Procurement Law Primer v1-9

Procurement Lore or Procurement Law ?
A GUAM PROCUREMENT PROCESS PRIMER

(Ver 1.9 )
(Both more and less than you will ever want to know)
John Thos. Brown
Attorney at Law
A GUAM PROCUREMENT PROCESS PRIMER 1
(Ver 1.9)
2
1
The author, John Thos. Brown, is an attorney, licensed on Guam, serving as General Counsel for Jones &
Guerrero Co., Inc., its affiliates and subsidiaries. The opinions expressed are his own and do not constitute legal advice.
This paper began as a short outline, prepared for delivery of an introductory procurement seminar to the Guam Chamber
of Commerce Small Business Committee in March 2009. It then took on a half-life of its own. The author is forever
grateful to Mr. Kenneth T. Jones, Jr., founder of Jones & Guerrero Co., Inc., for his encouragement and support of the
author’s endeavors to bring regularity and rationality and, above all, the rules of law to a process which has too often
been seen, by an outsider, as capricious if not influenced by extraneous matters. This paper is intended to be for non-
commercial educational purposes. The carabao and cart graphic used in the paper was taken from an online educational
source; no copyright claim is made to the graphic.
2
This is Ver 1.9, January, 2010. The author expects it to be tinkered with and revised periodically as
substantive or editorial changes are made, new cases and issues arise, or as otherwise deemed the thing to do. You may
contact him to obtain the latest version at jngoz@ozemail.com.au. Alternatively, the author intends to upload revisions to
www.Scribd.com, where you can search “procurement law primer” for the various posted versions. The online version,
in pdf format, can be more useful than a printed one because the blue-highlighted links are active when read in the freely
available Adobe Reader (http://get.adobe.com/reader/), and the Adobe Reader has a search feature allowing you to search
the Primer for, example, key words or section or case numbers.
Guam Procurement Process Primer Ver 1.9 © John Thos. Brown 2010 Page i
TABLE of CONTENTS
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. SOURCES of Guam Procurement Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A. The Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
B. The Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
C. Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
D. Other jurisdictions, experts, authors, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
E. Lore.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
F. The law of contract: private vs public. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
II. PURPOSES AND POLICIES of Guam Procurement Law.. . . . . . . . . . . . . . . . . . . . . . . . . . 7

A. Purposes and policies are intended to be effected and effective... . . . . . . . 7
D. to provide for increased public confidence. . . . . . . . . . . . . . . . . . . . . . . . 7
E. to ensure the fair and equitable treatment. . . . . . . . . . . . . . . . . . . . . . . . 8
F. to act in good faith. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
G. to provide increased economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
H. to foster effective broad-based competition. . . . . . . . . . . . . . . . . . . . . . . 8
9. “Fair and open competition is a basic tenet. . . . . . . . . . . . . . . . . . 9
I. to provide safeguards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Ethical Standards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
J. to require public access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
K. Policy in favor of planned procurement. . . . . . . . . . . . . . . . . . . . . . . . . . 14
e. “Competition is the most fundamental goal of acquisition
planning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
L. Policy in favor of local procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
N. The Procurement Act applies to almost all GovGuam purchases. . . . . . . 17
O. Making and keeping “determinations”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
P. A word from your author. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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3. The Guam legislature chose to forego procurement training and
education when it adopted the Guam version of the Model
Procurement Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
III. PROCUREMENT ADMINISTRATIVE STRUCTURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

A. Centralized Procurement Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
B. Policy Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
C. GSA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
D. DPW.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
E. Public Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
F. Attorney General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
IV. METHODS OF SOURCE SELECTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

4. “Unless other wise [sic] authorized by law”. . . . . . . . . . . . . . . . . 31
E. Changes (including extensions, renewals, amendments, task orders) to
contracts, awards and solicitation: when new solicitation required. . . . . 32
V. “BID BONDING”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
VI. COMPETITIVE SEALED BIDDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

B. The form is always by Invitation for Bids (IFB).. . . . . . . . . . . . . . . . . . . . . 41
C. Distribution, notice and “bidding time”. . . . . . . . . . . . . . . . . . . . . . . . . . 41
D. Withdrawal, cancellation and rejection of all bids. . . . . . . . . . . . . . . . . . 42
E. Bid opening. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
F. Bid “mistakes”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
G. Seeking clarification.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
award goes to the lowest responsible and responsive bidder. . . . . . . . . . . . . . . . . . . . . . 46
5. Note that the next lowest bidder may get the contract if the low
bidder fails to perform.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
I. What is a Responsive Bid?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
J. “Materiality” only concerns “Responsiveness”. . . . . . . . . . . . . . . . . . . . . 48
a. Matters of bidder prejudice. . . . . . . . . . . . . . . . . . . . . . . 49
K. What is a Responsible bidder?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
d. Standards of Responsibility. . . . . . . . . . . . . . . . . . . . . . . 51
h. Inquiry into determination of responsibility. . . . . . . . . . . 55
i. The interesting requirement for a writing .. . . . . . . . . . . . 55
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L. “Qualified Bidder lists”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
M. Information available from an IFB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
N. A Note on “All or None” bids: Why not take part of me?. . . . . . . . . . . . . 58
VII. MULTI-STEP SEALED BIDDING.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

D. The first phase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
E. Phase two. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
VIII. REQUESTS FOR PROPOSALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

normally only allowed for “professional services”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
D. The procurement process for RFPs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6. The process of evaluating the offers in an RFP involves the steps
described briefly as follows.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10. The purpose of negotiations is to reach agreement on compensation
which must be determined to be “fair and reasonable”... . . . . . . 69
11. Conduct in negotiations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
14. Information available from an RFP. . . . . . . . . . . . . . . . . . . . . . . . 76
E. Architectural, engineering and land surveying vs. construction services. . 78
IX. UNSOLICITED OFFERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

shall be subjected to the Competitive Sealed Bidding . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
X. SOLE SOURCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
XI. SMALL PURCHASE PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

H. REQUEST FOR QUOTATION (RFQ). . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
I. BLANKET PURCHASE AGREEMENTS (BPAs). . . . . . . . . . . . . . . . . . . . . . 85
XII. EMERGENCY PROCUREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

A. Requires an existing “threat to public health, welfare, or safety under
emergency conditions”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
C. “Emergency procurements shall be made with such competition as is
practicable under the circumstances”... . . . . . . . . . . . . . . . . . . . . . . . . . . 86
F. LIMITED TO 30 DAY SUPPLY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
XIII. FEDERAL SUPPLY SCHEDULE PURCHASES must adhere to specified methods of source
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selection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
XIV. SPECIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
A. Specifications Are the Bedrock of Procurement. . . . . . . . . . . . . . . . . . . . 90
B. Competition is the Bedrock of Specifications. . . . . . . . . . . . . . . . . . . . . . 90
C. AMENDING specifications... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
E. MINIMUM needs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
F. Unduly RESTRICTIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
H. Non-proprietary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
K. BRAND NAMES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
L. Brand Name OR EQUAL.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
M. The Who and How of specification preparation and use.. . . . . . . . . . . . 94
7. Procedures for Development of Specifications. . . . . . . . . . . . . . . 96
XV. VARIOUS CONTRACT TYPES, AND THEIR REQUIREMENTS FOR USE.. . . . . . . . . . . . 97

G. Policy Regarding Selection of Contract Types. . . . . . . . . . . . . . . . . . . . . . 98
H. Multi-term contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
I. Fixed-Price .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
J. Indefinite Quantity.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
K. Requirements contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
L. Leases, of both equipment and other supplies or real property,. . . . . . . 101
M. Options to purchase, renew, extend. . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
N. Multiple Source Contracts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
1. An Incremental Award is a variety of Definite Quantity. . . . . . . 102
2. A Multiple Award is a variety of Indefinite Quantity. . . . . . . . . 102
XVI. PROCUREMENT PROTESTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

B. ONLY “AGGRIEVED” BIDDERS CAN PROTEST. . . . . . . . . . . . . . . . . . 103
2. Who is an aggrieved person?. . . . . . . . . . . . . . . . . . . . . . . . . . . 103
D. TIMING FOR PROTEST FILING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
1. General Rule: 14 days from knowledge of aggrievement... . . . . 108
4. POSSIBLE EXCEPTION for Pre-bid-opening issues:. . . . . . . . . . . 109
6. Note possibility of 30 day filing period for initiating a protest action
in the Superior Court.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
F. Request for Reasons for Rejection of Bid. . . . . . . . . . . . . . . . . . . . . . . . 112
G. FORMAT OF PROTEST.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
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H. RESOLUTION OF THE BID PROTEST. . . . . . . . . . . . . . . . . . . . . . . . . . 116
2. Parties to the Protest:.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
I. Requests for Reconsideration of Protest Decision. . . . . . . . . . . . . . . . . 120
XVII. THE AUTOMATIC STAY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

a. Beware this gap.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
D. Lifting the Automatic Stay; confirming a Declaration of Substantial Interest:
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
E. Consider an ordinary stay. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
XVIII. APPEALS OF BID PROTESTS TO THE PUBLIC AUDITOR.. . . . . . . . . . . . . . . . . . . . . . 134

A. Prerequisites of Appeal are Protest and Decision. . . . . . . . . . . . . . . . . . 134
2. Appeals to the OPA are administrative in nature and not Civil
Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
C. 15 Day Filing Deadline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
1. Equitable Tolling.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
D. Jurisdiction of the Public Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
3. Scope of OPA jurisdiction: . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
4. OPA’s Standard of Review is broader than Court review:. . . . . 140
6. OPA does not have jurisdiction of matters merely incidental to
procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
b. OPA jurisdiction does NOT include direct review of Ethical
violations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
c. Wage Determination issues. . . . . . . . . . . . . . . . . . . . . . 143
E. OUTLINE OF AN APPEAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
c. CAVEAT: This outline is bare bones.. . . . . . . . . . . . . . . 145
2. First step, filing the Notice of Appeal. . . . . . . . . . . . . . . . . . . . . 145
3. Second Step, the Procurement Record. . . . . . . . . . . . . . . . . . . . 147
a. Within five (5) days from filing the Notice of Appeal. . . 147
4. Objections to OPA jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . 148
5. Third Step, the Agency Report. . . . . . . . . . . . . . . . . . . . . . . . . . 149
b. The Agency Report is meant to be filed ten (10) days after
receiving the Notice of Appeal. . . . . . . . . . . . . . . . . . . . 149
6. Fourth Step, the Appellant’s Comments on Agency Report. . . . 149
c. Comments on the Agency Report must be filed within ten
(10) days of the filing of the Agency Report. . . . . . . . . . 150
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7. Fifth Step, the agency’s Rebuttal to Appellant’s Comments on
Agency Report... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
b. Rebuttals are meant to be filed within five (5) days of filing
the Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
9. Discovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
10. Role of the Hearing Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
11. The Hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
12. The Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
F. Dateline flow of simple, ideal appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . 155
1. Filing of Notice of Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
3. Agency must file Procurement Record. . . . . . . . . . . . . . . . . . . . 155
4. Any party must file objections to qualification (recusal) of Public
Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
5. Agency must file Agency Report. . . . . . . . . . . . . . . . . . . . . . . . . 155
6. Appellant’s or any Interested Party’s Comments. . . . . . . . . . . . . 156
8. Notice of Hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
9. Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
XIX. APPEAL REMEDIES (such as they are).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

B. Money.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
C. Other remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
1. Prior to award.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
2. Remedies after award.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
d. If the person did act fraudulently. . . . . . . . . . . . . . . . . . 160
e. If the person did not act fraudulently. . . . . . . . . . . . . . 163
f. Damages in the event a contract is terminated for violation of
law.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
3. It is obvious that the timing of the “award” is critical. . . . . . . . . 165
a. So, what then is an “award”? . . . . . . . . . . . . . . . . . . . . 165
4. Note: post-award prejudice and a proposal to rectify it. . . . . . . . 169
XX. Some issues relating to contract performance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

B. Performance Bonding.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
C. Contract disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
1. Who hears contract disputes? .. . . . . . . . . . . . . . . . . . . . . . . . . . 172
2. Procurement Act or Claims Act?. . . . . . . . . . . . . . . . . . . . . . . . . 173
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3. Contract dispute procedure.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
D. Appeals from Contract Disputes... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
XXI. Getting paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

A. Prompt Payment Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
1. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
2. Discounted settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
B. Non Prompt Payment Act Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
C. Promissory notes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
XXII. Public enforcement of unauthorized procurement spending. . . . . . . . . . . . . . . . . . . . 179

A. Guam taxpayers have standing to bring suit against improper spending.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
XXIII. The Courts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

B. Court review of bid protests:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
4. The case for a less deferential standard of Court review of
procurement matters under Guam law... . . . . . . . . . . . . . . . . . . 181
C. Court review of OPA decisions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
XXIV. A review (with commentary and full disclaimer) of some of the OPA Decisions. . . . . 185
1. OPA-PA-06-001, In the Appeal of the Debarment of Rex. . . . . . 185
2. OPA-PA-06-002, In the Appeal of Far East Equipment. . . . . . . . 186
3. OPA-PA-06-003, In the Appeal of RadioCom. . . . . . . . . . . . . . . 186
4. OPA-PA-07-002, In the Appeal of Emission Technologies. . . . . 187
5. OPA-PA-07-006, In the Appeal of Great West Retirement Services
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
6. OPA-PA-07-007, In the Appeal of Dick Pacific. . . . . . . . . . . . . . 188
7. OPA-PA-07-008, In the Appeal of Advance Management, Inc... 189
8. OPA-PA-07-009, In the Appeal of Pacific Security Alarm. . . . . . 191
9. OPA-PA-07-010, In the Appeal of Far East Equipment . . . . . . . . 191
10. OPA-PA-07-011, In the Appeal of JMI Medical . . . . . . . . . . . . . 192
11. OPA-PA-08-008, In the Appeal of Latte Treatment Center. . . . . 193
12. OPA-PA-08-009, In the Appeal of Captain, Hutapea. . . . . . . . . 197
13. OPA-PA-09-002, In the Appeal of Teal Pacific, LLC. . . . . . . . . . 198
14. OPA-PA-09-005, In the Appeal of Guam Community Improvement
Guam Procurement Process Primer Ver 1.9 © John Thos. Brown 2010 Page viii
Foundation, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
INDEX OF PERTINENT APPEALS and AUTHORITIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Guam Procurement Process Primer Ver 1.9 © John Thos. Brown 2010 Page ix
A GUAM PROCUREMENT PROCESS PRIMER
INTRODUCTION:
According to the Spanish historian Carlos Madrid, in his book Beyond Distances (Saipan, Northern
Mariana Islands Council for Humanities, 2006), there was an uncommon distress in the Marianas
Islands in 1876, brought about by a combination of factors, chiefly Spain’s forcible introduction
into the Islands of hundreds of political and other criminal deportees from Spain, but also typhoon
and drought. The situation on Saipan had become particularly dire. As he tells the story (pp. 173-
175),
“Chamorros and Carolinians together with the deportees were facing a famine
without precedent that could bring the island to catastrophe. Martín [the Saipan
Spanish authority] wrote Governor Brabo [the Guam-based Governor of the Marianas]
with an urgent request for provisions, since in a few days they would literally have nothing
to eat. In Guam this request would have been received with great concern as resources in
Agaña were also extremely limited. But the situation in Saipan was nevertheless so
pressing that Governor Brabo authorized, on his account, the purchase of all the
necessary rice, which was to be sent in the launch San José as soon as possible.
“The obligatory legal procedures, which mandated that government requisitions

had to be contracted through free and open auction, still had to be fulfilled. The
gobernadorcillo of Agaña, following the custom, ordered the prominent display of the
notice announcing the public auction in the busiest areas of the capital. At the same time
the pregonero, or town crier, spread the news in the streets for three consecutive days. In
order to save time, knowing that in the whole of the Marianas only George Johnston
could provide the necessary quantities of meat from his leasehold in Tinian, the request
for the purchases of barrels of cured pork was directly made to his representative Vicente
Calvo. The barrels were to be sent to Saipan in the amount of a pound daily per
deportee.
“The conditions of the auction of palay or unthreshed rice were basically to be

able to provide dry rice, free of dust and preferably from the last harvest. The minium
quantity for each bid being ten cavanes, it had to be delivered to the Tribunal in Agaña
within forty-eight hours. In return, it was guaranteed that the payment would take place
on the day after delivery, which was an incentive to all who knew that the colonial
administration was a late and often bad customer.
“The auction was held in the government offices on the ground floor of the
Guam Procurement Process Primer Ver 1.9 © John Thos. Brown 2010 Page 1
Palace, at ten o’clock in the morning of Monday, July 26, 1876. To speed up the
process, bids were submitted not in writing but vocally. All the bidders must have agreed
on a price among themselves before the auction, as everyone offered the same bid of two
pesos per cavan.
“The names of the contractors and the amounts they agreed to supply were:
• Don Gregorio Pèrez 210 Cavanes

• Don Juan Blas 60 cavanes
• Don Andrés de Castro 70 cavanes
• Marcelino Sy Pingco 10 cavanes
• Demetrio Quitugua 50 cavanes
“The mention of these individuals is very significant since they undoubtedly

represented a social class of means, as they had capacity enough to produce on their lands
or accumulate sufficient rice to be able to provide in only two days quite large amounts.
To be able to provide such quantities implied possession of tracts of land much larger
[than] the needs of a regular family required. Alternatively, the bidders had resources
enough to buy palay from other people. Gregorio Pèrez contracted for more than half of
the auction quantity, although the documents related to this episode do not reflect if he
was the largest producer or whether he received a favorable treatment on the part of the
colonial authorities.
“What was the social background of these people? How the principalía of the
villages and the capital had the right to use the title “Don” was earlier discussed, but in
actual fact many individuals not belong[ing] to the principalía were also referred to as
“Don” or “Doña” probably because [of] their social or economic ascendancy. In this
case, the fact that three of the five successful bidders were termed “Don” does not
establish that Marcelino Sy-Pingco, a Christian Chinese, and Demetrio Quitugua, a
Chamorro like the rest, were members of the principalía, but that among the major
producers of rice in Guam were Chamorros of different social backgrounds, as well as
some non-Chamorros such as Sy-Pingco.”
Emergency, competitive and sole source procurement, specifications, delivery terms, public notice,
collusion, responsive and responsible bidders, law (“obligatory legal procedures”) and lore
(“according to custom”): all have long been a familiar part of Guam procurement history.
I. SOURCES of Guam Procurement Law
A. The Law – (Guam Procurement Act: 5 GCA Div. 1, Chpt 5, §§ 5001 et seq.
http://www.justice.gov.gu/CompilerofLaws/GCA/05gca/5gc005.PDF) . Codes are
cited as “[Title number] G.C.A. [Section number]”, e.g., 5 GCA § 5210.
1. Originally enacted in 1982, becoming effective in October 1983, and major

overhaul in 1985, adding more MPC, and other tinkering since.
2. Based on Model Procurement Code, but not updated
a. “This Chapter is essentially the Model Procurement Code approved

by the American Bar Association in 1979. A model code is one
which provides a guide for the jurisdictions which wish to adopt it,
but does not require that it be followed precisely. It is different from
a uniform code, the latter being intended to unify the laws of the
jurisdictions which adopt it. The ABA and the drafters of the
Model Procurement Code recognize the wide organizational
differences between the states and jurisdictions under the U.S.
Therefore, there are many portions of this Model Code which are
optional, or which may be modified. This Act has modified the
model code to suit Guam’s organizational structure and function.
Because this Act intends that the Policy Office adopt implementing
regulations, Model Regulations are also available, and must be
examined and changed to coincide with the version of this Act
actually adopted by the Legislature. The Official Comments to the
Model Procurement Code are a part of the Legislative History of this
Chapter and, also, may be obtained from the American Bar
Association.” (Official Comment; this Official Comment, referred to
herein as the “introductory Official Comment”, appears at the end
of the outline of the Procurement Act, Title 5, Division 1, Chapter 5,
Article 1, Part C, but confusingly seems to be comment to § 5030:
http://www.justice.gov.gu/CompilerofLaws/GCA/05gca/5gc005.PDF,
at page 2 of the pdf – § 5030 actually appears on page 11 et seq.)
B. The Regulations – Guam Administrative Regulations (2 GAR Div 4, §§ 1101 et

seq.). http://www.justice.gov.gu/CompilerofLaws/GAR/02gar.html (Scroll down to
Division 4, Procurement Regulations, and open each Chapter). Regulations are
cited as “[Title] G.A.R. [Section number]”, e.g., 2 GAR § 3116.
1. Based on ABA Model Procurement Regulations.
2. Note some individual agencies have own regulations.
C. Decisions
1. Courts http://www.guamsupremecourt.com/
a. A decision cited in the form “[year] Guam [number]” is a Guam

Supreme Court decision, e.g., 2004 Guam 15. It overrides all other
local decisions.
2. Public Auditor http://www.guamopa.org/
a. A decision cited in the form “OPA-PA-xx-xxx” is a Decision of the

Guam Public Auditor, where “xx” is the last 2 digits of the calendar
year the action is filed, and “xxx” is the chronological order of
actions filed in that year.
b. Click on “Procurement Appeals” at the OPA website to review all

appeals ever brought to the Public Auditor, and clicking on
“Documents Filed” within an appeal reveals a wealth of interesting
argument and examples to form your own appeal.
c. Also note Audit Reports, e.g., General Services Agency, Competitive

Sealed Bidding, Sole Source, and Emergency Procurement
Functions, Performance Audit, OPA Report No. 04-14, December
2004, http://www.guamopa.org/docs/OPA0414.pdf
D. Other jurisdictions, experts, authors, etc.
1. Other Model Code States, e.g., Maryland, Hawaii

http://www.aia.org/SiteObjects/files/abamodelcode.pdf
a. Maryland State Board of Contract Appeals3.

http://www.msbca.state.md.us/
2. Note difference between detail and the similarities of general legal

principles, with guidance from e.g., Federal Acquisition Regulations (FARs),
http://www.arnet.gov/far/90-36/pdf/toc.html
3. There isn’t a huge resource of expert procurement literature. The George

Washington University Law School in Washington, D.C., conducts a
Government Contracts Program, and its resident instructors and authors, in
3
Maryland was an early adopter of the ABA Model Procurement Code and has established
a long line of reasoned, consistent and published decisional authority specifically applicable to
MPC issues (under its version, which runs fairly closely to the MPC), although also drawing on
analogous law from Federal and other jurisdictions. As such, the author asserts its decisions are
both pertinent and instructive to interpreting Guam’s Procurement Law. There are numerous
citations to the Maryland State Board of Contract Appeals decisions in this Primer, referenced as
MSBCA No. xxxx.
particular Ralph C. Nash, Jr., and John Cibinic, Jr., have authored a couple
of the authoritatively cited texts, but the primary focus of their programs and
works are Federal Procurement Acquisition, not the MPC; nevertheless,
many of the principles are the same.
E. Lore: As Carlos Madrid described the incident above, the procurement of

supplies to meet the dire needs of the Marianas in 1876 had “obligatory legal
formalities” to follow, but proceeded “according to custom”. Unfortunately, much
of what passes for regular procurement practice is the custom, habit and lore
handed down from lawyer to lawyer, contractor to contractor, procurement officer
to procurement officer. Even those well placed and motivated to know better often
act on instinct, common sense or analogy to make decisions about how
procurement should be conducted, regardless of what the law actually requires.
The best and worst of explanation often offered in defense of questioned

procurement practice is, “but that’s how we do it”. It is the best explanation
because, at least someone is paying some attention and to some extent there is
some consistency, if nothing else. It is the worst because, when everyone falls off
the same page, is blind to what the law requires, and starts making things up as they
go or have gone, procurement becomes arbitrary, inconsistent and obtuse, if not
slipshod and detrimental to government and private contractors alike.
The Guam Procurement Act has, with some exception, pretty much been intact now
for well over twenty years. Still, the law is only now really being discovered and,
sadly, some very fundamental aspects are only now being acknowledged. For
instance, for years GovGuam GSA has purchased directly from the Federal Supply
Schedules in disregard of any local procurement laws or regulation, but with full
support of a series of legal opinions from the Attorneys General past and present.
This has seen an expenditure of hugely significant sums of public funds without the
usual accountability and competition required by law.
Another example: everyone knows the lowest responsive and responsible bidder is
meant to win a bid award, yet we have only recently had a Decision of the Public
Auditor, acknowledged as a case of first impression, that pointed out “responsive” is
not “responsible” and determinations of responsibility cannot be transformed into
issues of non-responsiveness merely by the “mandate” of an Invitation for Bids.
Guam procurement lore had long taught us, and wrongly, just the opposite.
The author makes no claim to great authority of the subject. He acknowledges

willingly that procurement law has been seen to be impenetrably obtuse,
stultifyingly boring, and an aggravation to government and private business alike.
He was also himself well versed in and convinced by procurement lore; until, that
is, he was forced to spend some time and have a look under the hood. He was
surprised, after more than a little work at it, to find an almost elegant internal
structure, cohesion and meaning in the Guam Procurement Law that previously was
unknown to him. It was a bit of a “‘Eureka’ moment”.
The purpose of this paper is to, hopefully, share with you that Eureka moment. It is
only an outline and will not cover every topic of Guam procurement law and
regulation. Its focus is on law and not the harder practical issues of the day to day
implementation of the law and the demands of using agencies. It will not unlock all
the secrets of the Guam Procurement Law but will hopefully provide a handy
reference to some of them. Law is a dynamic thing, and what we know today will
not necessarily be true tomorrow. No one should rely on the statements in this
paper as legal advice.
The hope is that this paper will provide quick and easy points of entry to anyone
trying to delve into the Guam procurement regime. The procurement process is
intended to be expeditious and it can be difficult to quickly gather and assess the
law and arguments for one’s own case rapidly. This has led, so the author
perceives, to protests and appeals based on unsubstantiated or unfocused argument;
and where the arguments are not well put, the decision makers are too often left
without the information they need to assist their critical analysis and informed
judgment.
This effort is most importantly intended to help contribute to a unified knowledge,

or debate, to regularize Guam procurement practice, and achieve the worthy
procurement policy objectives, in the rational way the Guam Procurement Act
contemplates.
F. The law of contract: private vs public: It should be kept in mind that when we are
speaking of government procurement, we are talking about a very specifically
stylized version of contract law. Like contract law generally, this requires
competent parties, offer, acceptance, certainty, consideration, remedies, etc. The
general principles of contract law provide context and guidance to the overview of
procurement law. See, for instance, the discussion below as to what is an “award”.
Unlike the general private law of contract, however, public procurement law entails
broader public policy considerations that constrain the application of general
private law contract principles, to adapt it to the needs of a democratic, fair, prudent
and accountable system of due process, public governance and use of public funds.
It is, generally speaking, those constraints of fairness, prudence and accountability
with which the law of public procurement most particularly deals. (See, Formation
of Government Contracts, Third Edition, John Cibinic, Jr., and Ralph C. Nash, Jr.,
CCH/ Wolters Kluwer, at p1 and, again in more detail, in the chapter “Contract
Formation Principles” at pp 203 et seq., cited hereafter as Cibinic and Nash.)
For instance, private parties are free to compete, or not compete, to secure such
contracts as they need or simply, for whatever reason, desire. They can amend their
contracts ‘til the carabaos come home, if they so desire. They can discriminate
(generally speaking) with whom they deal, as to what they want to buy, how
extravagant they want to be, and how to settle their differences. The stewards of the
public purse, however, cannot spend public monies however they see fit; they must
follow the rules of procurement to ensure fairness, prudence and accountability.
1. “Unless displaced by the particular provisions of this Chapter, the principles
of law and equity, including the Uniform Commercial Code of Guam, the
law merchant, and law relative to capacity to contract, agency, fraud,
misrepresentation, duress, coercion, mistake, or bankruptcy shall
supplement the provisions of this Chapter.” (5 GCA § 5002.)
II. PURPOSES AND POLICIES of Guam Procurement Law
A. Purposes and policies are intended to be effected and effective. The law and
regulations specify certain purposes or policies of procurement law. These are not
mere platitudes and ideals. They are intended to fill in the blanks and provide
direction when the law or regulations have holes or are in need of clarification or
direction. In procurement law, they have particular importance because the Public
Auditor is charged with the broad duty to promote “the purposes” of the
Procurement Act, not simply its black letter strictures.
1. “These broad policies outline the general rationale for the promulgation of
this Code but are in no way to be interpreted as limiting either its provisions
or application.” (Commentary, Model Procurement Code § 1-101.)
“This Chapter [the Procurement Act] shall be construed and applied to promote its
underlying purposes and policies.” (5 GCA § 5001(a).) Some of the “underlying
purposes and polices” are described as follows:
B. to simplify, clarify, and modernize the law governing procurement by this

Territory (5 GCA § 5001(b)(1)).
1. “While it is the intent of the MPC [Model Procurement Code] to ‘simplify’

state procurement procedures, the effect on Guam will be to somewhat
complicate them. This is because procurement law under Executive Order
65-12A on Guam is vague and leaves much to administrative direction. At
least, this Act will regularize and centralize procurement on Guam and, in
so doing, attempts to save money for the Territory and make procurement
more certain and regular for the vendors.” (Official Comment, 5 GCA §
5001.)
C. to permit the continued development of procurement policies and practices (5

GCA § 5001(b)(2)).
D. to provide for increased public confidence in the procedures followed in public

procurement (5 GCA § 5001(b)(3)).
1. “It is essential that bidders, offerors, and contractors have confidence in the
procedures for soliciting and awarding contracts. This can best be assured
by allowing an aggrieved person to protest the solicitation, award, or related
decision.” (Commentary No. 1, Model Procurement Code § 9-101.)
E. to ensure the fair and equitable treatment of all persons who deal with the
procurement system of this Territory (5 GCA § 5001(b)(4)).
1. A Member will conduct its business fairly, honestly and with integrity.
(Guam Chamber of Commerce Code of Ethics, Principle I.)
2. A Member should conduct its business within the spirit as well as the letter
of the law. (Guam Chamber Ethics, Ethical Commentary IV-1.)
F. to act in good faith: “This Chapter requires all parties involved in the negotiation,
performance, or administration of territorial contracts to act in good faith.” (5 GCA
§ 5003.)
1. “Good faith means honesty in fact in the conduct or transaction concerned.”

(13 GCA [UCC] § 1201(13); see 5 GCA § 5002, quoted above, for the
application of principles of the UCC to the Procurement Act.) Under the
UCC, “good faith” has developed to mean both a subjective element of
honesty in fact and an objective element of the observance of reasonable
commercial standards of fair dealing. (See, Official Comment 20, UCC § 1-
201, 2005 Edition.)
G. to provide increased economy in territorial activities and to maximize to the

fullest extent practicable the purchasing value of public funds of the Territory (5
GCA § 5001(b)(5)).
1. All specifications shall seek to promote overall economy for the purposes
intended.... (5 GCA § 5265.)
2. Objectives of the territory's supply management program include preventing

waste; continuing utilization of supplies; and obtaining a fair return of value
upon disposal of supplies. (2 GAR § 8102(a).)
H. to foster effective broad-based competition within the free enterprise system (5

GCA § 5001(b)(6)).
1. The requirement of fair and open competition wherever practicable lies at

the very heart of the Guam Procurement Act. It should always be sought,
not avoided. Convenience or administrative expediency is no excuse for
failing to advance a competitive solicitation regime. Failure to solicit
competition is almost always present in cases of corruption or undue
influence.
2. All procurement of supplies and services shall, where possible, be made

sufficiently in advance of need for delivery or performance to promote
maximum competition and good management of resources. (5 GCA §
1102.03.)
3. All specifications shall seek to ... encourage competition in satisfying the

Territory’s needs, and shall not be unduly restrictive. (5 GCA § 5265.)
4. It is the policy of Guam that specifications permit maximum practicable

competition consistent with obtaining supplies and services that are
“adequate and suitable” for its needs.. (2 GAR § 4102(a)(1).
5. When for any reason collusion or other anti-competitive practices are

suspected among any bidders or offerors, a notice of the relevant facts shall
be transmitted to the Attorney General. (5 GCA § 5246.)
a. “For the purposes of this Section, an anticompetitive practice is a

practice among bidders or offerors which reduces or eliminates
competition or restrains trade. An anticompetitive practice can
result from an agreement ... or result from illicit business actions....”
(2 GAR § 3126(a).)
b. Anti-competitive practices include resale price maintenance. “The

practice of resale price maintenance consists of an agreement
between a manufacturer and a distributor or a dealer to fix the resale
price of a supply....” (2 GAR § 3126(e)(3).) Although anti-trust
Supreme Court case law has arguably relaxed the standard of review
of resale price strictures to a reasonableness standard, this provision
continues the per se analysis from older case law.
6. Unless otherwise authorized by law, all territorial contracts shall be awarded

by competitive sealed bidding.... (5 GCA § 5210(a).)
7. Emergency procurements shall be made with such competition as is

practicable under the circumstances.... (5 GCA § 5215.)
8. All unsolicited offers [any offer to the government other than one submitted
in response to a solicitation] considered as being desirable shall be
subjected to the Competitive Sealed Bidding process.... (5 GCA § 5219(e).)
9. “Fair and open competition is a basic tenet of public procurement. Such

competition reduces the opportunity for favoritism and inspires public
confidence that contracts are awarded equitably and economically.” (MPC
Official Commentary No. 3 to MPC §3-201, which is the same as 5 GCA §
5210(a).)
10. A Member should engage in fair, free and open competition with its
competitors (Guam Chamber Ethics, Ethical Commentary III-2.)
I. to provide safeguards for the maintenance of a procurement system of quality and
integrity (5 GCA § 5001(b)(7)).
1. Each procurement officer shall maintain a complete record of each

procurement. The record shall include the following (5 GCA § 5249) :
a. the date, time, subject matter and names of participants at any

meeting including government employees that is in any way related
to a particular procurement;
b. a log of all communications between government employees and

any member of the public, potential bidder, vendor or manufacturer
which is in any way related to the procurement;
c. sound recordings of all pre-bid conferences; negotiations arising

from a request for proposals and discussions with vendors
concerning small purchase procurement;
d. brochures and submittals of potential vendors, manufacturers or

contractors, and all drafts, signed and dated by the draftsman, and
other papers or materials used in the development of specifications.
2. “[P]rotecting the integrity of the procurement process is one of the reasons

for the requirement to create and maintain a procurement record.” (In the
Appeal of Latte Treatment Center, Inc., OPA-PA-08-008, p 17.) “No
procurement award shall be made unless the responsible procurement
officer certifies in writing under penalty of perjury that the aforementioned
procurement record was maintained and that it is complete and available for
public inspection and this certification must be a part of the procurement
record.” (Id.; 5 GCA § 5250.)
3. Public employment is a public trust.... Public employees must discharge

their duties impartially so as to assure fair competitive access to
governmental procurement by responsible contractors. Moreover, they
should conduct themselves in such a manner as to foster public confidence
in the integrity of the territorial procurement organization. To achieve the
purpose of this Chapter, it is essential that those doing business with the
Territory also observe the ethical standards prescribed herein. (5 GCA §
5625.)
4. Ethical Standards
a. For Government Employees: Any attempt to realize personal gain

through public employment by conduct inconsistent with the proper
discharge of the employee’s duties is a breach of a public trust. In
order to fulfill this general prescribed standard, employees must also
meet the specific standards set forth in §§ 5628 through 5633 of this
Chapter.
(1) In the Latte Treatment Center appeal, supra, there was
mention that the agency representative had, at one time or
other, been given air fare and/or accommodation to visit
each of the offerors. There was a specific allegation of such
a breach of ethics standards at issue in the appeal. The
Decision accepted that the payments may have been an
improper gratuity, if proven, but found no specific, credible
evidence had been presented to prove the allegation. The
Public Auditor required, in any event, proof of “a connection
between” any payment by the contractor/offeror and the
relevant solicitation. The Public Auditor did find, though,
that the employee should have been recused from any
consideration of or involvement with the solicitation, and
that the employee’s “appearance of impropriety is a serious
impairment to the public confidence and integrity of the
solicitation process....” (Id., at p 15.)
b. For Non-Government Employees: Any effort to influence any public

employee to breach the standards of ethical conduct set forth in this
Section and §§ 5628 through 5633 of this Chapter is also a breach
of ethical standards. [These sections deal with Conflicts of Interest,
Disclosure Requirements, Gratuities and Kickbacks, Prohibitions
Against Contingent Fees, Restrictions on Contemporaneous
Employment of Present and Former Employees, and Use of
Confidential Information.] (5 GCA § 5626.)
(1) A Member should avoid taking unfair advantage of its

customers, suppliers, competitors and employees. (Guam
Chamber Ethics, Ethical Commentary I-2.)
(2) A Member will accept its rights and obligations for

conducting business within a framework of a democratic
system of laws. (Guam Chamber Ethics, Principle IV.)
c. Examples of specific standards: Gratuities, kickbacks and favors (5

GCA § 5630). It is a breach of ethical standards:
(1) to give or take a gratuity. A gratuity is “anything of more

than nominal value” unless there is adequate consideration.
(2) for a subcontractor to offer payment, gratuity or employment

to get a subcontract or order from a prime contractor.
(3) for any contractor, subcontractor or associate to give, and for

any government employee to accept, a favor or gratuity
“during the pendency of any matter related to procurement.”
A favor is “anything, including raffle tickets, of more than
deminimus value and whether intended for the personal
enjoyment of the receiver or for the department or
organization in which they are employed ... whether or not
such favor or gratuity may be considered a reimbursable
expense of the Territory....”
(a) Query whether these examples are a favor or

gratuity?:
i) A contract requires payment for certain

removal services, as well as other more
significant matters. The contractor writes to
the head of the agency as well as the
procurement officer in the agency and says, “I
received approval to authorize the moves for
the department at not charge. This is a one-
time approval and we’re happy to do it for
you.”
ii) Under the same contract, rodent damage is

not covered as part of the agreed services.
The Contractor writes to the head of the
agency and says, “in the past we have had
thousands of dollars worth of damage
resulting from rodents and have managed to
repair the damaged equipment without
charge to the agency, however, we cannot
continue to do so. There are currently
several machines in need of rodent repair
work. The total cost to replace one piece of
equipment is $17,000, but we will replace it
at no charge is you will assure us you have
implemented a rodent infestation treatment
plan.”
iii) A contractor agrees to hold a partnering

meeting, paid for or justified under the
contract, with staff of a government agency
in, say, Las Vegas.
5. Other standards of conduct
a. 4 GCA Chapter 15 contains provisions dealing generally with the

standards of conduct required of elected and appointed officers and
employees of the government. 4 GCA §§ 15201 et seq. specifically
contain provisions relative to standards regarding gifts, confidential
information, fair treatment, conflicts of interest, contracting, and
disclosure requirements for such persons.
b. The Public Official Financial Disclosure Act of Guam (5 GCA §

13101 et seq.) requires that certain government officials file annual
financial disclosure statements. Bill 30-209 would have extended
that requirement to “all persons or public officials that have
authority to enter into binding contracts on behalf of the
government of Guam or any of its departments, agencies,
autonomous entities and public corporations”, as well as “and all
persons or public officials that have consent authority to enter into
binding contracts on behalf of the government of Guam or any of its
departments, agencies, autonomous entities and public
corporations”. Although the Bill was unanimously passed by the
Legislature, it was vetoed by the Governor; it may yet see a revival,
considering its unanimous legislative support.
J. to require public access to all aspects of procurement consistent with the sealed
bid procedure and the integrity of the procurement process. (5 GCA §
5001(b)(8).)
1. The [procurement] record required by § 5249 of this Chapter [see above] is

a public record and, subject to rules promulgated by the Public Auditor,
any person may inspect and copy any portion of the record. (5 GCA §
5251.)
a. To date, the Public Auditor has not promulgated any such rules.
b. This section (§ 5249) is modeled after MPC § 1-401, Comment

number 1 to which says, “[t]he purpose of this provision is to
achieve maximum public access to procurement information
consistent with appropriate consideration of safeguards for
contractors and employees.”
2. The Superior Court is given jurisdiction to hear a complaint “by any

member of the public to enjoin a governmental body from withholding
procurement data....” This is an expedited proceeding, and the complainant
is entitled to costs and attorney fees if she prevails; further, the matter could
result in Civil Service action being taken against a government official who
has acted arbitrarily or capriciously. (5 GCA § 5485.)
3. Consider more broadly the Freedom of Information Act, known also as the
Sunshine Act 5 GCA, Div. 1, Chpt 10, §§ 10101 et seq.
a. The author is of the view that the FOI content and process rules are
not adequately responsive to the needs of the procurement process.
Rules from the Public Auditor to facilitate and enforce access to the
procurement record would be in keeping with the spirit “to provide
for the expeditious resolution of controversies”, as mentioned in 2
GAR § 12101.
K. Policy in favor of planned procurement
1. “All procurement of supplies and services shall, where possible, be made

sufficiently in advance of need for delivery or performance to promote
maximum competition and good management of resources.” (5 GCA §
5010.)
2. The Procurement Record shall include “the requesting agency’s

determination of need.” (5 GCA § 5249(e).)
3. Consider general principles laid out in FAR Part 7 (“Acquisition Planning”)

and Part 11 (“Describing Agency Needs”).
a. “The purpose of this planning is to ensure that the Government

meets its needs in the most effective, economical, and timely
manner.” (FAR Subpart 7.102.)
b. Acquisition planners address the requirement to specify needs,

develop specifications, and to solicit offers in such a manner to
promote and provide for full and open competition with due regard
to the nature of the supplies and services to be acquired. (FAR
Subpart 7.103(c).)
(a) “Acquisition plans start with a statement of need.

(Subpart 7.105(a)(1).) If the acquisition planning is
being done prior to preparing a budget, the agency
will have to analyze its needs in a thorough manner
as part of the acquisition plan.” (Competitive
Negotiation, Second Edition, Ralph C. Nash, Jr.,
John Cibinic, Jr., and Karen R. O’Brien, The George
Washington University, Law School Government
Contracts Program, p. 41, cited hereafter as “Nash,
Cibinic and O’Brien.)
c. Acquisition planning should begin as soon as the agency need is

identified, preferably well in advance of the fiscal year in which
contract award is necessary. (FAR Subpart 7.104(a).)
d. Requirements and logistics personnel should avoid issuing

requirements on an urgent basis or with unrealistic delivery or
performance schedules, since it generally restricts competition and
increases prices. (FAR Subpart 7.104(b).)
e. “Competition is the most fundamental goal of acquisition planning
because it is believed that obtaining competition is the best method
of ensuring that the Government will receive the supplies and
services it needs at fair and reasonable prices. Competition also
furthers the [legislative] goal of providing all qualified sources an
opportunity to participate in the procurement process.” (Nash,
Cibinic and O’Brien, p 85.)
4. “Lack of advance planning does not justify noncompetitive procurement.”

