Guam’s Centralized Procurement Regime

© John Thos. Brown 2011

The Mythconceptions of Procurement Autonomy

The Centralized Procurement “Regime”

As will become apparent in subsequent slides, the “centralized procurement regime” refers to the

creation of uniform procurement law and regulation, and

the consolidation and transfer of most procurement authority from agencies to the following three

bodies: The Policy Office, CPO and Director DPW (“DDPW”)

• By Public Law 1 the Legislature established the Working Capital Fund, for financing the

Division of Procurement and Supply. • But no procurement law.

• Based on PL-1, and his Organic power, the Governor ultimately issued E.O. 1957-1:

“Procurement and Supply Regulation No. 1”

And E.O. 57-1 Begat Law (PL 4-68) and Law Begat E.O. 65-12A

And E.O. 57-1 Begat Law (PL 4-68) and Law Begat E.O. 65-12A

PL 4-68 (1958)

The Legislature Empowered Executive Authority • GC § 6600.1. The procurement and warehousing of all supplies … • other than for the Guam Memorial Hospital and the Department of

Education

• shall be a function of the Department of Administration,

• And all procurement (DOA, GMH and DOE) was to be performed “in accordance with such terms, conditions, and procedures” as shall be prescribed

by the Governor under Executive Order

De-Evolution of “Centralized” Procurement (Recap)

PL-1 and E.O. 57-1 were created “to obtain for the Government of Guam maximum benefits and advantages available through centralized purchasing and warehousing of materials, supplies and equipment for the use of all departments and agencies of the government” and “standard procurement procedures”.

PL 4-68 and E.O. 65-12A made modifications to the centralized and standardized regime, but continued to allow the Governor to promulgate “terms, conditions, and procedures” of procurement for each of DOA, GMH and DOE. And, it exempted GMH and DOE from the centralized purchasing requirement. Neither services nor construction were mentioned.

Transition from Executive control to Legislative control

PL 16-124 contained several sections dealing with the transition to the new Centralized Procurement Regime provided for in Section 1, such as: • Section 5: It requires the CPO to “adopt a plan

effectuating the transfer of functions for procurement”, required by what is now codified as 5 GCA § 5120.

• “The transition to central procurement shall be in place and ready to be implemented … October 1, 1983.” (In was enacted December 30, 1982.)

The Legislature S h r e d d e d the Old Law

• Public Law 16-124 created the new Procurement Act comprised of 12 Articles, and took Legislative control over the procurement policies and procedures of the Government of Guam, and set out the basic structure and scope of the procurement law.

• Section 2 of PL 16-124 specifically repealed Govt. Code § 6600 and subsections that had given the Governor Executive authority over procurement.

• The Procurement Act is now codified at Title 5, Chapter 5 of the Guam Code Annotated (GCA), §§ 5001 et seq.

Procurement Policy and Practice Was Transformed From Executive Order to Law

The Legislature cleaned the slate, erasing all procurement authority, whether by

Executive Order or by existing agency legislation…

Repeal/Conforming Sections in PL 16-124

• § 2 Repeals Governor’s Executive Order authority and the procurement authorities of GMH and DOE

• § 6 makes Procurement Act applicable to GHURA • § 7 makes Procurement Act applicable to GMHA • §§ 8, 9 conforms and applies Act to GPA • §§ 10, 11, 12, 13 conforms and applies Act to GEDA • § 16, 17 conforms and applies Act to GIAA • §§ 18, 19 conforms and applies Act to PAG • § 20 applies Act to UOG • §§ 21, 22, 23 conforms procurement law to GMHA • § 24 makes Act applicable to GCC • § 25 makes Act applicable to GMTA

And, It Started All Over Again

PL 16-124, Section 1, GC § 6946.6 (now 5 GCA § 5120)

Centralization of Procurement Authority

“Except as otherwise provided in this Article, all rights, powers, duties, and authority relating to the procurement of supplies, services, and construction, and the management, control, warehousing of supplies, services, and construction now vested in, or exercised by, any governmental body under the several statutes relating hereto are hereby transferred to the Policy Office and the Chief Procurement Officer and the Director of Public Works, as provided in this Chapter.”

Any “Governmental Body”

The Centralized Regime consisting of the

Policy Office, CPO and DDPW

Transfers to …

General Procurement Authority under the

Centralized Procurement Regime Is “Centralized”

By a Uniform (“Regularized”) Body of Law and Regulation,

and

In the Policy Office, CPO and DDPW

“[T]he centralized procurement regime of Article 2 of this Chapter…” (5 GCA § 5125)

ARTICLE 2 PROCUREMENT ORGANIZATION

(5 GCA Chapter 5, §§ 5101 through 5150) – Part A. Procurement Policy Office. – Part B. General Services Agency. – Part C. Organization of Public Procurement. – Part D. Guam Procurement Regulations. – Part E. Coordination, Training and Education. – Part F. Duties of the Attorney General. – Nothing in Article 2 confers general procurement

authority on any agency other than the central regime.

Uniformity and Centralization in a Nutshell: 5 GCA § 5120 (PL 16-124, GC § 6946.6)

• “Except as otherwise provided in this Article, all rights, powers, duties, and authority relating to the procurement of supplies, services, and construction, and the management, control, warehousing of supplies, services, and construction now vested in, or exercised by, any governmental body under the several statutes relating thereto are hereby transferred to the Policy Office and the Chief Procurement Officer and the Director of Public Works, as provided in this Chapter.”

