edition yielded approximately $10,000.00 in income to the Section over a three-year period. He said that the book needs to be revised to address changes in the Buy American Act, other statutes, and the Federal Acquisition Regulation. There was a motion to approve the proposal, which was seconded and passed by the Council.

Carl Pierce, the Reporter for the ABA’s Ethics 2000 Commission, provided an update report on the work of the Commission to evaluate the Model Rules of Professional Conduct. A report was included at Tab 5 of the Council meeting agenda. This preliminary report is the result of three years of work by the Ethics 2000 Commission. The Commission will report to the House of Delegates in the summer of 2001. The Commission solicits comments as it continues its work concerning revision of the Model Rules. A copy of the overview of the Commission and its report is attached as Exhibit 1 to the minutes.

Examples of changes to the Model Rules being studied and proposed relate to contact with represented parties, lawyers’ voluntary disclosure of client confidences to prevent fraud and conflicts screening where lawyers change firms or move from government to private practice, plus liberalizing the rules regarding lawyers’ practice in jurisdictions in which they are not licensed. Mr. Pierce responded to questions from members attending.

Pat Wittie and Allen Samelson presented a report of the E-Commerce Committee. Pat Wittie reported that the committee provided input to the comments concerning reverse auction guidance in the FAR. Allen Samelson reported that a review of the FAR is underway to determine if the FAR and agency supplements provide adequate guidance regarding e-commerce and to propose changes if needed. The committee’s interim report was included in the Council agenda at Tab 3, noting that a desktop review of the FAR has been completed and a survey of agency procurement personnel is ongoing. The committee is looking particularly at three issues: (1) When should late submittals by electronic communication be considered? (2) Should agencies acknowledge receipt of electronic communication such as bids? (3) Should standard electronic format for bids be prescribed? Related issues of refining a “point of entry” for a government agency, whether a bid or other submittal is timely if it reaches a government “point of entry” but does not reach the Contracting Office by the specified time and whether the technology is available to identify the government “point of entry” were also considered. There was discussion why there is a requirement that electronic bids be submitted a day ahead of the scheduled bid opening and some concern was expressed that these are not “sealed bids,” because they can be accessed, thus creating a potential for abuse. There was discussion concerning acknowledging receipt of an electronic bid by an agency, noting that usually a bidder only knows that a bid was sent by electronic communication but does not know that it was received by a government server unless the agency acknowledges that receipt. There was some discussion concerning whether a standard electronic format should be adopted, noting that both Word and WordPerfect allow a bid to be changed by the recipient while Adobe and PDF do not permit alteration.

Tony Palladino reported on the activities of the Inter-Agency ADR Working Group, particularly concerning the confidentiality guidelines regarding ADR with a government agency which have been published in the Federal Register. The Working Group reviewed statutes which affect confidentiality and published guidelines based on the 1996 Alternative Dispute Resolution Act. Tony reported that a “dispute resolution communication” generally may not be voluntarily disclosed nor may disclosure be compelled. An agreement to use ADR and the settlement agreement reached through an ADR proceeding are not protected from disclosure. Disclosure of protected “ADR communications” is permitted only if one or more of seven exceptions to non-disclosure apply, including a “judicial override” of confidentiality if a court determines that disclosure is needed to prevent injustice, to establish a violation of law or to prevent harm to public health or safety and the court finds that the need for the information outweighs maintaining the integrity of the ADR process. Past Chair Ruth Burg commented on the process used by the Working Group to generate the guidelines and emphasized the need for awareness that not all “ADR communications” are confidential, for example, statements and documents used in plenary sessions in a mediation.

Section Financial Officer, Pat Meagher provided a report concerning corporate sponsorship of Section activities and functions. She identified five areas where corporate sponsorship might be considered: cocktail receptions at Section meetings, the Construction Division lunch seminar at some Section meetings, miscellaneous functions such as the committee officers’ luncheon, a speakers’ breakfast, etc., exhibitors at the Section’s mid-year meeting, and advertising on the Section’s website. The Section currently solicits sponsors for the reception at the annual meeting. Last year sponsors included 41 law firms, one consulting firm and one legal publisher. Pat noted that it is possible to expand this system to have sponsors for receptions at other meetings. The sponsor contribution requested for the annual meeting reception for the year 2000 was $1,000, approximately twice the amount requested in prior years, because there were two receptions in New York and in London. Pat suggested that the $1,000 contribution level could be maintained in 2001 and in future years but use the amount to defray the cost of receptions at all four quarterly Council meetings. She also noted that sponsorship could be expanded to include corporations and more legal publishers. Sponsorship of the Section’s receptions is not an issue that the Section is required to refer to the Corporate Sponsorship Committee for review and comment. Vigorous discussion ensued, with Carl Vacketta noting that soliciting more legal publishing firm sponsors could create a possible conflict with advertisers in the Public Contract Law Journal. Past Chair Stanley Dees offered his opinion that increasing Section reception sponsorship amount to $1,000 is too much of a burden on small firms, that there is pressure on law firms to contribute and be listed as sponsors and there is a possible conflict for government lawyers to accept the benefits of a cocktail reception. Stan stated that the reception sponsorship issues should have a full discussion. Chair-Elect Norm Thorpe noted that the Section should get the opinion of agency ethics officials concerning participation by government lawyer Section members. Past Chair Marshall Doke noted that the Section could consider having a cash bar at the cocktail reception. There was discussion concerning other options including a fee for attending the reception, partial subsidy by the Section from its annual budget and contributions by individuals in addition to firm sponsorship. It was the sense of the Council to send all five of the corporate sponsorship issues to the Corporate Sponsorship Committee chaired by Past Section Chair Dave Hirsch for review, evaluation, comment and a report to the Council.