(Nash, Cibinic and O’Neal, p. 38.)
a. 41 USC §253 and 10 USC § 2304 (f) : “In no case may the head of
an agency ... (5) enter into a contract for property or services using
procedures other than competitive procedures on the basis of lack of
advance planning.”
5. The author offers the observation that most procurement mistakes, disputes
and protests would be avoided by assiduous needs assessment and planned
procurement.
L. Policy in favor of local procurement (5 GCA § 5008).
1. “All procurement of supplies and services shall be made from among

businesses licensed to do business on Guam....”
2. “Procurement of supplies and services from off Guam may be made if no

business for such supplies or services may be found on Guam or if the total
cost F.O.B. job site, unloaded, of the same supplies or services “ obtainable
from a business on Guam is not more than 115% of the off-island cost.
Thus, as between an on-island bidder and an off-island bidder, the off-island
bidder loses unless its bid is no more than 85% of the on-island bidder.
Putting numbers to it, an on-island bidder with a $100 bid price wins over
an off-island bidder with a bid price of $85.01.
3. “Award to an off-island vendor without a comparison to the price or

availability of local vendors is inconsistent with [the local preference
provision] 5 GCA § 5008. Without the required cost analysis, the record
does not support an award to [an off-island bidder].” (In the Appeal of
Emission Technologies, Inc., OPA-PA-07-002, p 12; note, however, this
Decision was vacated by Writ of Mandate issued by the Guam Superior
Court, on other issues: TRC Environmental Corporation vs. Office of the
Public Auditor, SP 160-07.)
4. Businesses “licensed to do business on Guam”:
a. Must maintain “an office or other facility” on Guam
b. Plus one of the following:
(1) Manufacturing which adds at least 25% value using US

Citizens, permanent residents or authorized workers who are
citizens of the old Trust Territory.
(2) Regularly carries inventory for regular immediate sale of at

least 50% of supplies to be procured.
(3) Retail or wholesale location that regularly carries an

inventory on Guam of items of similar nature to those sought
of a value of at least half the bid value or $150,000
(whichever less).
(4) Service business “actually in business”, doing “substantial

portion” on Guam, hiring at least 95% US Citizens,
permanent residents or authorized workers who are citizens
of the old Trust Territory.
5. By Executive Order 2000-25, Governor Guiterrez purported to override the

effect and intent of the Local Preference provisions of the Guam
Procurement Law, to give additional preference to local consultants or
providers of educational training and instruction to GovGuam departments
and agencies. This preference was not based on a cost comparison but
provides a blanket preference simply on the basis of being “on-island”. The
author does not believe the Executive has the power to make or remake law,
and that this Order conflicts directly with Guam law, beginning with 5 GCA
§ 5004(b), discussed below. Nor does the Governor have any procurement
rule making authority, which has been reposited in the Policy Office: see
Article III below.
6. The Federal government (Buy American Act; see FAR Part 25.000,
http://www.acquisition.gov/far/current/html/Subpart%2025_1.html), as well
as State and municipal governments across the US and abroad have various
forms of local preference provisions. (Just search online and see, e.g.,
http://www.oregon.gov/DAS/SSD/SPO/reciprocal_detail.shtml.)
7. In In the Appeal of Teal Pacific, LLC, OPA-PA-09-002, (dismissed when the

Public Auditor recused herself), the Appellant argued that the Guam local
preference provision is an unconstitutional and inorganic violation of its
right to equal protection. The author has sympathy for the agency's position
that it is its duty to apply the law, not determine it, and suspects the Public
Auditor would reach the same result; that issue is for a court to determine.
a. Note that a Federal Appeals Court has ruled unconstitutional a

Federal set-aside provision favoring women-owned businesses based
on the ruling that no relevant findings were made to substantiate the
presumptions underlying the alleged purpose of the act. (See, Rothe
Development Corp. v. Department of Defense, United States Court
of Appeals for the Federal Circuit, 2008-1017,
http://www.cafc.uscourts.gov/opinions/08-1017.pdf .) The ultimate
ramifications and ripple effect of this decision are yet to be known.
b. The author believes that the Rothe Development rationale would be

inapplicable to an analysis of local preference rules. There, the issue
was alleged discrimination based on status (women only, minorities,
etc.) Status issues attract strict judicial scrutiny under an equal
protection analysis. Local preference provisions involve commercial
issues of geography only and, as such, do not enjoy such precious
protection of the courts. Indeed, the current legal consensus seems
to be that the Commerce Clause and its protection of interstate
commerce does not apply to Guam.
M. Policy in favor of Bio-friendly products
1. Public Law 21-22 purports to change the Procurement Regulations “to

insure that in all purchases of goods by the government of Guam, when
possible, emphasis shall be placed on the purchase of products that are
biodegradable, reuseable, recyclable, or recycled, or any combination.”
The law did not direct the Policy Office to change its regulations, but its
regulation 2 GAR § 1102.02 purports to be in compliance with the law.
2. § 1102.02 gives a ten percent (10%) advantage to any bidder of products

meeting those bio-friendly characteristics. Moreover, it specifically provides
that the 10% bid advantage is to be given in addition to the 15% local
preference, with the express effect that there could be a 25% bid advantage
when bid-friendly products are bid by local companies meeting the local
preference requirements.
N. The Procurement Act applies to almost all GovGuam purchases.
1. “This Chapter shall apply to every expenditure of public funds irrespective

of their source, including federal assistance funds ... by this Territory, acting
through a governmental body .., under any contract...” (5 GCA § 5004(b);
cf, In the Appeal of L.P. Ganacias Enterprises, Inc., dba RadioCom, OPA-PA-
06-003.)
2. Exceptions are made (id.) for
a. Pre-emptive federal government funding regulations, if any.
b. Grants or inter-governmental contracts.
(1) The author understands that most Federal grants and funding
regulations, similar to the Federal Acquisition Regulations
applicable to Federal Supply Schedule purchases (see
below), include a provision that local procurement laws are
to be followed (see, e.g., 32 CFR 33.26), making this
exception, the author believes, inapplicable to such grants.
Each grant would need to be studied to determine if it is
subject to local law.
c. Gifts, bequests and other such private grants and donations, or

cooperative agreements.
3. “Where a procurement involves the expenditure of federal assistance or

contract funds, or other federal funds as defined by Section 20 of the
Organic Act of Guam, all persons within the government of Guam shall
comply with such federal law and regulations which are applicable and
which may be in conflict with or may not be reflected in this Chapter.” (5
GCA § 5501.)
4. A “governmental body” to whom the Guam Procurement Act applies only

refers to the executive branch of the government. (5 GCA § 5030(k).) Thus,
for instance, the Supreme Court of Guam has at one time adopted its own
procurement regulations which deviated significantly from the Procurement
Act law and regulations, such as apparently deleting entirely the
requirement that a bid be responsive, awarding the bid solely on the basis
of bidder responsibility. (Procurement Regulations of the Supreme Court of
Guam, Promulgation Order 03-07, Sections 5(A)(1)(g) and 5(A)(2), but see
Sections 6(D)(3)(a)(ii) and (iii).) Note, however, that the current Judicial
Council of Guam Procurement Regulations have superceded those Supreme
Court regulations and reinstated the responsive requirement. (See,
http://www.guamsupremecourt.com/Information/images/ProcurementRegula
tions.pdf;
http://www.guamsupremecourt.com/Resolutions/images/JC06-011%20Re%
20Amending%20Procurement%20Regs.pdf.)
5. An interesting question has been presented whether an agreement made by

the Department of Chamorro Affairs, in its administration of The Chamorro
Village market place, to give exclusive license to one taxi company’s use of
parking spaces at the Village, is a violation of the procurement law. This
news item is reported here and here. The agency justifies the arrangement
as a means of improving tourist patronage of the markets. Importantly, it
claims it is not paying the taxi company, nor is the taxi company paying it:
"We did not go out for bid because we're not paying anyone." Since there
is no “expenditure of government funds”, is the Procurement Act
implicated?
a. 5 GCA § 5004(a) says the Procurement Act applies to contracts

made after the effective date of the law. 5 GCA § 5004(b), on the
other hand, says the Act applies to “expenditure of public funds”.
Does the “expenditure” condition of subsection (b) delimit the
“contracts” of subsection (a)? Does subsection (a) merely define the
implementing date of the law, without reference to expenditures?
These are debatable questions.
b. Perhaps other considerations provide more guidance. The definition

of “contract” in 5 GCA § 5030 says it includes “all types of
agreements ... for the procurement of ... services ...,” and says that
“procurement” includes “otherwise acquiring any ... services ....”
The taxi agreement evidently requires that the taxi company “will
provide quality, reliable, clean and excellent service to all its
customers”, which is expected to benefit the market vendors, who
are tenants of the agency: “They’re bringing clients to the vendors.”
This possibly gets closer to an answer whether this implicates the
procurement laws, but only if we ignore the expenditure issue.
c. The author is inclined to conclude that the expenditure of funds

aspect is integral to procurement and that this situation does not fit
well within the procurement law prohibitions. This does not mean
that the arrangement is lawful under other laws, it should be noted
(nor does the author imply it is unlawful, but if it is not unlawful, the
legislature might want to consider the matter).
(1) For instance, 5 GCA §87104(l) says it is within the power of

the agency to operate the facilities, but only in accordance
with the Procurement Act. This section could be read to
impose procurement law requirements (including imposing
the purposes and policies discussed above) on this contract,
when the procurement law, by itself, might not. (See
discussion of the “unless other wise authorized” clause in the
Article on procurement methods, below.)
O. Making and keeping “determinations”.
1. Throughout the procurement law and regulations, procurement officers are

meant to make “determinations”. The author takes the view that any
required determination, including a determination of what is “the best
interests of the Territory”,
a. should be articulable and kept in some record form which includes

an explanation of the basis for the determination,
b. requires a reasoned and deliberative consideration and balancing of

all the competitive policies of the procurement act, including fair
and equitable treatment of all parties, and
c. must not be impulsive, partial, deceptive, arbitrary, unreasonable or
capricious, let alone contrived or implausible.
d. Note, that a “best interest” determination is entirely dependent on

the circumstances of each case. For instance, while it is expressly
stated that inadequate specifications may be sufficient reason to
reject all bids, it is not an express reason to cancel a solicitation; on
the other hand, it may be in the best interest, in both instances,
where supplies, services, or construction being procured are no
longer required. (Compare 2 GAR §§ 3115(d)(1)(B) and (d)(2)(A).)
In other instances a finding of best interest may be conditioned, e.g.,
upon a finding of “encouraging effective competition or otherwise
promoting economies”. (5 GCA § 5237(b)(2).) That said, it should
follow that a mere conclusory statement that something is in the best
interests of the territory should be found to be insufficient without
further elaboration.
e. While not directly dealing with procurement determinations, in an

analogous situation involving the Civil Service Commission’s
decision to reconsider a prior final decision, the Guam Supreme
Court said, “We explicitly hold here that where the CSC exercises its
power to reconsider a final decision without articulating in its
decision a reasoned basis for doing so, the exercise is inherently
arbitrary and capricious. Consequently, a judgment made pursuant
to such an arbitrary exercise of power is reversible as an abuse of
discretion.” (In re Department of Agriculture v. CSC (Rojas),
Amended Opinion on Rehearing, 2009 Guam 19, at ¶ 31; emphasis
added.)
f. In the Guam Education Financing Foundation appeal Decision,

OPA-PA-09-005, in rejecting the agency’s initial decision that the
protest was untimely, the Public Auditor observed, “DPW initially
found the GEFF’s protest was untimely, but it did not state the
reasons for making this finding”. (At p. 5; emphasis added..)
2. “Written determinations required by this Chapter [the Procurement Act]

shall be retained in the appropriate official file of the Chief Procurement
Officer or the purchasing agency.” (5 GCA § 5020.)
3. That code (§ 5020) is adopted verbatim from MPC §1-201; indeed, the
Compiler’s note to § 5020 identifies MPC §1-201 as the source for § 5020.
There are Model Regulations intended to implement that Model Code
provision, which do not seem to have made their way into the Guam
Procurement Regulations, notwithstanding the introductory Official
Comment to the Guam Procurement Act, which says “[b]ecause this Act
intends that the Policy Office adopt implementing regulations, Model
Regulations are also available, and must be examined and changed to
coincide with the version of this Act actually adopted by the Legislature.”
(See introductory Official Comment citation under sources of Guam law,
above.)
4. Model Regulations implementing the Model Code equivalent of 5 GCA §

5020 require:
a. Where the Procurement Code or these regulations require a written

determination; the officer required to prepare the determination may
delegate its preparation, but the responsibility for and the execution
of the determination shall not be delegated. (§ R1-201.01.1.)
b. Each written determination shall set out sufficient facts,

circumstances, and reasoning as will substantiate the specific
determination which is made. (R1-201.01.2.)
c. While an officer is responsible for the execution of the written

determination, other personnel, particularly technical personnel and
appropriate personnel in the Using Agency, are responsible for
furnishing to the cognizant procurement official, in an accurate and
adequate fashion, the information pertinent to the determination.
(R1-201.01.3.)
d. Each written determination shall be filed in the solicitation or

contract file to which it applies, shall be retained as part of such
file for so long as the file is required to be maintained, and except
as otherwise provided by law or regulation, shall be open to public
inspection. (R1-201.01.5.)
5. At a minimum, the Model Regulations should be used as a guide to define

the meaning and implementation of determinations under Guam law. The
author would argue, however, that this model regulation is not simply a
guide, it is an implied requirement. The author argues that these Model
Regulations are integral to implementing the Model Code, as spelled out in
the introductory Official Comment mentioned above: “[b]ecause this Act
intends that the Policy Office adopt implementing regulations, Model
Regulations are also available, and must be examined and changed to
coincide with the version of this Act actually adopted by the Legislature”.
The Guam Procurement Act did not make any substantive change to the
nature of determinations, indeed enacted § 5020 verbatim from MPC § 1-
201, and identified the MPC as the source. There is nothing inconsistent in
these Model Regulations and the version of the Act adopted by Guam, so
these Model Regulations having to do with determinations should have
been included in the Guam Regulations. Given the duty of the Policy Office
to adopt the implementing regulations, it was not within the discretion or
power of the Policy Office to fail to adopt these particular Model
Regulations; or so the author believes.
6. Under the original Procurement Act, certain specific determinations were
said to be “final and conclusive unless clearly erroneous, arbitrary,
capricious or contrary to law.” (5 GCA § 5425.) However, this was
changed under revisions allowing appeals to and oversight of the Public
Auditor: “[n]otwithstanding § 5425 of this Chapter, no prior determination
shall be final or conclusive on the Public Auditor or upon any appeal from
the Public Auditor.” (5 GCA § 5703.)
P. A word from your author:
1. Notice that there is no policy that says procurement is to be conducted for

the convenience or ease of the government or the public. Government
procurement is very clearly intended to be methodically planned,
competitive, transparent and accountable. This is, not coincidentally, the
goal of private sector procurement, as well; in a word, it’s called
“management”. The author takes umbrage at anyone who blames
ineffective government management on the government procurement
processes. Those within and without the government who complain and
editorialize about the “cumbersome” procurement process fail to understand
its principle values, or are just pursuing some other agenda. If the price of
freedom is vigilance, the price of a consistently fair, effective and
trustworthy procurement process is “red tape”. Because, when properly
understood and used, procurement red tape does not suffocate us, it holds
the system and its competing participants together.
2. The author does not doubt that many efficiencies could be had in the
procurement “system”, but would prefer that we all first try to make it work
effectively by making it work the way it is designed to work, before
tinkering too much with the “system”. The author believes the most obvious
failures and burdens of the Guam “procurement system” of recent times are
due to dysfunctions in operating the system, not the system itself. The first
step to making it function properly is to understand and experience how it is
meant to work under the existing law, and then make that process function
professionally, consistently and routinely.
3. The Guam legislature chose to forego procurement training and education

when it adopted the Guam version of the Model Procurement Code. In this
regard it is important to note a significant “hole” in the procurement law and
regulation:
a. Along with the MPC, the Guam Procurement Act has a Part entitled
“Coordination, Training and Education” (Part E, Article 2 of the
Guam Procurement Act.)
b. Guam law and regulation have enacted the “Coordination”

provision, calling for collection and preparation of procurement
statistics (5 GCA § 5140; 2 GAR § 2111; MPC § 2-501). But that is
all. Guam law does NOT address “training and education”.
c. The MPC (§ 2-502) contemplates a “Procurement Advisory Council”

to be funded by the Government to discuss and make
recommendations “for improvement of the procurement process”,
and to make studies, analysis and reports as requested. Guam law
does not follow that lead.
d. The MPC (§ 2-503) goes further and contemplates formation of what

it terms a “Procurement Institute” to conduct or participate in
procurement education and training for public and private
employees and others, as well as conduct research and maintain a
library of resources, to be funded by the Government.
e. Official Commentary to MPC § 2-503 make the following points:
(1) “Procurement is a complex process which experience has

shown can only be adequately learned over a period of
time. Thus training in procurement is vital for new
[GovGuam] employees without prior experience in the field.
It will accelerate the learning process and will tend to make
[GovGuam] procurement personnel knowledgeable and
effective in the minimum time.”
(2) “In addition, training courses should also be reasonably

available to vendor personnel, university professors,
students, and others. Experience has shown that when a
vendor or other person affected by the system makes an
unnecessary mistake through lack of knowledge of the
ground rules of procurement, it causes friction and expense
to the [government].”
f. In reaction to certain announcements by the Obama administration

to reform Federal government procurement processes, Professors
Steve Kelman and Steve Schooner made the following comments
(see, Commentary: Achieving effective reform, Federaltimes.com,
http://federaltimes.com/index.php?S=4032866.). Steve Kelman is
the Weatherhead Professor of Public Management at Harvard
University’s John F. Kennedy School of Government. Steve
Schooner is the co-director of the Government Procurement Law
Program at George Washington University Law School.
(1) “The federal procurement system is the world’s most heavily

regulated, and a well-established regime of laws, statutes and
policies addresses each of the president’s concerns. But rules
can’t spend money wisely, only people can. And we’ve got
huge people problems.... “
(2) “Generating competition is time consuming and labor

intensive. The government needs experienced professionals
to, among other things, understand agencies’ requirements to
fulfill their diverse missions, plan contracting solutions to
fulfill those requirements, conduct market research to
identify the best contractors, solicit those contractors to
assure competition and that the government get a good deal,
draft and negotiate contracts, manage relationships during
contract performance, and perform quality assurance to
ensure the government obtains the value it paid for and high
levels of customer satisfaction. Proper staffing will contribute
more toward responsible fiscal stewardship than another
round of studies, legislation or policymaking.”
III. PROCUREMENT ADMINISTRATIVE STRUCTURE: Policy Office, GSA, DPW, Public

Auditor, and Attorney General
A. Centralized Procurement Policy: 5 GCA § 5120 states the general objective to

centralize all procurement activities in the Policy Office, the Chief Procurement
Officer at the General Services Administration (CPO/GSA) and the Department of
Public Works (DPW).
1. All Executive Branch bodies are subject to the general requirements of

Guam procurement law and regulation, although certain bodies are
authorized to directly conduct their own procurement. These bodies
include GCC, UoG, GPSS, GMHA, GEDCA and GVB. “It is the intent [of
the Legislature] to require all Executive Branch governmental bodies,
including autonomous agencies, ... to be governed to the maximum extent
practicable by [the Procurement Act].” (5 GCA §5125.)
a. Note the author’s comments above in respect of Executive Order

2000-25 and the Governor’s lack of power to make law or
regulation in respect of procurement matters.
2. This has led to such Agencies often adopting their own procurement
regulations, with their own numbering/classification systems, even though
the general Guam procurement regulations preempt anything substantively
inconsistent (5 GCA § 5131; Guam Imaging Consultants, Inc., v. Guam
Memorial Hospital Authority, Guam Supreme Court, 2004 Guam 15 at ¶¶
22, 41).
3. The author believes this is not a satisfactory development and efforts should
be made to identify the “core” procurement regulations that are intended to
apply uniformly throughout GovGuam, allowing Agencies to then only
adopt such additional regulations as are necessary to conduct their direct
procurements. This will have the added benefit of focusing agency
procurement practice on the standardized general procurement regulations
and away from any notion they may be a law unto themselves.
B. Policy Office: The Policy Office is meant to be established under the Office of the
Governor. It is meant to consist of five members, three government employees
selected by the Governor plus the Directors of Administration and DPW; the DPW
Director is the chair. (5 GCA § 5101.)
1. Under Guam law (5 GCA § 5101) :
a. The Policy Office is created in the Office of the Governor and

comprised of three government employees, all to be appointed by,
and presumably serve at the pleasure of, the Governor, plus two
ex-officio government Directors (also appointed by the Governor).
b. There is no statement of qualification.
c. The Governor’s Office holds the purse strings for the Policy Office (§
5101(c) and Comment).
2. The MPC (§ 2-101(2)) presented two models of Policy Office composition,

an “inside” one (the model adopted by the Guam legislation) and an
“outside” one, and suggested by Comment that another permutation could
be a “mixed” inside and outside one (a solution the author favors). In either
an inside or outside model, it is recommended that the CPO be an ex officio
member. (MPC §2-101(2) [Option 2], Commentary 1.)
a. The “outside” model is composed of private, non-governmental

persons:
(1) the Office is to be comprised of members “who shall not

otherwise be full-time employees of the [Territory]”; and
(2) “each appointed member shall have demonstrated sufficient

business or professional experience to discharge the
functions of the Policy Office.”.
b. In determining which model to adopt, the MPC Commentary (no. 6)

to § 2-101(2) [Option 2] mentions some relevant considerations, one
of which may be particularly salient in Guam’s case: “the
independence and accountability of the Policy Office”.
3. The Policy Office is responsible (5 GCA § 5102) for promulgation of

Regulations governing “procurement, management, control and disposal of
all supplies, services and construction to be procured by the Territory.”
a. “The Policy Office shall not delegate its power to promulgate

regulations.” (5 GCA § 5130(b).)
b. The Attorney General has issued an opinion that GSA has the power
to adopt alternative methods of source selection and procurement
procedures to implement the alternate method. (Legal
Memorandum (GSA 07-1084, June 16, 2008.) It based this power
on the authority given GSA to adopt internal operational procedures,
5 GCA § 5113(b) and 2 GAR § 2104(b). The Public Auditor has
decided that this legal opinion is “incorrect”, and GSA does not have
such broad authority. (In the Appeal of Town House Dept. Stores,
Inc. dba Island Business Systems and Supplies [IBSS vs GSA], OPA-
PA-08-012 (decided February 10, 2009).)
c. In the Appeal of L. P. Ganacias Enterprises, Inc. dba RadioCom,

OPA-PA-06-003, involved a protest of a sole source award made by
Guam GSA on behalf of the Office of Homeland Security, “a part of
the Office of the Governor”. The Decision of the Public Auditor
noted at p 10, “[t]here is no evidence of delegation to OHS or the
Office of the Governor [of] the authority to prepare its own
specifications.”
4. The Policy Office is an on-again-off-again institution. Presently, it is the

author’s understanding that it lacks the appointees necessary to function.
C. GSA: The CPO of GSA shall serve as the central procurement officer “with respect
to supplies and services.” (5 GCA § 5113(a).) The CPO’s duties include:
1. Procure or supervise procurement of all supplies and services.
a. The current Guam GSA web site is rudimentary. For instance, it

only includes three Circulars issued in 2009, and none from prior
years. These Circulars are important policy and practice statements
issued by the CPO under her authority to issue internal operational
procedural rules, and it serves the best interests of the Guam
community to make these available to the public, consistent with the
public access policy, 5 GCA § 5001(b)(8).
b. CPO has a limited power (2 GAR § 2105) to delegate her authority

to any government body or official (5 GCA § 5114) and to revoke
any authority previously delegated (2 GAR § 2105). Legislation
occasionally limits that authority (e.g., 5 GCA § 5116 re GPA) or
preempts it (e.g., 5 GCA § 5117 re Guam Preservation Trust).
(1) While the CPO has authority to delegate, there is no express
provision to allow the delegatee to further delegate any such
authority, and would likely not be implied given the very
specific grants of authority and responsibility in the
procurement organizational regime. Thus, given the CPO’s
authority to only delegate to government officials/agencies,
and the lack of authority to further delegate, it would not
seem proper for an agency to delegate any procurement
authority to a third party.
(a) Note also, the strict limitations on the use of non-

governmental parties in the preparation of
specifications, in the Article below discussion
Specification, which would be an independent
limitation on delegation of procurement authority.
c. Items of works of art, publications, A&E services and investment or

actuary services are generally exempt from the requirement of direct
CPO or DPW procurement, but the procuring agencies must do so
pursuant to general procurement law and regulation. (5 GCA §
5124.)
2. Exercise general supervision and control over all inventories of supplies.
a. CPO “shall have general supervision of all inventories of tangible

personal property, whether warehoused or in use, belonging to the
territory or any of its agencies. This responsibility shall not,
however, relieve any agency of accountability for tangible personal
property and other supplies....” (2 GAR § 8102(c).)
b. Sound inspection, testing, warehousing, and inventory practices are

called for, and effective means of transferring and disposing of
property must be employed. (2 GAR § 8102(a).)
c. Ascertain or verify that supplies, services, or construction items

procured by such officer conform to specifications. (2 GAR §
8102(b).)
d. General supervision of any receiving, storage, and distribution

facilities and services maintained and operated by the Office of the
Chief Procurement Officer or using agencies. (2 GAR § 8102(d).)
e. Using agencies shall notify the CPO of all excess supplies. No

using agency shall transfer, sell, trade-in, or otherwise dispose of
supplies owned by the territory without written authorization of the
Chief Procurement Officer. (2 GAR § 8102(e) and second (d); Note:
The copying of the Model Code and Regulations into Guam Code
and Regulations is replete with typographical and reference errors.)
(1) Note Article 7, Ch. 22 of Title 5 GCA (§§ 22701 et seq.),
dealing generally with the inventory and disposition of all
surplus and lost/damaged property, including interagency
transfers, by the Department of Administration and the Board
of Survey. A Cross-Reference note by the Compiler to §
22702 states, “[t]his section does not apply to surplus
supplies, the definition and disposition of which are covered
in 5 GCA § 5403 as part of the Procurement Law”.
f. Disposal: Surplus supplies shall be offered through competitive

sealed bids, public auction, established markets, or posted prices. It
is recognized, however, that some types and classes of items can be
sold or disposed of more readily and advantageously by other
means, including barter. In such cases, and also where the nature of
the supply or unusual circumstances call for its sale to be restricted
or controlled, the Chief Procurement Officer may employ such other
means, including appraisal, provided such officer makes a written
determination that such procedure is advantageous to the territory.
(2 GAR § 8102(h).)
g. Prepare, issue, revise, maintain and monitor the use of specifications

in accordance with the law and regulations, and this can be
delegated to the using agencies, but not vendors. The CPO can
contract with third parties to prepare specifications provided there
“will be no substantial conflict of interest involved”. (2 GAR §
4103.)
(1) “GSA should review the specifications provided by the

purchasing agencies to ensure they will result in a
procurement that maximizes the purchasing value of public
funds and amend such specifications to ensure that purpose
is achieved.” ( In the Appeal of Guam Publications, Inc.,
OPA-PA-08-007, p 12.)
h. Data Collection: The CPO is responsible, together with BBMR and

the Public Auditor, to prepare statistical data concerning
procurement, usage and disposition of all supplies and services. (2
GCA § 5140.)
D. DPW: The Director of DPW shall serve as the central procurement officer with
respect to construction.
1. Duties of the Director of DPW include (5 GCA § 5113(c)(2)):
a. Procure or supervise the procurement of all construction needed by

Guam.
b. Establish and maintain programs for inspection, testing and
acceptance of construction.
c. Responsibility for selection of methods of construction contracting

management, that is, the contracting method and configuration that
will most likely result in timely, economical, and otherwise
successful completion of the construction project. (2 GAR §
5102(a).) Note that this does not empower DPW to alter or
establish methods of source selection (that is, bidding methods); it
only allows contract management flexibility. This is emphasized by
2 GAR § 5108, which says that the methods of contracting
management apply to A&E and land surveyor contracts, but For the
purpose of acquiring the services, the methods of source selection
shall be followed.
E. Public Auditor
1. The Office of the Public Auditor has had a name makeover and, as a result
of PL 30-27, signed into law June 16, 2009, is now to be known as the
Office of Public Accountability, but can still be called “OPA”.
a. There is curious politics behind the name change. The preamble to

the law states, “that the current title of the Office of the Public
Auditor appears to imply an office of an individual rather than the
function of the office. Oftentimes, the findings of an audit may be
attributed to the elected individual, as opposed to an actual finding
of the audit or investigation, especially if the audit findings reflect
questionable accountability issues.” Thus, the name change.
b. The Public Auditor is still the Public Auditor; only the name of the
office has changed. (1 GCA §§ 1903, 1906, etc.)
2. The Public Auditor has the power and jurisdiction to hear any appeal of a
procurement protest, as well as appeals from contract disputes and
debarment or suspension actions. She also has the power to make certain
determinations and adopt certain regulations within the context of the
procurement laws.
3. It must be remembered the Public Auditor also has the power and duty to
conduct financial and management audits, program evaluation and review,
and to inquire into any person having any official relations with any officer
in any matter relating to the expenditures of government funds and property,
and to report offenses for prosecution to the AG, and to conduct other
investigations and render other reports as required. (1 GCA Chpt 19, §
1900 et seq.)
4. The role of the Public Auditor in Procurement Appeals will be discussed
below.
F. Attorney General
1. The Attorney General has traditionally had a limited role to play, generally,
in the conduct of the procurement process, although a primary role as
attorney for any Agency it represents. The traditional role of the AG has
been to serve as legal counsel and provide legal services to the Policy Office
and the GSA (5 GCA § 5150), and even the Public Auditor in some
circumstances (1 GCA § 1909(d)). In this role, the AG has for decades
issued memoranda, guidance and opinion to the government agencies as to
the legality of various issues concerning procurement, as well as
representing the government in litigation and administrative proceedings
regarding procurement.
a. This role has been specifically expanded to require the AG to

provide legal procurement advice to the entire Government of
Guam in large dollar procurements, by new law, Public Law 30-72.
The Legislative reasoning behind this law is “ that such involvement
of the Office of the Attorney General in the procurement process
would ensure proper and expeditious procurement of goods and
services and would minimize protests of bid awards and allow for a
more expeditious procurement process.”
b. This law amends 5 GCA § 5150 to include the following:

“Whenever the Chief Procurement Officer, the Director of Public
Works, or the head of any executive branch agency, autonomous
agency, instrumentality or public corporation of the government of
Guam conducts any solicitation or procurement which is estimated
to result in an award of Five Hundred Thousand Dollars ($500,000)
or more, the Attorney General shall act as legal advisor during all
phases of the solicitation or procurement process.”
2. When the AG is meant to approve a contract, she must approve both form
and substance for legality, and that may mean inquiring into the procedures
that precede the making of the contract, that is, the procurement process
that led to the award of contract. (5 GCA § 5150.)
3. Although 5 GCA § 5121(c) places responsibility on the CPO to execute all

procurement contracts for services and supplies, “[i]f the Attorney General
or the Governor wish to review any contracts, this Section will not prohibit
it.“ (Official Comment to § 5121.)
4. The provisions of 5 GCA § 5450, et seq., regarding pre- and post-award

remedies, “does not apply to, say, a review by the Attorney General, who
determines, in the course of his normal review, that the proposed action
would be in violation of law if it were to be made.” (Official Comment, §
5450.)
IV. METHODS OF SOURCE SELECTION (Procurement Methods)
A. Generally speaking, there are only six main means of allowed procurement
methods, which the Procurement Act speaks of as “methods of source selection” (5
GCA § 5210(a)):
1. Competitive Sealed Bidding (2 GAR § 3109(b); 3109(n)(1))
2. Multi-step Sealed Bidding (2 GAR § 3109(r))
3. Small Purchases (2 GAR § 3111)
4. Sole Source (2 GAR § 3112)
5. Emergency (2 GAR § 3113)
6. “Professional” Services (5 GCA §§ 5216 and 5121; 2 GAR § 5108)
B. Of these, only the competitive sealed bid method can be used for all solicitations, in
all circumstances, though it is not always ideal, which is why there are other
approved methods. All other methods are restricted to particular conditions of use;
any use of a method that does not comply with its particular conditions of use
violates the procurement system and is grounds for protest.
C. “The exceptions to the sealed bid process are delineated by statute.... The
exceptions ... are limited, and Guam law no longer provides for an alternative to
sealed bidding except as provided above.” (Fleet Services, Inc. v. Dept. of
Administration, 2006 Guam 6, ¶¶ 14,15.)
D. Other special circumstances:
1. Unsolicited Offers (5 GCA § 5219)
2. Purchases from “a nonprofit corporation employing sheltered or

handicapped workers”. (5 GCA § 5217)
3. Drugs to be purchased by DOA, DPHSS, GMHA and GPSS shall be

purchased, whenever possible, directly from the manufacturer so as to
ensure and maximize economy. (5 GCA § 5270)
4. “Unless other wise [sic] authorized by law” (5 GCA § 5210(a)).
a. Note, for instance, PL 29-114 which specifically authorized the
issuance of an RFP for the financing and construction of a particular
new high school, and specifying other terms and conditions some of
which were also at variance with the general Procurement law and
regulations, some of which are discussed herein. Under 5 GCA §
5216, discussed below, the RFP method of source selection is, by its
own terms, only applicable to the procurement of certain
“professional services”. Here, the Legislature specifically made that
method applicable to this particular solicitation.
(1) In the Appeal of Guam Community Improvement

Foundation, Inc., (vs DPW) OPA-PA-09-005, involved a
protest of a bid brought under the RFP authorized by PL 29-
114. In rejecting the Appellant’s Request to Reconsider
Disclosure of the procurement record before award, the
Decision (at pp 6 et seq.), engaged in a tortuous deliberation
whether there were sufficient incidents of requirements of
professional A&E services to invoke the RFP disclosure rules.
The author suggests all that analysis was unnecessary, and
distracting, believing that the Legislation in PL 29-114 itself,
under the “otherwise authorized” clause, expressly provided
full authority and direction to follow the applicable RFP
processes regardless whether any “professional services”
were involved.
b. Compare this to 5 GCA § 5122, which the Attorney General opined

implied authority for the CPO to undertake direct purchases from the
Federal government Supply Schedules under the “other wise
authorized” clause. The Public Auditor disagreed: In the Appeal of
Town House Dept. Stores, Inc. dba Island Business Systems and
Supplies [IBSS vs GSA], OPA-PA-08-012; see Article below on
Federal Supply Schedule purchases.
E. Changes (including extensions, renewals, amendments, task orders) to contracts,

awards and solicitation: when new solicitation required
1. Guam procurement history has included many instances where, once a

contract has been let, it is thereafter renewed indefinitely. The fact that the
Guam Election Commission has leased the same office space for over thirty
years without ever putting it out to bid is just one example. This is
absolutely improper practice. The Procurement Act applies to every
expenditure of public funds (5 GCA § 5004(b)) and all territorial contracts
shall be awarded by one of the approved methods of source selection (5
GCA § 5210(a)).
a. Although there is a fine but clear legal distinction between renewing

and extending a contract, the same rule would apply in either case.
A renewal is technically a new contract and clearly within the
language of § 5210(a), and creating an extension of an existing
contract after award, when that was not within the contemplation of
the specifications of the original bid, violates the notion that awards
can only be made consistent with the solicitation criteria (see, e.g., 5
GCA §§ 5211(g) and 5201(d) and (f), 2 GAR § 3114(f)(2)).
2. A properly procured contract may contain a renewal option, but such a

contract provision is subject to strict conditions, as discussed in the article
below dealing with contract types.
3. In L.P. Ganacias Enterprises, Inc., dba Radiocom vs. GIAA and Guam Cell
Communications, CV 1787-00, (at page 17) the Judge said, “[i]t is the
opinion of this Court that to allow Defendant [GIAA] to automatically renew
its contract with Guam Cell at the end of the one year period would clearly
side step the purpose and the protections of the open bidding process for
government contracts. Thus, to allow the Defendant to renew its contract
with Guam Cell at the end of the contract term, for a price that is to be
negotiated between them, circumvents the entire bidding process, and this
is not proper.... Rather, GIAA will again have to open the bid ... and will
once again have to go through the entire bidding process before awarding
the contract ....”
4. Sometimes, contracts are indirectly renewed or expanded into new fields by

so-called amendments, and more recently “task orders”. The author takes
the view that any contract amendment which materially changes the scope,
by addition, deletion or otherwise, of the originally solicited term,
specifications, supplies, services or construction work should be analyzed
with much the same principle as declared in the L.P. Ganacias Enterprises,
Inc., case, id. That is, the test should be or at least include the consideration
whether the making of the amendment to purchase something not
previously solicited (supply, service, construction) “would clearly side step
the purpose and the protections of the open bidding process for
government contracts.”
a. If “proposed amendments to the solicitation would be of such

magnitude that a new solicitation is desirable”, it “is in the territory’s
best interest” to cancel a solicitation in whole or part prior to bid
opening. (2 GAR § 3115(d)(1)(B)(iii).) See, also, the discussion on
amending specifications in the Specifications Article, below.
b. In the Appeal of The Chesapeake and Potomac Telephone Company

of Maryland, MSBCA No. 1194 July 30, 1984, the MSBCA relied on
the scope of the contract test to find that a contract modification
required a new solicitation. The facts involved a change in a
telecommunications services agreement that the State believed
would significantly reduce its costs by changing the contract to allow
purchasing equipment rather than leasing it.
(1) The Board said, “[t]he issue before us concerns whether a
new contract is about to be entered into without formal
advertising, or whether proposed modifications to an existing
... agreement would be outside the scope of that agreement.
In the latter situation, the modifications would be
tantamount to a sole source award under a new
procurement.” (Opinion, pp. 17-18.).
(2) The Board ruled, “[t]he determination of whether a contract

modification is within the scope of the original bargain is a
legal issue. ... Accordingly, we are free to consider the issue
de novo. ... Maryland’s Procurement Law was enacted, in
part, to foster effective broad-based competition through
support of the free enterprise system. ... Whether a
modification falls within the scope of the original
undertaking, in a public contract context, depends on
whether the alteration to performance is within the scope
of the competition which originally was conducted.
[Citation omitted.]” (Opinion, p. 23; see discussion of public
vs. private contract law in Article I, above.)
c. See author’s comments on In the Appeal of JMI Medical Systems,

Inc. (OPA-PA-07-011) in the appeals review article toward the end
of this outline, below, to the effect the government cannot purchase
something it has not solicited.
d. See 2 GAR § 6101(3)(a) relative to “change order” clauses in fixed

price contracts: “By a written order, at any time, and without notice
to surety, the Chief Procurement Officer or the head of a Purchasing
Agency may, subject to all appropriate adjustments, make changes
within the general scope of this contract ....”
e. Note that the Legislature has, in PL 29-114, allowed amendments to

be sole sourced, apparently without restriction, to the incumbent
contractor under the lease or lease-back contemplated in that
legislation (“... in connection with any amendments to an existing
Lease or Lease-Back, the Contractor with respect to such
amendments shall be the Contractor with respect to the existing
Lease or Lease-Back. § 58A105.) The fact the Legislature went to the
trouble of making such a careful and unusual statement supports the
validity of the view that contract amendments would usually
implicate a new solicitation.
5. Note that any “prospective bidder” would have standing to challenge what
amounts to an award of a new contract without proper solicitation when a
contract is improperly extended, renewed or amended, by first protesting
the action to the agency. See discussion of bid protests, below, and
consider In the Appeal of Town House Department Stores, Inc., dba Island
Business Systems and Supplies, OPA-PA-08-003, involving the protest of a
prospective bidder for supplies which had not been properly solicited.
6. Assessment of whether a change to a contract constitutes a change order,

thus amending a contract within its scope, or a new contract, adding
additional matter beyond the scope of the original solicitation, is basically a
matter of general contract interpretation principles, as noted by The
Chesapeake and Potomac Telephone Company MSBCA appeal, supra.
a. The determination of the scope of a contract lies in determining

what it is that the contract called for in the first place.
b. Answering the question whether the contractor has promised to do

or provide exactly what the Government has requested is an issue of
bid responsiveness. (In the Appeal of J&G Construction, OPA-PA-
07-005, p. 6; see discussion of responsiveness in Article below on
competitive sealed bidding.)
c. Thus, any determination of whether something is within the scope of

a contract involves a similar evaluation as that of responsiveness;
that is, the determination of the scope of the contract should at least
consider the materiality of any changes to what the Government
requested in the solicitation. (Again, refer to the discussion of bid
responsiveness, and more particularly materiality, in competitive
sealed bidding below.)
(1) In this regard, note In the Appeal of O&M Energy, S.A., OPA-
PA-08-004, ibid, wherein the Public Auditor indicated that
an analysis of materiality may properly require a
consideration of significant differences in prices.
d. Note that where a contract adjustment involves a change of

magnitude in price greater than $100,000, certain cost and price
data must be submitted by the contractor to support the change.
(See, 2 GAR § 3118(b)(1)(B).)
e. Note that there is authority for the government to enter into a “fixed
price contract with price adjustments”. (2 GAR § 3119(d)(3).) This
contemplates a “variation in contract price under special conditions
defined in the contract, other than customary provisions authorizing
price adjustments due to modifications to the work. The formula or
other basis by which the adjustment in contract price can be made
shall be specified in the solicitation and the resulting contract.”
(Id.) This is only one of several types of contracts that may be made
which anticipate price adjustments that can be expected to be
encountered within the scope of the originally let contract. (See, 2
GAR § 3119.)
f. Some contractors have asserted to the author that at least one agency
of GovGuam has implemented a hard-and-fast rule that any price
adjustment that exceeds 15% of the original line item price bid must
result in a new solicitation for that item, and does not qualify as a
normal change order. It was solemnly asserted to the author that this
is a Guam procurement regulation. The author has not been able to
ascertain any such regulation within the general Guam procurement
regulations, although it may be a policy of a particular agency. The
author understands the legal basis for such a “rule”, in that a
significant price change may reflect a bidder’s misunderstanding of
the solicitation specifications in the first instance, or some other
“outside the scope” deviation. And the author appreciates having a
bright line reality check to assure that unauthorized changes are not
occurring. But the author believes that any arbitrary limit to price
adjustments may work an injustice on a contractor and an
unnecessary impediment to government contract administration
when the adjustment can reasonably and fairly be of the type of
“customary provisions authorizing price adjustments due to
modification to the work” as alluded to in 2 GAR § 3119(d)(3),
mentioned above.
7. The authoritative professors Cibinic and Nash from The George Washington
University, Government Contracts Program, discuss the issues of contract
changes and adjustments in the following manner (Formation of
Government Contracts, Third Edition, John Cibinic, Jr., and Ralph C. Nash,
Jr., CCH/ Wolters Kluwer, p302 et seq., cited hereafter as Cibinic and Nash):
a. “Merely because work is added to an existing contract by

modification or change order does not justify the use of ‘other than
competitive’ procedures if the work is in reality a new procurement
action... Change orders issued under the various Changes clauses
may be made on a sole source basis if they are within the general
scope of the contract. [T]he Comptroller will review an allegation
that the Government action should have been the subject of a new
procurement....”
b. “A ‘scope of the competition’ test is employed to determine

whether work has been improperly added to a contract. See
American Air Filter Co., 27 Comp. Gen. 567(B-188408), 78-1 CPD ¶
443, stating at 573:
The impact of any modification is in our view to be
determined by examining whether the alteration is within
the scope of the competition which was initially conducted.
Ordinarily, a modification was within the scope of the
procurement provided that it is of a nature which potential
offerors would have reasonably anticipated under the
changes clause.
To determine what potential offerors would have reasonably

expected, consideration should be given, in our view, to the
procurement format used, the history of the present and
related past procurements, and the nature of the supplies or
services sought. A variety of factors may be pertinent,
including: whether the requirement was appropriate initially
for an advertised or negotiated procurement; whether a
standard off-the-shelf or similar item is sought; or whether,
e.g., the contact is one for research and development,
suggesting that broad changes might be expected because
the Government’s requirements are at best only indefinite.”
c. “A slightly different test was used in Cray Research v. Department of

the Navy, 556 F.Supp. 201 (D.D.C. 1982), where the court stated at
203:
The ‘cardinal change’ doctrine prevents government
agencies from circumventing the competitive process by
adopting drastic modifications beyond the original scope of a
contract. The basic standard is whether the modified
contract calls for essentially the same performance as that
required by the contract when originally awarded so that the
modification does not materially change the field of
competition.”
(1) See, too, Webcraft Packaging, Division of Beatrice Foods