• Official Comment: “This Section brings all agencies of the government within the purview of this Chapter. Whether or not such powers may be

delegated depends upon the specific provisions of this Chapter, but all agencies are covered by this one Chapter.”

Got It?

Executive Governmental Bodies (other than the

Policy Office, CPO, and DDPW) Have

Limited, If Any, Procurement Authority

In case you missed that, § 5120 means …

Effective October 1, 1983 …

“Except as otherwise provided in this Article, all rights, powers, duties, and authority relating to the procurement of supplies, services, and construction, and the management, control,

warehousing of supplies, services, and construction now vested in, or exercised by, any governmental body under the several statutes relating hereto

are hereby transferred to the Policy Office and the Chief Procurement Officer and the Director of Public Works, as provided in this Chapter.”

Let’s Break It Down

The Operative Words Are … (: you should know this by now)

• All rights, powers, duties and authority • Relating to procurement • “Now” (effective October 1, 1983) • Vested in • “Any governmental body” • Are hereby • Transferred to • The Policy Office, CPO and DDPW

¿¿ “governmental body” ?? ‘Governmental Body’ means any department, commission, council, board, bureau, committee, institution, agency, government corporation, or or official of the executive, legislative or judicial branches of Guam.

PL 16-124, Govt. Code § 6952(k) (Current version codified at 5 GCA § 5030(k))

The definition of ‘governmental body’ evolves …

PL 17-27(2) “any department, commission, council, board, bureau, committee, institution, agency, government corporation, authority or other establishment or official of the executive , legislative or judicial branches of Guam.”

PL 17-43:2, Jan. 18, 1984 “any department, commission, council, board, bureau, committee, institution, agency, government corporation, authority or other establishment or official of the executive or judicial branch of the Government of Guam,

except the Guam Community College, the University of Guam, the Department of Education, and the Guam Memorial Hospital Authority.”*

* Current version also “excepts” the GovGuam Retirement Fund (“GGRF”). 5 GCA § 5030(k)

Does “except” mean exempt? “… except • the Guam Community

College, • the University of Guam, • the Department of

Education, • and the Guam Memorial

Hospital Authority and GGRF” …

Do they have to show you their stinking badges?

The definition of governmental body may evolve but the definition does not provide authority.

The change in definition does not transfer

procurement authority back.

The definition is not the operative language needed to confer or reinstate authority.

Last in time • In the event of inconsistency between

two statutes, the last in time prevails.

• In 1983, PL 16-124 stripped DOE,GMHA, GCC, UOG, GPA,GEDA, GHURA, GIAA, PAG and Guam Mass Transit and all other governmental bodies of all procurement authority they may have then had under any Executive Order or Legislative Act.

• Unless or to the extent a subsequent law specifically granted authority back, they have no procurement authority other than that specifically conferred by the Procurement Act.

Who

• GCC

• UOG • DOE

• GMHA

• Centralized Procurement

Regime under PL 16-124

When: Date of Enabling Powers • Nov 11, 1977 (PL 14-77)

• July 1, 1963 (PL 7-66) R/R PL 19-40, Dec. 30, 1988*

• 1965 (GC § 6600.3, EO 65-12), R/R PL 26-26, July 2001*

• 1965 (GC § 6600.2, EO 65-12), R/R May 27, 1977 (PL 14-29) R/R PL 30-190, Aug. 28, 2010*

• Dec 30, 1982, effective Oct 1,

1983

* See following slides: no subsequent power is conferred to replace transferred authority.

General Repeal and Re-enactments Do Not Generally Repeal Prior Specific Law

• Even though the law states that it repeals a prior public law, the legislative intent of the law was not necessarily a repeal. Repealed and reenacted statutes may be regarded as having been continuously in force. (Supreme Court of Guam, San Miguel v. Dep 't of Public Works, 2008 Guam 3.)

• Some agencies have had their general implementing legislation overhauled by general statutes purporting to repeal and re-enact the prior law. Such Acts do not constitute a new grant of procurement power unless, and only to the extent, specifically expressed to do so.

Specific Statutes Trump General Ones

• Where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment.

Morton v. Mancari, 417 US 535 – US Supreme Court (1974) • § 5120 is a specific transfer of “all rights, powers,

duties, and authority relating to the procurement of supplies, services, and construction, and the management, control, warehousing of supplies, services, and construction”, thus trumps any subsequent grant of more general powers or authority.

Guam Community College Procurement Authority

17 GCA § 31104. Rules and Regulations. • The Board shall adopt reasonable rules and regulations not

inconsistent with the laws of the United States and this Territory (a) for its own government, (b) for the government of the College and (c) for the purpose of carrying out all other duties and powers herein conferred. (Formerly GC § 11966, PL 14-77, 1977)

• PL 16-124 is inconsistent: it gives the Policy Office exclusive power to adopt regulations, as will be explained below.

A search of the laws of GCC’s administrative obligations and powers for the word “procure” or any derivative turned up no use of the term.

GCC, continued

17 GCA § 31109. Powers of the Guam Community College and Board.

The Guam Community College and Board shall have all the powers necessary and convenient to carry out and perform the purposes and provisions of this Division … including … [the power to:] • (3) enter into and execute contracts and instruments of every

kind and nature necessary or convenient to the exercise of its powers and functions.

-- Only a general power, inconsistent with specific procurement powers specified in PL 16-124.

• (4) in accordance with Title VII-A of the Government Code [the Procurement Act], acquire …personal property. (As conformed by PL 16-124:24.)

-- Note absence of power to procure services or construction.

