AMERICAN BAR ASSOCIATION
SECTION OF PUBLIC CONTRACT LAW
1. The Annual Meeting of the Section Council was held at the Mark Hopkins Inter-Continental Hotel, San Francisco, California on August 2, 1997. Council members and Section members attending the meeting are identified in Attachment 1.
2. The meeting of the Council was called to order at approximately 9:15 a.m. The first order of business was approval of the minutes of the May 17, 1997 Council meeting.
Construction Division Mission Statement
3. Mr. Hubert J. Bell, Jr., Chair, Construction Division, presented a proposed Mission Statement for the Construction Division. (See Tab 2 of the Council meeting Agenda Book.) Mr. Menaker commended the efforts of the Construction Division in developing this Mission Statement and moved its approval. After seconding, the motion was unanimously approved by the Council.
Proposed FAR Amendment Regarding Terminations for Convenience
4. Messrs. Kent R. Morrison and Rick Claybrook presented proposed amendments to the FAR regarding terminations for convenience in light of the Federal Circuit's recent decisions in Krygoski and Ellett. The proposal was prepared jointly by the Judicial Remedial and Federal Claims Committees, and a memorandum detailing the proposal and its underlying analysis was provided at Tab 23 of the Council Agenda Book.
5. The principle concerns addressed by the proposed amendments relate to court holdings (most recently in the Krygoski case) that the Government abuses its discretion to terminate for convenience only when it "enters a contract with no intention of fulfilling its promises" or otherwise acts in malicious bad faith. A review of recent caselaw and analyses indicates, on the other hand, that in the commercial contracting context an objective, rather than a subjective, test is applied when addressing allegations of breach of contract. Thus, it appears that the government through court decisions has been given much greater latitude in exercising its ability to terminate a contract, i.e., a termination will stand unless the contractor can demonstrate subjective bad faith, than is granted to commercial contractors. Accordingly, the proposed FAR amendment would apply to the government the same standard as is applied in the commercial contracting arena. The analysis underlying the proposed FAR amendments is detailed in Rick Claybrook's recent article, Good Faith in the Termination and Formation of Federal Contracts, 57 U. Md. L. Rev. 555 (1997).
6. An extended substantial discussion, with contributions by Messrs. Churchill, Barletta, Doke, Joseph, Gamboa, Miller, Love, Johnson, Thorpe, Kinlin, Hirsch, Hinchman, Madden, and Ms. Madsen and Ms. Berg. As a result of the discussion it was determined that the Committees would revise the proposal to address the points raised in the discussion and resubmit the proposed amendments for review at the next Council meeting.
FTC Joint Venture Project
7. Mr. Richard Feinstein presented proposed comments for approval by the Council in response to the Federal Trade Commission's ("FTC") ongoing Joint Venture Project. The Project is intended to address whether antitrust guidance to the business community can be improved through clarifying and updating antitrust policies regarding joint ventures and other forms of competitor collaboration. The proposed comments are included as Attachment 2.
8. Mr. Feinstaein indicated that the proposed comments had been coordinated with the Antitrust Section, and Ms. Madsen indicated that the Antitrust Section had no objection to our general comments. However, she also emphasized that if the Section elects to submit further comments we will need further coordination with the Antitrust Section. Mr. Thorpe suggested that the comments be expanded to address the issues beyond the DoD and defense industry, i.e., civilian agencies and their contractors. After further discussion, it was decided that the Council would study the comments and consider them further at the upcoming new Council meeting.
ABA Finances
9. Mr. Marshall Doke advised the Council that Former Chair and Section Liaison to the ABA Board of Governors, Mr. Alan Joseph, had been asked to serve as Chair of the ABA Finance Committee for the coming year. Mr. Joseph discussed briefly the state of ABA finances and noted that the ABA faced a substantial projected budget shortfall within the next three years which would no doubt require dues increases and budget cuts. He indicated he would keep the Section informed of developments of this front.
COFC Bid Protest Monograph
10. Mr. Mark Colley reported on the progress of the Section monograph on the Court of Federal Claims ("COFC") new bid protest jurisdiction. He reminded the Council that the monograph was intended to identify issues and not advocate a particular point of view. He also thanked Mr. Herman Levy for his substantial editorial work in reviewing and upgrading the draft monograph. Mr. Colley then briefly highlighted the monograph's treatment of such issues such as jurisdiction, scope of COFC authority over executive agencies, interested parties and the scope of the record for review. He expressed appreciation for the support of the Bid Protest Committee Chair, Mr. Glen Walcott. Chairman Kuelbs thanked Mr. Colley and Mr. Stu Nibley who co-chaired the subcommittee responsible for the monograph for their efforts.