Co., Comp. Gen. Dec. B-194087, Aug. 17, 1979, 79-2 CPD
¶120, discussed in the Appeal of The Chesapeake and
Potomac Telephone Company MSBCA case, supra, where
specifications were “relaxed” during the procurement
process to all those offerors who had originally bid to obtain
more easily obtainable products. Had the original
procurement contained those relaxed specifications, the field
of competition would have been significantly wider, and the
competition more broad-based. That case was decided on
the field of competition test.
(2) The “change of the field of competition” test might be used

to analyze, for instance, dropping a major requirement in a
bid during a solicitation, such as dropping a financing
component from a finance, design, build and maintain
solicitation. While the bidders or offerors in such a
solicitation may not, as amongst themselves, be prejudiced,
certainly the field of competition may have been significantly
altered by such a change.
d. “Contract extensions, exercise of contract options, and lease

renewals can also constitute de facto sole source procurements...
The Comptroller General has stated that ‘competition should be
sought whenever it appears likely that the Government’s position
can be improved whether in terms of cost or performance’.... [In
one case the] Comptroller General found that the extensions became
necessary only because the agency failed to timely solicit a follow-
on contract, and the extensions were therefore not justified... [In
another case, the] Comptroller General found no justification for the
Navy’s contention that it would have been impracticable to obtain
competitive proposals. The Navy’s primary reason for failing to
procure competitively was a desire to ensure that the incumbent
contractor performed the work.”
8. Changes by way of deletions of, as well as additions to, bid requirements

made during a solicitation or contract award or performance can materially
change the scope of the original solicitation, in which case, consistent with
the general principles stated above, should result in a new solicitation.
a. For instance, prior to bid opening, the government should cancel a

solicitation in whole or part if “such action is in the territory’s best
interests for reasons including ... proposed amendments to the
solicitation would be of such magnitude that a new solicitation is
desirable”. (2 GAR § 3115(d)(1)(B)(iii).)
b. The author takes the view that when a bid has been let for the
finance, design and construction of a project, for instance, and
subsequently the solicitation or the award on which it is based is
changed to drop the finance requirement or materially alter it, there
has been a change of such magnitude beyond the scope of the
original solicitation, which has materially changed the field of
competition, so as to require a new solicitation.
(1) This would especially be the case where the bid evaluation
is based on the finance criteria because the mere presence of
the finance requirement will materially affect the field of
competition in the first place and more importantly because
the bidders are supposed to all be evaluated based on the
same criteria, equally applied.
(2) It should make no difference that the solicitation contains the

express right of the government to reject any or all bids in
part (see discussion of “all or none” bids in Article on
Competitive Sealed Bidding, below). That policy (see 5 GCA
§ 5225) allows rejection of part of a bid when in the best
interests of the territory.
(a) First, as noted above, it may be in the best interest of

the territory to make a new solicitation when changes
are of a magnitude to do so.
(b) Second, competition is one of the prime goals of the

territory’s procurement law. Where a bid
requirement which initially narrowed the field of
competition is dropped, opening the potential field of
competition wider is in the territory’s best interest.
(c) Third, and more to the point, the right to reject a part
of a bid is not the same thing as dropping a bid
requirement. Rejecting part of a bid only affects the
one bidder. Dropping the requirement altogether
affects not only all bidders, but all potential bidders.
9. The author is aware that many in government and the private industry feel
personally affronted by having to abide by procurement rules, and spend
more time trying to figure out ways around the procurement process than
through it. There has been, on Guam of late, a tendency to contract out
wide-ranging authority, to give the contractor free reign from the
procurement strictures. Without debating the merits of that, the author
would caution that any arrangement whose scope is so broad as to be
uncertain fails the contract law test of certainty, in which case the entire
arrangement falls, to the risk of government and “contractor” alike. So
trying to avoid the “scope of the contract” test by ambiguity is a risky
proposition.
V. “BID BONDING”
A. Actually, “bond” is the common word used, but “security” is more technically apt
and specified in the law (see, 5 GCA § 5212). Security includes a bond, but also
can include other forms of security such as cash or other form satisfactory to
GovGuam: a cashier’s check or standby letter of credit might be alternatives (see, 2
GAR § 3109(c)(4)(D).
B. Bid security for competitive sealed bids for supplies or services:
1. Bid security for competitive sealed bids for supplies or services is required
when the total price estimated to be bid exceeds $25,000, and may be
required when under that amount, by a written determination (“and
justification”) included in the IFB. (5 GCA § 5212(a).)
2. The amount of bid security is fifteen percent (15%) of the amount bid. (5
GCA § 5212(b).)
a. Note: The amount of bid security specified (15%) was made by

amendment to the law in PL 27-127:2. This legislative change has
not yet been reflected in regulation, which continues to purport to
allow the agency head to determine the amount (2 GAR §
3109(c)(3)(A). The legislative change overrides the inconsistent
regulation. (See, Guam Imaging Consultants, supra.)
3. Release of bid security. The law here is probably broader than intended. As
written, the “bid security required under any applicable [IFB] shall not be
released upon award of the bid, but instead shall continue in full force and
effect until delivery of the supplies or services....” (5 GCA § 5212(c).) This
does not by its terms limit the application of the continued effectiveness to
the successful bid and literally applies to the security of all bids, including
rejected or high bids. The apparent intent, however, is to have only the
successful bid security convert to and replace the need for a separate
performance security; all others should be released upon withdrawal or
rejection of the bid. (See, 5 GCA § 5212(f).)
4. Failure to provide required bid security may cause the bid to be rejected as
non-responsive; see section on materiality and responsiveness below.
C. Bid security for competitive sealed bids for construction contracts:
1. 5 GCA § 5303(a) demands essentially the same bid security requirements

for competitive sealed bids for construction contracts as is noted for supplies
and services, above (i.e., required for bids expected to exceed $25,000 and
discretionary for bids below that amount), except that there is no
requirement for making a determination and justification for under $25,000
bid security to be made part of the IFB.
2. Other provisions for bid security for construction contracts also parallel
those for supplies or services, including the amount of the security and the
possibility of rejection for noncompliance, the main significant difference
being there is no provision intended to extend the bid security into the
performance period, as there is with the supplies or services provision.
3. As with supplies and services, failure to provide required bid security may
cause the bid to be rejected as non-responsive, but the situations in which
such failure may be considered to be “non-substantial” are more limited: see
2 GAR § 5103(d).
D. There does not appear to be any requirement for security for any bid or offer under
any of the other methods of source selection for construction projects (besides
competitive sealed bid), nor any prohibition against any such security, if required in
any such solicitation.
VI. COMPETITIVE SEALED BIDDING (5 GCA § 5211; 2 GAR § 3109)
A. The default method. Preferred to all others. “Contracts shall be awarded by

competitive sealed bidding except as otherwise provided in § 5210(a)....” (5 GCA §
5211.)
B. The form is always by Invitation for Bids (IFB), which should contain the following
(2 GAR § 3109(c)(2)):
1. Instructions and information to bidders concerning the formalities of when,

where, how to bid; the “form of offer” requisites. It’s meant to be a checklist
of all the things a prospective bidder needs to know to submit a bid, and
instructions on how the bids will be physically dealt with.
2. A purchase description of the supply or service that the Government wants;

that is, what it wants, when it wants it, how it will evaluate the product
offers, and any inspection or acceptance requirements.
a. “Purchase description means the words used in a solicitation to

describe the supplies, services or construction to be purchased....”
(5 GCA § 5201(b)(d).) “Unless the context requires otherwise, the
terms specification and purchase description are used
interchangeably throughout these Regulations.” (2 GAR §
4101(a)(4).)
3. The terms and conditions of the contract to be awarded, including such

incidental matters as warranties and bonding. This is intended to fill in the
ultimate essential legal requirements of the contract, otherwise the bid is
nothing more than an unacceptable “agreement to agree”.
4. Other formalities of the bid must also be met, such as signatures,

declarations of ownership/major stockholders, certifications of non-
collusion, bid bonding and the like as specifically provided by law or
regulation.
5. Remember that by signing a bid, you are making a legally enforceable offer
to contract, so all essential legal requirements of offer and acceptance are
met when the government “awards” the contract by accepting the bid.
C. Distribution, notice and “bidding time”:
1. The law requires simply “adequate public notice” of IFBs. Newspaper

publication is only required if the procurement exceeds $25,000, and then
only requires seven (7) days notice before final submissions. (2 GAR §
3109(f)(2).) In all cases, the solicitation is meant to be initiated, not by
publication, but by “distribution” by mail or other means “furnished to a
sufficient number of bidders for the purpose of securing competition.” (2
GAR § 3109(f)(1).) Thus, GovGuam is meant to affirmatively seek out
competition, not passively see what pops up, especially when it is
recognized that newspaper ads often appear buried in the paper and unread
by potential vendors.
2. In contrast to the minimum publication time, and lore about when to start
measuring the bidding time, the minimum bidding time is fifteen (15) days
from “the date of distribution” to the “time and date set for receipt of
bids”. (2 GAR § 3109(d).)
a. Although there is a minimum 15 day bidding time, “[i]n each case

bidding time will be set to provide bidders a reasonable time to
prepare their bids”. (Id.)
b. Further, “a shorter time [may be provided if] deemed necessary for a

particular procurement as determined in writing by the procurement
officer.” (Id.)
D. Withdrawal, cancellation and rejection of all bids (5 GCA § 5225).
1. A bidder can modify or “withdraw” a bid by written notice prior to the time
set for bid opening. (2 GAR 3109(j) and (k).)
2. Solicitations should only be issued when there is a valid procurement need

unless the solicitation states that it is for informational purposes only. (2
GAR § 3115(b).)
3. The Government can “cancel” a solicitation only prior to opening if there is

no longer a need, nor funds, or “proposed amendments to the solicitation
would be of such magnitude that a new solicitation is desirable.” ( GAR
3115(d)(1)(B).)
a. Preparing and distributing a solicitation requires the expenditure of

government time and funds. Businesses likewise incur expense in
examining and responding to solicitations. Therefore, although
issuance of a solicitation does not compel award of a contract, a
solicitation is to be cancelled only when there are cogent and
compelling reasons to believe that the cancellation of the solicitation
is in the territory's best interest. (2 GAR § 3115(b); in accord,
Commentary to MPC § 3-301.)
b. Cogent and compelling reasons for cancellation need not be given

to disappointed bidders, but such reasons must exist; even so, only a
brief explanation of the reason for cancellation need be given. (J&B
Modern Tech v. GIAA, Guam Superior Court, CV 0732-06, p 6.)
(1) In that Civil case, the plaintiff tried, unsuccessfully, to enjoin

an agency from cancelling a bid after bid opening based on
the sparseness of the information given in the notice of
cancellation, and the remedy sought and posture of the case
made the argument an uphill battle from the start.
(2) The author agrees with the result in that case (denial of
injunctive and mandamus relief), based more on the
procedural and technical requirements of the injunctive
relief sought and the posture of the case. The Court noted
that even if the substantive issues might be overcome, the
plaintiff failed to make the requisite showing that plaintiff
would likely have been awarded the contract anyway. (At p.
7.) Thus, the Decision was rooted in the technical and
procedural issues, arguably rendering the comments on the
substantive issue dicta.
(3) However, on the substantive issue of the need for an

explanation of the reasons to cancel a bid, the author would
point out that 2 GAR § 3115(d)(1)(D)(ii) expressly requires
that the notice of cancellation shall “briefly explain the
reason for the cancellation”. This is not an unduly
burdensome requirement since “[t]he reasons therefor shall
be made part of the contract file”. (5 GCA § 5225.)
(4) The Decision held simply identifying the legal justification

suffices for the explanation requirements of the law and
regulation. All the notice did there was parrot the particular
justification of territorial “best interest” allowed by the
regulation: “ambiguous or otherwise inadequate
specifications were part of the solicitation” (2 GAR §
3115(d)(2)(a)(ii)). The author would suggest that such a bald
conclusory statement falls far short of the requirement to
“briefly explain”, even if a full dissertation of the reasons
(which should be part of the contract file) is not required.
(5) The author further points out this Civil case was decided
before procurement appeal jurisdiction was conferred on the
Public Auditor. A more recent decision of the Public
Auditor, discussed immediately below, makes the point that,
technically, a solicitation cannot be cancelled after bid
opening. Indeed, a close examination of the Court’s
decision evidences a failure to closely discriminate between
reasons allowed for cancelling a bid and reasons allowed for
rejecting all bids. The Court’s Findings explicitly said,
“GIAA’s Executive Manager determined, in writing, that the
Specifications in the IFB were inadequate ...”, then
identified particular reasons. The notice of cancellation itself
only referred to “inadequate specifications”. Inadequate
specification is expressly a reason allowed for rejecting all
bids (2 GAR § 3115(d)(2)(a)(ii)) , but is not one of the reasons
mentioned for allowing a solicitation to be cancelled in 2
GAR § 3115(d)(1)(b).
c. In the Petition of IBSS to Compel Decision, OPA-PA-09-011,

Petitioner made the argument that it is improper to cancel a bid once
a Protest has been filed, before a Decision on the Protest is
rendered, based both on the substantive reason given for the
cancellation as well as on the automatic stay, which is discussed
below. (See, Memorandum in Support of Petition to Compel ...)
The argument was undecided when the Petition was withdrawn and
dismissed.
4. After bid opening and prior to award, the solicitation cannot be ‘cancelled’
but all bids may be "rejected" in whole or part (2 GAR 3115(d)(2)(A) IF in
the Territory’s “best interests”, including:
(1) there is no longer a need
(2) “prices exceed available funds and it would not be

appropriate to adjust quantities to come within available
funds” [note this condition is not applicable to cancellations
prior to opening due to lack of funding]
(3) the specifications were ambiguous or inadequate
(4) the solicitation did not provide for consideration of all factors
of significance to the territory
(5) appearance of collusive bids
(6) all otherwise acceptable bids or proposals received are at

clearly unreasonable prices
b. Where GovGuam “cancels” a bid after bid open, (as opposed to

“rejecting” all bids) it does so improperly and the cancellation is
void. (In the Appeal of Pacific Security Alarm, Inc., OPA-PA-07-
009.)
c. Compare rejection of all bids to a rejection of an unsuccessful bid or

offer. In the latter case the rejected party may request that reasons
be given for such a rejection. More on that below. While there is no
particular grant of a right to request reasons for the rejection of all
bids, note that the reasons for the rejection must be made part of the
procurement file and available to the public. (2 GAR § 3115(d)(3).)
5. Too Late, too bad: Any bid submission, modification or withdrawal

received after the time “set for opening“ of bids is late and will not be
considered unless it was late due to the direct action or inaction of
GovGuam personnel.” (2 GAR § 3109(k).) The word “set” would exclude
any bid that comes in at the start of a delayed bid opening, but who would
that prejudice? (See discussion of bidder prejudice and responsiveness,
below.)
E. Bid opening: The author recently reviewed an IFB that said simply, “bids and
modifications shall be opened publicly in the presence of one or more witnesses.”
The bidders were advised they would be later told the results. That is an
incomplete description of what the regulations require and an improper procedure.
2 GAR § 3109(l)(2) requires that the IFB specify the time, date and place of opening,
to facilitate a truly public opening at which the bidders can be present. “Prices and
makes of models or catalogue numbers of the items offered, deliveries, and terms of
payment shall be publically available at the time of bid opening regardless of any
designation [of proprietary or other confidentiality] to the contrary (id.).
F. Bid “mistakes” (discovered after opening, before award) generally are closely
scrutinized. If the error was one of judgment rather than, for instance, a clerical
mistake, the bidder is stuck with his original judgment. Minor bid “mistakes” which
are not contrary to the interest of the Government or prejudicial to other bidders
may be corrected. (2 GAR § 3109(m).)
1. If the Procurement Officer opening the bids knows or should know there is
a patent mistake, and the mistake is minor and non-prejudicial, the officer
should ask the bidder to confirm or correct the mistake.
a. In Appeal of Richard F. Kline, Inc., MSBCA No. 116, Feb 24, 1983,
the Appeal Board ruled (at p. 4) that, although one rule for
determining mistakes in bids was to give preference to written words
over numerical figures, this rule “cannot be applied with blinders. ...
[T]he procurement officer must rely on his experience and common
sense. ... [H]e may review the prices submitted by other bidders
relative to the procurement at hand.”
2. If the mistake is a minor informality of form or otherwise insignificant and

non-prejudicial, the Procurement Officer “shall waive such informalities or
allow the bidder to correct them.” Examples include failure to return
required number of signed bids or failure to sign where required but other
places were signed signifying intent to be bound.
3. Mistakes that can be waived or corrected “without prejudice to other
bidders” are those when “the effect on price, quantity, quality, delivery, or
contractual conditions is negligible.” (2 GAR § 3109(m)(4)(B))
G. Seeking clarification.
1. In Appeal of Dominion Contractors, Inc. [#2], MSBCA No. 1041, Feb 9,

1984, the appellant argued that the bid was ambiguous (whether the
contractor was to supply water meters or not). The Appeals Board ruled (at
p. 10) that even if the contractor’s interpretation of an allegedly ambiguous
provision might be conceivable, it was required to request a clarification
prior to bidding. In so doing it relied on Federal law cases which was to the
effect that contract ambiguities are not to be resolved against the
government in procurement cases.
2. There were other disputes in the Dominion Contractors case, supra,

involving other alleged contract ambiguities, which the Appeals Board for
the most part resolved against the appellant. As the concurring opinion
stated, appellant “had a duty to seek clarification”, and “[b]y ignoring the
installation requirement and failing to inquire, Appellant assumed liability
for its erroneous interpretations.” (At p. 27.)
H. The award of the contract is “to the lowest responsible bidder whose bid meets the
requirements and criteria set forth in the” IFB. (5 GCA § 5211(g).)
1. The short hand, but not as precise, version of this general rule is that “the
award goes to the lowest responsible and responsive bidder”. (2 GAR §
3109(n)(1).) There are thus three criteria to separately and independently
assess:
a. A Responsive bid (“which meets the requirements and criteria of the

IFB”).
b. A Responsible bidder (capable, trustworthy; not a guaranty of

performance, only expectation of performance).
c. “Lowest” price/cost.
(1) “Nothing in this Section shall be deemed to permit contract

award to a bidder submitting a higher quality item than that
designated in the [IFB] if such bidder is not also the lowest
bidder....” (2 GAR § 3109(n)(5).)
2. To discourage collusion among bidders, tie low bids are generally not to be
awarded by drawing lots or dividing the business, but only in such
“permissible manner that will discourage tie bids.” In the case there is no
such method, the award can be made by drawing lots, but not dividing the
business. (2 GAR § 3109(o)(2).)
a. Nor are tie low bids to be decided by awarding to the bidder with
the perceived better product. Bid products are to be judged against
the specifications, not other bids (2 GAR §§ 3109(o)(1), 3109(n)(3)).
3. The determination of the lowest responsive bidder must focus on price

considerations, not the qualification of the bidders. It is improper to
evaluate a bid based on the ranking and selection of the most qualified
company. (In the Appeal of JMI Medical Systems, Inc., OPA-PO-07-011, pp
10-11.)
4. Bids and offers must be evaluated fairly and effectively to make sure they
comply with the criteria of the solicitation. In L.G. Ganacias, CV 1787-00,
supra, the Judge stated (at page 23) that the person charged with evaluating
the bid offerings “should be an individual with some knowledge of the
product which is the subject of the bid”. There, the evaluator who
reviewed the bids testified she did not examine samples submitted because
she “did not know much about” them, which drew an admonishment from
the Court.
5. Note that the next lowest bidder may get the contract if the low bidder fails
to perform, which reduces the necessity for re-bidding (assuming no
changes to the solicitation). “In the event that a successful bidder fails to
complete delivery of supplies or services as required in the contract
between the contractor and the government of Guam, the government of
Guam may proceed to procure such supplies or services from the next
lowest bidder who is able to deliver such supplies or services.” (5 GCA §
5212(d).)
a. This raises a fairly esoteric question whether such next lowest bidder
who is able to deliver must be fully responsible. As discussed
below, bidder responsibility involves both ability and integrity; in
this instance, on its face, only ability is required.
I. What is a Responsive Bid?
a. “Responsive Bidder means a person who has submitted a bid which

conforms in all material respects to the Invitation for Bids.” (5 GCA
§ 5201(g))
b. Any bidder’s offering (that is, product or service) which does not
meet the acceptability requirements shall be rejected as
nonresponsive. (2 GAR § 3109(n)(3).) The IFB shall set forth any
evaluation criteria to be used in determining product acceptability.
(Id.)
(1) The acceptability evaluation is not conducted for the
purpose of determining whether one bidder’s item is
superior to another, but only to determine that a bidder’s
offering is acceptable as set forth in the IFB. (Id.)
(2) Thus, when bids are tied for lowest bid amount, the award is
not given to the one offering the superior product if all tied
bids meet the minimum specifications. (2 GAR § 3109(o).)
(3) “It is improper to use responsibility-related factors or

subfactors if the evaluation is merely to determine
acceptability.” (Nash, Cibinic and O’Neal, p. 271.)
c. A bid is nonconforming if it fails to comply exactly with the literal

requirements of the IFB. However, not all nonconforming bids are
nonresponsive. It is critical to determine whether a nonconformity
deals with the responsiveness of a bid or the responsibility of the
bidder. Responsiveness deals with the question whether the
contractor has promised to do or provide exactly what the
Government has requested. (In the Appeal of J&G Construction,
OPA-PA-07-005.)
d. Questions of responsiveness are determined “in the bid envelope”,

that is, only on the basis of information submitted with the bid and
on the facts available at the time of bid opening. (Id.)
e. As a general rule, and contrary to lore, matters that deal with bidder
responsibility cannot be converted into matters of responsiveness
merely by inserting a provision into the IFB requiring production in
the bid envelope of information regarding issues of responsibility,
and rejection of bids that do not comply. (Id.) So, not everything
“mandated” by the IFB can be considered to affect responsiveness.
(Compare the J&G Construction Appeal, with the discussion of
“responsive bidder” in In the Appeal of Guam Publications, Inc.,
OPA-PA-08-007 (at part III, D of the Decision, beginning p 13; and
note that J&G Construction was decided subsequent to Guam
Publications, and specifically declared that its distinctions between
responsive and responsible were matters “of first impression”.)
J. “Materiality” only concerns “Responsiveness”: The subject of Bid Mistakes has

been introduced above. Here it is again discussed to emphasize that materiality
and immateriality are measures of bid responsiveness (“material in all respects”).
Thus, immaterial mistakes, though non-conforming, will not render a bid non-
responsive.
1. Minor mistakes in a bid are not material so do not make a bid

nonresponsive. (But a bid price and terms involves a calculated judgment
on the part of the bidder, and mistakes of judgment are material and
cannot be corrected or otherwise changed. (2 GAR § 3109(m).))
2. Minor mistakes include insubstantial matters of form (“minor informalities”)

and “insignificant mistakes” that do not “prejudice” other bidders. (2 GAR
§ 3109(m)(4)(B).)
a. Matters of bidder prejudice only include factors that affect “price,

quantity, quality, delivery, or contractual conditions.” (Id.) Non-
negligible factors of price, quantity, quality, delivery or contractual
conditions are material and prejudice other bidders. Matters
reflecting on bidder qualifications are issues of responsibility and
do not concern or “prejudice” other bidders because they do not
involve issues of price, quantity, quality, delivery or contractual
conditions. These concepts are often confused, particularly when
the IFB contains specific requirements concerning the bidder's
responsibility characteristics – such as the requirement for
submission of information relating to responsibility.
b. Minor mistakes are immaterial so can be corrected after bid opening,

before award. The Procurement Officer shall waive or allow the
bidder to correct minor mistakes.
c. Manifest mistakes are “clearly evident on the face of the bid” and
“shall be corrected to the intended correct bid and may not be
withdrawn”. Examples include “typographical errors, errors in
extending unit prices, transportation errors, and [obvious]
arithmetical errors”.
d. Low bids can be withdrawn but not corrected if the mistake is

obvious but the intended bid amount is not clearly evident.
e. When a mistake is suspected, the Procurement Officer “should

request the bidder to confirm the bid”. Examples include errors on
the face of the bid or a bid unreasonably lower than the other bids
submitted. The bidder can confirm, correct or withdraw the bid
under the conditions noted above.
f. Any kind of mistake can allow a bidder to withdraw or correct a bid

prior to the time set for bid opening because bids are not firm until
then.
g. After award, mistakes cannot generally be corrected unless the

Head of the purchasing agency determines it would be
unconscionable not to allow the correction.
h. Noncompliance with the requirements to provide bid security

“requires the bid to be rejected unless ... it is determined that the bid
fails to comply in a non-substantial manner....” (5 GCA § 5212(e).)
3. Note that when there is an extraordinary difference in price between the

accepted bid and a lower bid rejected as non-responsive, the materiality of
the reasons given for rejecting the low bid are closely scrutinized, assessing
such matters in terms of the dollars associated with the non-responsive items
against the excessively higher bid as a whole, to arrive at, perhaps, a
different conceptual meaning of “material in all respects”. That is, the
question of what is material is, to a degree, a question of relativity,
dependant upon the facts of a particular case.
a. In her Decision in In the Appeal of O&M Energy, S.A., OPA-PA-08-

004, the Public Auditor found “[t]he fact that TEMES’ bid was six
million dollars over O&M’s bid indicates that GPA may not have
done sufficient analysis as to the cost of the four items it deemed to
be non-responsive....” (At p 3.)
b. In support of her authority to cancel the bid in that case, the Public
Auditor referred to her jurisdiction “to promote the integrity of the
procurement process and the purposes of [the Procurement Act],” as
well as other case law she cited as holding “t]he purpose of statues,
charters or ordinances requiring competitive bidding is to ‘guard
against favoritism, improvidence, extravagance, fraud and
corruption, and to secure the best work or supplies at the lowest
price practicable and they are enacted for the benefit of the property
holders and taxpayers, and not for the benefit of enrichment of
bidders, and should be construed and administered as to accomplish
such purpose fairly and reasonably with sole reference to public
interest.” (Id.)
c. The Public Auditor found, “GPA did not engage in the required
determination of materiality,” adding, “the issue is whether O&M
was non-responsive, or whether the irregularities found in their bid
submission might be determined to be waiverable [sic]
irregularities”. (Id., at p 5.)
K. What is a Responsible bidder?
a. A Responsible Bidder “means a person who has the capability in all

respects to perform fully the contract requirements, and the integrity
and reliability which will assure good faith performance.” (5 GCA §
5201(f).)
(1) Capability is determined as of the time of award. (2 GAR §

3101(1).)
(2) The author has the view that the determination of capability
is more objectively determined that integrity, which is a
more subjective judgment.
(3) A capable bidder is not necessarily responsible if the bidder

lacks integrity, nor is a highly respected bidder responsible if
incapable of providing the thing or service the government
specifies in the IFB. Each factor, capability and integrity, are
independently essential to a determination of responsibility.
(a) See, In the Appeal of Latte Treatment Center, Inc.,

supra, where the Public Auditor held it was error to
fail to conduct a separate inquiry into the offeror’s
integrity.
b. Responsibility involves the question whether the contractor can or

will perform as it has promised. (In the Appeal of J&G
Construction, OPA-PA-07-005.)
(1) The issue of distinguishing between a responsive bid and

responsible bidder was a “matter of first impression” before
the Guam Public Auditor. No prior OPA appeal had raised
or argued the distinction, and many decisions were made on
the lore that an IFB could, by mandate, allow an agency to
determine issues of responsibility by the standard of
materiality and in the “bid envelope” process used to
determine whether the bid is responsive.
c. Responsibility determinations are made on the basis of all

information that may be submitted or available up to the time of
award. (J&G Construction, supra.) Thus, whereas responsiveness is
determined by the material “in the envelope” at bid opening,
responsibility is determined by information available or made
available at any time up until an award is made. Contrary to lore,
the IFB cannot alter this rule of law by requiring (“mandating” is a
word bandied about) information concerning bidder responsibility to
be submitted in the bid envelope.
(1) Hint: The law and authorities generally (not always) use the
term “evaluate” or “evaluation” when discussing issues of
responsiveness, but “determine” or “determination” when
discussing issues of responsibility.
d. Standards of Responsibility (2 GAR § 3116(b)(2): “Factors to be

considered in determining whether the standard of responsibility
has been met include whether a prospective contractor has:
(1) “available” the appropriate financial, material, equipment,
facility, and personnel resources and expertise, or the ability
to obtain them, necessary to indicate its capability to meet
all contractual requirements;
(a) These matters relate to the nuts and bolts of

performance, and do not refer to the capability to
actually render full performance on the date of
award, but only when required “to meet all
contractual requirements”. Most contracts have a
time for performance element, and all that is required
for a determination of responsibility is that the
prospective contractor has the ability to obtain all
such elements in time to perform the contract.
(b) In Hawaii, an MPC state, the Office of Administrative

Hearings, Dept. of Commerce and Consumer Affairs,
provides the procurement appeals function of the
Guam OPA. In a case before that tribunal, it was
decided that the determination by a procurement
officer that the low bidder was responsible would not
be over-ruled even though, at the time of award, the
bidder did not have “the necessary business licenses
and permits, employees, equipment, and business
office or other facilities” to provide trash removal
services for the Honolulu International Airport. The
tribunal said it was sufficient that the bidder had
shown, before award, the ability to obtain the
resources to meet the full contract performance
requirements. (In the Matter of Browning-Ferris
Industries of Hawaii, Inc., PCH-2000-4.) That is, the
measure of responsibility is being able to perform
when required, not necessarily at bid award (if
performance is to occur sometime later). It is not so
much an issue of readiness to perform but ability to
perform when required.
(2) “a satisfactory record of performance;
(3) “a satisfactory record of integrity;
(4) “supplied all necessary information in connection with the

inquiry concerning responsibility;” and
(5) “qualified legally to contract with the territory [that is, a

business license];
(a) Compare Emission Technologies vs. Dick Pacific:
i) In the Appeal of Emission Technologies, Inc.,
OPA-PA-07-002, involved an RFP and held
that the bid of an offeror who does not have a
license to conduct business on Guam at bid
opening, especially where the RFP requires a
business license, is nonresponsive. Arguably,
the J&G Construction case overturns the
holding in that decision even though it did
not involve an IFB, since “legal qualification
to contract” (as opposed to a specialty license
to perform a service) is a matter of
responsibility and may be rectified by
obtaining the license after bid opening.
Other MPC jurisdictions reach that result
consistently. In any event, TRC
Environmental Corporation, SP 160-07,
supra, vacated the OPA Decision in Emission
Technologies, suggesting the business license
of an offeror in an RFP is not necessary until
“consideration of the bidder for the award”
(at page 7 et seq.).
ii) “It is improper to use responsibility-related

factors or subfactors if the evaluation is
merely to determine acceptability of a
proposal.” (Nash, Cibinic and O’Brien, p
271.)
iii) The Appeal of Dick Pacific Construction

Company, Ltd., OPA-PA-07-007, involved an
IFB and held a bid is non-responsive when it
fails to include a resume and the bidder fails
to have a Guam business license and
specialty license at bid opening. The result in
that case can possibly be justified based on
the specialty license matter (though the
author is not convinced; this involved an IFB,
not an RFP – see discussion of RFPs below).
iv) A “requirement that bidder possess an

operating license properly relates to
responsibility, notwithstanding solicitation
language stating it affects responsiveness”.
(Cibinic and Nash, p545).
v) Where the thing to be provided incidentally
involves use of a specialty service, that
concerns bidder responsibility, and a bidder
who lacks a specialty license can subcontract
to provide that part of the work before award.
However, if the specialty service is itself the
thing to be provided, such as specialty
contractor services, then it deals with
responsiveness.
vi) But consider the necessity of having a

business license to obtain the benefit of the
local preference provision (see above). In
that case, the local preference is a factor in
determining the lowest acceptable bid. Since
that is a matter determined at bid opening, it
should follow that having a Guam business
license is an issue of responsiveness solely for
the purpose of determining if the bid of the
bidder claiming the preference is entitled to
the local preference, and not to further
disadvantage or penalize an off-island bidder.
(6) Bid or performance bonds should not be used as a substitute

for a determination of bidder or offeror responsibility. (2
GAR § 3102(f).)
e. It should be emphasized that “the factors to be considered” include

material that would never be in a bid package, such as past records
of performance and reputation, but such matters must be considered
in any event, called for or not. The author takes the view that a
determination of bidder responsibility is a judgment to be
deliberatively made by a balance of any or all such factors of
responsibility, and that it is a weighing process, not a “tick-the-box”
method of trivia gathering. The judgment to be made is simply, does
the bidder have the capability to perform and the reputation to
reasonably conclude the bidder will perform; any one or
combination of the factors of responsibility could, in any particular
case, justify such a judgment.
f. Consider whether Bidder Qualification Statement (“BQS”) issues are

”nonresponsive” or “nonresponsible”:
(1) See, In the Appeal of Guam Publications, OPA-PA-08-007:

Where GSA ‘mandated’ the requirement of BQS to be a
“material part” of the bid, failure to provide it at bid opening
made the bid “nonresponsive”. The author would argue that
everything in the typical IFB BQS concerns bidder
responsibility and the J&G Construction case would overturn
that issue in that decision; such information is not pertinent
to responsiveness, only responsibility.
g. The prospective contractor may demonstrate the availability of

necessary financing, equipment, facilities, expertise, and
personnel by submitting upon request (§ 3116(b)(3)):
(1) evidence that such contractor possesses such necessary items
(2) acceptable plans to subcontract for such necessary items; or
(3) a documented commitment from, or explicit arrangement

with, a satisfactory source to provide the necessary items.
h. Inquiry into determination of responsibility:
(1) “If such contractor fails to supply the requested information,

the Procurement Officer shall base the determination of
responsibility upon any available information or may find
the prospective contractor nonresponsible if such failure is
unreasonable.” (2 GAR § 3116(b)(2)(B).)
(a) The author is of the view that any request for

information that is plainly insignificant, especially
when compared to other more substantial “factors to
be considered”, is of itself unreasonable, and the
failure or refusal to provide that information would
be reasonable; but would you want to chance it?
(2) “The inquiry is not required in every case. The extent to

which a review or investigation should be conducted will
depend on the value and size of the procurement, and the
bidder’s or offeror’s past record of contract performance in
the public and private sectors.” Official Commentary No. 2,
MPC § 3-401.)
(3) When the agency had reason to suspect an offeror’s integrity

or other matters bearing on the offeror’s determination of
responsibility, and does not conduct a responsibility inquiry
prior to selecting the offeror as best qualified, it engages in
“serious error”. (In the Appeal of Latte Treatment Center,
Inc., supra.)
i. The interesting requirement for a writing when making the

determination of nonresponsibility but not for responsibility:
(1) Before awarding the contract, the procurement officer must
be satisfied the prospective contractor is responsible (2 GAR
§ 3116(b)(4)), but there is no requirement that such
satisfaction be justified in anything written.
(2) A written determination is only made if the prospective

contractor who otherwise would have been awarded the
contract is found nonresponsible. (§ 3116(b)(5).)
(a) The written determination of nonresponsibility must

set forth the basis of the finding, be sent promptly to
the nonresponsible bidder, and made a part of the
procurement file.
(b) This indicates that the only party who can

successfully appeal a finding in respect of
responsibility is the bidder who is found to be
nonresponsible; the decisions generally are very
deferential to the agency when the agency makes a
finding of responsibility, but are more careful when
dealing with determinations of non-responsibility,
which reflect on a bidder’s character and reputation.
It has been said that procuring officers have greater
discretion when dealing with issues of responsibility
than issues of responsiveness, meaning their
discretion to determine responsibility is greater than
their discretion to judge responsiveness.
(c) Recall the Browning-Ferris Matter from Hawaii,

supra. At first blush, it seems incredible that a bidder
who lacked so many qualifications could be found
responsible. But the appeal tribunal there did not
make a finding that the bidder was responsible.
What the appeal tribunal decided was that it would
not sustain the appeal of a higher bidder to overturn
the procurement officer’s determination of
responsibility. Thus, higher bidders have a very
heavy burden to overturn any determination of
responsibility; they, in effect, must prove the
procurement officer’s determination of responsibility
was the result of clearly unreasonable error, fraud or
other serious fault, such as, perhaps, ethical
violations.
(3) In contrast to the many requirements in the procurement

regulations for the making of written determinations and
keeping of records, there is no requirement that the finding
of responsibility be written or recorded. Why is that?
(a) Consider the policy implications when questioning

why the government should be given wide discretion
to determine that a bidder/offeror is responsible.
Remember, it is the “prospective contractor’s”
responsibility that is in question, that is, the lowest
responsive bidder. It is in the government’s interest
to acquire the lowest price. By placing too precious
a standard on bidder responsibility, or by allowing
higher bidders to complain too critically about the
low bidder, the procurement regulations would tend
to defeat that low price objective.
(b) Consider the policy implications when questioning

why the government should be required to justify a
determination of nonresponsibility. The key factors
to responsibility are judgments of capability and
integrity, boiled down to character. Labeling
bidders “nonresponsible” is seen as almost
slanderous of their trade and reputation. The
common law has long protected an individual’s
character and reputation, requiring strong proof of
the slanderous label and objective community
standards, and this is reflected in the requirements for
findings of nonresponsibility. The author suggests,
therefore, that it would be good practice that any
determination of nonresponsibility differentiate
between any findings of capability and of integrity, so
as to minimize any imputation of lack of integrity if
the basis for the nonresponsibility determination is
lack of capability.
L. “Qualified Bidder lists”: The GSA has recently been publishing notices “to all
interested vendors/contractors” advising it is in the process of establishing “a vendor
list”, and soliciting the identities and interests of potential contractors. The
contractors are asked to submit a copy of business license, company address,
contact name and phone and fax number, together with their “area of interest”, such
as hardware supplies, auto repair services, etc. This is intended to establish
“solicitation mailing lists” (5 GCA § 5231), commonly referred to as “qualified
bidder lists”.
1. Since solicitations are generally meant to be initiated by distributing and

mailing solicitations to potential contractors (see “bidding timing”, above),
this is a perfectly sensible thing to do, and all potential contractors should
provide that information to GSA (and keep it current) if they have any desire
to obtain GovGuam business.
2. This is broadly reminiscent in notion to the Federal government’s Central
Contractor Registration (http://www.ccr.gov/ ), but the CCR is much more
passive and restrictive, in contrast to the local procurement requirements to
actively seek out competition.
3. Prospective suppliers may be prequalified for particular types of supplies,

services and construction. Solicitation mailing lists of potential contractors
shall include but shall not be limited to such prequalified suppliers. (5
GCA § 5231.)
4. Distribution of solicitation shall not be limited to prequalified contractors,

nor may a prospective contractor be denied award simply because such
contractor was not prequalified. (2 GAR § 3117(a)(1).)
5. The fact that a prospective contractor has been prequalified does not
necessarily represent a finding of responsibility. (Id.)
6. There is nothing to prohibit GovGuam from soliciting any information about

any need or upcoming solicitation or prospective bidder qualifications;
indeed, there is much merit in that. But, such information gatherings are not
source selections, cannot take the place of proper source selection
solicitation, and should not preclude or disadvantage any potential
contractor who did not respond to the information request from taking part
in the solicitation, nor favor any potential contractor who did. (2 GAR §
3117(a)(1).)
M. Information available from an IFB: Information in all bids is publicly available from
the time the bids are opened, except for confidential proprietary information
designated by the bidder in the bid. (2 GAR §§ 3109(l)(2) and (3).)
N. A Note on “All or None” bids: Why not take part of me?
1. The standard General Terms and Conditions for GovGuam IFBs has a clause
that reads something like this, taken from a recent GPA bid:
“ALL OR NONE” BIDS: Unless otherwise allowed