GCC -- Wrap Up 17 GCA § 33102. Construction with Other Law. (§11983 GC, PL 14-77) Except as expressly provided for herein and notwithstanding any other law to the contrary, the College shall be autonomous and self-sufficient in matters pertaining to its governance, organization and administration and the promulgation of its rules and regulations, in accordance with the Administrative Adjudication Law pertaining to … • (4) obligation and disposition of funds, provided that appropriated funds

are used for the purpose or purposes stipulated in the Act appropriating said funds.

• -- There is no authorization to promulgate regulations pertaining to procurement.

• All procurement authority for services and construction was stripped from GCC and transferred to the centralized procurement regime in PL 16-124. – What’s left? Only supplies (“personal property”) as noted before.

University of Guam Procurement Authority

• 17 GCA § 16104.1 (PL 19-40). Duties of the Board of Regents. – The Regents shall have general supervision over the University and

the control and direction of all funds of, and appropriated to, the University, subject to such restrictions as may be prescribed by law.

• § 16109. Powers. (GC § 11838, repealed and added by P.L. 13-194, R/R by P.L. 19-40:1. )

– “The University of Guam has the power and duty to do any and all things necessary to further the purposes of this Chapter.”

-- These are only grants of general power, not specific grants of procurement authority. Procurement authority was specifically transferred to the

centralized procurement regime by the Procurement Act.

• 17 GCA § 16101. (GC § 11830, repealed and added by P.L. 13-194, R/R by P.L. 19-40:1.) – UOG’s “property shall be administered and disposed of according to

law.”

UOG continued …

• The University was given “the power and duty to do any and all things necessary to further the purposes of this Chapter” under its 1976 enabling legislation in PL 13-194. (See, GC § 11838 et seq.)

• The University was also given certain fiscal authorities and duties, cataloged in GC §§ 11847(a) - (f).

• PL 16-124:20 added GC § 11847(g): – “Title VII-A of this Code [the Procurement Act] shall be

applicable to the procurement of supplies, services and construction of projects by the University”.

– The Procurement Act transferred UOG procurement authority to the centralized procurement regime.

– (5 GCA § 5120.)

UOG continued …

PL 13-194 was “repealed and re-enacted” by PL 19-40, which contained a general statement of “repeal of any prior inconsistent laws”, similar to GCC’s “Construction with Other Law” provision. (See 17 GCA § 16111, and compare 17 GCA § 33102.) -- Did PL 19-40 “repeal” PL 16-124? The Guam Supreme Court has considered that specific statute and observed: • “With respect to the first repealer clause, a clause which

repeals inconsistent enactments is a general repealing clause. It has been observed that such a clause should legally be a nullity. Such a clause cannot be an express repeal because it does not identify any act to be repealed, or an implied repeal because it does not declare the inconsistency but conditions repeal upon the existence of a conflict.” – (Univ. of Guam v. Foley, 2002 Guam 4; all emphasis added, citations omitted.)

– Is PL 16-124 even inconsistent? What procurement powers are

conferred by PL 19-40? – Show us any such badge of authority.

UOG continued …

• § 16109. Powers. The University of Guam has the power and duty to do any and all things necessary to further the purposes of this Chapter.

• The purposes of UOG are described in § 16102: To provide instruction; to provide support services for its functions; to conduct research; and, provide services to the people of Guam. It shall be Guam’s Land Grant Institution. – Procurement is not mandated as a UOG “function”.

• These powers and purposes were enacted by PL 13-194 and

impacted by PL 16-124. None of those purposes are inconsistent with the Procurement Act. The procurement act specifies how services are to be procured; it does not prevent support services from being acquired.

UOG Wrap UP

• PL 19-40 does not grant UOG new powers, indeed it contains the same exact language granting UOG only general powers that was first found in PL 13-194. Compare GC § 11838 (quoted above) and 17 GCA § 16109.

• PL 19-40 specifically carried forward those limited powers: “[t]he University of Guam, already established according to existing laws, is hereby confirmed.... All the rights, immunities, franchises and endowments heretofore granted thereto are hereby perpetuated unto the said University.” (17 GCA § 16101.)

• PL 16-124:20 specifically made the Procurement Act applicable to UOG procurement, and the Procurement Act transferred all procurement functions to the centralized procurement regime.

• There is nothing in PL 19-40 which expresses any legislative intent to restore to the University the specific procurement power over supplies, services or construction taken away by PL 16-124.

Department of Education Procurement Authority

17 § 3103. The Superintendent shall: • (1) administer the day-to-day activities of the Department of

Education; • (4) serve as the Department’s approving authority for the

expenditure of funds; • (9) perform other duties as may be required by public law to

provide an adequate public educational system. -- PL 16-124:2 specifically repealed authority for DOE’s procurement functions granted by GC § 6600.3 and EO 65-12A. -- What’s left? (Delegation, nothing more.)

Guam Memorial Hospital Authority Procurement Authority

• GMH was given authority over procurement functions in GC § 6600.2 . • This was replaced by P.L. 14-029:1 (May 27, 1977). GC § 49009 granted

GMHA specific procurement authority and processes for acquiring supplies and construction (but not services generally).

• PL 16-124:23, 24, and 25 specifically repealed GC § 49009, and made other conforming changes making GMHA subject to the Procurement Act. (PL 16-124 provides an exemption to procure “professional services”, see 5 GCA § 5121, but no grant of authority to acquire general “services”.)