11. Mr. Tom Madden advised that on a related note the COFC Task Force appointed by the Court to recommend procedural changes to accommodate the bid protest jurisdiction had finished its work and forwarded a report to the Court. The Report recommended a General Order which would address such issues as protective orders, required core documents to be included in the Administrative Record and procedures for advanced notice of filings to the Department of Justice.
Regulatory Coordinating Committee
12. Mr. Alex Brittan reported on the work since the last meeting of the Regulatory Coordinating Committee. The Committee's report was provided at Tab 6 of the Council Agenda Book.
Region Division
13. Mr. Donald G. Featherstun provided the Annual Report of the Region Division (see Attachment 3). Prominent examples of the Division's efforts to expand the usefulness of the Section to members outside the Washington D.C. area include dinner meetings in Southern California, sponsored by Linda Maramba, where as many as 50 practitioners discuss given topics, a California state bid protest seminar in November in Northern California and significant activities in Arizona (under the leadership of Mr. Rob Schaefer), New York, New Mexico, Massachusetts and the State of Washington. The Division is actively planning even more activities for the coming year and is also encouraging its members to identify both federal and state personnel who may be interested in and benefit from activity in the Section of Public Contract Law.
"Other Transactions" Authority
14. Ms. Ruth Berg and Mr. Scott Pickens provided a detailed presentation regarding status of the DoD's "other transactions" ("OT") authority and the Section's response to issues raised by that authority. A copy of the presentation is provided at Attachment 4. Mr. David Drapkin, of the Department of Defense, also discussed an ongoing Inspector General ("IG") review to examine how the DoD is using its OT authority. In the connection with this review, DoD is seeking private sector input regarding the range of commercial practices used for similar kinds of undertakings. Mr. Drapkin estimated that at this point there is some $8 billion obligated to OTs issued by DARPA and other services. Ms. Berg suggested that the Section should encourage private sector companies to submit their commercial practices directly to the DoD IG, and Mr. Kuelbs asked her to prepare a letter for his signature on that issue. Mr. Hirsch noted that the Section's General Counsel's Committee was also a good source of input on the subject. Mr. Drapkin noted that the DoD IG was more interested in completely commercial companies and their experiences rather than companies more experienced with DoD-unique business.
15. A considerable discussion of the issues raised by the OT authority ensued with contributions by numerous Section members. Mr. Donald Durkee, in particular, discussed examples of OT-type projects being undertaken by the Department of Transportation, noting that DoT was seeking "across the board" authority for these type of transactions in the current Highway Reauthorization Bill.
16. Ms. Madsen noted that legislation in this area was a possibility and that the Section should anticipate a need for a Blanket Authority request. Chairman Kuelbs asked the Committee to draft a Blanket Authority Request and to develop comments on any potential requests for waivers that might be sought in legislation by DoD. It was agreed that the request for Blanket Authority would be prepared for review by the Council prior to the November meeting.
FAR Rewrite
17. Mr. John Pachter reported on the status of the FAR Part 15 Rewrite. He noted that on July 14, the Section submitted a third set of comments on the proposed rewrite, which along with comments submitted on October 7, and November 27, totaled 73 pages. Chairman Kuelbs noted the tremendous amount of work done by Mr. Pachter and his Committee and thanked Mr. Pachter for his leadership on this issue.
Membership
18. Ms. Linda O'Sullivan, Section Budget and Finance Officer, described the background and status of the Section's "Share Our Wealth" membership drive. She also recognized the contributions of Mr. Dave Pronchik and Ms. Linda Maramba and the members who have recruited new members under the campaign to date. Additional details and support of Ms. O'Sullivan's report were contained at Tab 9 of the Council Agenda book.
Model Procurement Code Update Project
19. Ms. Maggie McConnell reported on the status of funding for the Model Procurement Code update project (see Attachment 5). She noted that the section was 75% of the way towards its goal of $100,000 in seed money and that additional efforts identifying potential donors and following up on identified donors were proceeding aggressively.
