Public entities must always act in a lawful, transparent and accountable manner. They must act in such a manner for two cardinal reasons. The first is that these entities utilize public resources from taxpayers’ pockets and must, therefore, do everything in their power to make prudent use of these resources. Secondly and most significantly, their actions may end up affecting thousands or millions of people`s lives and livelihoods and, therefore such actions need to be carefully examined, lawful and transparent. These are some of the best practices that are elements of good governance that characterize a democratic society. In a democratic society, the rule of law is supreme which dedicates that any action by the government and its agents must be lawful to be enforced. This means that justice must not only be done, but must also be seen to be done. All government operations must adhere to the rule of law, and the procurement process is not any exception. Procurement laws govern this critical sector to ensure that there is an element of certainty, predictability, fairness and transparency. This is especially critical in this day and age where competition for government tenders is stiff and the need to promote transparency, fairness and accountabilityin government spending is cardinal. This goes hand in hand with the need to promote the production industries by providing incentives for companies to spur economic growth within a particular sector.
The need to have sufficient and adequate consideration for taxpayers’ money made the government adopt a good governance practice whereby a request for proposal (RFP) is advertised to contractors. This is a request asking contractors to submit to the interested agency or customer the price range, quality and quality of their services or goods. It is often used to incite organizations to submit competitive bids to the requesting agency. In this case, the military agency needed to have at least one million computers scanned for virus invention and subsequently protected from such virus infection. Qualification is an essential and core part of the RFP. The agency uses RFPs to get the most beneficial circumstances possible from the transactions that would not only please the public entity, but also the public. Just like the military agency did, RFP must contain a set of specifications that the agency deems vital. In this case, the agency was not only interested in the price of the bid, but also more fundamentally the past performance of the binding company. Actually, they categorically stated that past performance would be considered twice as significant as the quoted fixed price. It is critical that once an agency has set its selection criteria it sticks to it. Failure to follow the criteria after companies have already made their bids will expose the agency against accusations of being biased and possibly lawsuits.
If the contracting officer goes ahead and awards the tender to Grimmel, the agency will expose itself to a number of risks. The agency will enter into a contract involving millions of taxpayers’ money with a company that it is not sure whether it will deliver. If Grimmel is awarded the tender, there are two possibly scenarios that may occur at the end of the project. It will either fail or succeed in scanning the computer virus and protecting the computers. If it succeeds, both parties in the contract would have fulfilled their obligations and thus the contract would be terminated by performance. The second possibility is that it would fail to fulfill its obligations. This would a beach of the fundamental terms of the contract. A breach entitles the injured party to damages and an opportunity to repudiate the contract. However, the legal claim against Grimmel by the agency will not succeed. This is because Grimmel did not misrepresent itself by alleging to have past successful performance. More fundamentally, the agency did not stick to its bidding list. According to their requirements in the RFP, Grimmel did not qualify. They cannot, therefore, be heard to be suing a company they awarded a tender knowing fully that it was unqualified according to their selection criteria. The company would also expose itself to other suits by the disqualified bidders who met the selection criteria.
Aleph and Bet have the legal options of suing the agency for damages or seeking the orders of judicial review. The basis of their claim would be the fact that they met the selection criteria as stipulated by the agency on its RFP, yet it decided to award the tender to another company which did not meet the criteria. They would base their argument on procedural fairness and the need for public entities to adhere to their own procedures to protect the interests of all their stakeholders. Indeed, procedure is the handmaiden of substance and public entities are supposed to respect such procedures. If the two disqualified companies seek judicial review orders, the result may be that the court may declare the process null and void and order the procurement process to begin afresh. Damages, on the other hand, would seek to compensate them for the injury suffered when the agency infringed on their rights by selecting an unqualified party.
Aleph and Bet need to follow the procedure as stipulated in procurement laws of the state or nation. More fundamentally, it is cardinal to stick to the procedure as stipulated in the parent act that established the agency and the delegated legislations under the act. In most cases, the law would provide for an appeal process to a specialized tribunal. For example, the law may stipulate that an aggrieved party has 14 days to appeal to the procurement tribunal if dissatisfied by the decision of the procuring entity, in this case the military agency. Aleph and Bet must strictly adhere to such a procedure in order to get a remedy. In case they lodge an appeal, no contract would be entered into between the agency and Grimmel until the appeal is heard and conclusively determined. The tribunal will hear both parties and make a determination. However, the two companies still retain the right to go to a superior court of law for a judicial review order.
Aleph and Bet must file their claim at a superior court with supervisory jurisdiction over government entities and administrative tribunals. It is only a court which has been given supervisory jurisdiction over lower courts and administrative agencies that can be competent to hear their claim and make the necessary orders. The superior court may set aside the decision agency or tribunal. At the superior court, they can elect to either request for an order of certiorari or an order of mandamus. An order of certiorari seeks to quash the decision of the procuring entity to award the tender to Grimmel. This will force the agency to start the process again. In contrast, an order of mandamus seeks to compel the agency to award the tender to one of the companies. In most cases, these two orders are requested in a single claim. It is the discretion of the court to issue any orders as it deems fit. It is also vital to note that the court will not dwell on the merits of the case. This is left on the purvey of the public entity because it is the most qualified entity to make such decisions, however, once they set a selection criteria it must stick to it.
American Bar Association, & Section of Public Contract Law. (2008). The 2007 Model Code for Public Infrastructure Procurement (MC PIP). New York: American Bar Association.
Halvey, J. K. (2007). Business Process Outsourcing: Process, Strategies, and Contracts. New York: John Wiley & Sons.
Klass, G. (2010). Contract Law in the USA. New York: Kluwer Law International.