under this Solicitation, “all or none” bids may be
deemed to be non-responsive. If the bid is so
limited, the Government may reject part of such
proposal and award on the remainder. NOTE: By
checking this item, the Government is requesting all
of the bid items to be bidded [sic] or none at all.
The Government will not award on an itemized
basis. Reference: Section 3-301.06 of the Guam
Procurement Regulations.”
2. The first part of this provision is OK, but the second part in the “Note” is
complete lore. Lore would have it that the government can force a bidder
to bid all items in the solicitation, otherwise the bid is non-responsive, even
if the bidder’s prices on the selected items bid are lowest. This is wrong for
two reasons, at least:
a. First, the referenced regulation (3-301.06) does NOT say that the
government has the power to choose “all or none”, so does not at all
support the proposition made in the “Note”. (See 2 GAR § 3115(f),
the current codification of the regulation.) The regulation (§ 3115(f))
expressly gives the bidder, not the government, the power to make
its own bid “all or none”, unless the IFB specifically disallows that
choice. If the IFB is silent and thereby allows such a bid, the
government is limited to either accepting the bid as a whole or
rejecting it. That is the gist of the first part of the “all or none”
clause, which the is the only part of the “all or none” clause which is
consistent with the referenced regulation.
b. Second, the claim that “the government will not award on an

itemized basis” runs contrary to an express legal requirement:
(1) “Each solicitation issued by the territory shall provide that

any bid or proposal may be rejected in whole or in part
when in the best interest of the Territory....” (2 GAR §
3115(e)(2); see, 5 GCA § 5225.)
(2) Clearly, the government cannot waive its right to reject in the
part. It is a legal requirement that GovGuam must be able to
“cherry pick” amongst the bids to obtain the best prices for
items, and any “mandated” provision in an IFB which
stymies that requirement is contrary to the law.
(3) Recall also the policy of the law mentioned above, “to
provide increased economy in territorial activities and to
maximize to the fullest extent practicable the purchasing
value of public funds of the Territory”. Any provision
inserted in an IFB which prevents the government from
cherry picking amongst the bids defeats that policy.
c. Further, consider the anti-competitive effect if a bidder can beat the

pants off all others on 95% of the items, but does not have a product
in its lineup for the other 5%. By eliminating that vendor’s ability to
bid the solicitation only because the vendor lacks the full range of
products sought, the government loses the benefit of the vendor’s
low cost on most of the items, and the vendor loses the business to
higher cost competitors. This is particularly anti-competitive if an
IFB can be purposefully structured to achieve that end.
VII. MULTI-STEP SEALED BIDDING (2 GAR § 3109(r))
A. This is a variant of a competitive sealed bid method of source selection, being a

two-phase process consisting of a technical first phase where offerings are evaluated
for product acceptability, and a second phase where the lowest bid is picked from
amongst all the bidders with acceptable offerings. It is solicited by an IFB and
defined by the specifications of the IFB.
B. Multi-Step bidding is not the same thing as competitive sealed bidding and cannot
be used interchangeably with competitive sealed bidding, even though the
regulations – but not the law (5 GCA § 5211(h)) – might imply it is an equal
alternate form of competitive sealed bidding (2 GAR § 3109(a)). This distinction is
important because of the policy preference for competitive sealed bidding.
C. Multi-step bidding “is designed to obtain the benefits of competitive sealed bidding
... and at the same time [obtain] the benefits of the competitive sealed bid proposals
procedure....” (2 GAR § 3109(r)(1).)
1. The competitive sealed proposal method of source selection was initially

adopted as part of the Guam Procurement Act but was impliedly
disapproved by the Legislature when that method was repealed in 1985 (PL
18-8:8). Competitive sealed proposals are no longer allowed under Guam
law or regulation. (Fleet Services, Inc. v. Dept. of Administration, 2006
Guam 6, ¶15.)
2. Although competitive sealed bidding is the preferred method of source

selection, the repeal of the competitive sealed proposal method indicates
the multi-step bidding process does not carry the same favor.
3. Multi-step bidding can only be used “when it is not practical to prepare

initially a definitive purchase description”. (Sub§(r)(2).) “Purchase
description” is the same thing as “specification”. (See, Specifications,
below.)
a. The CPO/GSA has admitted that multi-step bidding is inappropriate

for the procurement of standard, commercial off-the-shelf supply
items. (See, Appellee Response to Petition to Compel Decision...,
OPA-PA-09-011, Nov. 19, 2009.)
4. It is noted that OPA has recently published notice of a multi-step bid

solicitation for office space. Real property is generally thought of as being
unique, and every “piece” of real property has its own characteristics,
unlike, say, standard commercial items such as air conditioners, pick-up
trucks and copiers. But, for purposes of appreciating the appropriate use of
this method, consider whether it would be appropriate when limited to, for
instance, condominiumized (thus, multiple owned) office space in a
particular building where every office had identical floor plans.
D. The first phase can consist of further multiple steps. See, generally, 2 GAR §
3109(t).
1. The first phase technical offer submissions are unpriced or have sealed
prices and are not publically opened.
2. It is contemplated that discussions of the technical aspects of the technical

offer can be conducted between the procurement officers and the bidders
solely “for the purpose of facilitating understanding of the technical offer
and purchase description” of the IFB.
a. Discussions are only conducted “to evaluate and determine the

acceptability of technical offers.” (2 GAR §§ 3109(r)(1), (r)(2)(a).)
b. It follows from this that, during the phase one discussion, where
appropriate, technical offers can be amended and supplemental
information may be provided by the offerors to demonstrate the
acceptability of their offers, and the government may make minor
amendments to the IFB purchase description to reflect a better
knowledge of what offerors may reasonably be expected to offer. (2
GAR § 3109(r)((2)(b).) Bear in mind that purchase descriptions are
meant to be drafted, and therefore amended, so as to maximize
competition while acquiring the essential functions required to meet
the Territory’s minimum needs, as discussed in the Specifications
section below.
c. If any contemplated amendment to the IFB specifications “will

significantly change the nature of the procurement”, the IFB must
be cancelled (sub§(t)(2)), and presumably re-bid.
d. Information derived from one offeror is not supposed to be disclosed

to any other offeror during these discussions. (2 GAR § 3109(t)(5).)
3. The technical offers are evaluated in the first phase “solely in accordance
with the criteria set forth in the” IFB. (Sub§ 3109(t)(4).)
a. The evaluation is not intended to rank the offers in any way (unlike
RFPs for services which do engage in a ranking process). Rather, the
technical offers are only to be categorized as either:
(1) acceptable, that is complies with the minimum specifications

of acceptability, or
(2) potentially acceptable, that is, “reasonably susceptible of
being made acceptable”, or
(3) unacceptable.
b. Unacceptable offers are tossed out and not further considered, but
the procurement officer must make a written record of the basis for
the unacceptability. (Sub§3109(t)(4)(c).)
c. Potentially acceptable offers must be made acceptable by

discussions and amendment of the offer or the specifications, as
mentioned above, before the time set for opening of the priced bids.
If not, potentially acceptable bids are treated as unacceptable.
d. As mentioned above, “[i]t is improper to use responsibility-related

factors or subfactors if the evaluation is merely to determine
acceptability of a proposal.” (Nash, Cibinic and O’Brien, p 271.)
Any negative responsibility-related factors can only be used to
disqualify the offeror as non-responsible in an appropriately
conducted inquiry into and determination of responsibility, not to
reject the offer as unacceptable, which is the functional equivalent
of being non-responsive. (Offerings which do not meet the
acceptability requirements shall be rejected as nonresponsive; 2
GAR § 3109(n)(3).)
e. Compare the RFP process for professional services, which, unlike

phase one evaluations, does involve ranking of best qualified offers,
and which does allow responsibility-related factors to be considered
in assessing the relative order (the rank) of the competing qualified
offers, as discussed below.
4. Discussions are only had or continued with acceptable or potentially

acceptable bidders to further refine the offers and specifications, not with
unacceptable offerors. “Once discussions are begun, any bidder who has
not been notified that its offer has been finally found unacceptable may [at
its own behest or on the request or suggestion of the government] submit
supplemental information amending its technical offer at any time until the
closing date....” (sub§ 3109(t)(5)), but unacceptable offers are not afforded
that opportunity (sub§ 3109(t)(6)).
a. Note that this implies that there is an initial screening for

unacceptable and potentially acceptable offers before discussions
begin, based solely on the offer documents. If so, discussion are
only had with “potentially acceptable” and “acceptable” offerors.
E. Phase two is initiated once the procurement officer determines “there are sufficient
acceptable unpriced technical offers to assure effective price competition” without
further discussions or amendments to the specifications. (Sub§ 3109(r)(4).)
a. Bid prices are not to be considered during phase one, only phase
two. (2 GAR § 3109(r)(1).)
b. Phase two is conducted by opening priced bids from all acceptable

technical offerors, and determining the lowest bidder as in
competitive sealed bidding, except only the winning bidder’s
technical offer is publically disclosed. (Sub§ 3109(v).)
(1) The priced bids are submitted sealed, either with the original
technical offers or after phase one, depending on the
requirements of the IFB as originally issued.
VIII. REQUESTS FOR PROPOSALS
A. Competitive sealed proposals are not allowed. See above.
1. “The Guam Legislature ... repealed [the prior provision allowing competitive
sealed proposals] when it passed section 8 of Guam Public Law 18-8.... The
repeal of the statute repealed the corresponding regulation.” (Fleet Services,
Inc. v. Dept. of Administration, 2006 Guam 6, ¶ 15.)
B. Requests for Proposals (RFPs) are normally only allowed for “professional
services”.
1. Only the services of “accountants, physicians, lawyers, dentists, licensed

nurses, other licensed health professionals and other professionals” are
procured by a Request for Proposals. (5 GCA §§ 5216, 5121(a); 2 GAR §
3114(a).)
2. The issuance of an RFP for the operation, management and maintenance of

the Guam Mass Public Transit System was improper, since that did not
involve the procurement of “professional services”. (Fleet Services, Inc.,
supra, ¶34.)
3. Bad debt collection services must be procured by competitive sealed bid

because they do not fall within the “professional services” exception for an
RFP. (In the Appeal of Oceania Collection Services, OPA-PA-08-006.)
C. Special legislation, however, may authorize the RFP process for particular other
procurements. (See, 5 GCA § 5210(a): “Unless other wise authorized by law ....”)
For instance, PL 29-114 authorized the solicitation of RFPs for the design, finance,
construction and maintenance of a high school in Tumon. The fact that the
legislature specifically authorized an RFP in that particular instance underscores,
under the general provisions of the Procurement Act, that RFPs cannot normally be
used for other than professional services.
D. The procurement process for RFPs is built around a negotiation process, and has its
own “competitive selection procedures” and other requirements. See, generally, 2
GAR § 3114.
1. “Competitive selection procedures shall be used” when the contract

amount is over $5,000, otherwise “small purchase procedures” (discussed
below) are to be used when under that amount. (§ 3114(b).)
2. A detailed determination must be made before undertaking any

announcement of “need for services” requiring competitive selection
procedures (§ 3114((d)), which includes:
a. the nature of the relationship to be established between the using

agency and the contractor
b. the using agency has developed, and fully intends to implement, a

written plan for utilizing such services, which will be included in the
contractual statement of work.
3. The “need for services” is essentially the RFP itself, and “adequate public
notice” of it must be given at least 10 days in advance of due date. Public
notice is to be given in the same manner as competitive sealed bids (see
above) and, “additionally shall consist of distributing Requests for Proposals
to persons interested in performing the services”. (§ 3114(e).)
4. The contents of the RFP is specified in § 3114(f), and includes detailed

information regarding the persons (and their qualifications) who will be
providing the services.
a. Note that in this instance, such personnel information is an issue of

responsiveness because those services are precisely what is being
sought, whereas, when products and other things are being sought,
such personnel issues are incidental and go to issues of
responsibility.
b. Note also the obligation of offerors to clarify ambiguities in the RFP

prior to submitting their proposals, similar to the discussion of
mistakes and seeking clarification in the Article above on
Competitive Sealed Bidding. While there might be the possibility of
clarifying and fine tuning a proposal in the discussion stage, the
government might simply skip the discussion stage and go directly to
evaluation of proposals: “The head of the agency conducting the
procurement ... shall evaluate all proposals submitted and may
conduct discussions....” (2 GAR § 3114(i).)
5. Three Stages: The Public Auditor has described the RFP process as
occurring in three “stages” (In the Appeal of Guam Community
Improvement Foundation, Inc., (vs DPW) OPA-PA-09-005, Decision for
Protective Oder, at pp 3-4):
(1) the proposal stage;
(2) the price solicitation, negotiation and agreement stage; and
(3) the award stage.
6. The process of evaluating the offers in an RFP involves the steps described
briefly as follows:
a. First, evaluate the proposals for the qualification and responsiveness

of the offerors to determine which offerors “qualify” (2 GAR §
3114(f)(2));
b. Second, rank the offerors proposals from “most best qualified” to

“least best qualified” based on the qualification (and, to some extent,
“responsibility”) of the offerors (2 GAR § 3114(j));
c. Third, starting with the most best qualified offeror, negotiate with
each offeror in turn down the rank (2 GAR § 3114(l)(4); and see §
3114(l)(6)), to determine if the government and an offeror are able to
agree on a price that is "fair and reasonable". (2 GAR § 3114(l).)
“If compensation, contract requirements, or contract documents
cannot be agreed upon with the best qualified offeror, a written
record stating the reasons therefore shall be place in the file....” (2
GAR § 3114(l)(4)(A).)
(1) In the GCIF Appeal, OPA-PA-09-005, the Public Auditor

noted that the negotiation phase contemplates the possibility
of price adjustments, including increases, based on the
particular terms and conditions negotiated. However,
negotiated increases over and above the prices indicated in
the offer must be evaluated to determine that they are fair
and reasonable compensation, and the greater the ultimate
price is over the price originally submitted, the greater is the
scrutiny required to determine that the original price was
submitted in good faith and not simply to leverage a higher
ranking. (See, Decision, pp 18 et seq.)
(a) “DPW may not determine that IBC’s increased

finance costs are fair and reasonable if they result
from an unachievable or unrealistic low cost
financing proposal that was submitted in bad faith.
... Indeed, considering the large cost increase, DPW
should at least be highly suspicious of whether IBC
took advantage of the open ended evaluation
criteria.... Thus, the Public Auditor finds DPW must
determine whether IBC’s proposal was made in good
faith by conducting an analysis as to why IBC’s
financing costs [greatly exceed its original offer].... ”
(Decision, p. 19; emphasis added.)
(2) In a similar appeal arising from the same JFK RFP, the GEFF
Appeal, OPA-PA-007, supra, the Public Auditor again
focused on the “good faith” issue rather than framing the
analysis on the “fair and reasonableness” of the offered price.
(a) “The next issue is whether the total project cost in

IBC’s proposal was made in good faith. ... Thus, the
crux of this issue is whether IBC’s total cost for the
JFK reconstruction project increased due to DPW
discovering that IBC’s proposed costs were made in
bad faith.... The Public Auditor finds that DPW’s
existing certification of procurement activities were
(sic) performed in good faith, however, it is
insufficient because it lacks a proper analysis of
whether IBC’s proposal was made in good faith. ”
(Decision, at pp. 9-10.)
(b) The Decision went on to criticize the analysis for,

among other reasons, failing to consider alternative
amortization periods, failing to justify the apparent
material difference between maintenance costs
offered and maintenance costs actually obtained in
other projects, and other “unexplained” costs totaling
approximately $19 million. This is precisely the
analysis that is conducted to determine “fair and
reasonable” cost, and does not require any reference
to or consideration of good or bad faith.
(3) The author considers this to be a bit of a Catch 22 for an

offeror and an inapt focus on good or bad faith (see
discussion above on the duty of good faith, in the Article on
the Purposes and Policies of the procurement law). If an
offeror submits an offer allowed by the specifications, how
can it be in bad faith?
(a) Recall that “bad faith”, at least in the context of

determining remedies, requires a showing of
“reckless disregard of clearly applicable laws or
regulations” (2 GAR § 9104(a)(3).) Responding, as
required, to the specifications of a solicitation would
rarely if ever evidence any disregard of applicable
law.
(4) The author respectfully suggests the more appropriate

analysis would be to compare the negotiated price against
the offered price of the other offerors to determine whether
the negotiated price is fair and reasonable. (See the
discussion immediately below in this Article concerning the
evaluation criteria used to determine a fair and reasonable
compensation, which may include comparison to other
offers.)
(a) Even absent bad faith, the award should not go to an

offeror if the price is not fair and reasonable; nor
should an offeror who took advantage of loose
specifications be denied the award if the
compensation is fair and reasonable.
d. And, at the conclusion of negotiations resulting in the award, the

agency shall prepare a memorandum, available to the public, setting
forth the basis of the award, including:
(1) how the evaluation factors stated in the RFP were applied to
determine the best qualified offerors; and
(2) the principal elements of the negotiations, including the

significant considerations relating to price and the other
terms of the contract. (2 GAR § 3114(m); also, the GCIF
Appeal, supra, p. 20.)
(3) In the GEFF Appeal, supra, the Public Auditor held that
“DPW must conduct a more complete analysis of why
financing costs increased from what IBC initially proposed,
and that analysis must be made part of the procurement
record”. (Decision, at p. 16.)
7. As in the competitive sealed bid process, proposals must only be evaluated

to determine qualification based on factors stated in the RFP. (§ 3114(f)(2).)
a. Even under PL 29-114, mentioned above, the legislation required

that the scope of the contractor’s responsibilities were only “to the
extent provided ... in the Request for Proposals”. (§58A106.)
b. In the GCIF Appeal, id., the Public Auditor criticized the

specifications of the RFP for being so broadly written as to invite
outlying offers, and that there was no evaluation criteria specified to
determine if price offers were realistic or achievable, yet she did not
upset the bid. The author agrees with that result, as the best time to
protest improper specifications and evaluation criteria is before the
offers or bids are submitted. (See discussion of Timing of Protests,
below.)
8. Unlike the phase one acceptability determination in the multi-step bid

process (see above), the offerors in an RFP are, after evaluation, ranked in
order of “best qualified”. (§ 3114(l).)
a. Remember, RFPs are normally only allowed for solicitation of

professional services, so the only authorized process of ranking
offers allowed anywhere in the Procurement Act (and contrary to
many IFBs the author has reviewed) is in the context of RFPs; in IFBs,
including multi-step IFBs, lowest cost prevails, pure and simple.
b. While responsibility-related factors must not by themselves be used

to determine the qualification of offerors, in the case of RFPs for
services, where services are the thing sought, ability to perform the
services, qualifications of key personnel and records of past
performance may be appropriate to consider in conducting the
qualification evaluation. (2 GAR § 3114(f)(2).) For the sole purpose
of ranking offerors already evaluated as qualified, evaluation of
responsibility factors is appropriate in the RFP process.
(1) “Agencies commonly evaluate factors and subfactors related

to responsibility, notwithstanding the fact that a formal
responsibility determination must ultimately be made before
award of the contract. Such factors and subfactors frequently
include experience, staffing, and past performance. This
process does not officially constitute a responsibility
determination as long as these factors are evaluated on a
variable basis.... In Electrospace Sys., Inc., 58 Comp.Gen.
415 (B-192574), 79-1 CPD ¶ 264, the Comptroller General
stated at 425: ‘Since neither 10 U.S.C. § 2304(g) nor
applicable regulations in any way restrict “other factors” that
may be used by agencies in selecting the proposal having
the greatest value to the Government, we have not
prohibited procuring agencies from using responsibility-
related factors in making relative assessments of the merits
of competing proposals....’” (Nash, Cibinic and O’Brien, p
270.)
9. Once ranked, negotiations are begun with the most best qualified offeror
over compensation, that is, the price to be paid for the services sought, and
then on down the list from most best qualified until an agreement is reached
with a qualified offeror. This parallels the multi-step process where prices
are not considered until after acceptability of product is determined. And,
similarly, it would seem to be improper for the government to try to
renegotiate the ranking or qualification of the offerors once the process has
moved to haggling over price.
10. The purpose of negotiations is to reach agreement on compensation which

must be determined to be “fair and reasonable”. (2 GAR § 3114(l)(2)(C).)
a. Although the Federal procurement regime is different is significant

circumstances from the Model Act, as noted before, it can prove
useful as a guide to principles common to both regimes. Here, the
author suggests the FAR principles for determination of “fair and
reasonable” are apt guides. See generally, FAR Subpart 15.400,
excerpts of which follow. It must be emphasized again, though, that
the FAR provisions, in and of themselves, do not apply to GovGuam
procurement; they are mentioned here solely for purposes of
examples of how the principals of the GovGuam procurement rules
might be applied.
b. Under FAR, except in cases of competitive sealed bids, negotiated

prices must be “fair and reasonable”. (Subpart 15.402(a).)
c. Subpart 15.406-1 Prenegotiation objectives.
(1) (b) The contracting officer shall establish prenegotiation

objectives before the negotiation of any pricing action.
d. Subpart 15.405 Price negotiation.
(1) (a) The purpose of performing cost or price analysis is to

develop a negotiation position that permits the contracting
officer and the offeror an opportunity to reach agreement on
a fair and reasonable price. A fair and reasonable price does
not require that agreement be reached on every element of
cost, nor is it mandatory that the agreed price be within the
contracting officer’s initial negotiation position.
(2) (b) The contracting officer’s primary concern is the overall

price the Government will actually pay. The contracting
officer’s objective is to negotiate a contract of a type and
with a price providing the contractor the greatest incentive
for efficient and economical performance. The negotiation
of a contract type and a price are related and should be
considered together with the issues of risk and uncertainty to
the contractor and the Government. Therefore, the
contracting officer should not become preoccupied with any
single element and should balance the contract type, cost,
and profit or fee negotiated to achieve a total result — a price
that is fair and reasonable to both the Government and the
contractor.
e. “The contracting officer should use every means available to

ascertain whether a fair and reasonable price can be determined
before requesting cost or pricing data. Contracting officers must not
require unnecessarily the submission of cost or pricing data, because
it leads to increased proposal preparation costs, generally extends
acquisition lead time, and consumes additional contractor and
Government resources.” (Subpart 15.402(a)(3).)
(1) Note Guam regulations do not generally require cost or price

data to be submitted with a proposal unless the contract
price is expected to exceed $100,000. (2 GAR §§ 3114(k),
3118(b)(1).) Moreover, as with Federal contracting, cost or
price data is generally not required to be submitted where
the contract price is based on adequate competition or the
markets or by regulation. (2 GAR § 3118(b)(2); see, FAR
Subpart 15-403-1(b).)
f. “... the contracting officer must require that the information

submitted by the offeror include, at a minimum, appropriate
information on the prices at which the same item or similar items
have previously been sold, adequate for determining the
reasonableness of the price.” (Subpart 15.403-3(a)(1).)
g. “At a minimum, the contracting officer must use price analysis to

determine whether the price is fair and reasonable whenever the
contracting officer acquires a commercial item (see 15.404-1(b)).
The fact that a price is included in a catalog does not, in and of itself,
make it fair and reasonable.” (Subpart 15.403-3(c)(1).)
h. Subpart 15.404-1 Proposal analysis techniques.
(1) General. The objective of proposal analysis is to ensure that

the final agreed-to price is fair and reasonable.
(2) (1) The contracting officer is responsible for evaluating the

reasonableness of the offered prices. The analytical
techniques and procedures described in this subsection may
be used, singly or in combination with others, to ensure that
the final price is fair and reasonable. The complexity and
circumstances of each acquisition should determine the level
of detail of the analysis required.
(3) (2) Price analysis shall be used when cost or pricing data are
not required (see paragraph (b) of this subsection and
15.404-3).
(4) (3) Cost analysis shall be used to evaluate the

reasonableness of individual cost elements when cost or
pricing data are required. Price analysis should be used to
verify that the overall price offered is fair and reasonable.
(5) (4) Cost analysis may also be used to evaluate information

other than cost or pricing data to determine cost
reasonableness or cost realism.
i. Subpart 15-401(b) Price analysis.
(1) (1) Price analysis is the process of examining and evaluating

a proposed price without evaluating its separate cost
elements and proposed profit.
(2) “Price analysis is used to determine if a price is reasonable

and acceptable....” (2 GAR § 3118(g).)
j. Subpart 15-401 (c) Cost analysis.
(1) (1) Cost analysis is the review and evaluation of the separate
cost elements and profit in an offeror’s or contractor’s
proposal (including cost or pricing data or information other
than cost or pricing data), and the application of judgment to
determine how well the proposed costs represent what the
cost of the contract should be, assuming reasonable
economy and efficiency.
(2) “Cost analysis includes the appropriate verification of cost or

pricing data....” (2 GAR § 3118(h).)
k. Subpart 15-401 (d) Cost realism analysis.
(1) (1) Cost realism analysis is the process of independently

reviewing and evaluating specific elements of each offeror’s
proposed cost estimate to determine whether the estimated
proposed cost elements are realistic for the work to be
performed; reflect a clear understanding of the requirements;
and are consistent with the unique methods of performance
and materials described in the offeror’s technical proposal.
(2) “Evaluations of cost or pricing data should include

comparisons of costs and prices ... with those of other
offerors and any independent territorial price and cost
estimates....” (2 GAR § 3118(i).)
l. Subpart 15-401 (f) Unit prices.
(1) (1) Except when pricing an item on the basis of adequate

price competition or catalog or market price, unit prices
shall reflect the intrinsic value of an item or service and shall
be in proportion to an item’s base cost (e.g., manufacturing
or acquisition costs). Any method of distributing costs to line
items that distorts the unit prices shall not be used. For
example, distributing costs equally among line items is not
acceptable except when there is little or no variation in base
cost.
(a) The exception for adequate competition, catalogue

or market pricing is analogous to Guam regulation.
(See, 2 GAR § 3118(b)(2); see 2 GAR § 3118(c) for
definitions and application of the exceptions.)
m. Subpart 15-401 g) Unbalanced pricing.
(1) (1) Unbalanced pricing may increase performance risk and

could result in payment of unreasonably high prices.
Unbalanced pricing exists when, despite an acceptable total
evaluated price, the price of one or more contract line items
is significantly over or understated as indicated by the
application of cost or price analysis techniques. The greatest
risks associated with unbalanced pricing occur when—
(a) (i) Startup work, mobilization, first articles, or first

article testing are separate line items;
(b) (ii) Base quantities and option quantities are separate

line items; or
(c) (iii) The evaluated price is the aggregate of estimated

quantities to be ordered under separate line items of
an indefinite-delivery contract.
(2) (2) All offers with separately priced line items or subline
items shall be analyzed to determine if the prices are
unbalanced.
n. Subpart 15.404-4 Profit.
(1) (a) General. This subsection prescribes policies for
establishing the profit or fee portion of the Government
prenegotiation objective in price negotiations based on cost
analysis.
11. Conduct in negotiations:
a. Pre-negotiation discussions “shall not disclose any information

derived from proposals submitted by other offerors, and the agency
conducting the procurement shall not disclose any information
contained in any proposals until after award of the proposed
contract has been made. (2 GAR § 3114(i)(2).)
(1) Contract negotiations with best qualified offerors shall be

directed toward:
(a) making certain that the offeror has a clear

understanding of the scope of work, specifically, the
essential requirement involved in providing the
required services;
(b) determining that the offeror will make available the

necessary personnel and facilities to perform the
services within the required time; and
(c) agreeing upon compensation.... (2 GAR §

3114(l)(2).)
(2) The Nash, Cibinic and O’Brien text thoroughly canvasses the
competitive negotiation process under the Federal regime,
and, again, its principles would appear consistent with the
policies of and equally applicable to the Guam procurement
regime. In addition to the positive guides such as those
noted above, they discuss various improper negotiations (pp
680 et seq.), such as:
(a) Failure to give information to one or more offerors

while providing it to other offerors. Examples cited
include “where the agency improperly suggested that
one offeror use a more powerful computer that had
recently come on the market without providing the
same suggestion to other offeror,” and where one
competitor was informed the agency would accept
performance that seemed to be out of compliance
with the specifications, but not the others.
“Unfairness was also found where the agency
answered questions of one offeror but disclosed
answers with the corresponding questions to the
other offerors” ... “and where the agency told only
one offeror that it had decided to delete a
significant portion of the work”.
(b) An agency must not mislead an offeror during

discussions, such as, for instance suggesting concerns
only to one offeror that induced the offeror to
increase its services to address the concerns, thereby
increasing its rates uncompetitively.
(3) The FAR also gives guidance on how negotiations should

and should not proceed. For instance, the FAR distinguishes
between “clarifications” and “communications” and
“negotiations”:
(a) (1) Clarifications are limited exchanges, between the

Government and offerors, that may occur when
award without discussions is contemplated. (2) If
award will be made without conducting discussions,
offerors may be given the opportunity to clarify
certain aspects of proposals . (Subpart 15-306(a).)
(b) Communications are exchanges, between the

Government and offerors, after receipt of proposals,
leading to establishment of the competitive range.
(Subpart 15-306(b).)
i) Compare this with permissible “discussions”

in the Guam regulations (2 GAR § 3114(i)):
The head of the agency may conduct
discussions with any offeror, the purpose of
which is to determine in greater detail the
offeror’s qualifications and explore with the
offeror the scope and nature of the required
services, the proposed method of
performance, and the relative utility of
alternate methods of approach. However,
discussions shall not disclose any information
derived from other offerors’ proposals.
ii) Also note 2 GAR § 3115(e)(3)(B): the

territory’s stated requirements for offers
submitted in proposals may be revised or
clarified after proposals are submitted. This
does not, presumably, mean the territory may
revise or clarify its requirements in an unfair
or noncompetitive fashion.
(c) Negotiations are exchanges, in either a competitive
or sole source environment, between the
Government and offerors, that are undertaken with
the intent of allowing the offeror to revise its
proposal. These negotiations may include bargaining.
Bargaining includes persuasion, alteration of
assumptions and positions, give-and-take, and may
apply to price, schedule, technical requirements,
type of contract, or other terms of a proposed
contract. When negotiations are conducted in a
competitive acquisition, they take place after
establishment of the competitive range and are called
discussions. (Subpart 15-306(d).)
(4) FAR Subpart 15-306(e) proscribes certain communications or

conduct which would also seem, in principle, compatible
with the policies of Guam procurement: Government
personnel involved in the acquisition shall not engage in
conduct that—
(a) (1) Favors one offeror over another;
(b) (2) Reveals an offeror’s technical solution, including

unique technology, innovative and unique uses of
commercial items, or any information that would
compromise an offeror’s intellectual property to
another offeror;
(c) (3) Reveals an offeror’s price without that offeror’s

permission. However, the contracting officer may
inform an offeror that its price is considered by the
Government to be too high, or too low, and reveal
the results of the analysis supporting that conclusion.
It is also permissible, at the Government’s discretion,
to indicate to all offerors the cost or price that the
Government’s price analysis, market research, and
other reviews have identified as reasonable (41
U.S.C. 423(h)(1)(2));
(d) (4) Reveals the names of individuals providing

reference information about an offeror’s past
performance; or
(e) (5) Knowingly furnishes source selection information

in violation of 3.104 and 41 U.S.C. 423(h)(1)(2).
b. The government must negotiate in good faith with each qualified
offeror in turn and cannot move on to the next one until a higher
qualified offeror has made its best and final offer and a
determination has been made whether the offer is “fair and
reasonable”.
(1) See, In the Appeal of Great West Retirement Services, OPA-

PA-07-006, where the Public Auditor concluded the agency
arbitrarily and capriciously ended negotiations with a best
qualified offeror without a determination the best and final
offer “was not fair and reasonable.”
c. The award is given to the first best qualified offeror to conclude

acceptable fair and reasonable price negotiations with the agency.
“Award of a contract [under an RFP] requires two elements: a
determination that the offeror is the best qualified, and successful
negotiations of fair and reasonable compensation.” (Id.)
d. Unless the solicitation states otherwise, proposals need not be

unconditionally accepted by the government. This flexibility must
be considered in determining whether reasons exist for rejecting all
or any part of a proposal. (2 GAR § 3115(e)(3(B).)
12. When the dust settles and an award is noticed, the agency must prepare a
written memorandum, available for public inspection, including details of
how the evaluation factors were applied to determine the best qualified
offerors and the principal elements of the negotiations, including significant
considerations relating to price and other terms of contract. (2 GAR §
3114(m).)
13. Each agency is required to submit annual reports to the CPO identifying
every RFP issued in the preceding year. (2 GAR § 3114(o).)
14. Information available from an RFP: Unlike an IFB, the information available
to other offerors and the public from an offeror’s proposal is circumscribed.
a. The offers are not publically opened, but a Registrar of Proposals,

containing the name of each offeror, the number of modification
received, if any, and a description sufficient to identify the services
offered shall be prepared and opened to public inspection after the
award of the contract. (2 GAR § 3114(h)(1).)
b. Proposals of offerors who are not awarded the contract shall not be
opened to public inspection. (Id.)
c. Similar to IFBs, an offeror can request that “trade secrets and other
proprietary data” not be disclosed, which is subject to the consent of
the head of the procuring agency. (2 GAR § 3114(h)(2).) The
author takes the view that, under general trade secret laws,
proprietary information which has been allowed to come into the
public domain has lost its proprietary nature and cannot be
sequestered or protected.
d. In discussions with the various offerors, the agency conducting the

procurement shall not disclose any “information derived from
proposals” or “information contained in proposals” until after award
of the proposed contract has been made. (2 GAR § 3114(i)(2); see,
also, discussion of the timing of an “award” in the Article on Appeal
Remedies below.) The author takes the view that this confidential
proposal information loses its confidentiality if the confidentiality is
waived, by deed or word, by the party otherwise due the
confidentiality treatment. For instance, if a party publically discusses
its own proposal information or allows any information contained in
its proposal to come into the public domain, such part which has
been made public is no longer confidential or protectable.
e. Except for the specific proprietary and proposal information

mentioned above and protectable under the regulations cited, all
information intended to be included in a procurement record (see 5
GCA § 5249, discussed elsewhere herein) is a public record (5 GCA
§ 5241).
f. The Public Auditor has found that these provisions prohibit the
disclosure of any part of a proposal to another offeror until after an
award has been made and a contract executed. (See, Guam
Community Improvement Foundation, Decision for Protective Oder,
supra, p 3.) The Public Auditor additionally found that disclosure of
any part of a proposal to a competing offeror in such circumstance
would threaten the integrity of the RFP procurement process, giving
such offeror an unfair advantage.
(1) It must be pointed out that this Decision was made in the
context of a motion to confirm a Declaration of Substantial
Interest; that is, in the context of determining whether to lift
an automatic stay, which is to say, lift a preliminary
injunction.
(a) See the discussion below in the Article on the

Automatic Stay, wherein it is noted, according to the
Guam Supreme Court, a trial court order denying a
request to enforce the automatic stay “is the
equivalent of an order” refusing to grant a
preliminary injunction. (Guam Imaging
Consultants, Inc., p 4.)
(2) As such, considering the limitations on disclosure apply to a
procuring agency and not specifically to the Public Auditor,
and that trade secret and proprietary data may be redacted,
and that, in determining whether to lift or enforce a
preliminary injunction, the court should consider (if not
ultimately rule on) the likelihood of the protestor’s prevailing
on the merits, which must at some superficial level allow the
protestor to test the facts of the case, the author suggests,
respectfully, that this particular situation should allow for
some limited review of the record to enable the protestor to
adduce evidence found only in the procurement record then
available, including, in the appropriate case, some of the
material found in the proposals. This argument, however,
was not put by the Appellant in this case, so has not yet been
considered by the Public Auditor.
(3) In the arguments before the Public Auditor in the GCIF

Appeal, both the Attorney General and the Interested Party’s
counsel commented, without objection, on the Public
Auditor’s opportunity to review the entire, un-redacted,
procurement record.
E. Architectural, engineering and land surveying vs. construction services
1. There is a curiosity in the structure of the procurement law as regards

construction services. Are they procured as “professional services”, so can
escape the requirements of competitive sealed bids, or not?
2. The statutory definition of the “professional services” defined in 5 GCA §

5121(a) does not specifically include architectural, engineering, surveying or
construction services, but does include the broad “other professionals”
description. 5 GCA § 5216(a) also says “services for architecture,
engineering, construction, land surveying, environmental assessment and
other such services shall be procured in accordance with Article 5 of this
Chapter.” The problem is Article 5 only deals with the “alternative methods
of construction management” (5 GCA § 5302) and does not specifically
refer to methods of source selection. 5 GCA § 5301 (the first section of
Article 5) does, however, say that “as used in this Chapter” [sic: the entire
Procurement Act constitutes the Chapter] Architect-Engineer and Land
Surveying Serves are those professional services within the scope of the
practice of architecture, professional engineering, or land surveying”. It
does not include construction within the ambit of such professional services.
3. We must therefore look to the regulations. The regulations, however, again

only refer to the RFP method of source selection for architecture,
professional engineering, or land surveying services and not the more
broadly described “construction” services.
a. 2 GAR § 5108(1) (within the regulations implementing the Article 5

mentioned in 5 GCA § 5216(a)), specifies that “[t]he provision of
these Regulations applies to every procurement of services within
the scope of the practice of architecture, professional engineering,
or land surveying”, again excluding any mention of construction
services. 2 GAR §§ 5108(2) and (3) elaborate, explaining, “[i]It is the
policy of this territory to: (a) give public notice of all requirements
for architect-engineer and land surveying services; and (b) negotiate
contracts for such services on the basis of demonstrated competence
and qualification for the type of service required, and at fair and
reasonable prices”, by the RFP method (i.e., the method described in
2 GAR§ 3114, which implements 5 GCA § 5216(a)). Thus, while
the Procurement Act does not specifically dictate the use of a
procurement method for the acquisition of these services, the
regulation does, and in so doing pointedly excludes construction
services from the ambit of that type of procurement.
4. It appears to be a sensible conclusion that when procuring the professional

services of architecture, professional engineering or land surveying by
themselves and not as a component of a construction contract, an RFP
would be allowed. However, when procuring construction services for a
thing to be constructed, which necessarily but incidentally involves such
A&E and surveying professional services, competitive sealed bidding is
required.
a. Example: “Bid security shall be required for all competitive sealed

bidding for construction contracts when the price is estimated by
the Director of Public Works to exceed $25,000.” (2 GAR §
5103(1).)
5. The conclusions above are also consistent with the Model Procurement
Code, particularly the 2000 revisions to the Code and the 2002 Revisions to
the Model Regulations, which extensively refined the “project delivery
methods” (that is, the project management types) and the applicable
procurement methods for each such type in its Article 5 counterpart to the
Guam provisions (see, MPC § 5-101 et seq.)
a. For instance, MPC § 5-201(2) notes that a “design-bid-build” project

would proceed by securing the A&E services by the “qualifications”
procurement method in an RFP, and the construction would be
separately procured by competitive sealed bidding.
6. The author’s conclusion is that, as with the structure of the methods of

source selection generally, competitive sealed bidding is the preferred
method for construction projects. Procurement of specific A&E, surveying
and other such professional services, by themselves and unattached to the
construction services, is a specified exception to the preferred method, and
should be procured by RFP.
a. This simple construct was not, however, the analytical approach

taken by the Public Auditor in her Decision in the GCIF Appeal,
supra, OPA-PA-09-005.
(1) That case involved an integrated design, build, finance,

operate and maintain project delivery method, which by
specific Legislative Act, required use of the RFP method of
source selection. Under the author’s simple construct, the
solicitation being for the procurement of a facility and the
A&E and other professional services being merely incidental
to that end, competitive sealed bidding would be required.
But, as mentioned in the discussion above, the Legislature
specifically required an RFP method, so, under the “unless
other wise” clause of 5 GCA § 5210(a), that method was
applicable.
(2) Nevertheless, while also noting the legislative mandate to

use the RFP method , the Decision (pp. 6-8) undertook an
extensive analysis of the professional services required of the
solicitation to determine if the RFP process was applicable.
The Decision concluded that because “the RFP’s scope of
work requires the practice of architecture and engineering”,
the use of an RFP was authorized. The author believes this
part of the analysis is flawed, and certainly unnecessary to
the decision’s result given the explicit legislation. It is not, in
the author’s opinion, sufficient that the scope of work in a
solicitation may involve the practice of A&E, if the essential
end result required is a constructed facility, as iterated above.
If the critical analysis is as indicated by the Decision, the
professional services exception will swallow the rule that
construction projects ought to be solicited by the preferred
competitive sealed bid method.
(3) It might be noted that the MPC § 5-202(6), 2000 Version,

specifies that “[c]ontracts for design-build-finance-operate-
maintain shall be procured by competitive sealed
proposals...”, which, while broadly similar to the RFP
process, has been repealed in Guam procurement law.
IX. UNSOLICITED OFFERS
A. “An unsolicited offer is any offer other than one submitted in response to a
solicitation.” (5 GCA § 5219.) This would seem to include any “proposal”,
“pitch” or marketing of any item or service to GovGuam which includes price and
other terms capable of being accepted, and likely to include any offer capable of
being negotiated for acceptance.
1. Remembering that procurement law is intended to stylize and regularize the

basic contract formation process, the author takes the view that an
“unsolicited offer” must be one that is substantively equivalent to an offer in
the usual contract law sense. That is, it is a communication (or series of
communications) given by an offeror which empowers the offeree to simply
say “I accept” and thereby create a contract. Thus, mere negotiation or
supplying information or other such communications which would not
ripen into a contract upon “I accept” should not trigger the unsolicited offer
statute. But, as in contract formation issues broadly, this can be a grey area,
a minefield of ambiguity, and vendors are advised to tread warily. Providing
a brochure and price schedule could easily be taken to be a binding offer in
any given factual circumstance.
B. Old procurement law allowed unsolicited offers to be evaluated and processed for
procurement as a “sole source”. This was negated and reversed in 1999 by PL
25:31:2, currently codified as 5 GCA §5219. Now, unsolicited offers must be
processed by the competitive sealed bid procurement method.
1. “All unsolicited offers considered as being desirable shall be subjected to

the Competitive Sealed Bidding process under § 5211.” (5 GCA §
5219(e).) This means that none of the alternative methods, such as small
purchase or emergency procurement can be used for unsolicited offers,
because they are identified in § 5210(a), not in § 5211 .
2. Note that the Regulations (2 GAR § 3104) have not been updated to reflect
the change in law, although, as was held in the Fleet Services, Inc. case,
above, the change in law consequentially voids any inconsistent or
unauthorized regulation.
C. “Notwithstanding any other provision of law, sole source procurement shall not be
permissible in any procurement arising from an unsolicited offer. The criteria set
forth in the [IFB] shall not require the inclusion of any proprietary item proposed in
the unsolicited offer, and the proprietary character of an unsolicited offer or the
inclusion of a proprietary item in the unsolicited offer shall not be used to favor
the offer or any other bid, nor be a determining factor in awarding a bid.” (5
GCA § 5219(e).)
X. SOLE SOURCE
A. “A contract may be awarded for a supply, service, or construction item without
competition when ... there is only one source for the required supply, service or
construction item.” 5 GCA § 5214.) Heads of purchasing agencies are “authorized
to determine whether a supply item ... shall be included as a part of, or procured
separately from, any contract for construction”. (2 GAR § 3107.) Sole source, then,
is not appropriate for construction contracts. Also, it would be improper to use a
sole source solicitation that includes, as part of the IFB, any item which does not
qualify for sole source solicitation.
B. “A requirement for a particular proprietary item does not justify a sole source
procurement if there is more than one potential bidder or offeror for that item.” (2
GAR § 3112(b).)
C. “In cases of reasonable doubt, competition should be solicited. Any request by a

using agency that a procurement be restricted to one potential contractor shall be
accompanied by an explanation as to why no other will be suitable or acceptable
to meet the need.” (Id.)
D. The CPO, DPW Director or Head of the Purchasing Agency, “or their designee
above the level of Procurement Officer” must determine in writing that there is
only one source for the required supply, service or construction item. (5 GCA §
5214.)
1. “[2 GAR] §3112 also requires that any request by a using agency that a
procurement be restricted to one potential contractor shall be accompanied
by an explanation as to why no other will be suitable or acceptable to meet
the need.” (In the Appeal of L.P. Ganacias Enterprises, Inc., dba RadioCom,
OPA-PA-06-003, p 9.)
2. “Pursuant to 5 GCA §5214 and 2 GAR §3112, GSA must make an

independent assessment of the availability of potential suppliers.... There is
no evidence of delegation to OHS or the Office of the Governor the
authority to prepare its own specifications. Even if the authority had been
delegated to the using agency, delegation of this duty to the sole source
vendor is inappropriate and must be monitored by GSA to prevent
specifications in violation of the §5265 and §5268 of the Guam
Procurement Law.... In addition, §5262 and §5265 place the duty on the
CPO to ensure that specifications requiring only one vendor, especially
when written by that vendor, are monitored to ensure maximum
competition.” (RadioCom, id.)
a. Guam GSA has issued a Circular, 09-003, effective June 5, 2009,

requiring departments wishing to sole source select a particular item
to “make every effort to contact the manufacturer and inquire if there
are other companies across the nation that provides the same
product or services, so that the government is able to assure that the
cost provided by the vendor or contractor is reasonable.” This is a
step in the right direction but falls short, to the extent this only
requires an inquiry to the manufacturer, of obtaining the
independent assessment required by the Public Auditor’s Decision.
E. A record of all contracts made under the sole source procurement (as well as
emergency procurement) shall be maintained and a copy of such record shall be
submitted to the Legislature annually and made available for public inspection. (2
GAR § 3112(d).)
1. The author has asked for, and been given, copies of these reports from the
Office of the Speaker of the Guam Legislature. They make for interesting
reading (particularly the emergency procurements), but the author cautions,
in his experience, there have historically been harmless errors made in
classifying expenditures as emergency or sole source; he understands from
discussions with the CPO’s Office that, for instance, many times a purchase
order is logged as a sole source, when, in fact, it is simply the annual
renewal of a service or supply under a, say, five year contract, thus is
rightfully a proper continuation of an existing contract (where 2 GAR §
3121– multi-term, non-lease – is applicable) or a lease (where 2 GAR
§3119(j) is applicable.
2. The author has also been informed by the CPO’s Office that it is changing its
sole sourcing of certain maintenance and repair procurements. In the past,
for instance, maintenance services were sole sourced to a dealer in a
particular brand item. Realizing that there now exist on Guam other
authorized or capable maintenance and repair service providers other than
the authorized seller of the brand item, the author has been informed that it
is now the policy of the CPO to competitively or otherwise procure such
maintenance and repair services by appropriate source selection methods
other than sole source. The author applauds all such actions undertaken to
at least try to encourage competition in such matters.
F. When conducting any sole source procurement, the procurement officer shall
conduct negotiations, as appropriate, as to price, delivery and terms. (2 GAR §
3112(c).) There ought to be a record of the negotiations in the file, if for no other
reason than to verify compliance with this requirement.
G. Examples of appropriate sole source circumstances are (2 GAR § 3112(b)):
1. Where the compatibility of equipment, accessories, or replacement parts is

the paramount consideration.
2. Where a sole supplier’s item is needed for trial use or testing.
3. Where a sole supplier’s item is to be procured for resale.
4. Where public utility services are to be procured
5. Where supplies are offered through bankruptcy or receivership sales, or
other disposition at lower than prevailing market rates.
H. An example of when sole source procurement is not appropriate is in the Public