Programs
20. Ms. Laura Kennedy reported on several of the ongoing program efforts. In particular, she noted the "Young Lawyers" Program conducted this summer under the leadership of Mike Hordell, which attracted some forty attendees. She also noted the breakfast program on the FAA's new disputes resolution procedures conducted in May and summarized the upcoming programs to be conducted during the Annual Meeting. Chairman Kuelbs thanked Ms. Kennedy for her excellent efforts in organizing and implementing timely and educational programs for the Section.
Conflict of Interest Committee
21. Ms. Alison Doyle reported on the activities of the Conflict of Interest Committee during the past year. She noted that the Committee had a balanced membership including both representatives of the government and private sector and that it conducted regular monthly meetings. The meetings addressed a variety of items including recent developments and case law. The Committee also drafted proposed comments on a new procurement integrity rule and maintained a liaison with an ongoing industry initiative to amend the organizational conflict of interest rules. The Committees goals for the upcoming year include initiation of an update to existing ethics treatises on personal and organizational conflicts of interest. Chairman Kuelbs thanked Ms. Doyle for her efforts and the Committee's contributions during the past year.
Commercial Products Committee
22. Mr. Ron Hutchinson provided the annual report of the Commercial Products and Services Committee. (Details of the report were included at Tab 24 of the Council Agenda Book). He noted that the Committee conducted regular monthly meetings which drew attendance of up to thirty persons. Chairman Kuelbs thanked for Mr. Hutchinson for his leadership and thanked the Committee for its efforts during the past year.
Suspension/Debarment Committee
23. Mr. John M. Farenish provided a report on the activities of the Suspension/Debarment Committee during the past year. Details of this report were provided at Tab 21 of the Council Agenda Book. The major project for the Committee this year has been the preparation of a monograph outlining the effects that the Health and Human Services (HHS) exclusion process will have on the health care industry. The Committee continues to meet monthly and will endeavor to stay abreast of emerging legislative and regulatory debarment and suspension issues.
Health Care Committee
24. Mr. Bruce Shirk, the founding Chair, provided a report on the activities of the Health Care Contracting Committee. The Committee was newly formed three years ago to examine the potential role of the Section in the health care contracting arena. It has been very active and has sponsored, under the leadership of Mr. Frank Rappaport, several well attended and useful programs. The challenge for the Committee this next year will be to determine how to best integrate with other Committee's of the Section such as the Commercial Products and Conflicts of Interest Committees. Chairman Kuelbs thanked Mr. Shirk for his leadership in establishing the Health Care Committee.
Legislative Coordinating Committee
25. Mr. Alan Chvotkin reported on the activities of the Legislative Coordinating Committee. He noted that the Committee continued to conduct regular monthly meetings and that it was endeavoring to work more closely with the ABA D.C. office. In that regard, Mr. Chvotkin, as Chair of the Committee, has been participating in the monthly meetings of the ABA's legislative staff. He also noted that the Committee had been particularly active in establishing its own web site and posting current legislative information on that site for the benefit of Section members. Chairman Kuelbs thanked Mr. Chvotkin for his efforts in leading the Committee and its contributions to the Section in the past year.
Construction Division
26. Mr. Hubert Bell, Chair, Construction Division, reported on the activities of the Division during the past year. Details in support of his report were provided at Tab 25 of the Council Agenda book. Mr. Bell noted several construction industry programs that the Division was supporting in conjunction with other organizations.
Working Group on Internet Access
27. Mr. Fred Moss reported on the progress of the Section's efforts to enhance its web page and facilitate electronic communication among Section members. He noted that the Section had made great progress in this regard and highlighted, in particular, the efforts of Mr. Chris Yukins, Mr. Jerry Walz and Mr. Ty Hughes in making the Section "internet friendly".
Thanks and Recognition
28. Chairman Kuelbs noted the contributions of Mr. Richard J. Ike, Jr. who has served for the past year as the Law Student Division liaison to the Section. Mr. Kuelbs presented Mr. Ike a placque reflecting the Section's appreciation of his efforts.
29. Mr. Kuelbs also thanked all outgoing Committee Chairs and outgoing Division Chairs for their leadership and support during the past year. He also gratefully acknowledged the support and assistance of Section Manager, Ms. Marilyn Neforas.
30. Chair-Elect Marcia Madsen moved that the Council acknowledge the contributions of Chairman Kuelbs, his leadership and unfailing good nature. The motion received numerous seconds and was passed unanimously.
31. The meeting was adjourned at approximately 1:20 p.m.
Respectfully submitted,
Rand L. Allen
Secretary