Procurement Policy Flashcards
(40 cards)
1
Q
Scale of Federal Procurement System
A
- massive
- annually about $700 million in goods + services, according to GAO
- largest purchaser of goods + services in the world
- touches nearly every sector of economy, not just goods + services
- almost 20% of private sector workforce is employed by a company with federal sector contracts
2
Q
Procurement Policy and Presidential Authority
A
- Prof noted that President’s authority plays out a little differently in this space - able to reach into private sector + tell them what to do
- b/c private actors specifically coming to do business w/ gov, power dynamic changes -> as customer, gov can impose conditions
3
Q
Socioeconomic Policy + Procurement
A
- Pres can order EO stating fed gov will only contract w/ contractors who maintain minimum workplace standards
- Presidents have long imposed socio-economic procurement policy on procurement process + private contractors
4
Q
Biden Conditions on Procurement
A
- EO on tackling climate crisis on home and abroad: FARC (Federal acquisition regulatory council- sub agency made of officials from different agencies): Regulatory amendments to improve contractor sustainability and carbon emissions; carbon free electricity sector by 2035; zero emission fleet of USPS (USPS buys a lot of vehicles)
- EO climate financial risk: Requires federal suppliers to publicly disclose carbon emissions and requires them to set science based reduction targets
- EO labor: Contractors may not use pay history in setting compensation ; minimum wage standards, notify workers of rights, no discrimination on basis of sexual orientation or gender identity
5
Q
Federal Property and Administrative Services Act
A
- aka FPASA, aka Procurement Act
- winds up governing what President can do in terms of imposing conditions on Procurement
- stated intent - provide Government w/ “an economic and efficient system” for the procurement + supply of personal property and nonpersonal services and performance of related functions
- Prof limits need to be consistent w/ act + considers necessary to further act’s goals of efficiency and economy
6
Q
AFL v. Kahn - Facts
A
- DC Circuit, 1979
EO at issue:
- Creates Council empowered to set “voluntary” guidelines for wages and prices for purpose of control inflation
- requires fed contractors to comply with the wage and price guidelines
- imposes public disclosure requirements -> shames companies who do not comply with the guidelines (company subject to ire of public and cannot obtain federal contracts)
- labor unions sue b/c infringes on right to bargain collectively
- FPASA invoked as basis for Pres authority, but some q as to whether EO was for “economy + efficiency” of procurement process or just to curb inflation (big deal at the time)
7
Q
AFL v. Kahn - Holding
A
- Congress has authorized the President to deny Government contracts above $5 million to companies that fail or refuse to comply with the voluntary wage and price standards
- ## relatively pragmatic judiciary - giving Pres leeway to advance police agenda through procurement (contrast w/ Schecter Poultry + NFIB v OSHA)
8
Q
AFL v. Kahn - Rule
A
- “nexus between the wage and price standards and likely savings to the Government. As is clear from the terms and history of the statute and from experience with its implementation, our decision today does not write a blank check for the President to fill in at his will. The procurement power must be exercised consistently with the structure and purposes of the statute that delegates that power.”
- in other words, Pres has broad authority to impose conditions on procurement as long as they are related to economy and efficiency (need sufficiently close nexus)
9
Q
AFL v. Kahn - Reasoning
A
- Text of FPASA statute: Section 205(a), provides that the Pres “may prescribe such policies and directives, not inconsistent with the provisions of this Act, as he shall deem necessary to effectuate the provisions of said Act”
-> Under FPASA, “Presidential policies and directives shall govern — not merely guide — “ agencies under FPASA -> court reasons that by emphasizing Pres leadership role in setting Government-wide procurement policy on matters common to all agencies, “Congress intended that the President play a direct and active part in supervising the Government’s management functions.” - “”Economy” and “efficiency” are not narrow terms;” -> Congress must’ve intended to give Pres flexibility
- History of FPASA authority invoked: “Congress itself has frequently imposed on the procurement process social and economic programs somewhat removed from a strict view of efficiency and economy.”
