INFOTECH AND THE LAW

Procurements Aren't Urgent Unless the Law Says So

Richard Rector

As Operation Enduring Freedom enters its second month and the reality of a lengthy military campaign looms ahead, the Defense Department continues its shift to a full, wartime posture. For acquisition personnel, this means finding ways to provide warfighters with the supplies and services they need, when they need them, to win the battle against terrorism.

One way agencies meet this objective is by streamlining procurements to provide for limited competition. The law states an agency may limit the number of sources in a procurement when, among other things, its needs are of such an "unusual and compelling urgency" that the agency would be seriously harmed if competition was not limited.

Thus, if the agency has an urgent requirement, it may avoid the regulatory and procedural requirements of conducting a full and open competition by conducting a limited competition among qualified suppliers or, under certain circumstances, awarding a contract on a sole-source basis to a single supplier.

These streamlined procurement methods have increased in the wake of Sept. 11 as government agencies, and particularly the military, have encountered many instances of unusual and compelling urgency. Indeed, the Air Force has expressly encouraged its acquisition staff to make "liberal use" of such procurement methods to quickly provide combat capabilities to warfighters.

Defense Department regulations provide specific examples of when a limited competition may be justified. These include situations in which:

? Supplies, services or construction are needed because of fire, flood, explosion or other disaster (e.g., reconstruction of the Pentagon after the Sept. 11 attack);

? Essential equipment or repairs are needed to support the operational missions of ships, aircraft and missiles;

? Construction is needed to preserve a structure or its contents from damage.

While streamlined procurements provide agencies with significant flexibility to deal with exigent circumstances, they are not without limits. These procurements are critically examined and occasionally protested by potential suppliers who believe they were unfairly excluded.

It is important, therefore, for agencies and contractors to understand the law in this area. There are three key rules to keep in mind.

First, the limited competition must be supported by a written justification and approval, or J&A, that details the basis for the urgency. If the procurement is protested, the rationale of the J&A will be closely scrutinized, so it is critical that the agency fully explain and justify its decisions.

In most situations, a J&A must be executed before the contract award. In a case of unusual and compelling urgency, however, the J&A can be executed and approved after the award to avoid unreasonably delaying the acquisition.

In some cases, agencies even have been allowed to justify an award after the fact, based on unusual and compelling urgency, when an entirely different justification was used when the award was made.

Second, it is important to recognize that, even if a requirement is urgent, the law compels agencies to solicit "as many potential sources as is practicable under the circumstances." Thus, award to a single source is not automatically justified by urgent circumstances. Rather, an agency must consider whether a limited competition can be accomplished within the time available, and whether there is more than one qualified source that might respond in that period.

Thus, sole-source awards are upheld when the urgent circumstances render competition impracticable (e.g., a building must be repaired immediately) or when an agency reasonably finds that only one contractor can meet its needs in a timely manner (e.g., only one source could make aircraft engine parts in accordance with an agency's schedule requirements).

Third, urgency will only be found when a delay in awarding a contract would cause "serious injury, financial or other, to the government." Thus, in its J&A, an agency should detail the operational, financial and other potential harm to the government in the event of a delay.

Most agencies describe potential injury in terms of operational harm, such as a loss of mission capability, increased danger to personnel or delay to planned operations. This is particularly true of military agencies, as potential harm to military operations carries considerable weight ? and, rightfully, receives great deference ? in the event of a protest.

As Operation Enduring Freedom stretches into 2002, there are sure to be numerous streamlined procurements based on unusual and compelling urgency. The protests, however, should be few and far between ? as long as agencies and contractors keep the above rules in mind and prepare well-reasoned J&As.

Richard Rector is a partner in the government contracts group of Piper Marbury Rudnick & Wolfe LLP in Washington. His e-mail address is richard.rector@piperrudnick.com.

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