Public Procurement Comparative Guide

1. Legislative framework

1.1 What legislative and regulatory provisions govern public procurement in your jurisdiction?

A number of main legislative provisions govern public procurement in the United States. The main overview statutes are:

• the Armed Services Procurement Act for defence procurements; and
• the Federal Property Administrative Services Act for non-defence procurements.

Other key statutes include:

• the Competition in Contracting Act (promoting competition);
• the Federal Acquisition Streamlining Act (promoting commercial item acquisition); and
• the Truth in Negotiations Act and Office of Federal Procurement Policy Act (each regulating ethical practices in federal procurement).

The Federal Acquisition Regulation (FAR) is the main regulatory provision for implementing the legislation discussed above. The FAR is segregated into eight sub-chapters consisting of 52 parts across the spectrum of the procurement lifecycle, from acquisition planning through contracting methods and contract types to compliance, audit and contract closeout.

1.2 Do any special regimes apply in specific sectors (eg, utilities, defence)?

Each federal agency has a 'FAR supplement' that sets forth the specific rules and regulations pertaining to procurements for the agency at issue. For example, the Defense Federal Acquisition Supplement pertains to specialised rules related to Armed Services procurement.

Other federal agencies also have their own supplemental acquisition regulations, such as:

• the Department of Transportation (DOTAR);
• the Department of Energy (DEAR);
• the US Agency for International Development (AIDAR);
• the Department of Housing and Urban Development (HUDAR);
• the General Services Administration (GSAR); and
• the Department of Homeland Security (HSAR).

In all, there are 29 agency-specific FAR supplements that apply to the procurements let by the agencies at issue.

1.3 Which bilateral or multilateral instruments or treaties with effect in your jurisdiction (if any) have relevance for public procurement?

The United States is a signatory to the World Trade Organization Government Procurement Agreement (GPA). In addition, a number of US free trade agreements have government procurement provisions. These treaties are generally implemented through the Trade Agreements Act of 1979 (19 USC §§2501–2581), which is implemented through Part 25 of the FAR.

2. Scope of application

2.1 What kinds of entities fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

US public procurement regulations do not differentiate between the types of entities that fall within the scope of the public procurement rules in the United States. On the for-profit side, it does not matter whether the contracting entity is a sole proprietor, a corporation or a limited liability company. Additionally, both for-profit and non-profit organisations are eligible to compete for federal public procurements, as long as they:

• meet the overall eligibility rules; and
• experience requirements as defined by the particular procurement.

2.2 What kinds of contracts fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

All kinds of contracts fall within the scope of the procurement rules in the United States. However, there is a distinction between what is called 'acquisition' and what is called 'assistance':

• 'Acquisition', broadly speaking, is when the government buys goods or services for its own purposes and use; and
• 'Assistance' is when the government is supporting the work of certain other governmental, education or non-governmental organisations.

In general, acquisition contracts fall under the public procurement rules but assistance agreements fall under a wholly separate set of laws and regulations.

To provide guidelines as to when the procurement rules apply, the US Congress passed the Federal Grant and Cooperative Agreement Act of 1977. In general, the procurement rules apply to 'acquisitions' of goods and services only.

2.3 What financial thresholds must be met for specific contracts to fall within the scope of the public procurement rules in your jurisdiction? Do any exemptions apply?

In the United States, financial thresholds do not govern which contracts fall within procurement rules. All federal procurements (acquisitions) fall within the procurement rules. However, the size of transactions can dictate:

• what level of procurement procedures by way of competition are necessary; and
• what overall rules apply.

For example, procurements below the 'micro-purchase' threshold – currently $10,000 as defined in Federal Acquisition Regulation (FAR) 2.101 – has the least onerous set of regulations. Micro-purchases are akin to 'shopping' and many micro-purchases can be undertaken through a government-issued credit card (see FAR Part 13.2). For acquisitions up to $250,000 for civilian and for defence purposes, government purchasers can utilise 'simplified acquisition procedures' (see FAR Part 13.3). These simplified acquisition procedures require a level of competition and documentation but the procedures are not as onerous as the 'full and open' acquisition procedures for procurements above the simplified acquisition limits (see FAR Part 14 for sealed bidding and Part 15 for contracting by negotiation).

2.4 Do any rules apply in regard to contracts which fall below the relevant financial thresholds?

See question 2.3. The size of the procurement can dictate the means of competition and certain other regulatory requirements. For example, 'micro-purchases' and 'small purchases' utilise procedures that are generally quicker and less onerous than the general 'full and open' competition procedures. Likewise, for micro-purchases and small purchases, the compliance obligations imposed upon a contractor are generally less burdensome than full and open competition purchases.