• PL 14-29 was repealed and reenacted by P.L. 30-190:1 (Aug. 28, 2010). • In Univ. of Guam v. Foley, 2002 Guam 4, the Guam Supreme Court held PL

14-29’s “repeal and re-enactment” overhaul did not repeal specific prior law relating to personnel matters, suggesting the same rule would be applicable to the specific procurement provisions of PL 16-124.

GMHA continued (current law)

10 GCA § 80102. Establishment. GMHA property shall be administered and disposed of according to law. -- What law? The Procurement Law.

10 GCA § § 80109. Powers. The Hospital shall have and exercise each and all of the following powers…:

• (e) upon written certification of the Administrator, that specified and specialized medical equipment and related supplies are needed immediately for the health and welfare of the patients …, the Guam Memorial Hospital Authority shall be exempt from the provisions of [the methods of source selection specified in the Procurement Act] in the acquisition of the medical equipment and related supplies [only]…;

GMHA powers continued …

• § 80109(k). GMHA may adopt such rules and regulations pursuant to the Administrative Adjudication Act as may be necessary for the exercise of the Hospital’s powers, performance of its duties and administration of its operations; – Note: The AAA establishes procedure for adoption of rules and

regulations, but does not provide authority to do so. 5 GCA §9300: “It is not intended to give to any agency any additional rule-making power or authority and no additional or new power or authority to make or adopt rules is given to any agency by this law.”

• 10 GCA § 80109(o). GMHA may do any and all other things

necessary to the full and convenient exercise of the above powers.

• 10 GCA § 80109(q). GMHA may acquire in accordance with the Procurement Law … any personal property or construct any projects necessary or convenient or useful for carrying on of any of its powers pursuant to the provisions of this Chapter. (Source: PL 16-124: 22, as mentioned above. Note absence of “services”.)

GMHA Wrap Up

• 80109(u) GMHA may retain or contract, in accordance with applicable procurement law, services relative to the providing of cafeteria and/or other food vendor services….

Ask yourself: If GMHA had inherent power to acquire the supplies, services and construction mentioned in §§ 80109(e), (k),(q) and (u) above, why would it be necessary to provide specific legislation to do so? The grant of these specific powers implies the lack of any other general procurement power. Thus, the power to acquire services generally, other than food services, must be conducted through GSA.

Current law does nothing to restore the limited procurement authority granted to GMHA in GC § 6600.2 and PL 14-29 and

then specifically repealed and conformed by PL 16-124:2 and 23.

Guam Imaging Consultants, Inc. v. GMHA (2004 Guam 15)

• The Court relied solely on language similar to current § 80109(k) granting GMHA general authority to “[a]dopt such rules and regulations … as may be necessary for the ... performance of its duties and administration of its operations.”

• The Court then discussed only part of the history of GMHA’s enabling legislation, Board resolutions and Governor Executive Orders, concluding “GMHA procurement of services through an RFP is governed by both the Guam Procurement Law and GMHA’s own Procurement Regulations.” This was dicta, not necessary to the case, and evidently not briefed or argued by Appellants.

• The Court did not even mention 5 GCA §§ 5102, 5120 , 5125, or 5130, which vest specific procurement authority in the centralized procurement regime and places sole power to adopt regulations in the Policy Office, nor did it review or discuss the several provisions of PL 16-124 which specifically repealed the Governor’s procurement power well as GMHA’s general procurement power and procedure, and imposed the obligation on GMHA to comply with the Procurement Act, and its limited power in respect of services, all as discussed in detail in this presentation.

• With respect, the conclusion reached was as hasty as it was unnecessary.

Specific Authority: Who has authority to promulgate

procurement regulations ?

Agencies?

Agencies do not have authority to adopt their own procurement regulations

We’ve seen above that most agencies do not have general procurement authority, because 5 GCA § 5120 specifically transferred all such authority to the Policy Office, the CPO and the Director DPW (the “Centralized Procurement Regime”).

Here we examine the specific (lack of) authority to promulgate their own procurement regulations.

Who Has Specific Authority to Write Procurement Regulations?

↙ Compare ↘

“Except as otherwise provided in this Chapter”?

• §§ 5102 and 5113 in Article 2 grant the general power to promulgate procurement regulations to the Policy Office…

exclusively.

• There is a specific exception otherwise provided Article 4 of this Chapter, § 5262, where, by virtue of the power of substitution granted in § 5125, the Directors of certain “exempt” agencies may draft certain very specific regulations regarding specifications. – (More on § 5125 later.)

• If an agency claims regulation-making power --- Badges!

So who has authority to write regulations?

May I see your passport, please?

• So where do agencies get authority to write their own regulations?

• Nowhere. They don’t have it.

• Demand Badges. You show me some ID, Boy

§ 5131. [Agency] Adoption of Regulations.

Each “governmental body” and each “named body” in § 5125* of this Chapter shall adopt the procurement regulations promulgated pursuant to

§ 5130(a)* of this Chapter to the extent such agency is subject to such regulations according to the terms of § 5125 of this Chapter.

*Need a § 5130(a) reminder?

§ 5130(a). Regulations shall be promulgated by the Policy Office in accordance with the applicable provisions of the Administrative Adjudication Law. -- This does not allow agencies to draw up their own regulations.

*And, who are the named bodies in § 5125?

The Government of Guam Retirement Fund, Guam Community College, the University of Guam, the Department of

Education, the Guam Memorial Hospital Authority, Guam Economic Development and Commerce Authority, and the Guam Visitor’s Bureau

(and don’t forget the “govenmental bodies” in addition to the named ones)

Who has specific authority to promulgate procurement

regulations ?