Auditor’s Decision in In the Appeal of Town House Dept. Stores, Inc., dba Island
Business Systems and Supplies [IBSS], OPA-PA-08-011, p 13: “Here, the fact that
XEROX provides copying services and equipment does not justify a sole source
procurement determination because XEROX is not the only possible source of
copier services and equipment.”
I. “This method of procurement involves no competition and should be utilized only

when justified and necessary ....” (Official Comment, MPC § 3-205.)
J. Sole source procurement is required, when applicable, even to small purchases. (2

GAR §3111(b)(4); see below.)
XI. SMALL PURCHASE PROCEDURES
A. Small purchase procedures exist for procurement of less than $15,000 for supplies
or services and less than $50,000 for construction when other methods are not
utilized, but if there is only one source for such procurement, the sole source
method must be used. (2 GAR §§ 3111(a), (3111(b)(4).)
B. Procurement requirements shall not be artificially divided so as to fall within the

small purchase limits. (5 GCA § 5214.)
C. For really small purchases, there are competition requirements for supplies and
services in the $500 to $15,000 bracket (2 GAR § 3111(c):
1. Insofar as is practicable, no less than three positive written quotations shall

be solicited, recorded and placed in the procurement file, with award to the
lowest responsible and responsive bidder. This file is a public record.
D. Really, really small purchases of supplies and services under $500 can be
conducted by operational procedures which “provide for obtaining adequate and
reasonable competition and for making records to properly account for funds and
to facilitate auditing....” (2 GAR § 3111(e).)
E. Procurement of construction is subject to similar rules, with the two brackets being,
(1) between $500 and $50,000, and (2) under $500. (2 GAR § 3111(d).)
F. Similar concepts are applied for “accountants, physicians, lawyers, dentists,

architects, engineers, or land surveyors”. (2 GAR § 3111(f).)
G. See, General Services Agency, Small Purchases, Procurement Function,
Performance Audit, October 1, 2001 through June 30, 2003, OPA Report No.
04-05, March 2004, http://www.guamopa.org/docs/OPA0405.pdf
H. REQUEST FOR QUOTATION (RFQ)
1. Requests for Quotations are only specifically mentioned in respect of small

purchases (§ 3111(c)(1): “no less than three positive written quotations from
businesses shall be solicited”) and emergency procurements (§ 3113: “the
procurement agent must solicit at least three informal price quotations”).
2. Except in those limited circumstances, RFQs are not authorized methods

of source selection.
I. BLANKET PURCHASE AGREEMENTS (BPAs) (2 GAR § 3112.1):
1. A BPA is a purchase agreement to establish a “charge account” to acquire

and indefinite quantity or type of supplies or services. (2 GAR §3112.11(a).)
It is thus contemplated that it is intended where there would otherwise be
numerous purchase orders for a broad class of goods (e.g., hardware). Also
contemplated are BPAs made with dependable firms with proven prices
which are considerably lower than other firms dealing in the same
commodities (§ 3112.12(d)), but they should be contacted to secure
maximum discounts. (§ 31121.12(f).
2. Individual purchases under BPAs shall not exceed $15,000 for supplies or
services or $50,000 for construction. (§ 3112.13(b).)
3. The use of a BPA does not authorize purchases that are not otherwise
authorized by law or regulation. (§ 3112.13(a).)
4. The existence of a BPA does not justify purchasing from only one source.
Wherever possible, the purchasing officer must provide for equal
distribution of the blanket purchase to at least three separate vendors. (§
3122.13(c).) Remember, a BPA is essentially an open account with a
vendor. The government is required to spread the business around accounts
and not favor any one (“equal distribution”).
5. If there is an insufficient number of BPAs to select from, the purchasing

officer is directed to go out and solicit more competition and establish more
BPAs. (§ 3112.13(d).)
6. “All competitive sources should be given an equal opportunity to furnish

supplies or services under BPAs. Therefore, if not impossible, then to the
extent practical, BPAs for items of the same type should be placed
concurrently with at least three separate suppliers to assure equal
opportunity.” (§3112.12(d).)
7. See, General Services Agency, Blanket Purchase Agreements, Procurement
Function, Performance Audit, October 1, 2001 through June 30, 2003, OPA
Report No. 04-08, July 2004, http://www.guamopa.org/docs/OPA0408.pdf
XII. EMERGENCY PROCUREMENT (5 GCA § 5215)
A. Requires an existing “threat to public health, welfare, or safety under emergency

conditions”. There must be a written determination of the basis for the emergency,
made under penalty of perjury by the CPO, Director DPW or Head of the
Purchasing Agency, unless there is a Governor’s declaration of emergency by
Executive Order which specifically states that emergency procurement may be
resorted to for the purposes of the order. Where there is no Governor’s emergency
Executive Order, as a condition of any procurement award, the certified
determination must be given to the Governor and Speaker; and, the Governor must
approve in writing all authorizations for emergency procurement.
B. “Emergency means a condition posing an imminent threat to public health, welfare,

or safety which could not have been foreseen through the use of reasonable and
prudent management procedures, and which cannot be addressed by other
procurement methods of source selection.” (2 GAR § 1106(47).)
1. One might question the repeated uses of declarations of emergency to skirt

normal procurement in circumstances due to poor management leading to
conditions that were clearly foreseen or foreseeable, e.g., Executive Orders
2008-16 (GPSS) and 2008-17 (DPW). For instance, the author takes the
view that under “other procurement methods of source selection” it is
within the power of the government to seek a lifting of the automatic stay
(see Article on the automatic stay, below). Thus, it should be a requirement,
in the nature of exhaustion of administrative remedies, that the government
seek to lift an automatic stay before rushing off to get an emergency
declaration to continue to procure goods or services in the face of a bid
protest.
C. “Emergency procurements shall be made with such competition as is practicable

under the circumstances”.
D. The procurement agent must solicit at least three (3) informal price quotations and,
if time allows, must give notice to all contractors from any qualified bid list.
E. Award goes to the “firm with the best offer, as determined by evaluating cost and
delivery time.” (Query: does this take issues of bidder responsibility out of the
equation?) A written determination of the basis for the selection of the contractor
shall be included in the contract file.
F. LIMITED TO 30 DAY SUPPLY: No emergency procurement or combination of
emergency procurements may be made for an amount of “goods or supplies”
(which does not speak to construction) greater than the amount of such goods and
supplies which is necessary to meet an emergency for the thirty (30) day period
immediately following the procurement.
G. The law contemplated that the Policy Office would draft regulations which further
define “emergency conditions”, but they have not done so: the only regulation on
the subject, 2 GAR § 3113, refers to a sub§ 3113(b) for such definition, but it does
not appear in the Guam Compiler of Laws’ regulations.
H. Recall that the Policy Office, not the Governor, has the power to adopt procurement
regulations. Emergency procurement is a specifically authorized method of source
selection (5 GCA §5210(a)), and its specific requirements of law and regulation
must be followed; the Governor has not been granted any plenary power to make
up emergency procurement procedures, nor to enter into any contract for the
expenditure of public funds, with limited exceptions, except as authorized by the
Procurement Act (5 GCA § 5004(b)). Thus, if any emergency procurement is
conducted contrary to the Procurement Act and Regulations applicable to that
method of source selection, any prospective bidder may protest the solicitation (5
GCA § 5425(a)).
I. “In an emergency under [2 GAR] §3113 (Emergency Procurement), any necessary

specifications may be utilized by the purchasing or using agency without regard to
the provisions of this Chapter [4 - Specifications].” (2 GAR § 4103(a)(2)(c).)
J. The CPO must deliver an annual report to the Legislature itemizing all emergency
procurements, together with all sole source procurements, as discussed above in the
Article dealing with Sole Source procurements.
XIII. FEDERAL SUPPLY SCHEDULE PURCHASES must adhere to specified methods of source
selection
A. For its own purposes, the US Federal Government has established a specialized
facility that allows government purchasers, pursuant to processes specified in the
FARs, Subpart 8.4 http://www.acquisition.gov/far/current/html/Subpart%208_4.html,
to directly purchase certain supplies and services directly from pre-approved private
contractors/vendors. This facility is known as the GSA Supply Schedule or “FSSP”
(Federal Supply Schedule Program).
B. A review of this program is beyond the scope of this paper, but see
http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentType=GSA_OVERVIEW&
contentId=8106 . “GSA Schedules offer customers direct delivery of millions of
state-of-the-art, high-quality commercial supplies and services at volume discount
pricing.” The FSSP is analogous to buying from an online catalogue of supplies and
services, each offered by different supply contractors at varying prices and upon
varying terms, depending on the contractor chosen.
C. The Federal government has authorized GovGuam to access the Supply Schedule
contractors, which is a discretionary privilege and not a right. To be an approved
Supply Schedule contractor, the Federal government requires certain standards and
generally extracts the “best customer” price from the contractors with its purchasing
muscle. This has the potential to provide GovGuam cost savings on Supply
Schedule supplies and services.
1. Most US Federal agencies can directly access the schedule contractors and
directly purchase scheduled supplies and services without normal
competitive procedures, although the applicable FARs do have their own
competitive requirements for such purchases.
2. The FARs, however, require other ordering activities – such as GovGuam –

to make their purchases “consistent with [their own] statutory and
regulatory requirements applicable to the acquisition of the supply or
service” (FAR Subpart 8.404(c)(3).)
D. The Guam Procurement Act puts a limit on the privilege granted by the Federal
government to GovGuam to access the FSSP.
1. “The [Guam] General Services Agency shall procure supplies from the
United States when the cost to the [Guam] General Services Agency is less
by ten percent (10%) than from other contractors.” (5 GCA § 5122)
2. The intent and purpose of this clause is vague and without any extant
explanation. Lore has it that the provision is intended to provide a “local
preference” for other bidders, even though there is a separate express “local
preference” provision, discussed above, and even though there is no
mention at all of the word “local” in the provision.
a. GSA adopted, and the Attorney General approved, regulations

allowing GSA to purchase from the Federal Supply Schedule so long
as it sought price comparisons from at least three “local vendors in
order to calculate the 10% differential.” The regulations, and, in
part, the opinion (Legal Memorandum, Legality of Purchasing
through Federal GSA Contracts, GSA 07-1084, June 16, 2008) were
disapproved in In the Appeal of Town House Dept. Stores, Inc. dba
Island Business Systems and Supplies [IBSS vs GSA], OPA-PA-08-
012.
b. In fact, the specific local preference provision contemplates a

greater, 15%, differential, which must also be considered if the FSSP
contractor is from off-island. The intent of § 5122 cannot be to
create a local preference right if a greater right is more specifically
created by other statute.
3. Some have argued § 5122 implies authority and direction to Guam to
purchase from Federal Supply Schedule Program, but, of course, only the
Federal government can authorize who can purchase from its programs.
This argument is based on a restrictive reading of the dependent clause
“shall procure supplies”, without reference to clearly conditional “when”
clause and the 10% limitation it expresses.
4. § 5122 refers to “contractors”, but Guam procurement law refers to

“contractor” only when discussing a post-award party. Prior to award, that
is, at the stage where a vendor is being considered as a supplier, the
procurement laws refer to “bidders” and “offerors”, or, and only when the
lowest responsive bidder has been selected, a “prospective contractor”.
5. Considering the historical context of the provision as well as the particular

language used in it compared to the language used elsewhere in the
Procurement Act, the author surmises that experience would have revealed
that simply buying from one contractor on the Schedule does not assure the
lowest price offered by all Schedule contractors.
6. The author concludes that §5122 is intended simply to make sure that,
when GovGuam buys from the Federal Supply Schedule, it must consider
all the supply items available from all the Schedule contractors, and not buy
from a more expensive contractor if there is another contractor on the
Schedule offering a similar item for at least a 10% lower price.
E. Lore has had it that the FSSP was a way to “bypass the bid process”. (See, (In the
Appeal of Town House Dept. Stores, Inc. dba Island Business Systems and Supplies
[IBSS vs. GPSS], OPA-PA-08-011, p 10.) Guam GSA has long purchased directly
from the Federal Supply Schedule contractors according to its own procedures, and
the Attorney General has, through more than one opinion, long provided legal
cover for GSA to do so, saying specifically in its Legal Memorandum dated June 16,
2008 (“Purchasing from GSA Federal Supply Schedule Procedure”) that § 5122
authorized another method of source selection beyond those specified in 5 GCA §
5210(a). The Memorandum also concluded that Guam GSA had the authority to
adopt procurement procedures to conduct purchases directly from the FSSP without
going through the other express methods of source selection specified in the
Procurement Act..
F. The Public Auditor has since ruled that § 5122 does not provide any exception to
the specific methods of source selection specified in §5210(a) and those methods,
such as competitive sealed bid, must be used when making any purchase from the
Federal Supply Schedule contractors. She also ruled that GSA does not have the
authority to adopt any other method of source selection. (Town House Dept.
Stores, Inc. dba Island Business Systems and Supplies [IBSS vs GSA], OPA-PA-08-
012.)
G. Guam GSA has, by GSA Circular No. 2009-01, effective January 9, 2009, directed
any using agency which wishes to purchase from the FSSP Supply Schedule to
“attach copies from the Contract or Schedule of a least three (3) different contractors
of the same type of equipment or supply from the Contract or Schedule. ... This
office will no longer procure directly through the U.S. GSA Contract or Schedule,
by using the informal process (Request for Quotation) to calculate the 10%
requirement pursuant to 5 GCA §5122.... The GSA will procure through the formal
process which is to issue an Invitation for Bid prior to procuring through the U.S.
GSA Contract or Schedule. The bid price will be utilized to calculate the 10%
requirement....” The point the author found most agreeable was the CPO’s embrace
of the competition policy goal: “This procedure has been issued to improve the
process of competition on a fair level playing field prior to using the U.S. GSA
Contract or Schedule.” Note that Guam GSA’s web page lists only a few of its
Circulars, not including this one.
1. This requirement to identify three Schedule Contractors is consistent with

the author’s interpretation of § 5122 noted above, that the intent of that
section is to make sure there is no other Contractor on the schedule who
could offer the same item for a significantly (10%) lower price. It would
appear, further, that this Circular directive envisages that even after that
Scheduled Contractor selection process, the lowest bid will be further tested
by a competitive method of source selection (and, indeed, that was
confirmed to the author in discussion with a GSA manager).
XIV. SPECIFICATIONS
A. Specifications Are the Bedrock of Procurement: “The purpose of a specification is

to serve as a basis for obtaining a supply, service, or construction item adequate
and suitable for the territory’s needs in a cost effective manner.... Specifications
shall be drafted with the objective of clearly describing the territory’s
requirements” (2 GAR § 4102(a)(1).) Thus, the most critical and first step in
planning and soliciting is to get the specifications right.
B. Competition is the Bedrock of Specifications: “It is the policy of the territory that
specifications permit maximum practicable competition consistent with this
purpose.“ (2 GAR § 4102(a)(1).) “All specifications shall seek to promote overall
economy for the purposes intended and encourage competition in satisfying the
Territory’s needs, and shall not be unduly restrictive.” (5 GCA § 5265; 2 GAR §
4106.)
1. In Appeal of Admiral Service, Inc., MSBCA No. 1341 Sep 15, 1987, the
Appeals Board, noting the tension between the policies of promoting
competition and meeting minimum needs, and without any reference to the
de novo standard of review, said (at p. 2), “[t]he primary issue is whether
the specifications as written unreasonably restrict competition. Under
Maryland procurement law, the procurement officer has broad discretion in
drafting specifications to meet the State’s minimum requirements when
weighed against the State policy of fostering the maximum practicable
competition. And ‘we will not substitute our judgment for that of the
procuring agency in absence of a clear showing that it acted unreasonably
or otherwise abused its discretion’....”
a. This case involved the availability of two different methods of

providing window cleaning services for three buildings, with the
specifications preferring one method over the other. It was noted
that the appellant had the opportunity to obtain equipment need to
provide the chosen method, but at a cost that possibly made his
product more expensive for two of the three buildings. The rationale
given by the agency for its choice of the one method was disputed
by the appellant. The Board said (at p. 3) “[w]hile the evidence
presented by Appellant is convincing, there is no clear showing that
[the agency] acted unreasonably in its exercise of its judgment to
require [one method over the other].”
b. The Board observed that this was an instance where industry

standards and practices were changing, saying that new methods
should not be rejected out of hand, in a hint that it considered this to
be a close case. It added (id.), the agency’s decision “may not be an
entirely correct assumption, and we might conclude differently were
it our responsibility to make this technical judgment in the first
instance.”
c. In this case, the Appeals Board said the technical specifications

would stand, but only because the appellant failed to show the
specifications unreasonably restricted competition (at p. 4), recalling
that the appellant did have the ability to obtain equipment to
compete on the specifications but at a higher cost. Thus, this was
not a case of unduly restricted competition, it was a case of the
agency preferring a more expensive product, and in this case the
Appeals Board did not disturb the conclusion. Perhaps, under a
more critical de novo review, or where the economics were truly so
lopsided as to suggest the minimum needs determination was not a
reasonable one, the decision would have gone differently.
C. AMENDING specifications. The principle applicable to amending contracts

(discussed in Article IV, above) would also apply to any amendment of
specifications or other terms of an IFB or RFP. That is, if the specification
amendment is beyond the scope of the original solicitation, it is improper and must
be re-solicited, or the amended part excised and put out to separate solicitation.
This principle is underscored by the requirement, in the evaluation phase of multi-
step competitive sealed bidding, that when “a contemplated amendment will
significantly change the nature of the procurement, the Invitation for Bids shall be
cancelled....” (2 GAR §3109(t)(2).)
1. In National Elevator Company, MSBCA No. 1266 Mar 7, 1983, the
specifications required contract work to be limited to a list of personnel
submitted with the bid. This was protested. Trying to deflect the
importance of this specification, the government agency argued it was “a
mere formality that as a practical matter could be subject to exception if
circumstances arose during the course of performance”. The Appeals Board
ruled “[t]his would be contrary to the requirement that bidders are entitled
to bid on an equal basis; they have a right to rely on the solicitation’s
wording regarding the scope of competition for award.
D. “Unless the context requires otherwise, the terms specification and purchase
description are used interchangeably throughout these Regulations”. (2 GAR
§4101(4).) “Purchase description”, simply defined (see 2 GAR §1106(26)), means
“the words used in a solicitation to describe the supplies”.
E. MINIMUM needs: The specifications in the IFB “shall include only the essential
physical characteristics and functions required to meet the Territory’s minimum
needs”. (5 GCA § 5268(a).) Bells and whistles, status symbols, ego trips, and the
95% of the functions you never use are non-minimalist extravagances that should
not be part of specifications.
1. You can't always get what you want

But if you try sometimes you might find
You get what you need (– The Rolling Stones).
2. In Appeal of National Elevator Company, No. 1266 Mar 7, supra, the

specifications required a bidder to list all of its personnel and to restrict its
contracted work to those employees. The Appellant argued this unduly
restricted competition. The government argued it needed assurance of a
ready workforce to meet the 24 hour maintenance obligations of the
contract. Without discussing the application of the “ability to obtain”
criteria for a determination of responsibility, the Appeals Board upheld the
appellant’s argument that the specifications were unduly restrictive and
therefore could not meet the State’s minimum needs. (See, pp. 6-8.)
F. Unduly RESTRICTIVE: All specifications shall seek to promote overall economy and
encourage competition in “satisfying”, not exceeding, the territory’s needs, and
shall not be unduly restrictive. (2 GAR § 4106)
1. In Appeal of Xerox Corporation, MSBCA No. 1111, Apr 25, 1983, the
appellant sought to restrict bid specifications in its protest. It argued that the
government solicitation should not allow agencies to acquire machines on
an “as needed” bases, as this would be fiscally disadvantageous since it
would require unit pricing and not volume discounting, and that
specifications with broad volume band sizes for different machines would
encourage overpricing. The Appeals Board (at p. 6) ruled that there was no
credible evidence submitted that the limitations complained of were
unnecessarily restrictive.
G. “It is the general policy of this territory to procure standard commercial products
whenever practicable. In developing specifications, accepted commercial
standards shall be used and unique requirements shall be avoided to the extent
practicable.” (2 GAR § 4102(a)(3))
H. Non-proprietary: All specifications shall be written in such manner as to describe

the requirements to be met without having the effect of exclusively requiring a
proprietary supply item, or procurement from a sole source, unless no other
manner of description will suffice, and in that event, a written determination shall
be made that it is not practicable to use a less descriptive specification. (2 GAR §
4106(a).)
I. Purchase descriptions shall not specify a product having features which are peculiar
to the products of one manufacturer unless it has been determined in writing by
the Director of the using agency that those particular features are essential and
specifying the reason that similar products lacking those features would not meet
minimum requirements for the item. (5 GCA § 5268(b).)
J. Purchase descriptions shall describe the salient technical requirements or desired

performance characteristics of supplies to be procured without including
restrictions which do not significantly affect the requirements or characteristics. (5
GCA § 5268(c).)
K. BRAND NAMES: Since use of a brand name specification is restrictive, it may be

used only when the purchasing officer makes a written determination that only the
identified brand name item will satisfy the territory’s needs. The government must
seek to identify multiple, competitive sources of brand name items, failing which it
must utilize the sole source method of source selection. (§ 4103(b)(2)(c)(ii).)
1. See, L.P. Ganacias, CV 1787-00, supra, at page 22, where the Court was
observed the agency “undertook no evaluation which lead to the conclusion
that only Motorola pagers would meet the needs of the agency”, and “there
was no written documentation prepared which would support a conclusion
that no other brand of pager would suffice”. The Court stated, “while GIAA
may have had legitimate reasons for focusing its IFB on the Motorala brand
pagers, there is absolutely no documentation to support such decision....
[T]his violation by Defendant GIAA is duly noted by the Court and the
Defendant is placed on notice that any and all future IFB’s must comply with
Guam’s procurement regulations.”
2. See, In the Appeal of IBSS [vs GPSS], supra, OPA-PA-08-011, at p 13,

wherein the Public Auditor held procurement of XEROX brand copiers
could not be justified under a brand name specification.
L. Brand Name OR EQUAL: Use of “brand name or equal” specifications (§
4103(b)(2)(b))”
1. The procurement officer must make the written determination that
a. no specification for a common or general use item is available,
b. and time does not permit the preparation of another form of

specification (not including a brand name specification)
c. and either the nature of the product or the territory's requirements

makes use of a brand name or equal specification suitable
d. or use of the brand name or equal specification is in the territory's

best interest.
2. The specifications must designate three or as many different brands as are

practicable as "or equal" references.
3. The specifications shall include a description of the particular design,

functional or performance characteristics of the brand name product which
are required, unless such essential characteristics of the brand name product
are commonly known in the trade or industry.
4. The brand name or equal specification must explain that the use of a brand
name is for the purpose of describing the standard of quality, performance
and characteristics desired and is not intended to limit or restrict
competition to the brand name product.
M. The Who and How of specification preparation and use:
1. Specifications contained in any invitation for bids or proposals “for the

procurement of supplies” shall identify the person responsible for drafting
the specifications and any persons, technical literature or manufacturer’s
brochures relied upon by the responsible person drafting the
specifications”. (5 GCA § 5267.)
a. In the underlying Protest which was the subject of a Petition to

Compel ..., OPA-PA-09-011, the Protestor argued the specifications
were defective because they failed to specifically identify the person
and other matters apparently required by § 5267. (See, protest letter
attached to Petition to Compel ....) The CPO/GSA denied the
objection, saying “[w]e believed that our action of having the agency
or department confirming the specifications does identify the person
or persons responsible for drafting the specifications and any
persons, technical literature or manufacturer’s brochures [relied]
upon by the responsible person in drafting the specifications.” The
author, who raised the objection in that matter, is not convinced by
the response, but that matter was withdrawn and dismissed for other
reasons and the dispute remains to be decided by the Public Auditor
on another day.
2. The CPO shall prepare, issue, revise, maintain and monitor the use of
specifications for the supplies and services required by the Territory. (5
GCA § 5262(a).)
a. The CPO “should ensure that restrictive ad specifications that favor

one bidder over another are not used, and that any specifications
provided [by the using agency] are properly screened and amended
when necessary to prevent such restrictive specifications from
appearing in future IFBs.” ( In the Appeal of Guam Publications,
Inc., OPA-PA-08-007, p 13.)
b. “The CPO must independently monitor Specifications used in sole

source procurements.” (In the Appeal of RadioCom, supra, p 10.)
3. The Director DPW shall prepare, issue, revise, maintain and monitor the
use of specifications for construction required by the Territory.. (5 GCA §
5262(b).)
4. The authorities above suggest that, except in the limited cases below, non-
governmental persons are not authorized to prepare specifications for
government solicitations.
a. In Appeal of Xerox Corporation, MSBCA No. 1111, supra, the

Appeals Board said (at p. 6), “[t]he drafting of specifications is
primarily a function of the State’s procurement agencies....”
5. The duty of the CPO and Director DPW to prepare and utilize
specifications may be delegated to the Using Agencies. (2 GAR §
4103(a)(1).)
6. Special circumstances for specification preparation or use:
a. Third party contracts to prepare specifications:
(1) A contract to prepare specifications for territory use in

procurement of supples or services (2 GAR § 4103(a)(2)(a))
may be entered into if:
(a) there will be no substantial conflict of interest

involved or it is otherwise in the best interest of the
territory,
(b) as certified in a written determination made by the
CPO, Director DPW or Head of the Agency, and,
(c) and so long as such officer retains the authority to

finally approve the specifications.
(2) Similarly, the Director DPW can authorize third party

contracting for specification preparation for construction. (2
GAR §4103(a)(2)(b).)
b. In emergencies (see Emergency method above; 2 GAR § 3113), “any

necessary specifications” may be utilized. (2 GAR § 4103(a)(2)(c).)
c. For Small Purchases (see Small Purchase method above; 2 GAR §

3111), purchasing and using agencies are generally authorized to
prepare specifications for such purchases (Id.).
7. Procedures for Development of Specifications, Generally (including

preparation by the CPO, Director DPW , Heads of Agencies, third parties
and all others; 2 GAR § 4103(b)(1)):
a. Specifications may provide for alternate descriptions “where two or

more design, functional, or performance criteria will satisfactorily
meet the territory’s requirements.” (Sub§ (b))
b. “To the extent feasible, a specification shall not include any

solicitation or contract term or condition such as a requirement for
time or place of bid opening, time of delivery, payment, liquidated
damages, or qualification of bidders.” (Sub§ (c))
8. Preparation and use of specifications for Common or General Use Items (2

GAR § 4103(b)(2)(a)):
a. The author is unaware of any application of this provision,

notwithstanding having reviewed numerous solicitations with widely
varying specifications for supposedly standard, commercial copiers,
but considers it to be a good idea if implemented properly, so
includes it here.
b. Common or General Use specifications are intended for:
(1) A supply, service, or construction item used in common by

several using agencies or used repeatedly by only one when
(a) commercially produced or provided, and
(b) the characteristic of it is relatively stable while the
frequency or volume of procurement is significant.
(2) When the territory’s recurring needs require uniquely

designed or specially produced items.
c. The drafter of the specification shall provide the using agency(ies)

and a reasonable number of manufacturers and suppliers an
opportunity to comment on the draft specification.
d. Final approval or cancellation of the specification lies only with the

CPO, the Director DPW or the Head of a Purchasing or Using
Agency.
e. Revisions and clarifications of specifications for common or general

use items requires similar review and approval.
f. The provision for common or general specifications is identified in

the regulation as “special additional procedures”, implying, if the
implication was not already clear, that all other applicable rules
regarding the policy, form and content of specifications apply. (See
2 GAR § 4107 (and to similar effect 5 GCA § 5266): “The
requirements of this Chapter regarding the purposes and
nonrestrictiveness of specifications shall apply to all specifications,
including, but not limited to, those prepared by architects,
engineers, designers, and draftsmen for public contracts.”)
XV. VARIOUS CONTRACT TYPES, AND THEIR REQUIREMENTS FOR USE
A. We have been discussing the various methods of source selection (procurement

types) and the specifications that determine what it is the government requires from
a vendor/contractor. Here we differentiate the “types” of contracts the government
can enter into. These types are generally differentiated by pricing (e.g., “fixed
price”, “time and materials”), quantity (“definite”, “requirements”), financing terms
(“lease”, “option”), time of performance (“indeterminate”, “multi-term”) and the like.
B. Note that while there is flexibility in selecting amongst contract types, different
contract types have conditions and limitations for their usage. Contract types can
only be used as appropriate.
C. Remember also, NO form of contract is allowed if procured improperly. First, there

must be the selection and use of an appropriate method of source selection. Then
there must be a selection of the appropriate type of contract in the solicitation. In
many cases, the same considerations that determine the method of source selection
influence also the contract type.
D. This is not a thorough review of the various contracts types or their requirements, as
it would detract from the primary focus of this paper, to introduce the procurement
process. For a more in-depth study, refer to 2 GAR § 3119, and to 2 GAR § 5102 et
seq. for contract considerations for determining different methods of management
for construction contracts.
E. Note, also, that the regulations also deal particularly with clauses within contracts,
and that such clauses are mainly not discussed in this paper. (See, e.g., 2 GAR §§
5106 and 6101.)
F. “Subject to the limitations of this Section, any type of contract which will promote
the best interests of the Territory may be used”. (5 GCA § 5235.)
1. A cost-plus-a-percentage-of-cost contract is prohibited. (Id.)
2. A cost-reimbursement contract requires a determination it is likely to be less

costly than any other type. (Id.)
3. Except for a fixed-price contract, no contract type shall be used unless there
is a determination that the contractor’s accounting system permits timely
and adequate collection and allocation of cost data. (5 GCA § 5236.)
G. Policy Regarding Selection of Contract Types (2 GAR § 3119(c):
1. “The objective when selecting a contact type is to obtain the best value in
needed supplies, services, or construction in the time required and at the
lowest cost or price to the territory.”
2. “The selection of an appropriate contract type depends on factors such as

the nature of supplies, services, or construction to be procured, the
uncertainties which may be involved in contract performance, and the
extent to which [either] the territory or the contractor is to assume the risk of
the cost of performance of the contract.”
H. Multi-term contracts: A contract may be entered into for any period of time
“deemed to be in the best interests of the Territory by encouraging effective
competition or otherwise promoting economies in territory procurement ”
provided (5 GCA § 5237) :
1. the term of the contract and any conditions of renewal or extension are
included in the solicitation
2. funds are available for the first fiscal period at the time of contracting
a. continuance of payment and performance obligations for succeeding

fiscal periods are subject to further availability and appropriation of
funds
(1) if funds are not available, the contract is to be cancelled and
the contractor reimbursed only for the reasonable value of
any non-recurring costs incurred but not amortized in the
original contract price for the goods delivered
b. a determination is made that the Territory’s estimated requirements

will be reasonably firm and continuing
c. the contract will “serve the best interests of the Territory by

encouraging effective competition or otherwise promoting
economies”
3. “Generally a contract for supplies or services may be entered into for any
period of time deemed to be in the best interests of the Government of
Guam provided the term of the contract and conditions of renewal or
extension, if any, are included in the solicitation and funds are available for
the first fiscal period at the time of contracting. 5 G.C.A. § 5237(a).
However, prior to using a multi-year contract, it must be determined in
writing that such a contract will serve the best interest of the Government of
Guam by encouraging effective competition or otherwise promoting
economies in government procurement. 5 G.C.A. §5237(b). There is no
such determination in the procurement record nor can one be made in
this case.” (In the Appeal of Town House Department Stores, Inc. dba
Island Business Systems and Supplies, OPA-PA-08-011, Decision p. 14.)
4. The objective of the multi-term contract is to promote economy and

efficiency in procurement by obtaining the benefits of sustained volume
productions and consequent low prices, and by increasing competitive
participation in procurement intended for multi-term contracting. (2 GAR §
3121(b).)
a. The MPC makes it clear that this form of contract is particularly

intended where the need is to attract offers from large companies
whose capacities for production limit them to large production runs,
so that the government can procure larger quantities and obtain the
benefits of volume discounts. Commentary No. 1 to MPC § 3-503
adds, “Multi-year procurements should attract more competitors to
submit bids or offers for the larger contract awards and thereby
provide the jurisdiction with the benefits of increased competition.”
5. Multi-term contracts, more specifically (2 GAR § 3121(a)):
a. Are appropriate and limited (sub§ 3121(c)):
(1) to obtain uninterrupted services extending over more than

one fiscal period
(a) where the performance of such services involves
high start-up costs, or
(b) where a changeover of service contractors involves

high phase-in/phase-out costs during a transition
period.
b. Are subject to very specific conditions of use and procedure too

complex (and rare for Guam) to mention here. (See sub§§ 3121(d)
and (e).)
c. Are not applicable to any other contract type, including but not
limited to contracts for construction or leases (of all property, real
and otherwise). (Sub§ 3121(c).)
I. Fixed-Price (2 GAR § 3119(d).) A fixed-price contract places responsibility on the

contractor for the delivery of the product or the complete performance of the
services or construction in accordance with the contract terms at a price that may be
firm or may be subject to contractually specified adjustments. The fixed-price is
appropriate for use when the extent and type of work necessary to meet territorial
requirements can be reasonably specified and the cost can be reasonably estimated.
a. A fixed-price type of contract is the only type of contract that can be

used in competitive sealed bidding. (Sub§ 3119(d)(1).))
b. When, under a contractually specified adjustment, the contract

permits unilateral action by the contractor to bring about the
condition under which a price increase may occur, the contract shall
reserve to the territory the right to reject the price increase and
terminate the contract, without liability as to any future performance.
(Sub§ 3119(d)(3)(B).)
J. Indefinite Quantity (2 GAR § 3119(i)(2): A contract for an indefinite amount of

supplies or services to be furnished.
a. Generally, an approximate quantity is stated in the solicitation. It

may specify a minimum or maximum amount.
(1) “[O]ne of the primary purposes of the procurement code is to

maximize to the fullest extent practicable the purchasing
value of public funds.. 5 G.C.A. §5001(b)(5). Here, GSA
could improve the purchasing value for these ads by
specifying at least a minium.... Further, future procurements
for these ads will benefit by not using an indefinite quantify
[sic; “quantity”] contract....” (Guam Publications, supra, (at p
12).)
b. Requires a determination “indicating the rationale for using this type
of contract and the reasons why another contract form will not
suffice.”
c. Must be reviewed every 6 months for a determination of the

continued need for such a contract.
d. To preserve competition, they shall not be used more than twice per
fiscal year for the same supplies or services.
e. If continued use of the supplies or services is required, the

procurement must be conducted by competitive sealed bid or under
the authority of the small purchase method..
K. Requirements contracts (2 GAR § 3119(i)(3): This is a variant of indefinite quantity

contract for supplies or services that obligates the territory to order all actual
requirements during a specified period of time from a particular contractor. (See
“multiple awards” below when there is more than one such contractor.) There are
special considerations, in addition to the general considerations for indefinite
quantity contracts, that must be taken into account for requirements contracts, and
variations on that theme, such as “outputs” contracts and “exclusive dealings”.
L. Leases, of both equipment and other supplies or real property, must be in the best
interests of the territory and “not used to circumvent normal procurement
procedures.” (2 GAR § 3119(j).)
1. Note that a multi-year contract (see, 2 GAR § 3121) is not a lease

arrangement, even though a lease may extend for several years. 2 GAR §
3121(c) specifically says that provision (§ 3121) “does not apply to any
other contract including, but not limited to, contracts for construction and
leases (including leases of real property)”.
2. Note that a lease containing an option to purchase must be let by

competitive sealed bid or sole source in order for the option to be valid. (2
GAR § 3119(k)(3).)
3. Note 5 GCA § 22704, which purports to grant to the Governor the power to
acquire leases of office space and facilities. That provision is derived from
old Government Code § 6116 and was added by P.L. 5-90 in 1960. The
subsequent enactment of the Procurement Act would have rendered that
provision obsolete, though it remains on the books.
M. Options to purchase, renew, extend (2 GAR § 3119(k):
a. Options must only be for the benefit of the territory, not the
contractor.
b. Options must be specified in the original solicitation.
c. Before any option to renew, extend or purchase is exercised

(including an option in a lease):
(1) the Procurement Officer should ascertain whether a

competitive procurement is practical and more advantageous
to the territory.
(2) A written record of the findings and determination must be

made part of the contract file.
N. Multiple Source Contracts (2 GAR § 3122). This involves splitting up contract

requirements amongst multiple contractors. The do not technically “share”
contracts as each one is independent. These are not generally favored since it
creates the environment for collusion to occur. There are two varieties allowed:
1. An Incremental Award is a variety of Definite Quantity Contract (sub§

3122(a)):
a. An incremental award is the award of portions of a Definite

Quantity contract to more than one contractor; each portion of
which is for a definite quantity, all totaling 100% of the
government’s requirements.
b. Can be justified only when necessary to obtain the total quantity the
government needs, such as when no single contractor has sufficient
capacity to meet the needs.
c. Intent to award incrementally must be stated in the solicitation along

with the criteria for how the definite quantities will be divvied up.
2. A Multiple Award is a variety of Indefinite Quantity Contract (sub§

3122(b)):
a. A multiple award is an Indefinite Quantity contract, more

particularly, a Requirements contract. The government becomes
obligated to buy all of its requirements from the awarded multiple
contractors.
b. Multiple awards must be procured either by the competitive sealed

bid method, the small purchase method or emergency procurement
method of source selection.
c. To avoid the facilitation of collusion, multiple awards cannot be

made when a single award can be made to meet the territory’s needs
without sacrificing economy or service, nor for dividing business or
settling low tie bids.
d. Multiple awards must be allocated to the least number of contractors

capable of meeting all government requirements.
O. Construction contracts
1. The various methods of management for construction and the corresponding

types of construction contracts are too numerous and too technical for the
scope of this paper. Suffice to say that there are different considerations to
be made in choosing between them, according to circumstances and
desired outcomes. See, generally, 2 GAR §§ 5102 and 5106.
XVI. PROCUREMENT PROTESTS
A. The first key take-away here is that, if you are entitled to protest the solicitation or
award, you MUST FIRST protest to the agency BEFORE you take your complaint to
the Public Auditor or to court. (See, Order of Dismissal, In the Appeal of Mega
United Corp., OPA-PA-09-001.) This is part of the notion of exhaustion of
administrative remedies. Protesting first to OPA (rather than the agency) is a
mistake often made; the author did so himself once (IBSS vs UOG,
OPA-PA-06-004). It can be a fatal mistake if you run out of time to protest to the
agency (but see discussion of equitable tolling in the Article dealing with appeals,
below).
1. A person who has a complaint about a solicitation or award “ should seek

resolution of their complaints initially with the Procurement Officer or the
office that issued the solicitation.” (2 GAR § 9101(b).) But see discussion of
differences between complaints and protests below, under the topic Format
of Protest.
B. ONLY “AGGRIEVED” BIDDERS CAN PROTEST: Any actual or prospective bidder,

offeror, or contractor who may be aggrieved in connection with the method of
source selection, solicitation or award of a contract, may protest to the CPO, the
Director DPW or the Head of a Purchasing Agency, whoever it was that handled
the solicitation. (5 GCA § 5425(a).)
1. This is intended to give rights only to persons “who may be aggrieved”.
2. Who is an aggrieved person?
a. We must start with the plain meaning of “aggrieved”. A dictionary

defines “aggrieved” to mean to be wronged or to injured in one’s
legal rights. The root word is grievance. A grievance is a
circumstance thought to be unjust or injurious and ground for
complaint against a real or imagined wrong. (New World Dictionary
of the American Language, Second College Edition, 1972.)
(1) If, then, you are in a well run race and you lose, you simply
lose: you are not aggrieved. Losing is an expected
consequence of the race, in which there is only one winner
(discounting dead heats). But if you are fouled in the race or
the race is run improperly, you are aggrieved. This obvious
statement is made here because of the too numerous
instances in occasional decisions that loosely and
gratuitously make the bald statement that a loser in an IFB or
RFP is aggrieved. The author respectfully disagrees that a
bidder or offeror who simply loses is not, by that fact alone,
an aggrieved person.
(a) For instance, in the GCIF Appeal, the Public

Auditor’s Decision, at p. 10, flatly stated, “a losing
bidder is an aggrieved bidder. Tumon Corporation v.
Guam Memorial Hospital Authority, CV 1420-01,
Line 13, Page 3, Decision and Order dated October
22, 2001 (Guam Superior Court). ... GCIF is an
aggrieved offeror because it was not selected as the
best qualified offeror.”
i) The author also respectfully asserts the stated

proposition and reliance on the Tumon
Corporation decision is wrong; the Superior
Court did not say that and the decision was
not about a losing bidder. The posture of that
case is a bit convoluted because it actually
involved a protest by the winning bidder in a
solicitation in which , after protest by the
losing bidder and notice of intent to award,
the agency rejected all bids. The Court did
hold that a losing bidder is an aggrieved
bidder, but only that a winning bidder is not
an aggrieved bidder. The actual statement of
the Court at the citation provided is, “Section
5425(g) applies to a protest by a losing bidder
after the winning bidder has been declared.
... In this case, Tumon received the notice of
intent to award the contract, therefore,
Tumon [the winning bidder] cannot be
considered an aggrieved bidder.” (Emphasis
added.) The reiterated conclusion of the
Court (p. 5, line 3) was that the bid winner is
not aggrieved, not that a bid loser is
aggrieved.
a) Query whether the holding was even

necessary to the result reached,
considering the agency had rejected
all bids in any event.
(2) If losing bidders or offerors are by such a rule ipso facto

aggrieved, that would have enormous disruptive
consequences to the procurement process.
(a) First, that would mean that all losing bidders and
offerors could, and maybe should, appeal every IFB
or RFP, notwithstanding the sanctions for filing
frivolous protests (see infra); after all, if the law is that
they are consecrated as aggrieved simply by losing,
how could an appeal be frivolous? The law
specifically gives aggrieved persons such right of
protest.
(b) Second, it would essentially require that all protests

be filed within 14 days of notice of award or
selection; if you are a loser and therefor aggrieved,
you only have14 days of receipt of notice of this fact
in which to protest.
i) Note the inconsistency here in the findings in

the GCIF Appeal (pp. 8-9). As quoted above,
the Decision held GCIF was aggrieved
because it was not selected as best qualified
offeror. GCIF learned, or should have know,
of that fact on March 5th. It did not file its
protest until August 5th, nevertheless the
Public Auditor found its protest was timely,
which would be inconsistent with any rule
that the aggrievement arose on the date the
offeror learned it was not selected as best
offeror. The timeliness finding was based on
the fact GCIF discovered facts by which it
may actually be aggrieved within the protest
filing deadline. Thus, although the analysis
rightly proceeded on the basis that there were
colorable facts to support a claim of
aggrievement, the Decision nevertheless
included the unnecessary and irrelevant
statement that non-selection, by itself, was
sufficient to render the protestor aggrieved.
(c) See discussion of the CNMI Public Auditor’s
Decision in the Appeal of Island Business Systems &
Supplies, CNMI OPA, Appeal No. BP-A057, in the
case review Article below.
b. Beyond the plain meaning of “aggrieved” are other considerations.