2.5 Do any special rules apply to certain types of agreements (eg, concession contracts, framework agreements)?

'Framework' agreements or 'umbrella' contracts are let mainly by the General Services Administration (GSA). The GSA implements the US government's Multiple Award Schedule (MAS) contracts. MAS contracts are like older catalogue-style contracts whereby frequently utilised goods and services can be purchased. These kinds of services are catalogued under schedules to include services such as:

• security;
• transportation;
• management; and
• goods such as:
• • office supplies;
  • office furnishings; and
  • IT hardware.

These 'framework'-style agreements have special rules regarding:

• the publication of procurement opportunities;
• the limitation of contractors that hold the applicable agreements to participate in the procurement; and
• the ability of contractors to file bid protests.

A sibling umbrella-style contract is a government-wide acquisition contract (GWAC). Like MAS contracts, GWACs are 'indefinite delivery/indefinite quantity' contracts where orders can be placed by the government entity for the contractor to fulfil at the previously agreed price.

Certain state and local governments and public universities can purchase goods and services through federal MAS and GWAC contracts through a procedure called 'cooperative purchasing'. Through cooperative purchasing, a federal MAS or GWAC holder can reach a broader customer pool for purchasers in the non-federal space.

Framework agreements can generally be located through a federal web portal called GSA Advantage – see www.gsaadvantage.gov.

2.6 Do any special rules apply where the supplier is a foreign entity?

The United States has country of origin requirements related to its participation in the World Trade Organization (WTO) Government Procurement Agreement (GPA) and various free trade agreements. However, the triggering criterion is not the nationality of the entity but rather the origin of the products. Assuming that the foreign entity is 'eligible' – that is, not from a proscribed country or not suspended or debarred– the origin of the product is at issue. For example, where the Buy American Act controls:

• the end product delivered to the government must be manufactured in the United States; and
• 50% of the cost of the components must be of US origin.

There are different thresholds for construction and steel procurements. However, the Trade Agreements Act waives the applicability of the Buy American Act for procurements over $193,000 (presently) so that those items that are from WTO GPA signatory or FTA signatory countries are treated as 'US' for the purposes of the US procurement rules. Notably, the Trade Agreements Act utilises a different country of origin test – the substantial transformation test – that is more akin to customs rules of origin for many countries.

Beyond procurement, however, general rules of trade will comply where a supplier is a foreign entity not producing in the United States. These international trade laws include Customs provisions pertaining to:

• classification;
• valuation; and
• country of origin marking.

Other laws include export controls – for example:

• the International Trafficking in Arms for defence items; and
• the Export Administration Regulations for so-called 'dual use' items.

2.7 Do any anti-avoidance rules apply in your jurisdiction?

Anti-avoidance rules are not triggered by the fact that the transaction is based in a public procurement, but rather upon the general rules at play – whether they relate to:

• taxation;
• security clearances;
• national security; or
• foreign ownership and control.

That said, there is a general prohibition on contracting with so-called 'inverted domestic corporations' (48 CFR § 52.209-9 and 10) that could be considered an anti-avoidance rule.

3. Preliminary stages

3.1 What initial engagement with the market will a procuring entity typically undertake in advance of launching a tender procedure? What rules and requirements apply in this regard?

The Federal Acquisition Regulation (FAR) itself has detailed rules related to acquisition planning and competition, and each agency has its own FAR supplements that describe how the agency will go about soliciting and contracting for the goods and services required. Once the agency has undertaken its requirement definition and procurement planning and budgeting, depending on the size of the procurement, most agencies publish a procurement forecast – in many cases a year in advance. In addition, agencies have the power to undertake pre-tender market engagement. These efforts could include the issuance of expressions of interest pre-solicitations to gauge the likely pool of bidders, possibly followed by a bidders' conference at which the agency can describe its needs and seek public feedback. In some cases, the agency seeks to understand whether small businesses, veteran-owned small businesses or women or minority-owned business are in sufficient number in the marketplace to compete on a narrower class of offerors.

Overall and during the procurement, the Procurement Integrity Act (41 USC §§ 2101–2107) provides guidelines on how the government and industry may interact during the course of a procurement. As implemented in Part 3 of the FAR, the Procurement Integrity Act protects the release of:

• 'source selection information' – that is, 'inside' information which the government uses in making its procurement decisions; and
• 'contractor bid or proposal information' – that is, as its name suggests, information provided by a contractor to the government in response to a tender.