The Governor?

EXECUTIVE ORDER NO. 84-21:

• GUAM PROCUREMENT REGULATIONS NO. 001 WHEREAS, Title VIl-A, Government Code of Guam (Guam Procurement Act), Public Law 16-124, Sixteenth Guam Legislature, Second Regular Session, established a General Services Agency blah blah blah; and … WHEREAS, the Act created a Procurement Policy Office, under the Office of the Governor, vested with the authority and responsibility to promulgate regulations, blah blah blah; and WHEREAS, the Procurement Policy Office has conducted a public hearing for the adoption of the Guam Procurement Regulations in accordance with the Administrative Adjudication Law; and WHEREAS, the Procurement Policy Office has adopted the Guam Procurement Regulations by Resolution No. 001-84;

NOW, THEREFORE, I RICARDO J. BORDALLO, Governor of Guam, by virtue of the authority vested in me by the Organic Act of Guam, do hereby promulgate the attached Guam Procurement Regulations No. 001 as adopted by the Procurement Policy Office.

Can The Governor Really Promulgate Procurement Regulations?

• NO -- § 5102: Except as otherwise provided in this Chapter, the Policy Office shall have the authority and responsibility to promulgate regulations. The Governor has the power to appoint the Policy Office members (5 GCA § 5101(b)), but not the power to exercise its duties.

• PL 16-124 stripped all “governmental bodies” of procurement authority. • ‘Governmental Body’ means any department, commission, council, board, bureau,

committee, institution, agency, government corporation, authority or other establishment or official of the executive branch of the Government of Guam. (§ 5030(k) )

• The Governor is an official of the Executive Branch. (Organic Act, § 1422: “The executive power of Guam shall be vested in an executive officer whose official title shall be the ‘Governor of Guam’.”)

• By enactment of PL 16-124, the Legislature revoked the Executive Power of the Governor under prior Govt. Code § 6600.1, and along with it, transferred the power to promulgate procurement regulations to the Policy Office.

Further evidence of Legislative intent to take away the Governor’s power to promulgate regulations

• PL 16-124 was enacted on December 30, 1982, with an effective date of October 1, 1983.

• On June 15, 1983, the Legislature enacted PL 17-9, which specifically brought forward the effective date of only the Emergency Procurement provision of the Procurement Act, to “take effect immediately”.

• PL 17-9 provided, “Until creation of the Policy Office, the Governor shall issue any regulations required under that Section and may do so without regard to the Administrative Adjudication Act.”

• This is a clear statement of the Legislature’s intent to restrict the Governor’s power to promulgate procurement regulations. PL 16-124 granted exclusive regulation- making power to the Policy Office. PL 17-9 made a very specific exception to that authority, for a very limited time, to allow the Governor to issue a very specific regulation. The Governor’s days of unlimited power to regulate procurement were over. The Governor only has Executive Organic Power when there are no inconsistent laws. (48 USC 1422.)

In re Request of Governor Carl T.C. Gutierrez (2002 Guam 1)

• “Having identified the respective powers of the Governor and Legislature as set forth in the Organic Act, we nevertheless acknowledge that the powers of each respective branch inevitably overlap to a certain extent.”

• “An analysis of each issue raised by the Governor must begin with the general rule that legislative enactments are presumed to be constitutional.”

• “The Legislature’s plenary power of appropriation includes the power to impose ‘conditions upon the expenditure of appropriated funds.’ “

