E-government

Army Lawyer, Jan-Feb, 2003

E-Government

Federal agencies introduced numerous electronic government (E-Government) initiatives this year. President Bush issued a memo reiterating that E-Government is a core feature of government reform and encouraged coordinated E-Government initiatives. (1) The Senate passed legislation creating an E-Government position in the Office of Management and Budget (OMB). (2) The E-Government Task Force implemented E-Government initiatives to address redundant and overlapping agency actions. (3) The General Services Administration (GSA) redesigned a key component of E-Government, FirstGov, to allow direct transactions between the government and the public. (4) The OMB plans to centralize the rule-making services of several agencies on-line with FirstGov.com. The integration should save the federal government $70 million in an eighteen-month period. (5) The OMB and the Department of Labor launched a Web Site, GovBenefits, to give easy access to information about government programs. (6) The GSA released the Certificate Arbitrator Module software on an open-source basis. The software is "designed to make it easier for the public and the commercial sector to securely conduct business with the government electronically." (7) The General Accounting Office (GAO) announced plans to implement electronically filed bid protests as part of the GAO's E-Gov initiatives. (8) The Department of Energy (DOE) used digital verification to send a 9500-page proposal. (9) "It is estimated the DOE saved nearly one million dollars in reproduction and storage costs by e-mailing and electronically signing the proposal." (10) Finally, the Administrator for Federal Procurement Policy launched the government-wide past performance retrieval database. (11) The Web site is an E-Government initiative to eliminate "collection redundancies." (12)

Electronic Request for Payment

The Department of Defense (DOD) proposed amending the Defense Federal Acquisition Regulation Supplement (13) to require contractors to submit payments electronically and the DOD to process those payments electronically. (14) The rule would authorize the Secretary of Defense to exempt cases if the electronic requirement would be unduly burdensome. (15) The DOD delayed implementation of the rule until 1 October 2002. (16)

Reverse Auctions

Agencies continued to use on-line reverse auctions to procure goods and services. The Air Force Center for Environmental Excellence (AFCEE) used a reverse auction to procure the construction of a motorized security gate. (17) The AFCEE notified contractors in advance and issued log-in identification and passwords to access the auction Web site. (18) Contractors submitted proposals in advance, and contractors with unacceptable proposals were excluded from the Web site. (19) The bidding process continued until there were no bids within a five-minute period, and ended in forty-eight minutes. (20)

When Will It End?

Last year's Year in Review emphasized the importance of thoroughly reviewing electronic commerce reverse auction requests for proposals (RFP) to avoid clauses that could indefinitely extend auctions. (21) In Royal Hawaiian Movers, Inc., (22) the GAO denied a protest challenging corrective action taken as a result of an ambiguous electronic commerce RFP. The Department of the Navy issued an RFP for the movement of containers between points in Oahu, Hawaii. The RFP included a reverse auction after the receipt of initial price proposals. (23) The auction was to begin at 0900 hours and last for sixty minutes, but receipt of revised offers within the last five minutes of the auction extended the acution for an additional five minutes. (24) The RFP authorized fifty extensions and indicated the auction would end at 1400 hours. The Navy failed to recognize that the auction would end at 1410 hours if the bidders used all fifty extensions. (25) they did, and the auction ended at 1410 hours. Royal Hawaiian submitted the lowest-priced offer after 1400 hours. Pacific Express objected, because it submitted the lowest-priced offer before 1400 hours. The Navy acknowledged that the RFP was ambiguous and amended it to request revised proposals from the offerors. (26)

Royal Hawaiian protested the amendment. Specifically, Royal Hawaiian complained that "reopening the competition after the reverse auction was not required to ensure fair competition."(27) Royal Hawaiian argued that there was no evidence that the RFP misled the offerors. Pacific Express knew that the auction would continue past 1400 hours because it submitted a revised offer after 1400 hours. Royal Hawaiian also complained that receipt of final proposals required it to bid against itself, resulting in fundamental unfairness to Royal Hawaiian. (28)

The GAO stated that "an agency has broad discretion in a negotiated procurement to take corrective action where the agency determines that such action is necessary to ensure fair and impartial competition." (29) The Comptroller General found that reopening the competition was a reasonable corrective action because the offerors may have formulated different strategies based on a different understanding of when the auction would end. (30) Pacific Express did submit a revised offer after 1400 hours, but the GAO would not conclude that this meant that Pacific Express knew before 1400 hours that the auction would continue past 1400 hours. (31) The GAO held that the RFP was patently ambiguous and that the Navy's request for revised proposals was an appropriate corrective action. (32) Although the Navy included clauses that avoided extending the auction indefinitely, (33) this experience still provides a valuable lesson--agencies should conduct dry runs and implement all the provisions of the RFP to alleviate conflicts and ambiguities. Major Davis.