The Chair recognized Bill Woods who reported on the “A-76 Study Group.” Bill noted that this group to be convened by the General Accounting Office is actually named the “Commercial Activities Panel.” The GAO is required by statute to convene the panel to study the transfer of commercial activities from government to private contractors. The GAO has published a notice of the Panel’s establishment and work in the Federal Register and has established a website for the Panel. Panel member selection is underway but is not yet complete. The Panel will be chaired by David Walker, the Comptroller General of the United States. The statute requires the Panel to include representatives of the Department of Defense, private industry, federal labor organizations and the Office of Management and Budget.

Angela Styles provided the Council a report of the Legislative Coordinating Committee. She discussed the memorandum from the White House Chief of Staff Andrew Card establishing a “Regulatory Review Plan.” A copy of the Card memo is attached to these minutes as Exhibit 2. The purpose of the Plan is to review all regulations not yet published in the Federal Register or which have been published but are not yet in effect and to direct the departments and agencies to send no new regulations, proposed or final, to the Office of the Federal Register until reviewed by an agency head appointed by President Bush after noon on January 20, 2001. It postpones for 60 days the effective date of all regulations published before January 22, 2001 to permit review by an agency/department head appointed by the Bush Administration. Regulations published and effective prior to January 20, 2001 are not affected by the Review Plan.

Angela also discussed legislation pending concerning tax credits, Inspector General Act renewal, paperwork elimination to promote use of electronic media, requirement for 15% of purchases to be from inter-city empowerment zones and other similar initiatives. Angela also discussed the review of the jurisdiction of the Administrator of the General Services Administration.

Holly Svetz reported on the DOD Intellectual Property Guide and Other Transactions Guide. She noted that the purpose of the “IP guide” is to facilitate DOD’s ability to access commercial technology and to avoid duplicate development of such technology by DOD. The IP guide provides for fair treatment of IP providers, urges DOD agencies to limit license rights only to that data and rights actually needed and to absolutely protect private or restricted intellectual property from unauthorized use or disclosure. The “OT guide” has been issued as a directive memo. It addresses data rights and intellectual property patents, provides guidance on dealing with nontraditional defense contractors and when their participation required, addresses requiring little or no cost reporting on fixed-price OT contracts and provides guidance concerning when and under what conditions a contractor can terminate the contract. The guide establishes policy to attract commercial and nontraditional defense contractors, but Holly noted that the OT guide treats IP rights inconsistently with the IP guide.

Section Vice Chair Mary Ellen Coster Williams reported on federal government lawyer participation in professional bar association activities. The American Bar Association has proposed principles and guidance concerning such participation. A copy of the ABA proposal to the Department of Justice is attached as Exhibit 3. The ABA Task Force encourages participation of federal government lawyers, notes advantages to the government of such participation and provides specific guidance. The guidelines may be further negotiated but the ABA hopes that the Department of Justice will adopt the principles and guidelines and that other agencies will agree with the DOJ.

Chair Greg Smith provided a status report concerning the Section’s participation in the American Infrastructure Consortium. The Section’s AIC membership has been approved by the ABA Board of Governors and the Section will proceed as a member.

Tom Madden discussed stage two of implementation of the revised Model Procurement Code. The effort will focus on education and advocacy, and, through the Section’s participation in the AIC, regulations will be developed and adopted to help promote the MPC to local governments and other agencies. Tom and the implementation group will contact national organizations which promote state and local law improvement and good government practices, will work with organizations such as NASPO and NIGP that support user agencies, will work with contracting community organizations such as the ACEC, AGC and ABC, will contact the intellectual technology community such as ITAA and others, will contact specialty contractor organizations such as the NHWCA and will work with state and local governments to encourage adoption of the revised MPC. Effective use of e-communication will be encouraged including downloading from a database, use of e-mail etc.

Chair Smith highlighted some other agenda items for which there were no oral reports, including the ABA “Pulse of the Profession” Commission and the creation of the “Dispute Avoidance/Early Dispute Resolution Task Force,” chaired by Rob Burton and Pat Wittie.

Carl Vacketta reported on the upcoming programs at the May Council meeting in Cambridge and at the annual meeting in Chicago. In Chicago, the programs will include streamlined contracting techniques, A-76 competition and export controls. Carl reported that the Public Contract Law Journal writing competition will again be conducted in 2001 and solicits submissions.

John Pavlick reports on the progress of revising the Suspension and Debarment manual. This group is chaired by Dick Bednar and its work is moving ahead. Non-procurement debarment regulations are addressed in the new manual but it probably will not be published before Fall of 2001.

Karen Manos reported that the Accounting, Cost and Pricing Committee responded to a request from the CAS Board to facilitate an open discussion of a new rule on accounting for post-retirement benefits. The committee met, together with representatives of other organizations, and intends to hold another meeting soon to allow additional discussion.

Marshall Doke noted that Past Chair John Pachter has written an article which took former OFPP head Steven Kelman to task for misrepresenting statements by John concerning the FAR Part 15 rewrite project.

Past Chair Marcia Madsen reported that the Section has received a request from the Acting Director of the Office of Management and Budget for comments concerning contract incentives. The Emerging Issues Committee is addressing this request, but this probably will not go forward until more top procurement officials are appointed by the Bush Administration.

A list of all those persons attending the March 3, 2001 Council meeting is attached as Exhibit 4.

Chair Smith adjourned the March 3, 2001 Council meeting at 12:25 p.m.

Hubert J. Bell, Jr.

Secretary