• “However, the Legislature may not set limitations or conditions which ‘purport to reserve to the legislature powers of close supervision that are essentially executive in character.’”

~~~~~~~~~~~~~~~~~~~~~~~~~~~ • The Procurement Law does not closely supervise or impinge on the Executive’s

determination of the subject matter or economic terms of procurement, nor the parties thereto, nor the timing thereof, nor does the Legislature reserve approval or review authority. The Law does not so burden the Executive with other conditions that are so essentially executive in character as to prevent the Governor from accomplishing his unique Organic functions. It passes muster.

So Who Can Promulgate Procurement Regulations?

Only the Policy Office

General Procurement Authority

OF AGENCIES

(Some agencies have some power) (But not carte blanche, either)

It is the intent of I Liheslaturan Guåhan [the Legislature] …

• “To require all Executive Branch governmental bodies, including autonomous agencies, and other above-named bodies, to be governed to the maximum extent practicable by Chapter 5 of Title 5 of the Guam Code Annotated.”

• “This provision requires any governmental body, and each above-named body, to conduct their procurement activities pursuant to Chapter 5 of Title 5 of the Guam Code Annotated, except insofar as said Chapter establishes and effects a system of centralized procurement” [in which case, the centralized authorities – the CPO, DDPW and Policy Office – will conduct the procurement activities for the body].

5 GCA § 5125

Agencies are Conductors, not Creators

This provision (§ 5125) requires any governmental body to conduct their

procurement activities … “Conduct”: The act of leading; guidance. To show the way; direct. Implies a supervising by using one’s executive skill. Organize and carry out. Manage.

Drilling down into § 5125: Application of this Chapter to Executive Branch. • Every “governmental body”

– which is in the purview of the Executive Branch, and including the Government of Guam Retirement Fund, Guam Community College, the University of Guam, the Department of Education, the Guam Memorial Hospital Authority, Guam Economic Development and Commerce Authority, and the Guam Visitor’s Bureau,

• shall be governed by Articles

1, 3, 6, 7, 10, 11 and 12 of this Chapter …

• Article 1. General Provisions. • Article 3. Source Selection and

Contract Formation. • Article 6. Modification and

Termination of Contracts for Supplies and Services.

• Article 7. Cost Principles. • Article 10. Compliance With Federal

Requirements. • Article 11. Ethics in Public

Contracting. • Article 12. Procurement Appeals.

… § 5125 continues in following slides

Executive “bodies” shall be governed… by Articles 1, 3, 6, 7, 10, 11 and 12 of the Procurement Act

• … “except to the extent • “ that any such governmental body or other abovenamed body

• “may be exempted from the ‘centralized procurement regime’ of Article 2 of this Chapter …

• … “in which event • “the Director of each such body … • “shall be substituted • “wherever there is reference to the Public Policy Office,

Chief Procurement Officer or Director of Public Works

• “In Articles 4, 5, 8 and 9 of [the Procurement Act].”

“Exempted” in § 5125 Does Not Mean Agencies Can Promulgate Their Own Regulations

• 5 GCA § 5125 was enacted as part of PL 18-44, in 1986, along with § 5131. § 5131, read together with § 5125, is specific with regard to who can promulgate and who must adopt promulgated procurement regulations: – Each governmental body and each named body in § 5125 shall

adopt the procurement regulations promulgated [by the Policy Office] pursuant to § 5130(a) of this Chapter [substituting where appropriate the Director of such body wherever there is reference to the Policy Office, CPO or DDPW in Articles 4, 5, 8 and 9].

The general authority to promulgate regulations is in Article 2. Article 4 (§ 5261) specifically directs the Policy Office to “promulgate regulations” relating to specifications. § 5125 grants the Director of an “exempt” body the power, by substitution, to promulgate those specific regulations.

§ 5125 does not grant exemption. It merely describes the consequence if exempted. If so, an agency is directly governed by most Articles, and indirectly by the rest of the Articles**, as to which an agency Director may act by substitution, in the same manner, and subject to the same regulations, as the respective agents of the centralized procurement regime might have acted. “Exemption” comes from a grant of independent procurement authority in other law or by delegation.

** • Article 4. Specifications. • Article 5. Procurement of

Construction, Architect-Engineer and Land Surveying Services.

• Article 8. Supply Management. • Article 9. Legal and Contractual

Remedies.

Effect of being generally “exempt” from centralized procurement regime per § 5125:

Main Differences between Exempt and Not Exempt Bodies

• Conduct own

procurement • Write Regulations

Exempt Not Exempt Central Regime

Yes No Conducts for Not Exempt

No No Yes But -- Policy Office only

Recapping § 5125

• All Executive agencies,

whether governmental bodies or named bodies, are subject to Articles 1, 3, 6, 7, 10, 11 and 12 of the Procurement Act.

And …

• To the extent of any exemption from the centralized procurement regime, the Director of any such agency shall act as substitute for the Policy Office, CPO or Director in fulfilling the requirements of Articles 4, 5, 8 and 9.

Putting the Procurement Act Pieces Back Together Again

• § 5125 describes “the centralized procurement regime of Article 2” of the Procurement Act.

• All Executive bodies, centralized or not, are either directly governed by or indirectly governed by (to the extent exempted from the centralized regime) all Articles of the Procurement Act,

1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, and 12.

Some Specific Exemptions

And an Exception to the

Centralized Procurement Regime

Repeat: § 5125 Does Not Exempt Anyone

• There is no language in § 5125 that exempts any governmental body, named or otherwise, from the obligations and prescriptions of the Procurement Act.

• It simply says IF a body is exempt, it can directly conduct procurement without going through GSA or DPW.

• “Exemption”, if it exists, must be specified in other law, by some specific grant of power or by delegation. Here we look at some of them.

Specific Exemptions to Centralized Procurement Regime

• § 5124. “Exemptions.” • “Unless otherwise ordered by regulation of the Policy Office, with

approval of the Governor, the following supplies, and services need not be procured through the General Services Agency or the Department of Public Works, but shall nevertheless be procured by the appropriate Purchasing Agency subject to the requirements of this Chapter and the regulations promulgated by the Policy Office:

(a) works of art for museum and public display; (b) published books, books or other regular publications published by any government agency, maps, periodicals and technical pamphlets; (c) architect, engineer and land surveying services as defined in §5301 of this Chapter; (d) investment agent services and actuary services for the Guam Retirement Fund.”

Exceptions from the Centralized Procurement Regime

• § 5121. For the purpose of procuring the services of accountants, physicians, lawyers, dentists, licensed nurses, other licensed health professionals and other professionals, any governmental body* of Guam may act as a purchasing agency and contract on its own behalf for such services, subject to this Chapter and regulations promulgated by the Policy Office, but this Subsection shall not authorize the procuring of such services where any given governmental body is otherwise prohibited from procuring such services.

• *Note that “governmental bodies” excepts GCC, UOG, GMHA, DOE and GGRF from that definition. Thus, none of them has this specific exemption to acquire professional services, which must be found elsewhere IF AT ALL.

• § 5123 provides and exception requiring acquisition of all vehicles “as a fleet” by GSA, even if an agency is “exempt”. Surprise!

§ 5122 and 5123 provide the only specific legislatively conferred exceptions to the centralized procurement regime of Article 2 in the Procurement Act.