-> SO have Presidents “ Since 1941, though, the most prominent use of the President’s authority under the FPASA has been a series of anti-discrimination requirements for Government contractors”: Johnson, Nixon, Kennedy (requiring affirmative action and ban sex and race discrimination)
10
Q
UAW Labor and Employment Training Corporation v. Chao - Facts
A
- DC Circuit, 2003
- EO required all fed contractors to post notices at all facilities informing employees of rights under fed labor law that protect employees from being forced to join union or pay mandatory dues for costs unrelated to representational activities
- rationale for nexus - informing workers of their rights enhances their productivity -> if US gov has such a workforce to draw from, the efficiency + economical completion of procurement contracts is enhanced
11
Q
Chao - Significance
A
- Prof framed this as court acknowledges the nexus here is attenuated or possibly non-existent, but still affirms president’s decision
- according to Prof, case takes standard from lenient to non-existent
12
Q
Chao - Holding
A
- EO is valid under FPASA: “The link may seem attenuated (especially since unions already have a duty to inform employees of these rights), and indeed one can with a straight face advance an argument claiming opposite effects or no effects at all. But in Kahn, too, there was a rather obvious case that the order might in fact increase procurement costs (as it plainly did in the short run); under Kahn’s lenient standards, there is enough of a nexus.”
13
Q
Policymakers and Procurement Tool
A
- discussed in class how Chao imposes relatively low standard -> can arguably use procurement system to advance any social or economic policy goal
- at this point, procurement system so tied to opportunity to make policy moves that its become a focus/key tool for policy advancement (rather than stuff developing purely for purpose of econ and efficiency of the procurement system itself)
- BUT still need to seriously discuss nexus - exec orders usually start w/ some kind of policy council coming up with ideas on how to shape this
- q of whether a policy can have a dual purpose
14
Q
Policy Process for FPASA Executive Orders
A
- CEA determines whether credible argument can be made that EO promotes economy and efficiency in procurement
- CEA issues “E&E” memos (economy and efficiency) these are confidential
- E&E memos rely on economic literature about worker efficiency
15
Q
Council of Economic Advisors
A
- CEA
- help Pres think through econ issues -> assess whether credible arg can be made that exec order will advance econ + efficiency of fed procurement system
16
Q
EO 10426
A
- Biden admin EO
- raised minimum wage to $15 for all non-tip federal contractors
- Obama did minimum Wage EO (at a lower amount) + survived Trump admin, so somewhat reasonable to think this shouldn’t be a big deal
- also CEA analysis pretty strong - extensive econ literature shows wage increase enhances worker productivity (economic costs more than offset by efficiency gains) -> Under Kahn, close nexus between EO + economy/efficiency
17
Q
State of TX et al v. Biden
A
- district court in TX rejects Biden minimum wage EO
- argues President’s role only supervisory
- Prof openly said very poor opinion
18
Q
State of TX v. Biden - Claim re FPASA
A
District ct claims only DC Circuit follows Kahn, + says instead need 3 things to satisfy FPASA:
1) a policy or directive
2) “necessary to carry out the subtitle”
3) “consistent with this subtitle”
- calling for a specific reference in FPASA to the EO policy
19
Q
State of TX and Chrysler
A
- this is the flatly wrong part of the op
- claims: “in Chrysler, the Court noted that there must be a “specific reference” in the Procurement Act as the source of authority upon which a president’s executive order is based.”
- BUT Chrysler had nothing to say about FPASA
-> Court actually said it was NOT addressing whether an EO was valid under FPASA (what was at issue is whether public disclosure requirements in EO about contractors’ hiring practices were valid under FPASA or FOIA or other statues)
20
Q
State of TX - FPASA Leg History
A
Uses this to argue in favor of its reading:
- prior to FPASA, every government agency was running its own procurement system, no centralized system
- Hoover Commission, tasked with improving the Federal Government’s procurement process, recommended centralizing this process under President, NOT to give President control over procurement
- Goal was to centralize control over procurement under the President, not to just give Pres policy control
21
Q
State of TX - View of President’s Role
A
- gov says broad grant of authority to implement policy necessary to foster economic + efficienct procurement system
- Pl argues just flexibility + centralization to remedy duplicative contracts + inefficiency
- Prof said two very different perspectives, court lands on pl’s arg of solely supervisory authority
22
Q
State of TX - could minimum wage have been adjusted to withstand its scrutiny?
