I read the article in the Janary 9 Quorum Columbia about Richland County’s putative procurement of some construction services. I profess to be an expert on procurement by government nationwide, a field different from procurement in the private sector. I have extensive experiences as a bidder with procurements by Army, Navy, Air Force, the highway departments of several states, counties, cities, school districts, etc.
I have many war stories about devious and collusive bidders gaming the systems. My hands are not spotlessly clean. That’s my basis for this expression of my opinion. I write to give you some background and the basic ideas of government procurement law. Policy is not law.
That the subject procurement is to be funded only by Richland County’s “penny tax” is irrelevant for the purpose of this writing.
Most, not all, procurement of construction services is for infrastructure. The same law should apply to procurement of goods. Procurement of insurance is a procurement of goods.
South Carolina Consolidated Procurement Code S. 11-35 is the basis for all S.C. governmental procurement. It applies, in its way, to all agencies of the State, political subdivisions, school districts, etc. It’s the best (and only) standard that we have. It’s poorly written, needs major revision and we and our judiciary stumble along with it. Universities consider it to be too stringent. The General Assembly exempted the Department of Transportation (DOT) and”research universities” from its teeth. Richland County can amend its procurement code to improve it using this writing as a guide; reasonable amendment is unlikely to conflict with S. 11-13.
I haven’t read Richland County’s Procurement Code. I know nothing about the specifics of the subject procurement other than your article.
The purpose of law regulating procurement by government should be:
- To reduce government expense.
- To encourage competition among vendors.
- To create an environment for procurement to be made on an objective basis with minimum subjectivity.
- To create an environment wherein aspiring vendors to a government are confident the law will be enforced and those who comply with the law will not be discriminated against.
- To create an environment where the citizens are confident that their government’s procurement operation is of laws and not of men. To that end, government should be required to publish solicitations for procurement in newspapers of general circulation, not just media aimed at vendors. That informs the public that a procurement is about to be made.
- “Fairness” is a word that has no meaning in law and should not be used.
- Protest and review processes are only a way for politicians to corrupt an objective process to become a subjective one and should not be created; resolution of disputes between government and vendors/contractors is the proper function of the judiciary.
- “Responsive” means a bid that complies with the solicitation document, the IFB, a useful process.
- “Responsible” should never be used; it enables a government official to make a subjective decision that a bidder, having submitted a bid bond, is ineligible to be procured from because it is incapable to perform. In New York, this means it hasn’t contributed sufficiently to a political campaign fund.
- The purpose of a procurement should not be to impose social engineering or to affect employment of any particular kind of labor. Procurement law should not be used to give advantage to local vendors.
There’s two basic methods that government can use to select its source of procurement, the competitive sealed bid (CSB) method and the competitive sealed proposal (CSP) method (no-bid), both with exemptions for small size, emergencies, sole source, etc. CSB is an objective process; CSP is a subjective process, an invitation to negotiate.
To initiate a procurement, government publishes an Invitation for Bids (IFB) or Request for Proposals (RFP). A bid and a proposal are two vastly different things; not synonymous. RFPs are properly used to properly used to procure professional services. Government officials hate CSB because it denies them the opportunity to reward their friends and punish their enemies. They frequently use an RFP to procure services for which an IFB should be used. Combining a procurement of design and construction services (design/build) in one CSP process is a common way to subvert the system to select the source of construction services without using CSB. Some such procurements have been of 2 percent design and 98 percent construction. This writing does not deal with RFPs.
An IFB is a solicitation for bids. A resulting responsive bid is an offer subject to acceptance. All bids should be submitted sealed. Law, not policy, should prohibit alteration of a bid after its seal is broken. Failure to enforce this simple rule can never be justified. A bid is not subject to negotiation. A contract is subject to negotiation. Perhaps procurement law should apply to modification of a contract for procurement; otherwise procurement law should end when procurement becomes a contract.
Bid bonds, payment bonds and performance bonds are important parts of procurement. Most governments err by failing to understand the system that protects their interest. All surviving sureties know how to defend themselves.
The debarment process is to be deplored. If tried, it’s rarely successful. A malefacting contractor should be prosecuted. Debarment is just political revenge by the government that is denying itself the future services of what might be a beneficial contractor. Revenge is deplorable.
In many communities, the construction industry is frequently the employer of last resort. Government procurement should not discriminate against a former prisoner who can buy a bid bond.
Federal grants of funds are conditioned to promote social engineering issues that are important to Washington. If federally granted funds are to be used to fund procurement, this is a major problem. Compliance with these conditions of grants is a massive problem. This writing does not deal with those federal issues.
Government should procure from a single contractor and refuse to recognize the existence of any subcontractor or supplier of material. Richland County has no good reason to use this language if no federal funds are to be used.
This covers only the highlights; a serious effort to write good procurement law will involve many more details. Several model government procurement codes have been published, most generally sound. For political expediency, governments frequently warp their codes from them, a perilous excursion.
-Ned Sloan, Sloan Engineering
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