~~~ § 5124 lists the only specific legislatively conferred exemptions to the centralized procurement regime of Article 2 in the Procurement Act.

~~~ These are narrow, functionally described carve-outs from the

central procurement regime, not broad immunities from the general obligations of the procurement law,

nor a grant of an alternative or additional procurement authority . ~~~

Note that an “exempt” agency is only exempt to the extent of specific powers granted. For instance, GMHA was not granted general authority to procure services.

Recapping Exempt, Exemptions and Exceptions

The Players in the Centralized Procurement Regime

• The centralized rights, powers, duties, and authority relating to procurement are exercised by: – The Policy Office (Policy and Regulations) – The CPO (Supplies and Services) – The DDPW (Construction) - With the counsel, representation and review of

the Attorney General According to the particular responsibilities of each of them.

The Powers of the Regime Players

Their roles and responsibilities.

The Policy Office

The Policy Office • The Policy Office was created by 5 GCA § 5101, with two ex

officio officers and requires appointment of three other public employee members by the Governor. Governors have failed to appoint since the first Policy Office was constituted and, as perhaps its only official act, adopted the initial General Procurement Regulations codified at 2 GARR, Division 4.

• The ABA Model Procurement Act suggests other models for the constitution of the Policy Office. Guam adopted the “inside” model. There is also an “outside” model comprised of non-government employees, and a “hybrid” model comprised of private and public members.

Power and Duties of the Policy Office • § 5102. Authority and Duties of the Policy Office. Except as otherwise provided in this Chapter, the Policy Office shall have the authority and responsibility to promulgate regulations … governing the procurement, management, control and disposal of any and all supplies, services and construction to be procured by the Territory. The Policy Office shall consider and decide matters of policy within the provision of this Chapter including those referred to it by the Chief Procurement Officer or the Director of Public Works. The Policy Office shall … not exercise authority over the award or administration of any particular contract, or over any dispute, claim, or litigation pertaining thereto, except that the Chief Procurement Officer and the Director of Public Works shall exercise such authority in accordance with the provisions of this Chapter. The Policy Office shall promulgate regulations governing the preparation, maintenance, and content of specifications for supplies, services and construction required by the Territory. (§ 5261) (The Director of “exempt” bodies can perform this function to the extent of their authority over supplies, services or construction.)

Independent of the Governor’s Direct Control

• The Policy Office is in the Executive Branch, and the Governor’s office is supposed to support its activities.

• 5 GCA § 5101: • (a) There is created in the Office of the Governor the

Procurement Policy Office which in this Chapter is referred to as the Policy Office.

• (c) The Governor’s Office shall provide such services as the Policy Office may request, including office space and administrative assistance.

Independence of Policy Office

“The Committee on General Governmental Operations determined that the Policy Office, operating as it does over the entire government, should be separate from the Department in which is located the General Services Agency. Therefore, it is placed within the Office of the Governor, which is responsible for supporting it.”

[Comment, PL 16-124, 5 GCA § 5101.]

Chief Procurement Officer

Powers and Duties of CPO Article 2, Part B, 5 GCA §§ 5110 et seq.

• The Chief Procurement Officer is the head of the General Services Agency, which is a body within the Department of Administration.

• The Chief Procurement Officer shall be a full-time classified employee and may be removed from office in accordance with the provisions of the Personnel Law, 4 GCA Chapter 4.

Continued … Powers and Duties of CPO INDEPENDENCE

• While the Chief Procurement Officer is a part of the Department of Administration, this Chapter places procurement responsibilities with this Chief Procurement Officer, rather than with the Director of Administration, who still remains his superior.

• Nonetheless, the Chief Procurement Officer must make the decisions and, to this end, it is he, not the Director of Administration, who must have the qualifications in the specialized area of public procurement.

• Because the Chief Procurement Officer is within an Executive Agency, he is a classified employee. Therefore, the term of office suggested by the MPC is inappropriate as are specifications for removal, both of which are fully covered in 4 GCA Chapter 4 - establishing the classified employment in the government of Guam.

[Comments, §§ 5111, 5112]

Continued … Powers and Duties of CPO

Limited to Procurement of Supplies & Services § 5113. Authority of the Chief Procurement Officer

• (a) The Chief Procurement Officer of the General Services Agency, shall serve as

the central procurement officer of the Territory with respect to supplies and services.

• (c)(1) Except as otherwise specifically provided in this Chapter, the Chief Procurement Officer shall, in accordance with regulations promulgated by the Policy Office:

– (i) procure or supervise the procurement of all supplies and services needed by the Territory; – (ii) exercise general supervision and control over all inventories of supplies belonging to the

Territory; and – (iii) establish and maintain programs for the inspection, testing and acceptance of supplies and

services.

• The Chief Procurement Officer shall prepare, issue, revise, maintain and monitor the use of specifications for supplies and services required by the Territory.

• (§ 5262(a).) Note this is an Article 4 power which might be exercised by “exempt” agency to extent of its authority.

Continued … Power of CPO to adopt operational procedures

• § 5113(b). Consistent with the provisions of this Chapter, the Chief Procurement Officer may adopt operational procedures governing the internal functions of [her/his] procurement operations.

• Agency rules which relate “solely to internal policy, internal agency organization or internal procedure” are not regulations which require promulgation in accordance with the Administrative Adjudication Act. (See, 5 GCA § 9107, definition of “rule” in the Administrative Adjudication Law.)