Conceptually, a person is not aggrieved if they would not be directly
affected by whatever error is alleged. This is often referred to as a
“standing” issue, and described by the conclusory statement the
person was not an “interested person”. This would include
examples such as these rulings from the Maryland Board of Contract
Appeals holding the complaining party was not an aggrieved
“interested person”:
(a) A person determined to be non-responsible (thus

ineligible for award in any event). (Appeal of RGS
Enterprises, Inc., No. 1106, Apr 8, 1983.) The same
logic would apply to a person whose bid has been
evaluated as non-responsive.
(b) A non-bidder, including a person whose bid was

lodged untimely. (Appeal of Delmarva Drilling
Company, No. 1096, Jan 26, 1983.) Query whether
this would apply to a non-bidder who became a
prospective bidder when the specifications were
materially changed in the course of the bid but did
not submit a bid based on original specifications.
(c) A person whose competitive position would not be

improved by the protest, such as when the protest
was brought against the lowest two bidders and the
protestor’s bid was sixth highest. (Appeal of Erik K.
Straub, Inc., No. 1193, Sep 11, 1984.)
(d) A person who was a potential subcontractor to an

unsuccessful bidder. (Appeal of Coach and Car
Equipment Corporation, No. 1531, Sep 7, 1990.)
(e) A person who was a supplier to an unsuccessful

bidder. (Appeals of PTC Corporation and Ion Track
Instruments, Inc., No. 2027, Jan 30, 1998.)
(f) Cibinic and Nash say that the FAR does not have a
specific statement of qualifications limiting who may
file a protest, but notes the “interested party” concept
as developed in the Comptroller General’s cases is
generally followed. (Cibinic and Nash, p. 1485.) A
very good exposition of the Federal cases construing
the concept is found in the “Interested Party [IBC’s]
Statement Re Remedies”, at pp. 3-5, submitted in In
the Appeal of Guam Community Improvement
Foundation, Inc., OPA-PA-09-005.
(g) Although the Guam procurement law and regulation

has somewhat muddied the distinction between a
protestor and an “interested party” (see discussion of
parties to protest further below in this Article), the
standing notion as discussed above would apply
equally to protestors and interested parties.
c. Finally, there is the conditional “may”, as in “who may be

aggrieved.” As noted above, the author disagrees with the absolute
statement that a bidder or offeror is aggrieved merely by not being
selected. But the test is not that the bidder is aggrieved, only that
she may be aggrieved.
(1) 5 GCA § 5425(a), which gives an aggrieved person the right

to protest, implies but does not explicitly statement that the
protestor must adduce “the facts giving rise thereto”. The
regulations (2 GAR § 9101(c)(3)(c) and (d)) requires the
protest to contain “a statement of reasons for the protest; and
supporting exhibits, evidence, or documents to substantiate
any claims unless not available within the filing time....”
(a) In the GCIF Appeal, supra, which involved a pre-

award protest of an RFP, the government argued that
the protest was invalid because it failed to specify
any facts in support of the protest, which was based
on surmise and supposition because the facts it
needed to support its surmise and supposition were
in the procurement record, which was unavailable to
the protestor until after the award was granted. The
Public Auditor’s Decision (at p. 10) accepted that the
supporting material was “not available within the
filing time,” citing the regulation above. The Public
Auditor was able to entertain the appeal because she
had the ability to review the record in camera to
make her own determination of the suppositions
even though the record was sealed to the protestor
and public.
(2) That would be a rare case, however, and in most cases, as a

matter of standing, the protestor should be able to point to
more than conclusory and unsupported allegations of
impropriety.
3. GovGuam, when rendering a Protest Decision, can impose costs (but not
attorneys fees) on any protester who files a protest “fraudulently, frivolously
or solely to disrupt the procurement process “. (2 GAR § 9101(g)(2).)
a. Costs were applied for but rejected by the Public Auditor in In the
Appeal of Guam Publications, Inc., OPA-PA-08-007 (beginning at p
17.). The Public Auditor noted that a bidder’s right to seek
clarification and further inquiry regarding an IFB, and the right to
protest, absent any other evidence of wrongdoing, do not “disrupt
the procurement process.”
C. “Protestors may file a protest on any phase of solicitation or award including, but
not limited to, specifications preparation, bid solicitation, award, or disclosure of
information marked confidential in the bid or offer.” (2 GAR § 9103(c)(2).)
Incorrect use or execution of a method of source selection is a ground for protest.
(5 GCA § 5425(a).)
D. TIMING FOR PROTEST FILING:
1. General Rule: 14 days from knowledge of aggrievement. The protest shall

be submitted in writing to the Head of the Purchasing Agency within
fourteen (14) days “after such aggrieved person knows or should know the
facts giving rise thereto.” (5 GCA § 5425(a).)
2. If your protest is not filed within the time required, you cannot appeal to
the Public Auditor. (In the Appeal of IBSS [vs GPSS(2)], cited above, OPA-
PA-08-011, p 6: “The threshold issue in this matter is whether IBSS’
December 4, 2007, protest was timely.”)
3. That IBSS case, supra, is one example of the protest condition that the
protestant must “know or should know of the facts giving rise” to being
aggrieved. In that case, IBSS knew for at least 2 years that GPSS was
purchasing copiers from a competitor, but it alleged that it did not know,
and GPSS would not disclose despite request, whether there was any legal
basis for the purchase, despite suspicions it was improper. The Public
Auditor held that IBSS did not know, and could not know, it was aggrieved
until it was finally given the procurement file, which revealed the purchases
were not conducted in accordance with the law and regulation. IBSS had
filed its protest within the time limits of revelation of those facts, so the
appeal was upheld.
a. Where a protesting offeror had, at an earlier date, received notice of

intent to award the contract to another offeror, but did not protest
until later when information was revealed in a government
memorandum which suggested the protester may be aggrieved, the
Guam Supreme Court held the protesting offeror “did not know, nor
should it have known, of the facts giving rise to this protest until it
received” the memorandum, thus the protest was timely filed based
on that revelation, and was not time barred because of the earlier
notice of intent to award to another. (Guam Imaging Consultants,
Inc. V. GMHA, 2004 Guam 15, at ¶ 33.)
b. See discussion of In the Appeal of Latte Treatment Center, Inc.,

OPA-PA-08-008, and Appeal of Island Business Systems & Supplies
(CNMI OPA case), both discussed below, regarding whether mere
notice of award to another is sufficient to trigger the 14 day protest
filing deadline. Also, held in the GCIF Appeal (OPA-PA-09-005),
that protest was timely though filed long after notice that another
was selected best qualified offeror, when filed within six days after
protestor became aware of facts by which it may be aggrieved.
c. In a Maryland MSBCA case, a protestor participated in a

procurement process for several months before becoming aware that
there were protestable grounds that the procurement was improperly
non-competitive. It filed protest within the time required after
learning of those grounds. The BSBCA held the protest was timely
filed. (Appeal of The Chesapeake and Potomac Telephone
Company of Maryland, MSBCA No. 1194 July 30, 1984, supra.)
4. POSSIBLE EXCEPTION for Pre-bid-opening issues: The second key take-

away is that if you have a complaint about the method of source selection or
its implementation or the form or substance or anything else connected with
the form or conduct of the solicitation occurring or revealed up to the time
set for submission of bids or proposals (which includes issues regarding
specifications), you should, if at all possible, protest BEFORE the time set
for opening the bids.
a. IF you cannot submit the protest before bid opening, you probably
should not submit a bid or proposal if you want to pursue your
protest.
b. It is hard to pinpoint the law on this, and there is as yet no definitive

Guam court or OPA decision known to the author, but it is
considered to be taking unfair advantage of the procurement process
if you have a complaint about the conduct of the bid but do not say
anything about it until you see what the other bids are or if you got
the award anyway.
(1) See Appellant’s arguments in Application for Enforcement of

Stay of Solicitation, In the Appeal of IBSS, OPA-PA-08-012,
footnote 9,
http://www.guamopa.org/docs/procurement_appeals/Applica
tion_for_Enforcement_of_Stay_of_Solicitation_08_012.pdf .
(2) In L.P. Ganacias Enterprises, supra, a Superior Court case,

the Judge found many improper irregularities in the bid
process but ruled he was unable to offer the Plaintiff any
relief because the Plaintiff bid on the IFB. The Judge found
(at page 19) the Plaintiff “did not claim that the bid process
was improper from the outset.... Had Plaintiff believed that
the actual Invitation itself was improper or illegal, the
Plaintiff should have sought to enjoin the bid process.
Instead, the Plaintiff submitted bids pursuant to the Invitation
for Bid, and thus the Court finds that the Plaintiff cannot now
claim as a basis for relief, the fact that the Invitation For Bid
was contrary to law.”
(a) It must be noted, however, that this was not a case

brought under the review processes of the
Procurement Act, but was a civil action seeking a
preliminary injunction, which had to be judged by
those deferential and unique standards and
procedures applicable to such a civil court remedy
(see, L.P. Ganancias, at page 5 et seq.), not by the
administrative procedures of bid protests required
under the Procurement Act.
c. Neither the Model Procurement nor Guam procurement law

expressly support this possible exception.
(1) In contrast, where a state statute specifically requires that a

protest alleging improprieties in the solicitation “which are
apparent before bid opening” be filed before bid opening,
then failure to file before bid opening is untimely. This rule
was articulated in a Model Procurement Code state,
Maryland, which deviated from the MPC by specifically
requiring such a result. (See, Appeal of Dasi Industries, Inc.,
No. 1112 (MSBCA May 5, 1983.) This would indicate that
adoption of the MPC without such a deviation would not
require the same result.
(2) Likewise, Federal procurement regulations also specifically

require pre-opening protests for pre-opening issues. (FAR §
33.103(b)(2).) Thus, referring to FAR’s “very formal rules”,
Cibinic and Nash say, “[p]rotests based on alleged
improprieties in a solicitation that are apparent prior to bid
opening or the closing date for receipt of proposals must be
filed prior to bid opening or the closing date for receipt of
proposals. In all other cases, protest must be filed not later
than 10 days [the FAR requirement] after the basis of the
protest is known or should have been known, whichever is
earlier.” (At p 1485-86.)
d. So, if you have the case and have not been able to file a protest
before bid opening, you should be encouraged to proceed with a
protest, even if you have submitted a bid but especially if you have
not, so long as you have met the 14 day limit. Still, if you can avoid
the issue, do so.
5. You can protest issues revealed at or after bid opening, including rejection
of bids or proposals, matters of responsiveness and responsibility, and the
like, after the bid opening, within the 14 day general rule.
6. Note possibility of 30 day filing period for initiating a protest action in the
Superior Court.
a. 5 GCA § 5480(a) offers the possibility of initiating a protest action

directly in the Superior Court rather than with the agency. That
section confers jurisdiction “over an action between the Territory
and a bidder, offeror, or contractor, either actual or prospective, to
determine whether a solicitation or award of a contract is in
accordance with the statutes, regulations, and the terms and
conditions of the solicitation.” Further, 5 GCA § 5425(g), in
establishing the automatic stay, recognizes the possibility of bringing
a protest directly to the court: “In the event of a timely protest [to the
agency] ... or under Subsection (a) of § 5480 ....”
b. 2 GAR 9109 (1)(a) allows any such action to be initiated “within 30

days after the aggrieved person knows or should have known of the
facts giving rise to the action. This would seem to allow an
aggrieved person who has missed the 14 filing deadline with the
agency to at least take the matter to court.
(1) But, as discussed elsewhere, the cards are stacked against

protestors in court actions due to their deferential standards
of review, so the case had better be pretty clearly egregious.
On the other hand, consider 5 GCA § 5245 and the author’s
suggested case for restricting court deferential standards of
review for most procurement issues, as discussed in the
Article on the Courts, particularly the review of bid protests
by the Courts, below.
c. 5 GCA § 5481(a) requires a 14 day filing limit “after receipt of a final

administrative decision”. It says nothing about the time for bringing
a protest. Thus, unless § 5481(a) is meant to imply a restriction on
bringing protest actions to the court, despite the clear language of §
5480(a), it appears this avenue of protest is open to a protestor who
has missed the 14 day agency protest time but still within the 30
time limit to bringing a protest action in court.
E. The third key take-away is that if you miss a deadline to file a protest (or appeal),
absent extreme and unjust circumstances (see equitable tolling discussion in
Article dealing with appeals, below), you will have a snowball’s chance on Guam
of ever getting it heard.
1. Cibinic and Nash also note that Federal agencies have some leeway for
considering protests filed after the 10 [14] day filing limit. (P 1486.)
F. Request for Reasons for Rejection of Bid:
1. Generally, unselected bidders/offerors are given no reason for rejection or

non-selection in the notice of award.
a. “Written notice of award shall be sent to the successful bidder. In

procurement over $25,000, each unsuccessful bidder shall be
notified of the award.” (2 GAR § 3109(q), applicable only
specifically to IFBs.)
b. A record showing the basis for determining the successful bidder

under an IFB must be made part of the procurement file, which is a
public record, but that basis does not need to be disclosed in the
notice of award. (See, 2 GAR § 3109(p).)
(1) In L.P. Ganacias, CV 1787-00, supra, the Judge took pains to

point out several deficiencies in the bid process in that case,
“in an effort to ensure that such do no [sic: “not”] occur in
future....” (At page 20.) Among the deficiencies in that case
was the failure of the agency to document the “written
determination demonstrating the basis upon which the
decision was made to award the bid.” (At page 24.)
c. A similar requirement for a record (but no notice) justifying the

selection of the “best qualified” offeror must also be made for RFPs
(2 GAR § 3114(m)) and for justifying a finding of “unacceptability” in
the first phase of multi-step sealed bids (2 GAR § 3109(t)(4)(c).
2. However, 2 GAR § 3115(e)(4) provides a specific authority for any rejected

bidder or offeror to request reasons why the bid was rejected: “[u]pon
request, unsuccessful bidders or offerors shall be advised of the reasons
therefor.”
3. 2 GAR § 3115(e)(3) sets out, broadly, the legal bases for rejecting a bid or a
proposal/offer.
a. The three legal bases specifically (but not exclusively) allowed to

reject a bid are:
(1) The business that submitted the bid is nonresponsible.
(a) And here there is another transcription error in the

Procurement Regulations, which, though specifically
referring to “Determination of Nonresponsibility”,
incorrectly says the business is “nonresponsive”.
Note that the corresponding Model Regulation says
“nonresponsible” (MPR R3-301.03(a)(i)), and even
the Guam version, which says “nonresponsive”,
specifically refers to the regulation dealing with
standards and determination of responsibility.
(2) This bid is not responsive. Or,
(3) The supply, serve or construction item does not meet the
specifications or other acceptability criteria.
(a) Note that this last reason is redundant to the not

responsive reason above, given that “any bidder’s
offering which does not meet the acceptability
requirements shall be rejected as nonresponsive”. (2
GAR § 3109(n)(3).)
b. The three legal bases specifically (but not exclusively) allowed to

reject a proposal (offer) are:
(1) The business that submitted the proposal is nonresponsible

(and here the Guam law got the word transcribed correctly).
(2) The proposal ultimately (after any opportunity has passed to

alter or clarify) fails to meet the announced requirements in
some material respect (i.e., was nonresponsive). Or,
(3) The proposed price is clearly unreasonable.
c. See In the Appeal of Latte Treatment Center, Inc., supra, which

made the close observation that an offeror under an RFP who is not
selected for award was “not rejected; rather LTC’s proposal was not
selected.” That is an interesting distinction, but is it one with a
difference? Sub§ 3115(e)(4)(B) specifically says “[r]easons for
rejecting proposals” include the ones noted above.
4. Although sub§ (e)(3) calls these “reasons” and not “legal bases”, the author
is of the view that sub§(e)(4), which allows parties to request and be
“advised of the reasons” for rejection, requires some advisement of the facts
upon which the rejection is based, particularly when the party requesting
had an apparent good shot at the award, and especially since the
government is supposed to make a record of that.
5. The regulations speak of no time limit within which to lodge your Request
for Reasons.
6. The statement is often heard that an agency need only provide minimal
justification in its notice of award rejecting other bidders, and that is
consistent with the requirement regarding mere notice of the award.
However, the author would argue that this specific provision allowing a
rejected bidder to request reasons necessarily implies an obligation to
provide more substantive detail for the rejection, when requested. Such a
rule would be consistent with the polices to provide increased public
confidence, ensure fair and equitable treatment of all persons who deal with
the procurement system, to provide safeguards, and to require public access
to all aspects of procurement. It would also further the goal of exhaustion of
administrative remedies by disclosing facts at the agency level upon which a
protest can be substantively heard, so as to alleviate the burden on the
appeals process.
7. A Request for Reasons would not usually constitute a Bid Protest, since if
you know the facts by reason of which you may be aggrieved, you should
protest. When in doubt as to whether you are or should be protesting,
submit your Protest within the 14 day protest filing period even if you have
a pending Request for Reasons. You can always withdraw a protest filed in
good faith, but cannot belatedly file a protest when you knew or should
have known of the facts, and are merely using the Request for Reasons to try
to get the government to acknowledge its error.
8. Even if your Request for Reasons does not claim expressly to be a “protest”,
the government may respond to your request as though it were a “protest”.
A good indication the agency believes your Request is a Protest is if, in their
response, they notify you that you have “a right to administrative and
judicial review”. You should carefully review the response for just such a
determination, because your protest filing period starts from the decision on
a protest. That is why it is good practice to specifically state in your Request
that it is not meant to be a Protest.
G. FORMAT OF PROTEST
1. First, distinguish between a complaint and a protest. You can “complain”

about a grievance to the CPO or the officer who issued the solicitation
verbally, but a “protest” not a mere complaint, is more formal and must be
in writing. (2 GAR §§ 9101(b) and (c).) You cannot appeal from a
complaint, only a protest.
2. The precise form of the bid protest is not defined and can be in a simple
letter format, but must be in writing, should positively declare it is a
“protest”, and include, at a minimum (2 GAR § 9101(c)(3).):
a. name and address of the protestor;
b. appropriate identification of the procurement, and, if a contract has

been awarded, its number;
c. a statement of reasons for the protest; and
d. supporting exhibits, evidence, or documents to substantiate any

claims unless not available within the filing time in which case the
expected availability date shall be indicated.
e. To expedite handling of protests, the envelope “should” be labeled

“Protest.” Technically, the protest “shall” be delivered in duplicate.
3. Bear in mind that you must protest every issue you know about (or should
know about) because you cannot add additional issues later (unless, of
course, you do not discover the facts upon which the additional protest is
based until later, in which case you should bring a separate protest on those
matters). (See arguments rejected in In the Appeal of Guam Publications,
Inc., OPA-PA-08-007 (at III, A, beginning p 6.)
a. In the GCIF Appeal, OPA-PA-09-005, the Public Auditor held that

issues concerning a lease contemplated in an RFP could not be
considered on appeal where they were not raised in the protest. The
reason given was that, since the issue was not raised at protest, there
was no protest decision rendered on the issue to provide the
jurisdictional basis for OPA review. The author agrees with the
result in this case under general principles of judicial economy but
suggests the jurisdiction of the Public Auditor extends to any matter
properly submitted in connection with a solicitation or protest,
which would include ancillary matters not specifically raised prior to
the appeal, particularly given her mandate to use her jurisdiction to
promote the integrity of the procurement law. (5 GCA § 5703; see
discussion of Jurisdiction of the Public Auditor below.)
Consideration of such matters also invokes consideration of judicial
economy by assuring, without requiring endless protests,
consideration of matters discovered or arising during the course of
the protest. Thus, the author suggests there is no bright line rule but,
rather, an analysis of what the nature is of the additional matter
submitted, how critical it may be to promoting the integrity of the
procurement law, when discovered, etc.
4. In the GCIF Appeal, supra, the Public Auditor noted that protests should
include supporting evidence of basis for the protests, but since the evidence
was contained in a procurement record which was not then available for
public inspection, the failure to include such documentation in the protest
did not render the protest invalid.
5. You are encouraged to review the various Procurement Appeals files

published on the Public Auditor’s website, noted above. Click on the
“Documents Filed” link in each appeal case and a drop-down menu of filed
documents is presented. Most protest letters are attached to the “Notice of
Appeal”, and are also supposed to be included in the “Agency Report”,
though the full contents of all Agency Reports are not always online (they
are available for review in the Public Auditor’s office).
H. RESOLUTION OF THE BID PROTEST
1. Bid protests are intended to be settled and resolved, where possible, by

“mutual agreement”, which implies an informal dialogue. (5 GCA §§ 5425
(b) and (c).) Information required by either party from the other should be
rendered expeditiously (2 GAR § 9103(d).).
a. The Procurement Act specifically states that the authority to resolve

and settle disputes is to be “exercised in accordance with regulations
promulgated by the Policy Office.” Unfortunately, there have been
no regulations promulgated which are actually aimed at facilitating
dispute resolution. (See, 2 GAR, Div. 4, Chpt 9, §§ 9101, et seq.)
b. Curiously, there are no Model Regulations to use as a fallback or

guidance, either, except by analogy. The analogy lies in the Model
Code and Regulations regarding the settlement and resolution of
contract disputes (see, 2 GAR §9103; MPC § 9-103; MPR § R9-103.)
The model those rules suggest is one of unstructured due process
notions of fairness and opportunity to be heard.
(1) 2 GAR § 9103(a)(1) says, “It is the territory’s policy,

consistent with this Act [sic], to try to resolve all
controversies by mutual agreement without litigation. In
appropriate circumstances, informal discussion between the
parties can aid in the resolution of differences by mutual
agreement and are encouraged. If such informal discussions
do not resolve the controversy, individuals who have not
participated substantially in the matter in controversy may be
brought in to conduct discussion if this is feasible.
Independent committees and panels which review
controversies expeditiously and informally with a view to fair
settlement possibilities also are encouraged at this stage.”
(2) Commentary No. 2 to MCP § 9-103 states, regarding the

exercise of the authority to settle contract controversies:
“This may avoid unnecessary litigation and often is essential
for fair treatment of parties.... On the other hand, some
safeguards are needed. Limitations upon the power to settle,
including prerequisite approvals, should be established by
appropriate regulation.”
c. In the author’s experience, it is rare for there to be any dispute

resolution procedure with an agency other than a written response;
and, too often, not even that. It is the author’s impression that
agencies feel they cannot, in good justice, discuss anything with a
protestor. In the cases of the author’s experience where the
Government has actually instigated a discussion to resolve the
protest, issues have been narrowed or avoided altogether. To
encourage an agency to mutually try to resolve a protest without
suggesting you are trying to side-step the procurement process, one
suggestion is to express your willingness, in your protest letter, to
enter into a discussions to resolve the matter, “as contemplated in 5
GCA §5425(b)”.
2. Parties to the Protest: There is no direct statement in the law or regulations

as to who the parties are in a protest. It would obviously involve the agency
and the protestor, but what about other bidders, prospective or otherwise?
Do they have any part to play? The answer to these questions requires
some guidance and some guesswork.
(1) Guidance comes from the commendable practice of

procurement staff to notify all bidders of the imposition of
the automatic stay resulting from a protest, as well as puzzle
pieces involving “interested party” in the regulations and
general notions of due process.
(2) An “interested party” is defined as meaning “an actual or

prospective bidder, offeror, or contractor that may be
aggrieved by the solicitation or award of a contract and who
files a protest”. (2 GAR § 9101(1)(a).) Based on this
definition, only a protestor can be an interested party.
(a) That definition is, however, a bastardization of the

Model Procurement Regulations, which distinguish
between a “protestor” and an “interested party”;
indeed, that definition is the exact Model Regulation
definition of a “protestor”, not an “interested party”
(see, R9-101.01.2).
(b) Model Regulation R9-101.01.1 defines an “interested
party” to mean “an actual or prospective bidder,
offeror, or contractor that may be aggrieved by the
solicitation or award of a contract, or by the protest.”
(3) Any “interested party” is entitled to receive from the Agency

any information bearing on the protest, unless proprietary or
otherwise confidential. (2 GAR § 9101(f).) Under the Model
Regulation definition, this would give other bidders who
may be aggrieved by the protest the opportunity to be heard
(i.e., due process) in the protest deliberation. The Guam
version would seem to preclude this; but shouldn’t due
process prevail, nevertheless?
(4) In addition to the “protestor”, “[r]econsideration [of a protest]

can also be requested by ... any interested party who
submitted comments during the consideration of the
protest....” (2 GAR § 9101(h)(1).)
(a) This provision, which closely follows the Model

Regulation as to this particular language, suggests
two conclusions:
i) Guam regulations do indeed intend to

distinguish between “protestor” and
“interested party” despite the clumsy (and all
too frequent) transcription of definitions from
the Model; and,
ii) An interested party is contemplated as having

the due process right to notice and
opportunity to be heard in the protest action.
(5) Further bolstering the argument that other interested parties

(in the Model Regulation sense) are proper parties to a bid
protest dispute resolution process is 5 GCA §5425(d), which
requires notice of the protest decision to be given “to the
protestant and any other party intervening.”
(6) The author would advise any non-protesting “interested

party” who receives notice of a bid protest to move post
haste to notify the agency of their interest and any contrary
position they may have to the protest. In procurement
process as in life, there is a definite difference between the
quick and the dead.
3. Bid protests decisions are meant to be rendered in writing “as expeditiously
as possible” (2 GAR § 9101(g)(1)) and “promptly” (5 GCA § 5425(c)).
a. The Public Auditor has determined, in In the Appeal of [IBSS], OPA-

PA-08-003, that she has the power to compel an Agency to issue a
decision on a protest when the agency fails to act to render one,
under her authority to promote the integrity of the procurement
process (5 GCA § 5703). In that case, the protester also filed a
Request for Decision with the Agency after the Agency failed to
render a decision promptly or expeditiously, and that Request was
also ignored. The Public Auditor found, in the circumstances of that
case, that the failure of the Agency to render a decision on the
protest was an act of bad faith which denied the protestors due
process rights.
b. See the Petition of Town House Department Stores, Inc., dba Island
Business Systems & Supplies, OPA-PA-09-011, brought to compel
GSA to render a Decision on a Protest when the decision was not
forthcoming after ten weeks. This matter further involved the
question whether an agency response which fails to address all
issues raised in a Protest is a “decision”. The Public Auditor did not
address this question because the agency (GSA) thereafter rendered
a response fully addressing each issue raised, and the Petition was
dismissed.
c. Compare the Procurement Regulations of the Guam Supreme Court,

which require a written decision within fourteen days, and if not
given in that time, “the aggrieved party may proceed as if an adverse
decision had been given”. (Sections 10 (B) and (C);
http://www.guamsupremecourt.com/PromOrder/images/PromOrder
No03-007AmendProcurementRules101703.pdf )
4. The three formal requirements of a decision are (5 GCA § 5425(c)):
(1) It must be in writing, and
(2) It must state the reason for the action taken, and
(3) It must inform the protestant of its right to administrative and

judicial review.
5. The protester may be entitled to “the reasonable costs incurred in

connection with the solicitation and protest, including bid preparation costs,
excluding attorneys fees, when a protest is sustained and the protesting
bidder or offeror should have been, but was not awarded the contract under
the solicitation.” (2 GAR § 9101(g)(2).)
I. Requests for Reconsideration of Protest Decision
1. 2 GAR § 9101(h) allows a protester or any agency or interested party who

submitted commits during the protest to request that an Agency reconsider
its initial decision, as mentioned above in the discussion regarding parties to
the protest. This request for consideration must be made within 15 days
after receipt by the protester of the decision (id.).
2. This is a potential trap for the unwary because of an inconsistency between

this regulation and the law: law does not take that 15 day time period for
reconsideration into consideration when determining the time limits
required for filing an Appeal.
a. In TRC Environmental Corporation SP 160-07, the protester

followed up with further correspondence which, on writ to the
Superior Court, it tried to argue was a request for reconsideration.
The Court held it was not such a request, because, among other
things, it was not labeled as such, but instead was labeled a “Letter
of Protest”. The Court suggests (at page 6), had it been properly
framed as a request for reconsideration, it might have tolled the 15
day filing period (“it was not a request for reconsideration and thus
no tolling occurred”). Note also that the Court suggested that the
tolling period to consider a request for reconsideration would not
start anew, but would include the time between the protest decision
and the date of the request for reconsideration (at page 7).
b. And note: “If for any reason the agency reopens a matter and, after
reconsideration, issues a new and final order, that order is
reviewable on its merits, even though the agency merely reaffirms its
original decision.... The new order is, in other words, final agency
action and as such, a new right of action accrues and starts the
running of a new limitations period for judicial review.” (Quoted
with approval in Pacific Security Alarm (Pacific Security Alarm, Inc.
v DPW, Guam Superior Court CV 0591 - 05, Decision and Order
Denying Motion to Dismiss, p3.)
3. Note some differences between the Guam version regarding Requests for
Reconsideration (2 GAR §9101(h)(1)) and the Model Regulation (R9-
101.08). The Model version requires a 10 day filing period (vs. 15 days in
Guam version), and the Model version specifically acknowledges (R9-
101.08.3) the agency “may uphold the previous decision or reopen the
case....” The author believes Guam’s failure to make such an express
acknowledgment does not carry any implication to negate such action,
particularly since the Guam Compiler’s note to the Guam version states:
“SOURCE: Modified to provide fuller procedure”.
XVII. THE AUTOMATIC STAY
A. Once a protest is filed, the government can take no further action on the solicitation
or award of contract (unless the stay is lifted as mentioned below). This is called the
“automatic stay”, and is essentially an injunction.
1. “In the event of a timely protest ... the Territory shall not proceed further
with the solicitation or with the award of the contract prior to final
resolution of such protest ....” (5 GCA § 5425(g).)
a. Note that the stay only covers the solicitation and award. It does not
apply to stay performance of a contract that has already been
entered into. Thus, the automatic does not take effect once the
award is made. (Guam Imaging Consultants, ¶ 34.) See, also, the
discussion of the timing of an award in the Article on Appeal
Remedies, below.
b. 2 GAR § 9101(e) makes it explicit that the protest must be filed

before an award is made to make the automatic stay effective:
“When a protest has been filed ... before an award has been
made...”.
c. Although a protest appeal to OPA can continue after an award,

failing to obtain and maintain an automatic stay from the time of
protest through appeal has a dramatic impact on the effective
remedies available to a such a protestor, which, as discussed below,
depend on whether the appeal decision is made before or after an
award. (5 GCA §§ 5451, 5452.)
2. “Final resolution” would seem to include awaiting the outcome of an

Appeal after the protest. (See, In the Appeal of [IBSS], OPA-PA-08-012, at
pp 9-10.) However, that does not appear to be the case. There is a fateful
gap in the automatic stay, from the time of the protest decision until the time
an Appeal to OPA has been filed in which the Territory might proceed with
award, which could substantially prejudice a protestor, as discussed in the
remedies section below.
a. Beware this gap between the decision on the protest and the time
you file an appeal to OPA. There is nothing to prevent the
Government from proceeding to award a contract between the time
of its decision on the protest and the filing of an Appeal. (See, In the
Appeal of Guam Publications, Inc., OPA-PA-08-007, at p 18; TRC
Environmental Corporation SP 160-07.)
b. In L.P. Ganacias, CV 1787-00, supra, (at page 25) the Judge found
“most troubling” the fact that the agency awarded a contract prior to
receipt by the other bidders of the notice of award, which precluded
the possibility of protesting, and thereby staying, the award. The
Judge stated, “[c]ertainly a party cannot protest a bid award unless or
until that party has been informed that the contract was awarded to
another bidder. For an agency to attempt to circumvent this process
by first awarding the contract, and then later informing the other
bidders that their respective bids were rejected is highly improper.
The parties should be informed in writing that their respective bids
were rejected and the basis for such rejection.... The agency should
then proceed to award the contract.”
B. Any further action to proceed with a solicitation or award during the period of the
automatic stay is void UNLESS all of the following approvals are given (5 GCA §
5425(g) :
1. The CPO or Director DPW “after consultation with and written concurrence
of the head of the using or purchasing agency and the Attorney General or
designated Deputy Attorney General, makes a written determination that the
award of the contract without delay is necessary to protect the substantial
interests of the Territory”;
a. Where an agency’s own regulations do not require the AG’s

concurrence, the Procurement Act prevails, and the agency’s
necessity determination is invalid without that concurrence. (Guam
Imaging Consultants, Inc., p 16.)
b. But note: “the Public Auditor shall review and confirm or reject any
determination by the Chief Procurement Officer or the Director of
Public Works that award of a contract without delay pending Appeal
is necessary to protect the interests of the government.” (2 GAR §
12501(b).) It is unclear whether this express directive is intended to
be self-enforcing or only applicable in the event of a timely protest
of the decision to lift the stay, as next mentioned. Nevertheless, this
regulation does preclude an agency from issuing a substantial
interest declaration before a protest can be or is filed to avoid OPA
review of the determination.
2. And, absent a declaration of emergency by the Governor, the protestant has

been given at least 2 days prior notice (to allow a protest on the
determination to the Public Auditor; see step # 3(b) below);
3. And, either:
a. If the protest is pending on Appeal to the Public Auditor or Court,

the Public Auditor or Court has confirmed such determination; OR
b. If no protest Appeal is pending, no protest to the Public Auditor over

the determination made in step # 1 above is filed prior to the
expiration of the 2 day notice mentioned in step # 2 above. This
would allow an appeal to OPA by a protestor to contest the
substantial interest determination even if it has not appealed the
decision on the protest.
4. Recall the policy of the Procurement Act to provide for increased public
confidence in the procurement procedures, and that the MPC commentary
declares that “[t]his can best be assured by allowing an aggrieved person to
protest....” (5 GCA § 5001(b)(3), as discussed above.) Since the protestor
has little incentive to protest after an award is made due to the limited
nature of the remedies available in that case (discussed below), a decision to
lift the automatic stay by confirming a declaration of substantial interest
should require a critical determination and high burden of proof.
C. The general provisions of Guam Procurement Law regarding the automatic stay –
and by extension, anything else – override any inconsistent provisions of an
Agency’s own regulations. (Guam Imaging Consultants, Inc., v. Guam Memorial
Hospital Authority, Guam Supreme Court, 2004 Guam 15 at ¶¶ 24, 41.) Thus,
where an agency fails to obtain the Attorney General’s confirmation of a
determination of necessity to lift the automatic stay, even where that confirmation is
not required by its own regulations, the agency has failed to make the proper
showing of such necessity. (Id., ¶ 41.) A trial court order denying a request to
enforce the automatic stay “is the equivalent of an order” refusing to grant a
preliminary injunction. (Id., ¶ 14.)
D. Lifting the Automatic Stay; confirming a Declaration of Substantial Interest:
1. The first Appeal to present OPA with an application to lift the automatic stay
by a request from an agency to confirm its substantial interest declaration is
In the Appeal of Guam Community Improvement Foundation, Inc., (vs
DPW) OPA-PA-09-005, referred to here as the “GCIF Appeal”. (Another
appeal has also been brought by another protestor in the same solicitation,
which will also involve the same issue. See, In the Appeal of Guam
Education Financing Foundation, Inc., OPA-PA-09-007.)
2. In the GCIF Appeal, the Public Auditor declined the Request to Confirm the
Declaration of Substantial Interest; that is, she refused to lift the automatic
stay. (See, Decision and Order for Confirmation...)
a. As mentioned below in the Article discussing Appeals to the OPA,

the OPA’s standard of review of any matter properly submitted to
her is de novo. In the GCIF Appeal, the Public Auditor confirmed
that standard (at p 5), denying a challenge from the Attorney
General, representing the government agency, that she should be
deferential to the agency’s declaration of substantial interest. She
then engaged in a critical examination of the declaration of
substantial interest.
b. In the GCIF Appeal, the government agency, DPW, compiled an
impressive array of letters from the Department of Education and
others, including its own statements, declaring that the
reconstruction of the JFK Tamuning High School was vitally urgent
to meet the government’s mandates to provide an adequate
education to the displaced JFK students in an unusually short time
frame required by special legislation authorizing the RFP which was
appealed in that case.
c. The Public Auditor, in essence, recognized the mandates as a

substantial interest, but ruled that the mere presence of urgency and
substantial interest did not, by themselves, constitute the required
showing of necessity to lift the automatic stay when other
alternatives, besides proceeding with award, are available to
mitigate the pressing needs and interests of the government.
(1) She said, “[a] determination that a substantial interest is

merely involved is not sufficient. [Citation omitted.] Instead,
the determination of substantial interest must specifically
identify the government interest and articulate why it is
necessary to protect those interests and award the contract
without delay.” (GCIF Appeal, Decision and Order for
Confirmation, id, p 7; emphasis added.) In short, she said
that the automatic stay should not be lifted unless the
government could “sufficiently establish necessity” to avoid
the stay. (Id.) Recall the requirement of 5 GCA § 5425(g)(1):
“... that the award of the contract without delay is necessary
to protect substantial interests ....”
(2) The Public Auditor found the government failed to

sufficiently establish that necessity in that Appeal because
the government had other alternatives, other than simply
pressing on with the award, to address and mitigate the
substantial interests. Specific findings included (pp 8 et
seq.):
(a) “This three month delay [in the OPA Appeal], by

itself, will not prevent the project from being
completed in time for the 2010-2011 school year.”
(b) The government has the ability to provide an

adequate education to the JFK students in other DOE
schools, including a temporary facility especially
acquired by the government for that purpose. She
implied any obstacle to providing adequate
education facilities, to the extent that condition
exists, was the result of an arbitrary decision of DOE
to keep the JFK student body together during the
interim rather than disburse them to other available
facilities.
(c) If there is a delay, it was substantially the fault of

