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How do the big boys see the procurement reforms, and what do they think needs to be done to improve the system today? To find out, Legal Times reporters questioned a select group of in-house counsel whose companies do a tremendous amount of work for the U.S. government. They were also asked who their outside counsel were, what regulatory problems accounted for most of their expenditures on outside counsel in 1999, and what they thought would be the three major legal problems in procurement in the coming decade. Their answers follow. THEODORE J. COLLINS, SENIOR VICE PRESIDENT, LAW AND CONTRACTS The Boeing Co. Improvements in government procurement during the 1990s have not come from any dramatic breakthrough, but from a variety of smaller changes. Perhaps paramount is better industry-government communication and cooperation at both the policy-making and working levels. The result has been earlier understanding of requirements leading to better contractor performance; reduced involvement of the Defense Department’s inspector general in procurement matters; and the ability of the government to buy commercial items, like spares and even commercial aircraft, using modified commercial terms. We expect the decrease in litigation involving claims and protests to continue. Many of the acquisition reforms – such as improved communication and understanding, plus alternative dispute resolution – have allowed government and industry to reach agreements without resorting to litigation. If I were to suggest one thing to improve existing procurement regulations, it would be to streamline the export control process. In 1999, the regulatory problem that accounted for our biggest spending on outside counsel were globalization issues, including export controls. (Boeing, for many years, has primarily used Bryan Cave; Crowell & Moring; McKenna & Cuneo; and Sonnenschein, Nath & Rosenthal. These firms have strengths in such key areas as cost and accounting issues, bid protests, claims, and compliance.) The three major procurement problems I see in the next decade are globalization and international issues, including export control; civil-military integration; and qui tam (whistleblower cases). JOHN CURRIER, GENERAL COUNSEL BAE Systems North America Inc. The reforms to the government procurement process have had some positive effect – albeit at an evolutionary rather than revolutionary pace. No one improvement stands head and shoulders above the rest in bringing about the greatest improvement. I would encourage the continued move toward more commercial practices: increased price-based contracting and use of commercial accounting practices. Absent further changes to the protest process, the trend toward less litigation has probably bottomed out. However, I have spent no time plotting trends in the protest area. Such a pastime would seem even more fruitless than filing most protests. Our major areas of expenditure on outside legal counsel were a combination of Hart-Scott-Rodino review and Exon-Florio (CFIUS) review related to acquisitions and divestitures. While we use several different, highly competent law firms for our government contract work, the firm we tend to use most is Crowell & Moring. The attorney who is our principal point of contact there is Jean-Pierre Swennen. He was filling this role for GEC when GEC acquired Plessey in 1989 and continues to do so today. I think that three areas of legal problems in the coming decade will be: Export administration and its impediments to globalization. Technical data rights as contractor investment increases. Appropriate risk sharing in longer-term contract arrangements. NATE FRIENDS, GENERAL COUNSEL AT&T Government Markets Division The procurement process has improved significantly, especially in the area of vendor debriefings. Prior to reform, vendors received little information when they lost a procurement, so they were left either to watch business go to their competitors or to sue their customers if they believed the award decision was incorrect. Now vendors get information in the debriefing process that helps them to better understand why they lost and to make improvements for future procurements. As a result, attorneys focus their efforts on preparing for a thorough debriefing, and litigation is relegated to its proper role: an action of last resort. I think protest litigation will continue to decline as the culture evolves toward partnership and vendors “get religion” that you don’t sue your customer simply because you did not receive a contract award. Best value selections and the widespread use of multiple-award contracts also will contribute to the decline. The risk of claims litigation, however, may rise with the increased use of innovative procurement techniques if ambiguities arise in the contracts. As it is, in-house counsel are focusing more on contract formation and administration issues. As agencies innovate more than in the past, in-house counsel spend a great deal of time advising clients as they perform to ensure that they comply with the more-complex requirements, do not waive the company’s rights, and maintain a positive business relationship with the customer. Also, while there’s value for the government in evaluating vendors on the basis of past performance, it’s important that the evaluation criteria be clear and applied consistently government wide. Other areas that could be strengthened are contractor due process and vendor review of past performance evaluations, to ensure that vendors can give meaningful and timely input. At AT&T, the evaluation of solicitation requirements and deviations from boilerplate accounted for the largest part of our expenditure on outside counsel in 1999. For government procurement, we’ve used three firms: McKenna & Cuneo; Sidley & Austin; and Dickstein, Shapiro, Morin & Oshinsky. McKenna & Cuneo has been AT&T’s primary government contracts counsel since 1982, led by the dean of federal procurement, C. Stanley Dees. In the next 10 years, information assurance/integrity will be a key legal issue. As the government moves to a completely electronic platform, securing information and assessing liability for security breaches will be important. Likewise, cost accounting principles and financial disclosures are areas where legal issues will arise as the government and industry search for an opportunity to align their interests. FRED GELDON, COUNSEL EDS Federal; Electronic Data Systems Corp. From the government’s perspective, I believe, the procurement process has significantly improved. Communication between government and industry has dramatically increased, both in frequency and in substance. The process has been streamlined; procurements are faster and more flexible. As a citizen and taxpayer, I applaud. From the contractor’s viewpoint, however, the blessing is mixed. Contractors realize business benefits from procurement flexibility, but those benefits can seem ephemeral in a multiple-award task-order-driven environment where the contractor is awarded a mere “hunting license” and must incur further rounds of proposal and marketing expenses to compete for each task order. Certain aspects of the existing system encourage an adversarial relationship between government and contractor; we should take steps to foster, instead, a more cooperative, partnership relationship. We’ve reduced the sting of the protest process, long a significant thorn in the side of government acquisition officials, but we haven’t dealt with the other direction. The regulations still encourage the government to exercise leverage not found in a commercial business relationship, such as the ability to threaten criminal sanctions in a contractual dispute or to impose “past performance” penalties when contractors seek prescribed administrative or judicial remedies. Our procurement system will be substantially improved if we devote our regulatory priorities to empowering the many who want to pursue sensible business behavior that benefits both government and industry, rather than to maintaining a regulatory structure designed primarily to prevent wrongdoing by the few. Litigation and protests have been decreasing, and there are a number of reasons why: more complete debriefings after award, more professionally run procurements, contractors’ fear that they might face “past performance” penalties for exercising protest or claim rights, increased use of multiple award “hunting license” contracts in which protests are barred, etc. For the past several years our greatest use of outside counsel in the government procurement area has been for protest representation, usually as an intervenor on the side of the government. This work requires a short-term concentration of resources for which an in-house office cannot, and should not, staff. We have also used outside counsel for litigation and for certain areas of specialized expertise. In the coming decade, three major legal problems in procurement will be: Keeping up with legal issues raised by technological change – for example, encryption, e-commerce, and the Internet in general. The effect of the mandated reduction in the government’s acquisition work force, accompanied by substantial loss of experience and expertise. Issues surrounding outsourcing, public-private competition, A-76, and the Federal Acquisition Inventory Reform Act.

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