• The authority to adopt internal procedures is not broad authority to promulgate procurement regulations. (5 GCA § 9300: “[The AAA] is not intended to give to any agency any additional rule-making power or authority and no additional or new power or authority to make or adopt rules is given to any agency by this law.”)

Continued … Power of CPO to adopt operational procedures

• The CPO and Attorney General have argued that the CPO has power to adopt certain procurement regulations, but the Public Auditor has rejected that argument. (OPA-PA-08-012.)

• It appears that “GSA” has allegedly adopted and amended some of the Policy Office Procurement Regulations in 1999. (See, Source note to 2 GAR § 1101: “Item (7) was added by the GSA to comply with 5 GCA §5001(b)(8). (1/1/1999)”.) Neither GSA nor the CPO have have any such power.

CPO’s Conditional Power of Delegation

• Subject to the regulations of the Policy Office, the Chief Procurement Officer may delegate authority to designees or to any governmental body or official. (§ 5114.)

• The Regulations place limits on any discretion to delegate. • The power to delegate includes the power to revoke a

delegation.

• A person can only delegate such authority as that person possesses. No one can create authority by delegation. Thus, for instance, the CPO cannot delegate the power to promulgate procurement regulations because the CPO does not have that power herself, nor can she delegate authority for construction.

Regulations limit delegation discretion 2 GAR § 2105. Decision to Delegate. Factors to consider (must consider?) in making the decision to delegate include:

• (a) the expertise of the potential delegate in terms of procurement

knowledge and any specialized knowledge pertinent to the authority to be delegated;

• (b) the past experience of the potential delegate in exercising similar authority;

• (c) the degree of economy and efficiency to be achieved in meeting the territory's requirements if authority is delegated;

• (d) the available resources of the Office of the Chief Procurement Officer to exercise the authority if it is not delegated; and

• (e) the consistency of delegation under similar circumstances.

Delegation continued … 2 GAR § 2106

• The Chief Procurement Officer or the Director of Public Works may delegate in writing such authority as may be deemed appropriate to the head of any department or independent agency of this territory.

• Such delegation shall be in writing and shall specify: • (a) the activity or function authorized; • (b) any limits or restrictions on the exercise of the delegated

authority; • (c) whether the authority may be further delegated (the power to

re-delegate is not implied in law); and • (d) the duration of the delegation. • Any designee of the Chief Procurement Officer shall exercise

delegated authority in accordance with the Guam Procurement Act and these Regulations. (2 GAR § 2105.)

Delegation continued: Exceptions and Limitations

• 2 GAR §2107. Exceptions to Delegation. The authority conferred on the Chief Procurement Officer or the head of a Purchasing Agency in the following sections of the Guam Procurement Regulations shall not be delegated, therefore, any agency exercising procurement power under a delegation (e.g., DOE) does NOT have any power granted under these following regulations (2 GAR):

– (a) Section 5104 (Contract Performance and Payment Bonds, Reduction of Bond Amounts);

– (b) Section 5106 (Contract Clauses and Their Administration, Modification of Clauses) [construction];

– (c) Section 6101 (Contract Clauses and Their Administration, Modification of Clauses) [supplies and services];

– (d) Section 9101 (Authority to Resolve Protested Solicitations and Awards, Stay of Procurement During Protests); and

– (e) Section 9102 (Authority to Debar or Suspend, Authority).

• Also note the “limitations” on delegation of authority to negotiate certain construction bid prices, and to hear suspension and debarment proceedings in 2 GAR § 2108.

Note “Delegation” That May Be Specified by Statutes

• Some agencies may believe they possess independence from the Procurement Act because of Legislative “grants” of powers in the Procurement Act. Those statutes confer only a right of delegation of powers by the CPO, limited by applicable regulations, and the CPO cannot delegate any power the CPO does not possess. Grants of procurement powers within enabling legislation are not typically by way of delegation.

• § 5116. Procurement may be Delegated to GPA Board. Notwithstanding any other provision of Guam Procurement Law, the authority to procure supplies and services for the Guam Power Authority may be delegated by the Chief Procurement Officer only to the Guam Power Authority Board of Directors [not to the Head].

• § 5117. Procurement Shall Be Delegated to the Guam Preservation Trust. Notwithstanding any other provision of Guam Procurement Law, the authority to procure supplies and services for the Guam Preservation Trust shall be delegated by the Chief Procurement Officer to the Board of Directors of the Guam Preservation Trust.

The Role of the Director, DPW (“DDPW”)

Powers & Duties of the DDPW • § 5113. Authority of the Director of Dept. of Public Works. • (a) The Director of Public Works (DDPW) shall serve as the

central procurement officer of the Territory with respect to construction.

• (c) (2) Except as otherwise specifically provided in this Chapter, the Director of Public Works shall, in accordance with regulations promulgated by the Policy Office: – (i) procure or supervise the procurement of all construction

needed by the Territory; and – (ii) establish and maintain programs for the inspection, testing

and acceptance of construction. Note that the Director DPW is not a classified employee, unlike the CPO.

Delegation and other powers of DDPW

For most purposes, the powers to adopt operational procedures and to delegate, as well as the limitations on such powers, are the same

for the Director DPW as they are for the CPO, limited, of course, to their respective

responsibilities.

The Attorney General

AG’s role as counsel 5 GCA § 5150

• The role of the Attorney General’s office has undergone several legislative changes of late, generally enlarging the AG’s role in reviewing the legality of and approving the procurement process, especially with respect to “large” procurements.

• The gist of the role remains the same, however: – To serve as legal counsel and provide necessary legal

services to the central procurement regime as well as other bodies, and

– To act as legal advisor to those entities during all phases of the solicitation or procurement process

© 2011 John Thos. Brown

Guam Procurement Process Primer and more at Blogged Down In Procurement …

http://bloggeddowninprocurement.blogspot.com/