DPW and the offeror trying to secure financing rather
than the automatic stay, and could have been
mitigated by considering other offerors who offered
proposals that did not require a delayed financing
process.
(d) The government did not provide proof of its bare

substantial interest declarations that it would suffer
increased costs, credit reputation losses, or other
such damages.
3. The Federal government procurement regime contains a similar “automatic

stay” provision, and the principles applicable to the automatic stay in that
context are useful to analyze Guam’s Model Act automatic stay, particularly
because there is plentiful law analyzing the Federal automatic stay, whereas
there is a dearth of law in the Model Code context. The Federal automatic
stay provision, and the principles and standards applicable to it, were
exhaustively discussed in the October 2008 US Court of Federal Claims
case, E-Management Consultants, Inc. v. US, No. 08-680 c.
4. Although the principles are similar, the actual differences between the
Guam automatic stay, discussed above, and the Federal automatic stay
ought to be understood.
a. The Guam stay is an integral part of the procurement process. In the

Federal situation, the automatic stay was grafted onto the Federal
procurement process by the Competition in Contracting Act of 1984
(CICA), codified as amended at 31 U.S.C. § 3551–56 (2006).
(1) Under both Guam law and CICA, however, the automatic
stay prevents an agency from proceeding with a solicitation
upon the timely filing of a protest of the solicitation.
b. The chief differences between the two automatic stays lies in the
process and the standard of review of a decision to effect the stay.
(1) First, The CICA stay can be overridden by an agency, and

any such override is then subject to a review; in contrast, as
noted above, the OPA review is an integral part and
condition of lifting the stay.
(2) Second, a review of a Federal stay is facially different
depending on whether the review is pre- or post-award; in
contrast, the automatic stay in Guam law is, in practical
effect, only applicable to a pre-award situation.
(a) In a pre-award situation under the Federal automatic

stay, the test of whether the agency override will be
allowed to stand is whether the stay override was
justified by “urgent and compelling circumstances”.
(b) In a post-award situation, the test is also whether

there were “urgent and compelling circumstances”,
but alternatively, may be determined on the basis of
whether the override was “in the best interests of the
United States”. (See Cibinic and Nash, p 1506.)
Thus, the Federal automatic stay is applied to cease
performance of a contract already awarded; Guam’s
automatic stay does not apply to contracted
situations.
i) Note that Guam law requires a determination

that lifting the stay is “necessary to protect the
substantial interests of the Territory”, and
query whether that is a significantly different
standard from Federal “in the best interests”
test. The author believes, for purposes of
analysis, the test of best interests would
suffice for determining substantial interest.
(c) In either event, the E-Management decision said (at

footnote 7), “As noted in Superior Helicopter LLC v.
United States (Superior Helicopter), “The precedents
addressing these considerations deal equally with
override determinations made on both ‘best interests’
and ‘urgent and compelling circumstances’ bases.”
Thus, in practice, the standards applicable in
analyzing the override or lifting of a stay are the
same, whether dealing with a pre- or post-award
case; whether the test is urgent and compelling
circumstances or best interest.
(3) Third, the standard of OPA review of the automatic stay

provided for in 5 GCA § 5425(g), is de novo and no
determination of substantial interest by the agency “shall be
final or conclusive on the Public Auditor”. (5 GCA § 5703;
the GCIF Appeal, supra.) Thus, the Public Auditor is invited
to substitute her judgment for that of the agency.
(a) In contrast, the Federal standard of review is highly
deferential to agency determinations, being “whether
a federal agency’s decision is ‘arbitrary, capricious,
an abuse of discretion, or otherwise not in
accordance with law’.” (E-Management, supra.) This
is a critically important difference and explains
many of the uncritical results of the Federal court
where the agency override is allowed to stand.
(b) In discussing the Federal standard of review, the E-

Management decision adopted the language of prior
decisions (see pp 5-7): “The arbitrary and capricious
standard applicable here is highly deferential. This
standard requires a reviewing court to sustain an
agency action evincing rational reasoning and
consideration of relevant factors.” It added, “In
particular, the reviewing court may not substitute its
judgment for that of the agency.” (Citations omitted.)
5. However, even under the arbitrary and capricious standard of review which
it was bound to, the E-Management decision outlined the tests the Federal
courts use to determine if the automatic stay may be lifted by an agency
override decision. If these tests are declared to be apt under a strict and
deferential standard of review, they are certainly instructive guides for
determining, under the OPA’s independent standard, the efficacy of an
agency’s determination of substantial interest. The following tests are
expressly identified in the E-Management decision (pp 6-9.):
a. “Generally, under the APA, the court analyzes whether an agency’s

decision was ‘arbitrary and capricious’ by considering whether the
agency:
(1) “[1] relied on factors which Congress has not intended it to

consider,
(2) “[2] entirely failed to consider an important aspect of the

problem [i.e., the Reilly Wholesale factors; see below],
(3) “[3] offered an explanation for its decision that runs counter
to the evidence before the agency, or
(4) “[4 rendered a decision that] is so implausible that it could

not be ascribed to a difference in view or the product of
agency expertise.”
b. “This court has also identified factors which elaborate the
“important aspect[s] of the problem” factor of Motor Vehicle for the
CICA context [citing ultimately to Reilly’s Wholesale Produce v.
United States, 73 Fed. Cl. 705, 711 (2006); thus these 4 factors
“often considered in the court’s override cases” are referred to as the
“Reilly’s Wholesale factors”]:
(1) “(1) whether significant adverse consequences would occur

if the agency did not override the stay,
(a) In the GCIF Appeal, supra, the Public Auditor found

the government agency did not provide proof of its
alleged adverse consequences related to claims of
increased costs, etc.
(2) “(2) whether reasonable alternatives to the override were

available,
(a) In the GCIF Appeal, supra, the critical findings upon

which the Public Auditor denied confirmation of the
Declaration of Substantial interest had to do with the
availability of reasonable alternative.
(3) “(3) how the benefits of overriding the stay compared to the
potential cost of the override, including costs associated with
the potential that the protester might prevail before GAO,
and ,
(4) “(4) the impact of the override on the competition and

integrity of the procurement system.”
c. “The court has also identified factors which Congress did not intend
for an agency to consider in the override context. Reilly’s
Wholesale, 73 Fed. Cl. at 711 (finding that some reasons for using
the override mechanism are simply inconsistent with the apparent
rationale for the override process and should not be considered).
Importantly, the government’s decision to override the stay cannot
be merely that the new contract is better or that the agency prefers to
use the override mechanism instead of seeking alternative
contracting options.”
(1) In the GCIF Appeal, at p 17, the Public Auditor suggested

that the delay caused by the time it took for the best qualified
offeror to obtain financing could have been mitigated if it
had reverted to the next best qualified offeror(s) (who had
apparently offered unqualified financing).
d. “In order fully to identify the relevant factors in an override case, the
court considers the objectives behind the automatic stay provision
in CICA. ... The automatic stay provision appears to the court to be
the keystone that ensures that the various provisions of CICA work
to promote competitive contracting. ... The automatic stay is the
enforcement mechanism of the GAO protest scheme. ... Any
override of the automatic stay must be viewed in light of the
importance of the automatic stay to the general scheme that
Congress enacted in CICA.”
e. Quoting from a US House of Representatives report on the CICA

automatic stay, the E-Management decision said, “The act also
establishes, for the first time in statute, a strong enforcement
mechanism through which contracts are held in abeyance while
contractors appeal to the General Accounting Office [now
Government Accountability Office] (GAO) when they believe they
have been unlawfully denied the opportunity to compete for the
award of Government contracts. Congress included these bid protest
provisions to help ensure that the mandate for competition would
be followed and that vendors wrongly excluded from Federal
contracts would receive fair relief.”
(1) The decision added, “The 1985 House Report stated that,
‘Congress fully recognized that a major deficiency in the
existing bid protest process was the inability to stop a
contract award or contract performance while a protest was
pending. ... As a result, vendors were confronted with a fait
accompli and often did not receive fair and equitable relief
even when GAO decided in their favor. . . . [The automatic
stay was included [in CICA] to preclude such faits accomplis
and to facilitate a fair and equitable remedy to vendors who
are illegally denied Government contracts.’ ... The
automatic stay forestalls agency investment in awards
subsequently disapproved by GAO.”
f. Adding further instruction, the E-Management decision proceeded to

a critical examination (as did the Public Auditor in the GCIF Appeal)
whether the agency decision in that case was arbitrary or capricious
under the four-factor Reilly Wholesale test, taking each factor in turn
(pp 9-16):
(1) “The first factor to consider is whether the agency analyzed

‘whether significant adverse consequences will necessarily
occur if the stay is not overridden.’ ... NHTSA failed to
address whether ... the adverse consequences will
necessarily occur.’ [Underlined emphasis in original.] ... The
court notes that NHTSA fulfils an important public policy
goal of the United States by its funding of transportation
safety grants and that information technology (IT) is an
important factor in carrying out the grant program. ...
However, attaining this goal does not give NHTSA license to
disregard federal procurement law, especially those
provisions that are designed to ensure fair competition.”
(a) Note, the Guam automatic stay is also subject to a

“necessary” test (5 GCA § 5425(g)(1); the GCIF
Appeal, supra).
(2) “The necessity of engaging the awardee is closely related to

the second factor: whether the agency considered reasonable
alternatives to overriding the automatic stay. See id. (noting
that the second factor is an alternative way of considering the
first factor). If the agency had reasonable alternatives to
engaging the awardee, adverse consequences to the agency’s
mission would not necessarily result from the stay. Here,
NHTSA has shown some possible adverse consequences of
not having an IT contractor but, in light of the possible
availability of reasonable alternatives, the OM does not
support the conclusion that such consequences would
necessarily occur if NHTSA did not override the automatic
stay. ... The lack of evidence of a serious exploration of
options for obtaining temporary IT services appears to the
court to veer close to, if not to reach, NHTSA’s ‘failing to
consider an important aspect of the problem.’ Motor Vehicle,
463 U.S. at 43.”
(a) The failure of the government to consider the

available reasonable alternatives was critical to the
Public Auditors refusal to confirm the government’s
declaration of substantial interest in the GCIF Appeal,
supra.
(3) “The third factor is whether the agency considered ‘how the
potential cost of proceeding with the override, including the
costs associated with the potential that the GAO might
sustain the protest, compare to the benefits associated with
the approach being considered for addressing the agency's
needs.’ ... The court views this factor in light of CICA’s
legislative history. The legislative history of CICA states that
the agencies should consider the costs of GAO’s sustaining
the protest before it issues an override: ... This is to insure
that if the Comptroller General sustains a protest, such
forms of relief as termination, recompetition, or re-award
of the contract will be fully considered for
recommendation. Agencies in the past have resisted such
recommendations on the grounds that the government’s best
interest would not be served by relief measures of this sort
because of the additional expenses involved. [The automatic
stay] is designed to preclude that argument.... The OM’s
cost-benefit analysis is flawed. First, the OM identifies the
costs of GAO’s sustaining the protest as “reprocurement
costs.” AR 2. These are not the only costs of the override.
One additional cost for an agency to consider is the cost to
the integrity of the procurement system. ... Furthermore, the
OM determined that, because NHTSA “has a reasonable
chance of prevailing on the merits,” the cost of the override
was low. Id. This is an impermissible consideration. This
type of balancing would allow an agency to employ the very
reasoning that CICA sought to prevent.” (In footnote 10, the
decision noted, “These arguments may well be reflective of
problems of the government’s own making. If the
government had pursued alternatives, it could have mitigated
this problem.”)
(a) Note that relief forms such as cancellation of the

solicitation or revision to comply with Guam are only
assured to a successful protestor in a pre-award
situation. Post-award, the successful protestor can
still lose out to another vendor, even if that other
vendor engaged in fraud. (More on that below,
under appeal remedies.) This reality should be
considered when deciding to lift the automatic stay.
(4) “The final factor is whether the agency considered ‘the

impact of the override on competition and the integrity of
the procurement system, as reflected in the Competition in
Contracting Act.’ Defendant claims to have “considered the
impact on competition and on the integrity of the
procurement process” in the OM. AR 2. However, the OM
failed to offer any reasoning that shows that it actually
considered the integrity of the procurement system Congress
created in CICA. ... The court finds that NHTSA, by failing to
consider the impact of its override on the procurement
system, has ‘failed to consider an important aspect of the
problem,’ Motor Vehicle, 463 U.S. at 43, and has, therefore,
failed to act rationally and in accordance with law. NHTSA’s
Override Memorandum fails to meet even the deferential
standards of APA review and the court must set aside the
override.
(a) Given that the automatic stay is, in effect, an

injunction, note the Rhinocorps case, below (in the
remedies section), to the effect that denial of a
protestor’s opportunity to engage in a fair solicitation
is irreparable harm supporting a claim to an
injunction of the solicitation.
g. Another judge of the US Court of Federal Claims has followed the

rationale of the Reilly factors and other caes cited in E-Management,
in Nortel Government Solutions, Inc., v. USA, No. 08-682C (2008),
another stay override case. Here, the procurement dispute had been
dragging on over two years. The government sought to override the
stay, claiming both urgent and compelling circumstances and best
interests. The Court stated (at p 9), “While frustration with the
prolonged nature of this solicitation is understandable, it alone is
not sufficient justification to override the stay.” The Court found
the action of the agency to proceed with the contract was “ an
attempt by defendant to circumvent the competitive process by
exactly the type of action Congress intended the automatic stay
provision of CICA to prevent. ...Moreover, defendant does not
consider the impact of its override decision on competition at all.
‘Ultimately, the public’s interest in a fair, competitive federal
procurement system outweighs unsubstantiated claims, even those
related to the public safety.’ [Citations omitted] ” (P 10.)
Furthermore, “The Court has already concluded that defendant’s
assertions with regard to the necessity of overriding the stay amount
to nothing more than defendant’s strong preference to begin
performance of the protested contract. ... Defendant has therefore
failed to establish that overriding the stay is in the best interests of
the United States.” (P 11.)
(1) Note the Guam test must consider the effect of delay of
award and make the determination that award “without
delay is necessary”.
h. It must be acknowledged that the E-Management analysis has not

won over all judges of the US Court of Federal Claims. In a terse
and unadorned decision, Planetspace Inc. v. USA, No. 09-0099C,
the Judge stated, without citation to or mention of the E-Management
case, “Plaintiff offered arguments regarding four factors courts
normally consider in deciding whether to grant an injunction. It
contended that NASA did not consider four additional “Reilly
factors” in making its decision. See Reilly’s Wholesale Produce v.
United States, 73 Fed. Cl. 705, 711 (2006) (listing factors “an agency
must consider in making an override decision based upon urgent
and compelling circumstances.”). We did not consider the Reilly
factors at the hearing because Congress limited the court’s review of
an agency’s decision in a CICA override action to the Administrative
Procedure Act standards.”
(1) Even so, the Planetspace decision does not detract from the
efficacy of the Reilly factors analysis in the less deferential
standard of review applicable to an OPA confirmation of
substantial interest, particularly where it specifically departs
from the E-Management result solely and expressly on the
”limited” arbitrary and capricious standard of review.
E. Consider an ordinary stay
1. The stay of an award or contract performance in procurement action is a

critical procedural issue, bearing directly on the ability of a protestor to
obtain any practical relief.
a. See the discussion below on the appeal remedies available to a

protestor after a successful appeal (5 GCA § 5450) of the protest: if
the award of contract has been made, even if the protestor wins the
appeal by showing irregularities in the procurement, the OPA can
confirm the contract, even where the person awarded the contract
acted fraudulently or in bad faith. (5 GCA § 5452.) However, if the
protestor’s appeal is decided before an award is actually granted,
solicitation, including any proposed award, must be cancelled or
revised to comply with the law. (5 GCA § 5451.)
b. Note also the discussion of the Federal automatic stay in the E-

Management case, above, where it was said the stay is necessary so
that, “vendors wrongly excluded ... would receive fair relief.” It also
noted the Legislative history of the Federal stay to the effect that “the
automatic stay forestalls agency investment in awards subsequently
disapproved.” The case decided the stay was a “keystone” to
promoting the competitive contracting goals of the procurement
system; that is, promoting the integrity and the purposes of the
procurement law.
2. The author has, perhaps incorrectly, detected a rush to award in some

procurements following the rejection of a protest. As pointed out by the
Guam Publications appeal, and noted in this Article above, the automatic
stay does not work to prevent award or stay a contract made between the
time of the protest conclusion and the filing of an appeal on the protest.
Such action could severely affect the remedies of a deserving protestor, even
if the filing of the appeal is timely.
3. Given the critical importance of an automatic stay and its role in

maintaining the purposes of the procurement law, the author would suggest
that it is within the power of the Public Auditor to also stay, on application,
any award of contract or performance of the contract, pending appeal,
under her mandate to promote the integrity and purposes of the
procurement law (see discussion below), in the same manner and for the
same principles as applicable to the Federal stay applications. Of course,
the application for such a stay should be filed posthaste.
4. Should the Public Auditor demurrer to imposing such a stay, the author
would suggest seeking a judicial stay (injunction) which also specifically
remands the appeal to the OPA for decision, to retain both the expertise of
the OPA and the standards of review under which the OPA operates. (See,
2 GAR § 12103(b).)
XVIII. APPEALS OF BID PROTESTS TO THE PUBLIC AUDITOR
A. Prerequisites of Appeal are Protest and Decision: A decision by an Agency “may

be appealed by the protestant, to the Public Auditor within fifteen (15) days after
receipt by the protestant of the notice of decision”. (5 GCA § 5425(e).) Thus, to
file an Appeal there must be:
1. First, a protest to the Agency (see, Request for Dismissal of Appeal, In the
Appeal of [IBSS], OPA-PA-06-004, based on IBSS’ failure to protest, and In
the Appeal of Mega United, supra).
a. As mentioned above in the discussion of bid protests, a mere

complaint is not a protest. You must formally file a protest to be
entitled to an Appeal.
2. Second, a decision on the protest (see, In the Appeal of [IBSS vs GPSS(1)],

OPA-PA-08-003, discussed above as to the Public Auditor’s power to
compel a decision).
a. In Teal Pacific (09-002) the Appellant argued that the protest

decision was improper because it failed to specifically notify
Appellant of its right to appeal. That issue was not decided.
b. Note the case mentioned above, Appeal of Midtown Stationery &

Office Supply Co., No. 1461, (Maryland State Board of Contract
Appeals - “MSBCA”) June 26, 1990, which held that a procurement
officer’s response to a mere inquiry did not constitute a decision, so
the review board lacked jurisdiction to hear an appeal based on that
response.
c. By the same reasoning, a request for reasons for rejection of the bid,
mentioned above, would not necessarily constitute a “protest”, thus
would not normally serve as the basis for an Appeal.
(1) See, “Notice of Appeal” in In the Appeal of J&G
Construction, OPA-PA-007-05, where question of
jurisdiction to Appeal from a response to a Request for
Reasons (that also specifically reserved a right to protest) was
noted by Appellant but was not considered an issue on
Appeal.
B. BY THE PROTESTANT: Although an “interested party” may have a role in the

protest dispute as discussed above, only the protestant/”protestor” can appeal to the
Public Auditor. Thus, if an interested party in the bid protest is dissatisfied by the
protest decision, its choices are to then protest to the agency and appeal to the
Public Auditor from any adverse decision from the agency, or contest the
solicitation or award of contract directly to the Superior Court under 5 GCA
§5480(a).
1. Although an interested party may not appeal, if an Appeal is taken by the

protestor, the interested party is expressly granted the right to appear and be
heard in the Appeal, as discussed below.
2. Appeals to the OPA are administrative in nature and not Civil Actions; nor
are the rights or procedures of the Guam Rules of Civil Procedure
applicable. (See, 5 GCA § 5701, et seq., and 2 GAR § 12101 et seq.)
C. 15 Day Filing Deadline for Appeal: The Appeal must be filed within 15 days of
receipt of the decision on the protest. The filing deadlines for Appeals (and
protests) tend to be strictly enforced. (The appeals board lacks authority to waive a
late filing even where no party would be prejudiced by the waiver: Appeal of Acme
Market #6762 and #6845, No. 1763, (MSBCA) Dec. 23, 1993. See, TRC
Environmental Corporation SP 160-07, at page 5.)
1. Equitable Tolling: Although strictly enforced generally, statutes of limitations

are subject to the notion of equitable tolling, which allows the filing period
to be effectively extended in a particular case if a filing party was diligent
but untimely due to unjust or other equitable considerations. See, TRC
Environmental Corporation SP 160-07, at page 6: “Limitations periods can
be tolled on an equitable basis, especially if the government has engaged in
trickery”.
a. The Public Auditor has indicated an inclination to stretch the time

limit to file (equitably toll) an Appeal if the Agency has clearly
misled the Appellant about the nature or existence of a possible
grievance. (See, In the Appeal of [IBSS vs GPSS(2)], OPA-PA-08-
011, at p 9 and following.)
b. In the Teal Pacific appeal (09-002; dismissed when the Public

Auditor recused), the Appellant has argued that an agency response
to protest which does not include a notice of right to review, tolls
the filing period because such a failure is a denial of due process.
The Appellant claims it received notice of the decision on April 7th
and filed its appeal April 28th , 21 days later. It may be noted the
Appellant and its attorney had previously brought a protest appeal
(Teal Pacific (08-010), which was, as this case ultimately was,
dismissed due to the recusal of the Public Auditor), thus could not
be characterized as unacquainted with procurement processes. The
Appellant relied on two Guam Superior Court cases to support its
claim.
(1) In the first, Pacific Security Alarm (Pacific Security Alarm,

Inc. v DPW, Guam Superior Court CV 0591 - 05), the notice
informing Appellant its protest was denied added “you have
the right to seek administrative and judicial review”.
Appellant petitioned the court for review 17 days after
receipt of the decision (but, because of the weekend,
effectively only one day late). The agency responded to the
petition, motions were allowed and then cut off, and the case
was set for trial. The agency only raised the filing deadline
issue a year later, one week before trial.
(a) The Court reviewed and relied upon Guam Supreme

Court cases and held that filing deadlines generally
(and particularly in the case of protest appeals) are
limitations issues and not jurisdictional, and they are
subject to equitable tolling. (Decision and Order
Denying Motion to Dismiss, pp. 3-4.)
(b) The Court held, since there was at that time no

avenue for administrative review, and the notice
failed to advise the appropriate action to take for
judicial review, that the filing deadline in that case
was equitably tolled until the petition was actually
filed.
(c) The Court held that the statute of limitations is an

affirmative defense and the failure to promptly raise
the issue until just before trial was “prejudicial” to the
petitioner. The Court observed it was misleading to
notify the protestor that it had a right to
administrative review, given there was no
administrative review then possible . Those issues
are no longer problematic, given the full possibility
of review to OPA.
(d) The author believes this case was decided on broad

equitable tolling notions and the specific facts of this
case, and that it did not establish any bright line, ipso
facto, due process rule.
(2) In the second case, Sumitomo Construction (citation in

Notice of Appeal), the Court ruled that, substantively, the
petition for writ of mandate would fail. Therefore, in the
author’s view, the court’s additional finding of a need to
notify a protester of its right of review was uncontrolling
dicta and not strongly supportive of the Appellant’s
argument.
c. In In the Appeal of Guam Pacific Enterprises, Inc. (OPA-PA-09-003),

the Public Auditor’s Decision relied entirely on Federal law to
declare (at p. 7) categorically, “[t]he Public Auditor is required by the
applicable law to strictly adhere to statutory time limits and has no
discretion to consider personal circumstances or equity. Time
provisions for filing an appeal are considered jurisdictional and
cannot be waived.” This would appear to contradict Guam case
law, including the Superior Court cases mentioned above.
(1) Pacific Rock Corporation v. Dept. of Education, 2000 Guam

19, involved a contract dispute. The Guam Supreme Court
departed from Federal case law, saying (at ¶16), “[i]n
Ciesiolka v. San Nicolas [citation omitted], the District Court
of Guam’s Appellate Division followed the Ninth Circuit’s
rich tradition of strictly construing claims statutes. ... We do
not agree.”
(a) This sentiment was reflected in the Pacific Security

Alarm Superior Court case, supra, which relied upon
Pacific Rock in holding that filing deadlines are
limitations rules and not jurisdictional, thus subject to
equitable tolling.
(b) It should be noted that, in Pacific Rock, the Supreme

Court ruled that because the action was not filed
within the required time limit the trial court lacked
jurisdiction (at ¶33). It did not specifically discuss
equitable tolling, but implied there would have been
no factual basis for doing so by stating, “while the
result today brings about an unfortunate
consequence to PRC, the company waited an
inordinate length of time to bring its action. The laws
assist those who are vigilant, not those who sleep
over their rights” (at ¶32). This left open the door for
consideration of equitable tolling issues for those,
who while technically late, nevertheless “are
vigilant”.
(2) Moreover, in Guam Pacific Enterprises, supra, the Public

Auditor noted (at pp 6-7) that in every instance of the many
contract disputes appealed, the agency failed to apprise the
contractor of its right to judicial or administrative review. In
Pacific Security Alarm, supra, the Superior Court said,
“equitable tolling is justified and dismissal is not appropriate
as the May 27 letter violates due process since it did not
inform or advise PSA how to exercise its right to
administrative and judicial review.” (At p. 4.)
2. Recall the trap for the unwary presented by the Request for Reconsideration.
Hint: If the original protest decision (or even if the answer to a request for
reasons) contains a statement informing “the protestant of its right to
administrative and judicial review” (see 5 GCA § 5425(c)(2)), the protester
must not dilly-dally around with any request for reconsideration, otherwise
the time for filing any appeal is jeopardized. While the equities and the
Model Regulation version (R9-101.08.3 as discussed above in the section
regarding parties to the protest) more clearly would favor allowing time for
the reconsideration process to take its course, the law fairly clearly indicates
(but not conclusively) the Appeals process is triggered by the initial
decision, and the author is aware of no case on the subject. Takeaway:
when in reasonable doubt, file an appeal to preserve your rights.
3. Recall that a rejected bidder can request the Agency to provide reasons for
its bid rejection (2 GAR § 3115(e). In this case, assuming the bidder had no
reason to know it may be aggrieved, the 15 day period to appeal would not
begin to run until the reasons were disclosed, assuming the reasons given
form the basis of a grievance.
4. The takeaway here is, if you have or suspect you have a grievance but are
engaged in discussions with the government about it, file the Appeal
anyway within the 15 days to preserve your claim.
D. Jurisdiction of the Public Auditor
1. The time limit for filing an Appeal is strictly enforced but not jurisdictional
and is subject to equitable tolling. (See, Pacific Security Alarm, Inc. v
DPW, supra.)
2. The Public Auditor has the power to review and determine “any matter
properly submitted” (5 GCA § 5703) protested in connection with the
solicitation or award (5 GCA § 5425(a)) or arising from the protest decision
(5 GCA § 5425(e)).
a. See, In the Appeal of [IBSS vs GPSS(1)], OPA-PA-08-003, where the
Public Auditor ruled she lacked jurisdiction over an appeal to
consider the merits of the protest where there was no agency
decision, but nevertheless took jurisdiction over the appeal to
compel an agency to render a decision on a protest.
b. Some have argued that the Public Auditor’s review is constrained to

the scope of the issues expressly raised in the protest; that is, if an
issue of alleged impropriety is not expressly raised in the protest it
cannot be considered on appeal.
(1) The author considers that argument to be unduly restrictive

and, if taken to its logical conclusion, would require the
Public Auditor to ignore improprieties coming to her
attention in the course of a procurement protest and appeal
and thereby constrain the Public Auditor’s mandate to utilize
her jurisdiction “to promote the integrity of the procurement
process and the purposes of” the Procurement Act (5 GCA §
5703).
(a) Consider, for instance, IBSS vs GSA, OPA-PA-08-012,

where the Appellant had protested the method of
source selection, only to find out from the decision
and subsequent response to the appeal that there
were other equally significant issues that were
unknown at the time of the protest. The Public
Auditor did not fail to consider and decide those
other issues.
(2) The author further believes any such constraint would work
to delay and confound expeditious hearing and resolution of
protests, since, if taken to its logical conclusion, once any
new issue emerges it would require the appellant to start a
new protest, precipitating another appeal, thus continuously
staying the procurement and dragging out resolution of the
controversies. Note that 5 GCA § 5701 requires the Public
Auditor to “adopt rules of procedure, which, to the fullest
extent possible, will provide for the expeditious resolution of
controversies....” These “rules shall be construed and
applied to provide for the expeditious resolution of
controversies....” (2 GAR § 12101.)
c. Note, though, that an appeal of a contract dispute does not implicate

the integrity of the procurement process, being limited to contract
law matters. Thus, in that case, the author’s arguments above do not
apply. Indeed, in In the Appeal of Guam Pacific Enterprises, Inc.,
(OPA-PA-09-003), a contract dispute appeal discussed infra, the
Public Auditor’s Decision held she “lacks jurisdiction to review
contract controversies which have not been previously brought to
the attention of the appellee agency.”
3. Scope of OPA jurisdiction: “The Public Auditor’s jurisdiction shall be

utilized to promote the integrity of the procurement process and the
purposes of [the Guam Procurement Act]”. (Id.)
a. The Public Auditor has used this jurisdiction frequently to achieve

results where specific authority has not been specifically provided in
the law or regulations. See, e.g., In the Appeal of O&M Energy,
S.A., OPA-PA-08-004 (where she carefully scrutinized an agency
determination of materiality when there were extravagant differences
between the price of the bids).
(1) It is interesting to observe that the O&M Appeal was one of

the few instances where the Public Auditor’s Decision went
beyond (if only slightly) the Findings of the Hearing Officer,
indicating her experience as auditor can add a very helpful
insight to the strictly legal approach of lawyers and courts.
The author believes giving the Public Auditor review
authority over bid protests was a stroke of legislative genius
that has brought about a significant improvement in forging a
workable and effective GovGuam procurement process.
b. It should be carefully noted that the jurisdiction to promote “the

purposes” of the Procurement Act gives weight and substance to the
policies and purposes expressed in the Procurement Act, some of
which were discussed near the beginning of this paper.
4. OPA’s Standard of Review is broader than Court review: The Public

Auditor’s power to review agency protest action is “de novo” (5 GCA §
5703). From a practitioner’s or vendor’s viewpoint, this is de-lovely and
delicious because it provides a complete contrast to how Courts review such
actions.
a. De novo review is contrasted with deferential review. Under a de

novo review, the reviewer steps into the shoes of the original
decision maker and comes to her own original decision. Under a
deferential review standard, the original decision must be accepted
unless it is clearly illegal, erroneous, capricious or arbitrary. (See,
L.P. Ganancias, CV 1787-00, supra, at page 11 et seq.) Therefore,
do not confuse the deferential standards of review in a Court with
the de novo standard of review before the Public Auditor.
(1) An excellent and hard to locate, but now becoming dated

and unofficial, outline of the significance and incidences of
standards of review in the Ninth Circuit Court of Appeals
gives the following definitions of de novo review: “The
appellate court must consider the matter anew, as if no
decision previously had been rendered. ... No deference is
given....” Thus, the standard of de novo review is exactly the
opposite of the deferential standard.
b. When Courts review an agency determination, they use the

deferential standard of review. An excellent summation of this
standard of review is found in “GMHA’s Supplemental Response to
Appellant’s Comments to Agency Report” in the Appeal of J&G
Construction, OPA-PA-07-005 ; see
http://www.guamopa.org/docs/procurement_appeals/GMHAs_Suppl
emental_Response_to_Appellants_Comments_to_Agency_Report_07
_005.pdf . (The Public Auditor’s Decision in that Appeal ignored,
and did not even undertake to discuss, the argument that it should
abide by the deferential standard.)
(1) It has been said that a reviewing court will not substitute its
decision for an agency decision even if, in the court’s view,
the agency decision is” wrong or even dead wrong”, so long
as it is not illegal.
c. In both the GCIF Appeal, OPA-PA-09-005 and the GEFF Appeal,

OPA-PA-09-007, supra, the Public Auditor specifically discussed and
held her standard of review is, in contrast to a court’s deferential
standard of review, de novo.
d. The Public Auditor’s de novo review has even greater significance

when there is an appeal to a Court from the final Decision of the
Public Auditor, because, in that case, it is the Public Auditor’s
decision and findings of fact that must be accorded deferential
treatment by the Court, not the agency’s:
(1) “Any determination of an issue or a finding of fact by the

Public Auditor shall be final and conclusive unless found by
a court to be arbitrary, capricious, fraudulent, clearly
erroneous, or contrary to law. Any decision of the Public
Auditor, including any determination regarding the
application or interpretation of the procurement law or
regulations, shall be entitled to great weight and the benefit
of reasonable doubt, although it shall not be conclusive ....”
(5 GCA § 5704.)
e. The author takes the view that the Public Auditor must be
considered to be a functional part of the Executive Branch of
government and not subject to the same constraints as the separate
but co-equal judicial branch. Although not subject to the control of
the Governor, the OPA is an executive instrumentality in the same
way that the Attorney General is a functional part of the Executive
Branch, and notwithstanding legislative language at face value
setting OPA apart as an equal and independent branch of
government: “There is an instrumentality of the government of
Guam, independent of the executive, legislative and judicial
branches, known as the Office of the Public Auditor.” (1 GCA §
1900.)
(1) The Organic Act only recognizes three branches of

government: “The government of Guam shall consist of
three branches, executive, legislative and judicial....”
(Organic Act of Guam, 48 USC 1421a.) Any legislation
purporting to create a fourth or fifth branch would be in-
Organic.
(2) “Judges are not experts in the field, and are not part of either
political branch of the Government.” (Chevron USA, Inc v
Natural Res Def Council, Inc, 467 US 837 at 865 (1984).)
f. Thus, the duty of the Public Auditor to use her jurisdiction to

promote the integrity of the procurement process and the purposes
of [the Guam Procurement Act] represents the last line of Executive
Will to get its procurement right.
(1) That is why the author believes, in contrast to the courts

which are hesitant to interfere with executive discretion (see,
J&B Modern Tech, supra, p 4), the Public Auditor is allowed,
indeed directed, to take a more assertive role in inserting her
oversight of executive procurement matters.
(2) “Generally, the doctrine of separation of powers restricts

judicial review of decisions by the executive branch of
government.” ( Medical Arts Clinic v. Franciscan Initiatives,
531 N.W.2d 289 at 300 (N.D. 1995).)
5. OPA jurisdiction extends to hearing appeals from decisions to suspend or

debar a contractor. (5 GCA §§ 5426(e), 5705 [note the reference error in §
5426(e), which mistakenly points to § 5706].)
6. OPA does not have jurisdiction of matters merely incidental to procurement:

All contractors are subject to a wide array of laws, some of which
specifically apply merely by virtue of their contracting with the government.
It is not the role or duty of the procurement staff to enforce most of such
laws, even if they have an obligation to make sure compliance is part of the
contract requirements. For instance, most contracts, and therefore bid or
proposal solicitations, require compliance with Equal Opportunity laws, but
it is not the role of the procurement system to enforce such compliance.
a. Jurisdiction does not extend to disputes having to do with money

owed to or by the government of Guam. Those must be brought
under the Guam Claims Act. A full review of the Government
Claims Act is beyond the scope of this paper. See generally, 5 GCA
§ 6101, et seq.
b. OPA jurisdiction does NOT include direct review of Ethical

violations.
(1) Complaints of ethics violations by Government employees

are handled by the Civil Service Commission. (5 GCA §§
5675, 5676.)
(2) Complaints of ethics violations by non-Government persons

are intended to be handled by the Policy Office (5 GCA §
5675), which isn’t empaneled, and governed by its
regulations (5 GCA § 5676(a)), which seem not to exist in
substance (see, 2 GAR §§ 11112, 11114.) Thus, non-
Government persons are effectively free of any
administrative discipline if they violate the Ethical Standards.
This would seem to be a deficiency to be rectified.
(3) The Public Auditor cannot adjudicate ethical violations and

will only consider complaints of ethical violations (by
government and, perhaps, non-government parties) when
raised in connection with an appeal from a protest of a
particular solicitation or award. (In the Appeal of Latte
Treatment Centers, OPA-PA-08-008.) Not seeing any such
connection to the appealed solicitation in that case, and
while noting that payment of a government employee’s
accommodation in a matter unconnected to the particular
solicitation on appeal was “not proper and has created the
appearance of impropriety”, the Public Auditor ‘found’ there
was no breach of ethical standards in that case. Presumably,
the jurisdictional basis for even considering and making any
finding of such ethical violations arises under the Public
Auditor’s duty to promote the overall integrity of the
procurement process.
c. Wage Determination issues:
(1) There is, within the codification of the Procurement Act, an

obligation for every contractor “for the provision of a service
to the government of Guam” to pay its employees “whose
purpose, in whole or in part, is the direct delivery of service
contracted” wages and benefits in accord with the Wage
Determination rates issued by US DOL. (5 GCA §§ 5801,
5802.)
(a) It would appear, from this, that the wage compliance

does not apply to a bidder or vendor under an IFB
for supplies or construction items.
(2) 5 GCA § 5805 obliges the CPO to “require bidders to

submit declarations ... to demonstrate their compliance....”
5 GCA § 5211(b) requires that IFBs contain “a recitation” of
the Wage Determination and the demonstration required
above. These are not enforcement obligations; they are
disclosure obligations.
(3) 5 GCA § 5803 requires the Guam Department of Labor to

“monitor compliance with the provisions of this Article.”
This makes it clear that this is not a procurement matter.
(4) For a discussion of the application of Wage Determination

law to procurement, see the discussion of In the Appeal of
Advance Management, Inc., in the review section at the end
of this outline.
E. OUTLINE OF AN APPEAL:
1. “Island Formal”: Appeals to the OPA are intended to be more “user

friendly”, casual and informal than, for instance, court cases, but at the same
time they are structured to find and extricate fact from perception, reality
from paranoia, law from lore. They are formal, but not too formal; legalistic,
but in a “small claims court” sort of a way. That said, OPA staff do have
higher expectations from lawyers than lay persons, so do not be
overwhelmed by the legalese in the form or format you find from
information or actions by lawyers. The OPA will not protect you from your
own folly, but they will help cushion you from the folly of any lawyers you
may bump up against.
a. The OPA staff is very helpful in guiding novices through the process
(as opposed to the substance or merits) of your claim, within the
bounds of their obligation to remain neutral and bureaucratic.
(1) “No person directly or indirectly involved in an Appeal shall

communicate with the Hearing Officer or the Office of
Public Auditor staff regarding any evidence, explanation,
analysis, or advice, whether written or oral, regarding any
matter at issue in an Appeal” except (2 GAR § 12107):
(a) At a hearing; or
(b) With the consent or in the presence of all other

parties (or counsel); or
(c) By means of papers allowed to be presented in the

case.
(d) OPA staff may entertain questions or complaints that

are not related to the substance of pending appeals.
(e) OPA staff shall report communications regarding

pending appeals to all parties.
b. The Public Auditor makes it a practice to attend and participate in

hearings of appeals, and, one would hope, formation of the
Decision, but doesn’t apparently take much of an operational hand
in managing the appeals process (supervising, yes; managing, no).
The administration is left to OPA staff and the conduct of the process
is left to a Hearing Officer.
c. CAVEAT: This outline is bare bones, and not even “typical”. It

doesn’t canvass every required event or step along the way, just the
main points, in the author’s view and judgment. Every case has its
own procedural needs and differences, as you can observe by
looking through the OPA Procurement Appeals files. The
regulations governing Procurement Appeals are mainly found in
Title 2, Division 4, Chapter 12 of the Guam Administrative Rules
and Regulations, 2 GAR § 12101 et seq.
2. First step, filing the Notice of Appeal.
a. The Public Auditor’s website (http://www.guamopa.org/) contains

links to all the minimally required Rules of Procedure and required
forms to get you started, including the contents of the Notice of
Appeal. You can also look at other Appeals cases to get an idea of
the framework and form.
b. Although the Appeal was dismissed because the Appellant failed to

first protest to the agency, there is an excellent example of a “do-it-
yourself” appeal filed, using OPA forms, in In the Appeal of Mega
Limited Corporation (the inherent contradiction of which amuses the
author), OPA-PA-09-001,
http://www.guamopa.org/docs/procurement_appeals/
Notice_of_Appeal_09_001.PDF .
c. The minimal requirements for filing a NOTICE OF APPEAL, which is
the document the protestant/appellant files, in triplicate, to start the
appeal, are (2 GAR § 12104(b)):
(1) Name, mailing and business address of the Appellant.
(2) The bid number or other identification of a solicitation or

contract appealed.
(3) “A concise, logically arranged, and direct statement of the

grounds for Appeal”. This is where the Appellant gets to
explain how the agency got everything so horribly wrong;
but keep it brief. It seems those taught to write a brief do the
worse job with brevity, the author being particularly wordy.
(4) A statement of what ruling you want from the Public Auditor
(the “relief requested”).
(5) Verification of the facts stated.
(6) Signed by the Appellant (including representatives).
(7) Including all documents and documentary evidence.
(8) Including copies of all final official documents from the

protest or contract dispute.
(9) Plus a statement that there is no pending court action in the

matter (the OPA has a form for this).
(10) Plus you are expected to file with the Appeal, or soon
thereafter (by the time required for filing Comments on the
Agency Report, which is about 20 days), an election whether
you want your case decided by a hearing (and there’s a form
for this, too). If you do not timely file this election, you
waive your right to a hearing. Generally, the more your case
turns on disputes of facts rather than disputes of law, the
more helpful it is for you to have a hearing.
(11) Anything else you consider particularly necessary to help the