Both sets of information are to be carefully guarded.

3.2 How are invitations to participate in a tender made public in your jurisdiction?

While FAR Part 5 still provides for the posting of smaller business opportunities in a public place, in reality, nearly all invitations to participate are made online through electronic notifications.

3.3 What criteria determine eligibility to participate in a tender? Do any exemptions apply?

General contractor qualifications vary by tender, but the general gatekeeping notion is one of responsibility. Per FAR Part 9, in order to be a 'responsible' contractor, a contractor must:

• have:
• • adequate financial resources; or
  • the ability to obtain financial resources to perform;
• be able to perform technically and within the delivery schedule;
• have a suitable past performance record and a record of integrity in government contracting; and
• be eligible to receive an award. For example:
• • a debarred business will not be eligible in general; and
  • a large business will not be eligible for a small business set-aside.
    

3.4 Can the number of potential participants in a tender be restricted in your jurisdiction?

The number of potential participants in a tender can be restricted in the United States. For example, for micro-purchases where a government official is utilising a purchase card to obtain a commercial off-the-shelf item, in practice, a rule of thumb is to consider three sources; but there is no regulatory requirement to do so.

3.5 Do any special incentives apply to promote the participation of small and medium-sized enterprises in tenders in your jurisdiction?

Yes, the United States has special incentives to promote the participation of small businesses and other socio-economic classes of business in tenders. Overall, FAR Part 19 provides for special rules for so-called 'small business set-asides'. Beyond small businesses in general, there can be set-asides for woman-owned, veteran-owned, service disabled veteran-owned and other statutorily defined disadvantaged businesses. Disadvantaged business preferences can extend to Native American, Alaska Native and Hawaii Native organisations. In addition, through programmes such as the Small Business Administration 8(a) programme, socially and economically disadvantaged entities can compete with a more narrowly defined pool of similarly situated business in order to provide for new entrants and more open opportunity.

3.6 What rules and requirements apply in regard to the formulation of technical specifications used as part of a tender procedure?

The general rules, including the Competition in Contracting Act, require that technical specifications not be drafted in a manner that is designed to prefer one contractor over another. Certain tools such as 'brand name or equal' are allowed in defining requirements; and even when a particular brand name is specified, competition among vendors licensed to sell that particular product is to be promoted to ensure adequate competition.

3.7 Are prospective tenderers which have assisted in the preparation of the tender restricted from participating in the tender procedure? If they are, what requirements are there on procuring entities to manage this?

Yes, the US procurement rules have very strict conflict of interest and ethical restrictions. Contractors that assisted in the preparation of requirements would have an 'organisational conflict of interest' and would be precluded from participation per FAR 9.5. While procuring entities are charged with avoiding organisational conflicts of interest, FAR ethical rules requiring codes of conduct (FAR 52.203-13) that address conflicts of interest govern the contractor. Finally, in practice, contractors can police the marketplace themselves through bid protest/bid challenge procedures.

4. Governing principles

4.1 What key principles govern public procurement in your jurisdiction?

As one prominent US procurement law scholar has suggested, the three overarching pillars of the US procurement system are "system transparency, procurement integrity, and competition". Other procurement principles include openness, fairness and value for money.

The stated vision of federal procurement in the United States is to deliver on a timely basis the best-value product or service to the government customer, while maintaining the public's trust and fulfilling public policy objectives (Federal Acquisition Regulation (FAR) 1.102(a)). Likewise, federal procurement regulations instruct purchasing entities to:

• "[s]atisfy the customer in terms of cost, quality, and timeliness" of the delivered product or service;
• minimise administrative operating costs;
• conduct business with integrity, fairness and openness; and
• fulfil public policy objectives (FAR 1.102(b)).

4.2 What requirements and restrictions apply with regard to the impartiality and independence of the procuring entity, including conflicts of interest?

The US procurement regulations state that government business must be conducted:

• "in a manner above reproach"; and
• unless authorised by law, with complete impartiality and preferential treatment for none (FAR 3.101-1).

The regulations prohibit any government employee from soliciting or accepting any gratuity, gift, favour or anything of value from someone who is seeking to obtain government business (FAR 3.101-2).

The Procurement Integrity Act (41 USC §§ 2101-2107) imposes:

• strict limitations on the release of procurement information; and
• restrictions on government employees' ability to receive compensation from certain contractors.