A
- Lack of uniformity –> the system will work better if you know all contractors are paying a certain level -> Increase in productivity
23
Q
State of TX - MQD
A
- district ct also invokes MQD -> says MQD = limit on presidential authority, not just agencies
- gov argued just building from Obama order, not actually all that expensive
- ct said more than just wage costs though (spillover effects to other wages rising, + regulatory familiarization costs)
- Prof emphasized that under this view of MQD, almost no FPASA measures can survive (would need to be super administerial + likely restricted to specific classes of contractors)
24
Q
Differing Views of Pres Authority - Kahn vs State of Texas
A
- Kahn (DC Circuit): fed procurement big + complicated –> ct recognizing that Congress recognized the complexity of it + gave Pres broad + flexible tool
-> If statute doesn’t narrow the purpose, we give Pres wide berth - TX (district court) – says we need to look at what specific problem Congress was solving + can’t read any flexibility into the solution Congress chose unless Congress is very clear that it wanted that flexibility
-> Because wide berth not specifically stated, can’t give to Pres
25
Mayes v. Biden - Facts
- 9th Cir
- EO 14042: Ensuring Adequate COVID Safety Protocols for Federal Contractors: All federal contractors have to ensure that all employees are vaccinated against COVID
- nexus argument - actually pretty tight (close relationship between vaccines + improving efficiency, designed to keep workplace open)
26
Mayes v. Biden - MQD
- Says MQD does NOT apply b/c Pres is not an agency
-> FPASA specifically delegated power to Pres, not the agency
-> Democratic accountability – Pres doesn’t have the same problems as agency (court analyzes why SCOTUS did this, addressing accountability issues)
-> Court says Pres is the most democratically accountable officer in the gov
- also says EO would w/stand MQD even if it applied
-> reasoning MQD is focused on expansion of REGULATORY authority, vs FPASA deals w/ proprietary authority
-> also reasons not transformative b/c not nearly as big as other things previous Pres' have done using this same authority (anti-discrimination conditions, wage and price controls)
-> added rationale that Congress reenacted FPASA in 2002, after lots of big Presidential moves - assumption that Congress is aware of interpretations of statutes -> assume by reenacting without making changes, Congress had been okay with how it was being used (vs TX had used this to say nothing changed in 2002, so the original reasoning for passing the law is what we should look at)
27
Mayes v Biden - Takeaway
- after this, wouldn’t want to bring an MQD challenge to a FPASA move in the 9th Circuit – they’re saying almost anything goes as long as it’s consistent with Constitution + Procurement Act + economy and efficiency
28
Mayes v Biden - Nexus
- says the EO is “reasonably related” (4th Cir test) and has a “sufficiently close nexus” (Kahn) to efficiency goal of FPASA
- Analogy to Biden v. Missouri (not a FPASA case): "Procurement Act is similar to the statutory text at issue in Biden v. Missouri. In Missouri, the Supreme Court held that language authorizing the Secretary of Health and Human Services to impose conditions he “finds necessary in the interest of . . . health and safety” was adequate authorization to impose a vaccination requirement on the employees of facilities that receive Medicare and Medicaid funds"
- Furthermore, This statute does not present the worry of Congress hiding “elephants in mouseholes.” (concept of Congress creating elephant hole, not a mouse hole)
- "We reject these invitations to adjudicate slippery-slope hypotheticals (by other circuit courts)… In our system of government, courts base decisions not on dramatic Hollywood fantasies, . . . but on concretely particularized facts developed in the cauldron of the adversary process and reduced to an assessable record.”
29
EO Fair Pay and Safe Workplaces
- disclosure requirement for contractors
- requires contracting officers to take into account (when awarding contractors) the history of labor & employment law violations when making assessment whether bidder is responsible party -> contracting officers can only award contractors to responsible bidders
-> before this, responsible just meant whether or not you actually had the necessary equipment, etc.