In addition, federal regulations require mitigation or disqualification based on 'personal' and 'organisational' conflicts of interest that arise during the procurement process (see FAR 4.104-1; FAR Part 9.5). US courts and administrative agencies have developed an extensive body of law interpreting these requirements.

5. Procedures

5.1 What different types of tender procedures are available in your jurisdiction? What are the advantages and disadvantages of each?

There are a number of ways in which the procurement market can be segregated by tender procedures.

• Invitation for bid (IFB) versus request for proposal (RFP): In general, procurement entities will utilise:
• • an IFB for procurements of goods; and
  • an RFP for procurements of services or a mixture of goods and services.
• For smaller-sized purchases, procurement entities can utilise a request for quotation, which generally is a streamlined procedure.
• Commercial versus non-commercial: The US procurement system differentiates between so-called 'commercial-off-the-shelf' (COTS) procurements and non-COTS procurements. When purchasing COTS items, the government has the ability to utilise streamlined procedures with pre-negotiated prices. Many COTS-style procurements are undertaken through framework style agreements, where the competition is based on discounts from the 'catalogue' pricing.
• Full and open versus set-asides: The US system includes procurement preferences for small businesses of all sorts, including disadvantaged business and women-owned business preferences. There are additional preferences for veteran-owned businesses (be they small businesses or service disabled owned) and certain Native American-owned businesses. If a procurement is set aside for a particular pool of preferred businesses, the competition will be limited to that pool and non-members of that pool will be precluded from competition.
• General services versus construction/architectural services: There are different procedures for procuring construction and architectural services. When sourcing these kinds of services, the government:
• • focuses more on qualifications and past performance; and
  • looks to price reasonableness as opposed to lowest price.

5.2 What rules and requirements apply with regard to the direct award of contracts, without a tender procedure?

The general rule in procurement is to seek the maximum possible extent of competition. However, there are some cases where 'sole source' procurements are allowed. In general, sole source procedures are utilised:

• in the event of a genuine emergency; or
• when there is only a single provider of the goods or services required.

In such case, the procuring entity must prepare a justification and authorisation (J&A) for other than full and open competition. This J&A is usually cleared by:

• the head of the contracting authority; and
• appropriate legal staff.

5.3 What rules and requirements apply to the choice of tender procedure? What other factors play a role in this regard?

As long as the procurement is full and open, there is a lot of discretion within the procuring office to utilise various tender procedures. The choice of tender procedure comes into play in a number of areas. First, commercial items purchased under GSA federal supply schedules ('umbrella' or 'framework' contracts) utilise certain procedures where there is a focus on delivery and discounted pricing terms. Next, the size of the procurement dictates the level of competition and procedures. For example, as one might imagine, 'micro-purchases' under $10,000 involve procedures akin to 'shopping', especially where credit card purchases are authorised. Moving to the next level of complexity, 'small purchases' where the simplified acquisition threshold is $250,000 are subject to some formal posting and competition requirements; while those procurements over $250,000 are subject to the traditional 'full and open' procedures. Finally, socio-economic programmes can dictate not the kinds of tender procedures to be utilised, but rather which organisations qualify to participate in the selected tendering/competition procedure.

5.4 How do the different types of tender procedures typically unfold? What are the typical timeframes for each?

This depends on:

• the procurement at issue;
• the size of the procurement; and
• the complexity of the procurement.

For example, commercial purchases under $1,000 are quicker and easier than the purchase of an aircraft carrier. It is not practical in this format to describe a 'typical' procurement, as even the utilisation of framework-style agreements can have a long upfront lead time for the issuance of the 'umbrella' contract under which delivery orders and task orders might be let.

5.5 What rules and requirements apply with regard to contract award criteria?

Consistent with the procurement principles discussed above, procuring entities seek to provide the 'best value' to the contracting authority. That said, if the particular procuring entity calls for technically acceptable/low price, the award will be made to the technically acceptable offer whose bid is low without a qualitative review among the technical capabilities of the offerors. More likely, however, is the reliance on 'best value' procurements, where:

• the technical specifications are set forth in the RFP (usually Section M); and
• the relative weights between technical and cost factors are included.

Procurement regulations require that the agency:

• only rank offerors based on the stated evaluation criteria; and
• only rank the offeror's actual proposal as submitted.

Should the procuring agency deviate from the stated evaluation criteria, that deviation will be grounds for a protest of the award.

5.6 On what grounds will tenderers be excluded from a tender procedure?

Generally speaking, exclusion takes place on three grounds at different points during the procurement process:

• at the outset, or whenever the procuring authority recognises the issue, based on the failure of a tendering participant to qualify for the category that has been delimited by the solicitation itself (eg, a non-small business attempting to compete for a small business set-aside procurement contract);
• at any point during the course of the procurement, but usually at time award is being made, based on the procuring authority recognising that the participant lacks responsibility; and
• during the course of the procurement, including the end stage, when a participant is excluded from the competitive range or ultimate award decision based on price and/or technical criteria.

5.7 Are tenderers permitted to negotiate with the procuring entity as part of the tender procedure? If so, what rules and requirements apply in this regard?

Yes, participants in the process can negotiate in a Federal Acquisition Regulation (FAR) Part 15 procurement, where negotiation of the technical proposal is a typical feature of the process. Complex rules and requirements apply to this kind of procurement, to ensure fairness, transparency and true arm's-length competition. In contrast, under FAR Part 14, IFB-style procurements, negotiations are not permitted.

5.8 What rules and requirements apply to the evaluation of tenders? What factors other than price play a role in this regard?

Complex rules apply to evaluations, especially in the case of negotiated procurements. Factors other than price include:

• responsiveness to the solicitation;
• technical solution;
• technical approach;
• overall experience in public procurement;
• overall experience in the area of expertise needed;
• organisational management;
• financial capacity; and
• past performance indicators.

Generally, the stated evaluation criteria will be found in Section M of an RFP.

5.9 Do any special rules or requirements apply with regard to abnormally low bids?

The US regime does not utilise the same parlance as one might find at:

• the World Bank;
• other multilateral development banks; or
• even certain national governments.

However, in the case of a perceived abnormally low bid, the contracting authority should undertake a 'price reasonableness' inquiry to ensure the accuracy and integrity of price proposals. During this process, the procuring agency can identify possible errors and, if there are no errors, confirm the offeror's low price.

5.10 How is the winning tenderer selected and what is the process for awarding the contract?

In a competitive procurement, the winning participant is selected based on the procurement authority's (contracting officer's) evaluation and weighing of the participants' technical and cost proposals against the requirements of the solicitation, under rules established by the solicitation itself; these can be quite complex. When a technical evaluation committee is empanelled to assess technical proposals, contracting officers will afford great deference to the committee's ratings of participants; however, the final decision is up to the contracting officer, including his or her separate evaluation and weighing of participants' cost proposals. Once a source selection decision is made, a negotiation process ensues and a responsibility determination is made, before a final contract is awarded.

5.11 What is the process for notifying unsuccessful tenderers of the outcome of the tender procedure?

The process typically involves the sending of a letter, by electronic means, notifying the recipient of the award to another entity. Salient reasons for the loss can be explained, but the losing participant:

• normally has the opportunity to ask for an in-depth debriefing; and
• may lodge a protest (in one of many different forms) either before or after the debriefing.

5.12 Is joint procurement possible? If so, in what circumstances is it typically used and what rules and requirements apply in this regard?

Yes, joint procurement is possible and is best established by explicitly allowing for that option in the language of the solicitation itself. Sometimes during the course of a protest, a 'compromise' is reached by the parties (awardee, protester and procuring entity) whereby the award is divided up for joint implementation; this sort of outcome is mostly easily reached in an initial indefinite delivery/indefinite quantity procurement, but can also be implemented in other circumstances.

5.13 What rules and requirements apply in regard to a procuring entity's record keeping during a tender procedure?

Generally, the procuring entity must keep the solicitation documentation, the proposal documentation provided by the offers and any and all other source selection determination information. The documentation retained is important from the government's perspective should there be a bid protest (ie, a bid challenge at the agency, the Government Accountability Office or the Court of Federal Claims), so that the agency can demonstrate that its decision was not arbitrary or capricious, or otherwise unsupported by the evidence on the record.

6. Modifications

6.1 What rules and requirements apply to modifications during the tender procedure – for example, to the contract specifications or conditions, to the timetable or to the members of a bidding consortium?

In general, the contracting agency may issue amendments to a solicitation, whether that be an invitation for bid (IFB) (ie, sealed bidding) or a request for proposal (RFP). In IFBs:

• the amendment must be issued before the time designated for receipt of bids; and
• the bidder must acknowledge receipt of the amendment by one of several authorised means (eg, by letter or by signing and returning the amendment) prior to the time designated for the receipt of bids.