30
EO Fair Pay and Safe Workplaces - Nexus Argument
1) Contractor performance: Contractors that consistently adhere to labor laws are more likely to have workplace practices that enhance productivity and increase the likelihood of timely, predictable, and satisfactory delivery of goods and services to the Federal Government.
2) Procurement System: Helping executive departments and agencies (agencies) to identify and work with contractors with track records of compliance will reduce execution delays and avoid distractions and complications that arise from contracting with contractors with track records of noncompliance.
31
EO Fair Pay and Safe Workplaces - Enforcement Challenges
Only after everyone had fallen in love with the policy did people realize no easy way to coordinate inquiries about contracting violations agencies were required to check
- Enforcement databases not interoperable – to make a list of all violations, would need to run separate inquiries at OSHA, NLRB, Wage and Hour Division, violations of state law
- No methodology for ensuring that a company’s name was consistently entered in the same way
- If name was misspelled, or misunderstanding re spelling of company’s name, couldn’t consistently get all of the violations
Whole new procedure would need to be implemented by contracting officers (tens of thousands across fed gov)
-Working on a system to train and support them
-Had to be done without any money because Congress refused to appropriate funds for this purpose
32
ABC of Southeast Texas v. Rung
- District Court case
- EO violates First Amendment: Disclosure requirement is compelled speech
- not really a FPASA challenge, but ct critiques nexus anyway - argues ev gov relies on only takes into account serious violations, vs the disclosures require you to report more than that -> court thinks no compelling interest
33
EO Fair Pay and Safe Workplaces - Decision to Include Non-Final Determinations
- opened admin up to attack in litigation
- but done for practical reasons
-> Concern of how much time there’d be between the conduct and the ultimate determination
-> Didn’t want to be incentivizing continuing litigation so contractors would avoid final determinations
-> Wanted to encourage remedial conversations – wanted to incentivize contractors cutting good deals with the agencies
-> Nowhere in the executive order did it say contractors who had these violations could not get gov contracts, just making it part of the procurement determination – not definitively cutting anyone out of the procurement situation
34
Potential Weakpoints of FPASA
- MQD -> Mayes response of elephant-sized hole -> BUT potential SCOTUS response of non-delegation doctrine (Congress can't create elephant-sized holes)
- always concern about getting a decision that could knock out the anti-discrimination piece, although Title VII diminishes this a bit
- Prof seemed to indicate could theoretically run into the TX leg history args
35
GHG Disclosure Requirement
- came out at beginning of Biden admin, requires fed contractors to disclose their emissions of GHGs + have a plan to reduce those emissions
- Prof said no litigation yet, but very likely
- q of whether GHG disclosures = controversial + stigmatizing -> Prof said admin very concerned about a 1st Am challenge similar to Fair Pay Safe Workplaces
36
Abortion and FPASA
- there have been calls for Biden to require fed contractors to cover travel costs for employees in states that have restricted abortion access
- Prof noted economy + efficiency arguments might be a challenge
37
Takeaway on Procurement
- Prof basically noted it's a super important area, but it is now in flux because of all the decisions we looked at
38
Defense Production Act
- Prof framed this as another way that gov's purchasing power can be used to advance policy
- usually thought of in terms of nat sec (power to harness output of defense contractors to ensure country can respond to foreign threats)
-> this was original impetus of statute in 1950 (gave Pres power to prioritize orders from gov)
- if Cong appropriates the funds, DPA gives Pres authority to incentivize private companies to produce more of the stuff that Pres thinks gov needs to buy
39
Defense Production Act - Novel Uses
- possibility of using in energy sector
- emergency preparedness + response to natural disasters
-> was important in pandemic response (able to prioritize gov orders on things like masks + vaccines)
- possibly also a tool in combatting climate crisis
40
Defense Production Act - Climate Change
- Inflation Reduction Act –> Congress appropriated $500 million for green energy sector in DPA investment
- Biden Admin could use this to accelerate production of electric vehicles + think also charging
- some advocating for aggressive use to jumpstart renewable energy sector -> gov could announce it will buy certain # of solar panels, green cars, etc. at a specified price if buyers can't be found
-> cos would then have guaranteed buyers