For RFPs, the contracting agency may issue an amendment before or after the RFP. The contracting officer must cancel the original solicitation and issue a new one if:

• an amendment is proposed for issuance after the RFP; and
• in the judgement of the contracting officer, the amendment is so substantial as to exceed what prospective offerors could have anticipated so that additional sources would have submitted offers.

6.2 Is the procuring entity permitted to negotiate with the successful tenderer after the contract has been awarded? If so, what rules and requirements apply in this regard?

The contracting agency may not negotiate downward pricing with the successful contractor after award, unless the scope of the contract changes and that change merits an adjustment.

6.3 Are any contract modifications permitted post award? If so, what rules and requirements apply in this regard?

Contract modifications are permitted post-award. Some changes can be made unilaterally and some require bilateral modification. The Federal Acquisition Regulation includes various 'changes' clauses which generally:

• allow the government to direct changes; and
• permit the contractor to seek an equitable adjustment to the contract price and/or schedule if warranted.

If the government attempts to make an out-of-scope change to the contract, with certain exceptions, it may be a violation of competition statutes and the work will need to be completed.

6.4 Can the contract be transferred to a third party post award? If so, what rules and requirements apply in this regard?

Contracts can be transferred to third parties only under certain circumstances. First, the government can agree to a transfer by entering into a novation agreement where this is in the government's interests. A novation agreement is required where a contractor transfers its obligations to a new entity. A novation is not required where there is a new entity by operation of law – for example, due to a name change, a merger or a restructuring – but the contract continues to be performed by the same entity in a different form.

The government can also agree to an assignment through its conduct. For example, even in the absence of a novation agreement, the government may be deemed to have agreed to an assignment in the course of its dealings with the parties.

7. Review

7.1 Which national bodies are responsible for enforcing procurement laws and regulations?

At the agency level, contracting officers enforce procurement laws and regulations. A contractor (or potential offeror on a contract) can challenge a contracting officer's actions. Where a potential offeror or offeror challenges procurement laws/regulations during a procurement, it can seek review of the contracting officer's actions at the General Accountability Office (GAO) of the Court of Federal Claims. If a contractor has a dispute with the contracting officer, it can seek review of the contracting officer's actions at:

• an appropriate board of contract appeals; or
• the Court of Federal Claims.

The Court of Appeals for the Federal Circuit is the appellate court to the Court of Federal Claims.

7.2 On what grounds can a decision of a procuring entity be reviewed? Who has standing to submit an application for review?

An offeror or potential offeror can protest an agency action when the agency:

• engaged in bad faith;
• acted unreasonably or in an arbitrary and capricious manner;
• abused its discretion; or
• violated a statute or regulation.

The offeror or potential offeror must be an interested party to bring a protest. An 'interested party' is one whose direct economic interest would be affected by the award or the failure to award.

A contractor can also pursue a disputes process if it has a claim for entitlement under its contract.

7.3 What is the limitation period for submitting an application for review?

A protest can be brought pre or post-award. Pre-award protests must be brought before the closing of a solicitation. The timeline for post-award protests varies with the forum. Protests to the agency or to the GAO must generally be brought within 10 calendar days of knowing or having reason to know the grounds for the protest. There is no time restriction for bringing a protest at the Court of Federal Claims (besides a six-year statute of limitations).

A contractor bringing a claim under a contract must do so within six years.

7.4 Does the submission of an application for review have a suspensive effect on the tender procedure?

In general, yes. A pre-award protest means that the contracting agency may not award a contract. A post-award protest means that the putative awardee may not perform the contract. There are procedures for when the head of a contracting activity can override the stay.

7.5 What is the typical timeframe for review proceedings?

Generally, a protest to the GAO is decided within 100 days. There are no timelines for protests to the agency or to the Court of Federal Claims. For contract claims brought to the contracting officer, a decision is usually required in 60 days.

7.6 What costs are typically incurred in review proceedings?

Depending on the forum, filing fees may be payable for both protests and claims. While the engagement of a lawyer is not required, there are often legal fees associated with protests and claims, as well as preparation costs.

7.7 What enforcement powers and remedies are available where a breach of the procurement rules is found?

GAO remedies are recommendations for procuring agencies and are not binding. However, an agency that does not fully implement GAO's recommendations within 60 days must report this failure to GAO, which in turn will report it to Congress. GAO may recommend any combination of the following:

• terminating the contract;
• recompeting the contract;
• not exercising a contract option;
• issuing a new solicitation;
• awarding a contract consistent with statute and regulation;
• making such other recommendations that GAO determines necessary; and
• imposing protest costs.

A contracting agency reviewing a protest can take any action that GAO can recommend.

Unlike GAO decisions, Court of Federal Claims decisions are binding. The court can enjoin the award and order all of the remedies that GAO can recommend.

7.8 Can the review decision be appealed? If so, what is the process for doing so?

In protests, an agency decision can essentially be appealed to:

• GAO; or
• the Court of Federal Claims.

A GAO decision can essentially be appealed to the Court of Federal Claims. A Court of Federal Claims decision can be appealed to the Court of Appeals for the Federal Circuit. For contract claims, a contractor:

• must first obtain the contracting officer's decision on the claim; and
• can then appeal the claim to:
• • an appropriate board of contract appeals; or
  • the Court of Federal Claims.

The Court of Appeals for the Federal Circuit is the appellate court for the Court of Federal Claims.

8. Privatisations and public-private partnerships

8.1 Do any special rules apply with regard to privatisations in your jurisdiction?

In general, privatisation is not prevalent in the United States. There is a procedure for determining whether a contractor might be able to provide at a more economical level certain functions performed by federal employees. This procedure is known as A-76 – named after Office of Management and Budget Circular A-76, entitled "Performance of Commercial Activities". The focus of the review is on identifying all activities performed by government personnel as either commercial or inherently governmental. For those activities determined to be 'commercial', the preference is to contract them out through competitive procedures, as opposed to having those activities performed by federal government civil servants. So while 'privatisation' is possible, it is not common.

8.2 Do any special rules apply with regard to public-private partnerships in your jurisdiction?

Public-private partnerships (PPPs) in the United States tend not to be at the federal level, but rather at the state and local level. Common purposes include toll roads on build-own-operate or build-operate-transfer models or for airport concessions, but not PPPs as might be more prevalent in other areas. One model that is close to a PPP is a 'share in savings' contract, whereby a contractor proposes energy efficiency upgrades and then, once the work is completed, is paid based on the government agency's savings. Again, however, this kind of procurement does not constitute the bulk of the procurement by any federal agency.

9. Environmental, social and governance

9.1 How are ESG factors influencing public procurement in your jurisdiction? What specific concerns and considerations should be borne in mind in this regard?

The US government has a long history of using the federal procurement system to enact public policies that apply nationwide. Perhaps most notably, in the 1960s, the federal government instituted policies to curb rational discrimination through an executive order that targeted federal contractors and subcontractors. These policies have since been codified in federal procurement regulations that prohibit discrimination based on:

• race;
• colour;
• religion;
• sex;
• sexual orientation;
• gender identity; or
• national origin (Federal Acquisition Regulation 52.222-26(c)).

Further, covered contractors must take 'affirmative action' to ensure that applicants and employees are not discriminated against based on any such status.

The United States has also taken aggressive steps to ensure that federal procurement supports:

• small businesses; and
• businesses owned and operated by:
• • women;
  • disabled veterans;
  • Native Americans; and
  • socially and economically disadvantaged persons.

In addition to economic support, these firms receive preferential treatment – often in the form of 'set-aside' contracts that are not subject to competition by other types of companies.

In terms of environmental concerns, the US procurement system maintains rules that prohibit the acquisition of certain hazardous or unsustainable products (FAR Part 23), although these rules are relatively underutilised. Recently, the Biden administration initiated a rulemaking process to require certain federal contractors to disclose greenhouse gas emissions and reduction targets. It remains to be seen whether this rule will be codified in its current form.

10. Trends and predictions

10.1 How would you describe the current public procurement landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

While the US federal procurement system has largely been stable in recent decades, there have been some notable recent developments:

• Better Contracting Initiative: On 8 November 2023, the Biden administration announced the Better Contracting Initiative (BCI). The BCI is a four-pronged initiative designed to ensure that the federal government gets better terms and prices when purchasing goods and services by:
• • leveraging data across federal agencies;
  • negotiating common enterprise-wide software licences for $70 billion on the IT market;
  • focusing on proper requirement designation the first time; and
  • finding value in sole-source and other high-risk contracts.
• Artificial intelligence (AI) and cybersecurity: Although AI and cybersecurity remain an overall challenge, on 3 October 2023, the Federal Acquisition Regulation (FAR) Council issued a proposed rule aimed at standardising the federal government's approach to cybersecurity regulations pertaining to unclassified federal information systems – be they cloud-based, other than cloud-based or a hybrid. This proposed rule also includes incident reporting and information sharing requirements.
• Sustainable procurement: On 8 August 2023, the FAR Council issued a draft revision to the FAR pertaining to sustainable procurement. In short, Part 23 of the FAR will be amended and reorganised to address procurement issues such as:
• • energy;
  • renewable energy;
  • water efficiency,
  • biobased products (and certifications);
  • recovered materials (and recovered materials certifications);
  • ozone-depleting substances; and
  • aerosols and foams.
• These rules are generally designed both to:
• • lower the environmental impact of federal procurement in general; and
  • drive the United States to a zero-carbon future.
• Buy American: In October 2022, the Buy American Act domestic content threshold increased from 55% to 60%. This will increase to 65% in calendar year 2024 and to 75% in calendar year 2029 for all procurements where the Buy American Act is not waived by operation of the Trade Agreements Act.
• Small business focus: The Biden administration announced that more than $160 billion was contracted through small businesses in the past year.

11. Tips and traps

11.1 What are your top tips for participants in public procurement procedures in your jurisdiction and what potential sticking points would you highlight?

Our top tips for public procurement include the following:

• Know your customer.
• Read and understand the solicitation.
• Detail and index all compliance obligations
• Cost in compliance.
• Compete openly and honestly.
• Read and understand the contract before you sign.
• Count on compliance controls.

In terms of compliance/controls, participants should be most mindful of the following issues, among others (non-exclusive):

• Internal conflicts of interest: For example, no director, officer or employee (or his or her family or friends) should personally benefit from the subcontracting and vendor award decisions of the participant organisation.
• Organisational conflicts of interest: Participants should be on guard for these – some are plain to see/understand but, given the movement within the industry (including the government-private sector revolving door), participants should be especially vigilant about new employees who have recently come from:
• • a competing organisation; or
  • a government unit connected to a particular procurement being bidded on by the participant.
• Downstream 'soft security' vigilance: Participants are responsible for the transgressions of all sub-tier contractors on issues such as:
• • anti-trafficking (recently expanded in scope);
  • child protection; and
  • sexual harassment.
• In addition to keeping all of their own policies up to date, participants must ensure that their subcontractors and sub-recipients are following all current norms and requirements in these areas, regardless of size or location.
• 'Third rails' in human resources/employment practices: These include the following, among others:
• • Time-keeping policies, comporting with contractual requirements, must be:
  • • put in place;
    • actually followed; and
    • enforced by internal oversight mechanisms; and
  • Employee non-disclosure agreements must be written in a way that does not stymie employees' ability to report fraud, waste or abuse to outside oversight bodies.
• Vetting: Participants must have in place a multi-level, worldwide vetting system – that is, to check all individuals and entities with which they work (foreign and domestic) against:
• • anti-terrorism lists;
  • Office of Foreign Assets Control restrictions; and
  • denied party lists.
• This vetting should start with the experts and consultants proposed as part of any procurement process.
• Internal reporting mechanisms: Participants' internal rules must provide for:
• • standard reporting – for example, of potential conflicts or other instances of fraud, waste and abuse; and
  • whistleblowing mechanisms for employees, including training them on the availability and use of such mechanisms.
• Contractor procurement assessment reports: Participants must be hyper-vigilant of filing dates and responses for earlier government work and ensure they are 'in the system' as required, as these will figure prominently in past performance evaluations.
• Know your rights: Participants must be aware of their rights to question and protest procurement unit decisions taken during the course of the procurement process, including when protest rights vest, counting rules and deadlines around debriefings and protest filings, in particular.
• Say what you mean and mean what you say: Contracting officers and oversight bodies will, in addition to enforcing 'hard rules', measure a participant's level of compliance by comparing deeds to words – that is, by ensuring that participants abide by the rules they set for themselves. For example, when a participant establishes policies and systems as to how costs are allocated (eg, as between direct and indirect costs), it must abide by those rules.

11.2 What are your top tips for procurers in your jurisdiction and what potential sticking points would you highlight?

Procurers should:

• approach the relationship as one of commercial cooperation as opposed to regulatory enforcement; and
• understand that not all changes are nefarious and not all mistakes are criminal acts.

Come to the relationship in good faith and when a contractor raises issues, find a commercial solution first and involve the inspector general only if there has been:

• an actual violation of procurement law or regulation; or
• identifiable fraud waste and abuse.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.