Public Auditor understand your case.
d. Once filed, the OPA must notify the affected GovGuam agency
within 24 hours and deliver to it a copy of the Notice of Appeal. It is
the duty of the agency to notify any counsel, including the Attorney
General, to notify other interested parties.
3. Second Step, the Procurement Record
a. Within five (5) days from filing the Notice of Appeal, (excludes
weekends, holidays), the agency must file (and deliver copy to
Appellant) the Procurement Record. (2 GAR § 12104(c)(3).)
b. It should be in chronological order, numbered sequentially, tabbed,

and indexed. The main GovGuam agencies do a fairly decent job of
putting together the information, to the extent they have actually
made and kept a “Procurement Record”. See In the Appeal of Latte
Treatment Center, discussed below, which cancelled an RFP
principally for the reason of a deficient record.
(1) 5 GCA § 5249. Record Of Procurement Actions. Each
procurement officer shall maintain a complete record of each
procurement. The record shall include the following:
(a) the date, time, subject matter and names of

participants at any meeting including government
employees that is in any way related to a particular
procurement;
(b) a log of all communications between government
employees and any member of the public, potential
bidder, vendor or manufacturer which is in any way
related to the procurement;
(c) sound recordings of all pre-bid conferences;
negotiations arising from a request for proposals and
discussions with vendors concerning small purchase
procurement;
(d) brochures and submittals of potential vendors,
manufacturers or contractors, and all drafts, signed
and dated by the draftsman, and other papers or
materials used in the development of specifications;
and
(e) the requesting agency’s determination of need.
(2) 5 GCA § 5250. Certification of Record. [Cf, 2 GAR § 3130]

No procurement award shall be made unless the
responsible procurement officer certifies in writing under
penalty of perjury that he has maintained the record required
by § 5249 of this Chapter and that it is complete and
available for public inspection. The certificate is itself apart
of the record.
(3) Note that this list is not exhaustive; it is only minimal. There
are many other requirements throughout the law and
regulations for determinations, certifications and reports and
other detail that must be made in connection with
solicitations, and these should also be included as part of the
record. (See, e.g., 2 GAR § 12501(c): the agency “shall file
with the Office of the Public Auditor a copy of all
determinations made ..., together with any information used
or considered by the agency in making that determination.”)
Feel free to request any such information if not produced.
4. Objections to OPA jurisdiction (2 GAR § 12104(9)).
a. Any objection or motion addressed to the jurisdiction of the Public

Auditor shall be promptly filed.
b. The Public Auditor shall have the right at any time to raise (or
consider) the issue of her jurisdiction. Jurisdiction is always a deal
breaker. Jurisdiction is what provides authority, so without any
jurisdiction, whenever that is discovered, there is no authority to
hear or decide.
c. Disqualification is not the same thing as jurisdiction, strictly

speaking, but flows from the due process requirement of a fair and
impartial hearing. Even at the US Supreme Court level, the Justices
each make their own independent judgment as to whether they
should recuse themselves. Jurisdiction more clearly is a legal
question than disqualification, except in extremity.
(1) Any request to disqualify the Public Auditor from” hearing

the Appeal” (e.g., conflict of interest or other “recusal” type
objection) shall be filed within seven (7) days after the notice
of Appeal is filed (but query if the basis of the objection is
not known until later, and query the disconnect with 2 GAR
§ 12601, which allows a disqualification issue to be raised
“prior to the hearing”; the author is of the view the 7 day
notice provision sows more confusion than necessary and
should be repealed).
d. Dismissals of Appeals due to the recusal (disqualification) of the

Public Auditor have not been infrequent and have likely upset a few
disappointed bidders because there is no alternative to an
administrative review of a bid protest (other than court action, which
offers a very deferential hearing of procurement appeals) if the
Public Auditor is recused. Such dismissals have been for such
tenuous reasons as the Public Auditor’s husband had been under the
care of a doctor who was a principal in the business of an Appellant
(In the Appeal of Teal Pacific, OPA-PA-08-010; and see a similar
result in In the Appeal of Teal Pacific, OPA-PA-09-002), or her
husband’s legal firm represented one of the parties (In the Appeal of
Far East Equipment, OPA-PA-08-001). Recognizing the
inconvenience and injustice of this lack of alternative, the Public
Auditor as asked for legislative change to provide an alternate
designee in the event of the Public Auditor’s disqualification (see,
her “Inaugural Remarks”, January 9, 2009,
http://www.guamopa.org/docs/2009_Inaugural_Remarks.pdf ).
5. Third Step, the Agency Report:
a. The guts of the Agency Report is the agency’s answer to the merits of
the complaints raised in the Appeal, including law and fact. This is
where the agency gets to tell how the Appellant got everything so
horribly wrong.
b. The Agency Report is meant to be filed ten (10) days after receiving
the Notice of Appeal, except in cases of an appeal of a Contract
Dispute, when there is a twenty (20) day response time.
c. Much of what is required in the Agency Report has already been

filed in connection with the Notice of Appeal or Procurement
Record, such as a copy of the protest and bid, agency decision on
the bid protest, etc.
d. The Agency Report must include “a statement answering the

allegation of the Appeal and setting forth findings, actions, and
recommendations in the matter together with any additional
evidence or information deemed necessary in determining the
validity of the Appeal. The statement shall be fully responsive to
the allegations of the Appeal.” (2 Gar § 12105(g).)
6. Fourth Step, the Appellant’s Comments on Agency Report (2 GAR §

12104(c)(4)):
a. This is were the Appellant gets to tell the agency, “Did not”.
b. Any interested party may also comment on the Agency Report.
(1) Interested Party means an actual or prospective bidder,

offeror, or contractor who appears to have a substantial and
reasonable prospect of receiving an award if the Appeal is
denied. (2 GAR § 12102(b).) This definition is broader than
the definition discussed above in relation to bid protests, and
the author suspects the meaning to probably be even a bit
broader than that; the word “means” probably means
“includes”, because the “prospect of receiving an award”
arguably only refers to a pre-award situation, and appeals
can be based on actual awards. More importantly, it would
not include, e.g., a government agency, who is obviously
“interested” but elsewhere defined, perhaps, as an “affected”
or “using” agency (see, 2 GAR §12102(e)).
c. Comments on the Agency Report must be filed within ten (10) days
of the filing of the Agency Report.
7. Fifth Step, the agency’s Rebuttal to Appellant’s Comments on Agency

Report.
a. This is where the agency gets to tell the Appellant, “Did too”.
b. Rebuttals are meant to be filed within five (5) days of filing the
Comments to which the rebuttal is addressed.
8. Disregard of Comments (or Rebuttal?) if not timely filed.
a. “The failure of an Appellant or any Interested Party to comply with

the time limits stated in this section may result in resolution of the
Appeal without consideration of the comments untimely filed.” (2
GAR § 12104(c)(5).) Note definitional issues above. Is it really
intended that this sanction does not apply to rebuttal or other
comments affected or using agencies?
9. Discovery
a. In court litigation, rules of discovery (where parties can seek

information from the other side before the trial) are technical, often
traps, often encouraging gamesmanship. Not so in procurement
appeals. Although there are no particular discovery rules provided
in the regulations, it would appear to be within the power of the
Hearing Officer to determine the nature, scope and other matters
concerning discovery. All you have to do is file a Request for
information with the Hearing Officer (and answer to the Hearing
Officer any questions or concerns) and the Hearing Officer can
direct a response.
(1) In order to expedite consideration of the Appeal, any

additional information requested by the Hearing Officer shall
be submitted within five (5) working days of receipt of such
request. (2 GAR § 12104(c)(7).)
(2) The Hearing Officer has the power to require parties to

produce for examination those relevant witnesses and
documents under their control and fix time limits for
submission of documents, as well as compel attendance and
testimony and sanction for nonperformances. (2 GAR §
12109.)
10. Role of the Hearing Officer
a. The Hearing Officer should be an attorney, and must be a “Guam-

licensed” attorney if contracted (as compared to employed) for the
purpose. The Hearing Officer, among other roles, powers and
duties (see generally, 2 GAR §§ 12108, 12109):
(1) may hold informal conferences to settle, simplify, or fix the

issues in a proceeding, or to consider other matters that may
aid in the expeditious disposition of the proceeding, by
consent or on motion.
(a) It is the author’s experience and observation that

Guam OPA has not led the way in any informal
settlement by alternate dispute resolution. Rather,
the Hearing Officers usually simply cut to the chase
in a more formal manner, even when parties appear
in pro se, immediately scheduling motions and
hearing, requiring stipulations, witness lists and the
like, and at best simply guiding the parties to meet
outside the presence of the Hearing Officer to
attempt their own settlement. See, for instance,
Notice of Pre-Hearing Conference, In the Appeal of
Guam Pacific Enterprises, Inc., OPA-PA-09-003, and
listen to the audio of the short hearing,
http://www.guamopa.org/docs/procurement_appeals/
Audio_Record_PreHearing_Conference_09_003.wav
(2) may require parties to state their positions with respect to the
various issues.
(3) may rule on motions and other procedural items.
(4) may fix time limits for submission of documents.
(5) shall receive written, oral, or otherwise presented testimony,

evaluate such testimony and make recommendations to the
Public Auditor.
(6) may consider testimony and evidence submitted by any

competing bidder or contractor.
(7) may regulate the course of the hearing and the conduct of
the participants.
(8) may require evidence in addition to that offered by the
parties.
(9) may receive, rule on, exclude, or limit evidence, and limit
lines of questioning or testimony which are irrelevant,
immaterial, or unduly repetitious.
(10) may impose appropriate sanctions against any party or

person failing to obey an order, including
(a) refusing to allow the disobedient party to advance a

claim or defense.
(b) excluding testimony.
(c) expelling a party or person.
(11) Note that a party may issue a subpoena requiring any person
to appear at a hearing to give testimony or produce
documentary evidence. Failure of such person to do so
should, in the author’s opinion, enable the Hearing Officer
to issue an order to comply. Although the Hearing Officer
might be constrained, without further order of a Court, to
compel action consistent with the subpoena, this would
seem to give the Hearing Officer authority to grant sanctions
for such refusal. Note also that the Public Auditor has
express “power to compel attendance and testimony of, and
production of documents by any employee of the
government of Guam, including any employee of any
autonomous agency or public corporation.” (5 GCA §
5703.) Presumably this power can be exercised without aid
of a Court.
(12) shall prepare a written determination of findings after the

hearing, and recommend to the Public Auditor a course of
action.
11. The Hearing
a. “Hearings shall be as informal as may be reasonable and appropriate

under the circumstances and shall not be bound by statutory rules of
evidence or technical or formal rules of procedure.... The weight to
be attached to evidence presented in any particular form will be
within the discretion of the hearing Officer.” (2 GAR § 12108(d).)
b. As a general rule, the Administrative Adjudication Act does not

apply to the procurement or appeal process, but is intended to “fill
in the blanks” in the context of the Hearing. “Where not otherwise
provided for by these rules and regulations or statute, and where not
inconsistent herewith, hearings shall be conducted in accordance
with the Administrative Adjudication Law in Chapter 9 of Title 5,
Guam Code Annotated, including those provisions on subpoenas
and contempt.” (2 GAR § 12108(d).)
c. Ordinarily, only one “hearing” will be held, but there could be

numerous pre-hearing conferences and motions hearings.
d. Lawyers are not turned away, indeed may attend without the
principals, but, especially when there are factual disputes or issues
of evidence, the real parties are encouraged to attend and
participate, subject to rulings about what a witness or potential
witness can hear in any particular instance. Except for witnesses as
noted, hearings are open to the public.
e. Testimony is normally given under oath or affirmation.
f. Hearings are normally recorded, and the recording eventually made

available on the OPA website.
g. Typical hearing process:
(1) Each party is allowed to make a short opening statement,

broadly describing their case and generally outlining their
claims (identifying the issues as they see them), beginning
with the Appellant, then the agency, then any interested
party.
(2) Each party is then allowed to make their opening arguments,

specifying the legal points they need to make to raise their
claim and generally discuss the facts that will support their
case. Rebuttals of the legal issues by opposing parties are
then allowed.
(3) Each party is then allowed to present their witnesses and

other evidence (direct evidence), in the same order as the
opening statement. The purpose is to establish the facts they
say back their case. You can’t just say something is a fact
without proving it; well, you can, but it won’t carry much
weight.
(a) Opposing parties get a chance to question the

testimony, witnesses and other evidence after it is
presented (cross examination).
(b) The presenting parties then get a chance to clarify

any answers or evidence that came up in the prior
cross examination step, but generally not introduce
any new evidence that was not introduced in the first
direct evidence step.
(4) There is usually a wrap-up, where each side gets to give a

summation of their case as revealed in the evidence
presented by both sides, or other such closing argument or
statement.
(5) At any point in the proceedings, the Hearing Officer or

Public Auditor can interject questions of parties, witnesses
and counsel.
(6) The order and process of a hearing can be much more

flexible, and tends to be when parties are not represented by
lawyers. Still, the Hearing Officer will try to control the
process so that events will unfold in such a manner as to
bring out the material, relevant facts, such as they may be
available on the day. So, COME PREPARED.
h. Since procurement hearings are open to the public, if you are

contemplating being involved in one, the author recommends you
attend a hearing and observe before you have to attend as
participant. The hearing dates are posted under “Detailed Status” for
each case, on the “Procurement Appeals” page of the OPA website.
12. The Decision
a. This is where the Public Auditor gets to tell both the Appellant and
the agency where they each got things so horribly wrong.
b. The Decision of the Public Auditor is meant to be rendered within

thirty (30) days of the hearing, but under-staffing in the OPA,
compared to the overwhelming auditing tasks they are obligated to
perform with pay-grade professionals in addition to hearing
procurement appeals, has resulted in some Decisions being delayed
longer than that.
c. As indicated above, most Decisions of the Public Auditor repeat

almost verbatim the Findings of the Hearing Officer. The Public
Auditor, in her 2009 Inaugural Remarks, characterized the Findings
and Decision as “redundant”, and recommended that the necessity
(2 GAR § 12110(a)) of having both papers be eliminated. The
author does not share this view, but if put to a choice, would choose
keeping the Decision rather than the Findings. The author considers
it instructive to understand the perspective of the various Hearing
Officers in their separate Findings. He also considers it important
that the Public Auditor have independent input as to her unique
auditing perspective, and reads both Findings and Decision to try to
determine when and how such a perspective may assert itself.
Finally, he feels that the Public Auditor must serve as the central
source of consistent authority, notwithstanding the various Hearing
Officers appearing from time to time.
d. Each Decision is posted to the OPA website.
F. Dateline flow of simple, ideal appeal.
1. Filing of Notice of Appeal
a. Aggrieved Person (Appellant) must file Notice of Appeal OPA within

15 days of receipt of rejection (Final Decision) of Protest
2. Notifying others of filing of Notice of Appeal
a. Appellant must serve copy of Notice of Appeal to Agency
(1) Within 24 hours of filing Notice of Appeal
b. OPA must notify Agency the appeal has been filed

(1) Within 24 hours
c. Agency notifies counsel, including AG
d. Agency notifies Interested Parties
3. Agency must file Procurement Record at OPA
a. Agency must file the Procurement Record within five (5) work days
of receipt of the Notice of Appeal
b. No requirement, but good practice, that Appellant be given copy by

Agency
4. Any party must file objections to qualification (recusal) of Public Auditor
a. If known, must be filed within seven (7) days after the Notice of
Appeal is filed
5. Agency must file Agency Report at OPA
a. Agency must file the Agency Report (which includes the answer to
the claims in the Notice of Appeal) within ten (10) ”working days” of
receipt by the agency of the Notice of Appeal.
b. No requirement, but good practice, that Appellant be given copy by
Agency
6. Appellant’s or any Interested Party’s Comments on the Agency Report
a. No requirement to file
(1) If filed, must be filed at OPA within ten (10) days after OPA’s
receipt of the Agency Report, with copy delivered to the
Agency. Comments untimely filed may not be considered.
7. Agency’s Rebuttal to any Comments on Agency Report
a. No requirement to file
(1) If filed, within five (5) work days after receipt by OPA of the
Comments to which rebuttal is directed, with copy delivered
to Appellant (and, presumably, to the Interested Parties).
8. Notice of Hearing (assumes no pre-conferences, motions, etc.)
a. No time is established for OPA to set and serve a Notice of Hearing

date, but must be served at least ten (10) days prior to the Hearing.
9. Decision
a. Within thirty (30) days of the hearing, a Decision and Findings shall
be prepared.
b. In her 2009 Inaugural Remarks, the Public Auditor declared, “our

goal is to render a decision within 90 days from the day an appeal is
filed.”
XIX. APPEAL REMEDIES (such as they are):
A. One major reason there is not much literature about procurement issues is that the
remedies available rarely make anyone whole. There just isn’t much money in it for
most vendors, even when vendors are vindicated, and the public purse always picks
up the costs regardless who wins the protests, so lawyers don’t tend to spend much
time pursuing procurement matters; principle is one of the last considerations, and
principal one of the first.
B. Money:
1. “Reasonable Costs” are allowed but not damages (5 GCA § 5425(h)), and
only if the protestant should have been awarded, or was reasonably likely to
have been awarded, the contract, but was not.
a. For the put-upon (that is, should have got the award but didn’t)
Protestant, “Reasonable Costs” at the Protest level includes bid
preparation costs BUT NOT attorney’s fees nor lost profits or other
such damages. (2 GAR § 9101(g)(2).)
(1) The inclusion of attorney’s fees as part of costs is different at

the Appeal level from the rule at the Protest level. As noted
above, such fees are not allowed in a Protest Decision.
(a) Note, however, “[t]he Public Auditor shall have the

power to assess” attorney fees against a protestor
and in favor of the government as part of reasonable
costs if the protest (not the appeal) is found to be
made “fraudulently, frivolously or solely to disrupt
the procurement process”. (5 GCA § 5425(h)(2).)
The protestor, on the other hand, is not entitled to
recover attorney fees in any event.
(2) Damages are not allowed. Damages include such things as

lost profits. Bear in mind that, without award there is no
contract, and without contract there are no contract
damages.
(3) In the Appeal of Guam Cleaning Masters, OPA-PA-09-009, is

the first case coming to the author’s attention in which a
claim has been pressed to recover damages in a specific
amount.
(a) In that case, the Appellant’s protest (that the chosen

RFP method was improper) was denied, Appeal was
brought, and in the course of the Appeal, the agency
determined to cancel the RFP, and moved to dismiss
the Appeal. The Appellant opposed the motion on
the basis that the agency’s actions caused Appellant
“to incur costs in submitting a proposal to for an
illegal procurement, and [to] have to incur additional
legal costs and incur financial hardships in protesting
and appealing this matter to OPA.” (Appellant’s
Memorandum in Opposition to Motion to Dismiss, p.
2.)
(b) The Appellant and agency then apparently settled

their differences, filing a stipulation which, among
other matters states the agency will pay Appellant
$3,050 for “RFP packet, labor and preparation costs,
including site visits and attending pre-bid
conference”.
(c) Although the stipulation has been filed in the Appeal,

as of the writing of this version of this Primer, the
Public Auditor has not issued the order granting the
stipulation; perhaps the stipulated damage amount
appears excessive and the Public Auditor will wish to
have it justified.
(4) Remember the possibility, discussed above, of obtaining stay

or injunctive relief to maintain status quo in a solicitation
even when the automatic stay may be unavailable.
(a) Note that the no damages rule has been cited in

some Federal cases as establishing a basis for a claim
of irreparable harm, in an action brought to enjoin a
solicitation in the face of a protest: “courts have
found consistently that the loss of an opportunity to
compete for a contract on a level playing field
sufficiently establishes irreparable harm. ‘An action
at law only allows recovery of “bid preparation costs
in a suit for damages, but not loss of anticipated
profits,” leaving a bid protestor irreparably harmed.’
Bannum Inc. v. United States, 60 Fed. Cl. 718, 730
(2004) (denying permanent injunctive relief), aff’d,
404 F.3d 1346 (Fed. Cir. 2005) (quoting Essex Electro
Eng’rs, Inc. v. United States, 3 Cl. Ct. 277, 287
(1983), aff’d, 757 F.2d 247 (Fed. Cir. 1985)).”
(Rhinocorps Ltd Co. v. USA, __ Ct.Cl. __, No. 08-
410C (2009).)
b. For the put-upon (that is subjected to a protest made “fraudulently,

frivolously or solely to disrupt the procurement process”)
government/agency, “Reasonable Costs” includes attorney’s fees,
both at Protest and Appeal levels, as noted above.
(1) As with the protestor, no damages are allowed in favor of the

government, such as price increases due to delays, expenses
incurred to provide interim needed goods or services, or the
like.
c. “Interest on amounts ultimately determined to be due to a

contractor or the Territory shall be payable at the statutory rate
applicable to judgments from the date the claim arose through the
date of decision or judgment, whichever is later.” (5 GCA § 5475.)
Note this doesn’t include through to the date actually paid ! The
Guam Compiler’s Comment indicates the judgment rate is 6% and
that post-judgment through to payment interest might be payable
under the Civil Procedure or Government Claims codes.
d. There is probably good policy reasoning for limiting the damages

that might otherwise flow to either the bidders or government (under
a non-contract theory): it puts an onus on everyone to try to facilitate
a quick resolution of controversies and move on, rather than offer a
carrot on a stick to extract as big a damage award as possible.
C. Other remedies:
1. Prior to award, improper solicitations and awards or proposed awards must

be either cancelled or revised to comply with the law, as determined by the
decision-maker (Agency, OPA or court, as the case may be). (5 GCA §§
5450 and 5451.) In this context, the solicitation or award is improper
“where it is determined administratively, or upon administrative or judicial
review, that a solicitation or award of a contract is in violation of law”. (Id.)
a. “A solicitation or award may be in violation of the law due to actions

of territorial employees, bidders, offerors, contractors, or other
persons.” (2 GAR § 9104(a)(2).)
b. In holding that a pre-award solicitation must be cancelled, the Public

Auditor said, the solicitation “cannot be revised to comply with the
law due to the fact that it would be difficult if not impossible to
create an accurate and complete procurement record at this time.”
(In the Appeal of Latte Treatment Center, Inc., OPA-PA-08-008, at p
19.)
c. Model Procurement Regulation R9-202.01 provides that a finding

“that the solicitation or proposed award is in violation of law will
constitute a cogent and compelling reason to cancel or revise a
solicitation or award.”
2. Remedies after award for improper solicitations or awards depend on

whether the person awarded the contract acted fraudulently or in bad faith
(5 GCA § 5452):
a. Recognize that fraudulent conduct and bad faith conduct are as

different from each other as murder and manslaughter in the sense
that fraud requires a specific intent to defraud (which may be
satisfied by acting recklessly in disregard of intent), whereas bad
faith is a lesser standard, likely including negligence or less in the
usual commercial law context. Good faith, under the Uniform
Commercial Act, requires a subjective element of honesty in fact
and an objective element of the observance of reasonable
commercial standards. (See discussion of the policy of the
procurement law to act in good faith, above.)
b. Nevertheless, the procurement regulations exact a higher standard in

the context of remedies after award. “Bad faith or fraud shall not be
assumed. Specific findings showing reckless disregard of clearly
applicable laws or regulations must support a finding of bad faith. A
finding of fraud must be supported by specific findings showing
knowing, willful acts in disregard of such laws or regulations.” 2
GAR § 9104(a)(3).)
c. Thus, bad faith is not merely the absence of good faith, it requires a
reckless disregard of the law. It would seem that people who do not
take the time or effort to become advised (that is, act in reckless
disregard) as to the clearly applicable law cannot hide behind their
ignorance.
(1) The author posits that if there is a finding of fraud or bad faith
on the part of a person awarded the contract, that person
should be debarred from further contracting. (See, 5 GCA §
5426(b).)
d. If the person did act fraudulently or in bad faith, then (5 GCA §

5452(a)(2)):
(1) Either, the contract may be ratified and affirmed but only if
in the best interests of the Territory;
(a) Note this should require a very heavy showing of

necessity considering it is generally in the best
interest of the government to uphold the integrity of
the procurement laws.
(b) The finding, mentioned above, in the E-Management

Court of Federal Claims case is instructive: “The
court notes that NHTSA fulfils an important public
policy goal of the United States by its funding of
transportation safety grants and that information
technology (IT) is an important factor in carrying out
the grant program. ... However, attaining this goal
does not give NHTSA license to disregard federal
procurement law, especially those provisions that
are designed to ensure fair competition.” (Bold
emphasis added.)
(c) In this regard, the author argues that neither may a

vendor disregard applicable procurement law,
especially those provisions that are designed to
ensure fair competition. The author suggests that it is
an act of bad faith on the part of a vendor to
participate in a solicitation it knows or should know
is being conducted improperly; at a minimum, at
least, it should advise the agency of the impropriety
in a public record.
i) As noted above, it is the policy of the

procurement law that all parties are required
to act fairly and in good faith. 2 GAR §
9104(a)(2) states “[a] solicitation or award
may be in violation of the law due to actions
of territorial employees, bidders, offerors,
contractors, or other persons.” The author
believes this requires bidders and offerors to
abide by the clear “rules of the road”, and
failure to do so, in “reckless disregard of
clearly applicable laws”, is an act of bad
faith. (2 GAR § 9104(a)(3).)
ii) Given the extremely limited effectiveness of

post award remedies, strict adherence to such
a standard would act to mitigate the
occurrence or effectiveness of connivance
between a vendor and an agency to avoid
proper procurement procedures.
(2) Or, the contract may be declared null and void.
(3) “Upon finding after award that a solicitation or award is in

violation of law and that the recipient of the contract acted
fraudulently or in bad faith, the Chief Procurement Officer,
the Director of Public Works, or the head of a Purchasing
Agency may, after consulting with the Attorney General,
declare the contract null and void or ratify and affirm it .... “
(2 GAR § 9106(2)(a).)
(4) “The contract shall be declared null and void unless

ratification and affirmation is found to be in the territory's
best interest ....” (2 GAR § 9106(2)(b).)
(5) “The contract shall not be modified, ratified, and affirmed

unless it is determined in writing that there is a continuing
need for the supplies, services, or construction under the
contract and:
(6)
(a) there is no time to reward [sic] the contract under
emergency procedures or otherwise; or
(b) the contract is being performed for less than it could
be otherwise performed.” (2 GAR § 9106(2)(c).)
(7) “In all cases where a contract is voided, the territory shall
endeavor to return those supplies delivered under the
contract that have not been used or distributed. No further
payments shall be made under the contract and the territory
is entitled to recover the greater of:
(8)
(a) the difference between payments made under the
contract and the contractor's actual costs up until the
contract was voided; or
(b) the difference between payments under the contract
and the value to the territory of the supplies, services,
or construction it obtained under the contract.
(c) [And]. The territory may in addition claim damages
under any applicable legal theory.” (2 GAR §
9106(2)(d).)
(9) Even if the contract is ratified as allowed, “[t]he territory shall

be entitled to any damages it can prove under any theory
including, but not limited to, contract and tort regardless of
its ratification and affirmation of the contract.” (2 GAR §
9106(2)(e).)
(10) There is no explicit relief offered to the bidder or offeror who

lost out on the award, but consider possibility of bringing
civil action against the fraudulent vendor for the economic
tort of intentional interference with prospective economic
advantage or other unfair competition or fraud tort.
(a) Note: California, but not Guam, has a general

statutory “Unfair Competition” law, which includes
"any unlawful, unfair or fraudulent business act or
practice and unfair, deceptive, untrue or misleading
advertising." California Business and Professions
Code § 17200.
(11) Contractors can be suspended (up to three months) or

debarred (up to two years) from consideration for any
government contracts for various reasons, including “filing a
frivolous or fraudulent petition, protest or appeal”. (5 GCA
§ 5426.) Curiously, there is no such explicit provision that
requires suspension or debarment for obtaining a contract
through fraud or bad faith, though § 5426 is broad enough to
imply such action is warranted.
(12) Suspension or debarment action is normally brought by the

agency (CPO, DPW, head of Agency, etc.), and those
decisions are reviewable by the Public Auditor. “Any
member of the public may petition the [agency] to take
action to debar or suspend....An investigation of each
petition shall be conducted promptly and a written report
should be made of findings of fact and action taken.” (Id.)
e. If the person did not act fraudulently or in bad faith, then (5 GCA §
5452(a)(1)):
(1) The contract may be ratified and affirmed if in the best

interests of the Territory; or
(2) The contract may be terminated [compared to “null and

void” when fraud or bad faith is found] and the person
awarded the contract shall be compensated for the actual
expenses reasonably incurred under the contract (to date of
termination), plus a reasonable profit, prior to termination.
What is reasonable; more than originally bid??
(a) The Guam Publications appeal, supra, made some

confusing statements on this subject. Although the
Decision found no fraudulent or bad faith act, it
declared the award “void” (Decision, p 16.) It then
decided to “terminate” the award (at p 17).
(b) The comments to the Model Procurement Regulation

analogue indicate that the bad faith element is
intended to eliminate issues whether a mere breach
of contract would be sufficient to invoke this
termination remedy: “Generally a violation of a
contact provision is not covered by [this section] and
will not result in a contract award being determined
illegal. ... An exception to this rule is when a
contract provision implements a provision of law. In
such cases the award may be found in violation of
law....” It recognizes that breaches of contracts may
invoke other remedies, e.g., contract damages or
termination based on an appropriate clause in the
contract, as opposed to the general law.
(3) “If the violation can be waived without prejudice to the

territory or other bidders or offerors, the preferred action is
to ratify and affirm the contract.” (2 GAR § 9106(1)(c)(1);
the numbering of the subsections is inconsistent in this
section.)
(a) Recall the discussion of prejudice and materiality and

the waiver of immaterial matters in the discussion of
responsive bidders, above.
(4) “If the violation cannot be waived without prejudice to the

territory or other bidders or offerors, if performance has not
begun, and if there is time for resoliciting bids or offers, the
contract shall be terminated. If there is not time for
resoliciting bids or offers either formally, or informally under
the emergency authority, the contract may be amended
appropriately, ratified, and affirmed.” (2 GAR §
9106(1)(c)(2).)
(5) “If the violation cannot be waived without prejudice to the

territory or other bidders or offerors and if performance has
begun, the Chief Procurement Officer, the Director of Public
Works, or the head of a Purchasing Agency shall determine
in writing whether it is in the best interest of the territory to
terminate or to amend, ratify, and affirm the contract.
Termination is the preferred remedy. The following factors
are among those pertinent in determining the territory's best
interest:
(a) the costs to the territory's best interest;
(b) the possibility of returning supplies delivered under
the contract and thus decreasing the costs of
termination;
(c) the progress made toward performing the whole
contract; and
(d) the possibility of obtaining a more advantageous
contract by resoliciting.” (2 GAR § 9106(1)(c)(3).)
(e) Further, consider the discussion above regarding the

making and keeping of determinations.
f. Damages in the event a contract is terminated for violation of law.

“If the contract is terminated, the territory shall, where possible and
by agreement with the supplier, return the supplies delivered for a
refund at no cost to the territory or at a minimal restocking charge.
[I]f a termination claim is made, settlement shall be made in
accordance with the contract. If there are no applicable termination
provisions in the contract, settlement shall be made on the basis of
actual costs directly or indirectly allocable to the contract through
the time of termination. Such costs shall be established in
accordance with generally accepted accounting principles. Profit
shall be proportionate only to the performance completed up to the
time of termination and shall be based on projected gain or loss on
the contract as though performance were completed. Anticipated
profits are not allowed.” (2 GAR § 9106(1)(d).)
g. Regardless whether the contract was awarded improperly, there is

no provision penalizing the government for the improper award of
the contract, no lost profits for the losing vendor, and the losing
vendor has only her pride and principle.
h. The Public Auditor has revised the outcome of a solicitation after

award, in the Guam Publications appeal, supra. This is an
interesting use of her power when the before and after award
remedies are examined, as discussed above. Before the award, the
solicitation can be revised to comply with law (5 GCA § 5451(b)),
but there is no such option for post-award remedies, such remedies
being either terminating or voiding the contract, on the one hand,
or ratifying the contract on the other. In Guam Publications, the
Public Auditor terminated the contract which had been awarded to
the lowest bidder, then awarded the contract to the remaining,
higher bidder. Given that the law (5 GCA §§ 5451 and 5452) seems
to require only certain specific remedies, and making an award to
another bidder after the awarded contract is terminated is not one of
them, then one must question the result; perhaps the appropriate
result would have been to simply re-solicit. The author appreciates
the desire to avoid any re-bid, and thinks the Public Auditor
probably should be able to order the award be given to the next
responsive and responsible bidder, but fears that may not be within
her powers.
3. It is obvious that the timing of the “award” is critical, given that remedies
available turn on whether a determination that the solicitation or award is
in violation of law is made before or after “award”. (And note, the
determination of the “award” is also critical for determining the timing of
the automatic stay (5 GCA § 5425(g), and see Article on automatic stay
above) and the timing for release of proprietary and confidential
information from an RFP (see, generally, 2 GAR § 3114, and Article above
regarding Requests for Proposals.)
a. So, what then is an “award”? Unfortunately, there is no definition

in the Procurement Act or regulations that defines or even describes
what is meant by the term “award”. There is no requirement that an
award take any particular form or substance, but “everyone” talks of
“an award” as if there were some commonly agreed meaning.
Probably the best articulation of the lore is that an award is the final
declaration by an agency to the bidders, offerors or public naming
the winner.
b. But there are other hints as to what an award is in the law :
(1) For instance, we know “award” does not mean the making
or execution of a contract, because the law speaks of “award
of a contract” (e.g., 5 GCA § 5452(b)), not the “making of a
contract”; it is not the contract that signals the shift in
available remedies, but the award.
(2) Another hint is the use of the modifier “proposed” in 5 GCA

§ 5451 – the “pre-award” remedy section (but not § 5452 –
the “post-award” remedy section): “a solicitation or proposed
award”. This is actually quite a curious use of the term
proposed, begging the question, proposed to or by whom? It
must imply some critical juncture in the negotiation process
when there is some kind of near agreement subject to a
condition subsequent to the proposal of the award, before
the finalized award.
(3) The regulations require “notice of award” be sent to the

successful bidder in an IFB (2 GAR § 3109(q), which would
hardly be a necessary act to perform if the successful bidder
had already signed all necessary documents.
(4) And, perhaps most illustrative, in an RFP, “if compensation,

contract requirements, and contract documents can be
agreed upon with the best qualified offeror, the contract
shall be awarded to that offeror”. (2 GAR § 3114(l)(4)(B).)
And thereafter, “notice of the award shall be public
information” (2 GAR § 3114(l)(5)), but nowhere is there a
requirement of the form or timing or even for giving notice
of award to the successful offeror.
(a) In contract law, if price and all other terms have been
“agreed upon”, a contract is made (as discussed
below, it may not be enforceable, but it does come
into being). This provision simply reflects contract
law that when the parties have agreed upon all
essential terms, a contract is the consequence of that
agreement (“the contract shall be awarded”).
(5) All of these hints indicate that an “award” is not embodied in

the contract itself, but in something that is nascent in the
sense that it comes prior to contract execution.
(a) Framed as an analogy, it is that moment when an

artist takes one last step back to assess the completed
canvass before putting her name to the painting. It
resembles a meeting of minds, but only in the sense
of an intent existing solely in the mind of the offeree,
bearing in mind that the bid or proposal process is
intended to illicit, whether negotiation is present or
not, a binding offer by the bidder or offeror which is
wholly acceptable by the government.
(6) As mentioned at the beginning of this Primer, procurement

law, though wrapped in its own language and custom, is a
subset of the more general and overriding body of contract
law. In contract law terms, the author concludes that the
references to an “award of contract” must mean an
acceptance of the offer.
(a) Acceptance is, in contract law, the analytical final act

of contract formation, the moment when the
government has formed the intent to accept the
terms of agreement. This concept is not well
understood in the population thoroughly and has led
to a lore that a contract is some written signed
document.
(b) In some instances a writing or other manifestation of

agreement is required to make a contract
enforceable; but that does not limit the legal
conception of contract. For instance, under what is
known as statutes of fraud (originating in English law
way back in the early 1600's), any agreement to
convey land must be evidenced in writing if it is to
be enforced in law or equity (to minimize fraud by
lying).
(c) Although communication of acceptance is not

required in every case to form a contract (see, e.g.,
the discussion of “implied-in-fact contracts in Cibinic
& Nash, pp 237 et seq.), the communication of
acceptance can be inferred from circumstances; the
Procurement Act does not specify any formality as to
what constitutes an award. (See, Corbin on
Contracts, One Volume Edition, West Publishing
Co.§ 67, When Notice of Acceptance is Necessary.)
(7) There is nothing in the Procurement Act which states a

uniform requirement for a communicated intent of
government to make a contract by acceptance of the bid of
the bidder or the offer of an offeror.
(a) In the case of an IFB, as noted above, notice of award
to the successful bidder is expressly required to
communicate acceptance. This makes sense
inasmuch as the government’s evaluation takes place
without negotiation of price or terms.
(b) But not so in the case of an RFP. In the case of an

RFP the acceptance of the proposal is presumed to
have been communicated by the conclusion of
negotiated agreement between the government and
the best qualified offeror on the terms of
compensation, contract requirements and contract
documents. Just when that communication of
agreement has occurred in the process is less clear,
but it cannot be when a notice of intent is given,
because there is no requirement that notice of intent
to award be given to the offeror.
i) Indeed, without reference to when or

whether any such notice of intent is given,
the regulations require, “[a]t the conclusion
of negotiations resulting in the award of the
contract, ... [the government] shall prepare a
memorandum setting forth the basis of
award....” (2 GAR § 3114(m).)
ii) It would appear, therefore, that in the context

of an RFP, it is the conclusion of negotiations
that determines acceptance and the resulting
award. Thus, when all that is left for the
parties to do is complete the documentation
and do whatever else is necessary to manifest
their agreement, the parties have determined
the award.
iii) Note the conundrum this can present to an

Appellant. If the Appellant seeks to argue, in
an RFP protest, that withheld or protected
information should be released because an
“award” has effectively been made at the time
the protest was made, the concession (if
accepted) that an award has been made
denies the Appellant of the more beneficial
pre-award remedies.
(8) Thus, whether an award, that is, acceptance of the offer, has
been made is a question of fact and not any bright line
clearly specified in procurement law, except when
occasionally expressed as a requirement that a “notice of
award” must be given.
(9) Cibinic and Nash (at pp 952 et seq.) extensively discuss the
nature and timing of awards in the Federal acquisition
context. (See, also, their extensive discussion of contract
formation principles in the context of Federal procurement at
pp 203 et seq.) It must be appreciated, though, that there is
significant difference in that context in that, while both
MPC/Guam Procurement Act and FAR require a notice of
award in an IFB, the FAR, but not the Guam Procurement
Act, also requires “the contracting officer ... to make the
[RFP] award with ‘reasonable promptness’ by transmitting
the notice of award....” (Id., p 952.) Nevertheless, their
discussion buttresses the author’s conclusion that what is
meant by use of the term “award” in the procurement
context is, in a strictly legal sense, “acceptance” and must be
analyzed in that legal context.
(a) “As a general rule, when written or oral discussion

have been held and BAFOs [Best and Final Offers]
requested, award is made by acceptance of a BAFO
[in the manner required].” (Id., p 954.)
(b) “To be binding, an acceptance must contain a

manifestation of present intention to be bound.
[Referencing a Comptroller General case]: ‘In order
for a binding contract to result, the contracting officer
must unequivocally express an intent to accept an
offer. ... [I]t must appear that both parties intended to
make a binding agreement at the time of the
acceptance of the contractor’s offer’.” (Id., pp 224-
225.) The authors then turn their discussion to
several cases that, the author suspects, will surprise
both legal and non-legal readers as to the results of
when acceptance had, in those cases, been found to
occur or not occur. The author’s take away confirms
his statement that acceptance – and by extension
award – depends on an analysis of all the facts of the
situation and is not some simple minded bright line
event.
4. Note: post-award prejudice and a proposal to rectify it: Because an award

can be affirmed even if there were significant improprieties in the
solicitation process, including fraud, a rightful bidder or offeror can sustain
substantial prejudice by bringing an appeal after an award has been granted;
indeed, what, other than principle to point out a defective procurement,
would be the incentive?
a. This makes the time gap, referred to previously, between the

rendition of the protest decision and the time available to appeal
absolutely critical; remember, the automatic stay expires on the
decision and is not revived until the appeal is filed. If the protestor
is unable to file appeal immediately, although the law allows 15
days to do so, by awarding the contract in the interim, the
government can effectively rob a rightful protestor of the fruits of her
protest. This seems a highly unfair circumstance.
(1) The author would propose, when a protest is brought before

an award is made, that the government be stayed from
awarding any contract under the protested solicitation until:
either it has, after giving notice of decision on the protest,
given notice to all bidders of intent to award (identifying the
intended awardee), and at least two business days pass; or,
the time for filing an appeal has lapsed; whichever is later.
The point of the two day period would be to allow an
interested party to file a notice of intent to appeal with the
OPA which would have the effect of extending the automatic
stay until the 15 day filing period has lapsed, though there
would no point in requiring such a filing in that period. Of
course, the formal appeal must still be filed within the
normal 15 day period. This would preserve the remedies of
the parties and not do any substantial injury to the
procurement process, particularly when it is recalled that any
frivolous filing intended merely to delay the procurement
process is sanctionable.
D. Request for Reconsideration
1. Unlike protests, there is no specific regulatory authority for asking the Public
Auditor to reconsider her Decision. 5 GCA § 5425(f) says her decision “is
final unless a person adversely affected” takes appeal to the Superior Court,
but does not expressly prevent her reconsideration and, theoretically, if she
changed her mind she could then issue a final final decision. In In the
Appeal of [IBSS vs GPSS(2)] the Public Auditor did respond to a Request for
Reconsideration, though the Request was pretty much summarily denied
and the response seemed to the author as though she was uncomfortable in
even considering or rendering it.
XX. Some issues relating to contract performance
A. In this Article, we assume there has been no procurement controversy and a
contract has been awarded and entered into.
B. Performance Bonding: (Remember: “bond” means “security”.)
1. The purpose of requiring security is generally to provide the government a

source of ready funds if the contractor fails to perform and the government
suffers damages because of that breach. It is not intended to constitute a
penalty nor provide funds where there has been no breach of the contract.
a. The fundamental notion is one of contract law. In contract law, a

party who materially breaches (fails to render the agreed
performance) is liable for the reasonably foreseeable damages that
result from the breach, including an agreed “liquidated” amount
where the damage is certain but hard to calculate.
b. To the extent the bonded amount exceeds the amount of damages

suffered, the excess security is released. To the extent the bonded
amount is insufficient to cover the damages, the contractor remains
liable to pay the deficiency. Beware that if there is a call on the
security, the security provider will seek to recover what it has paid
out from the contractor.
c. Discussion of contract damages and other remedies, as well as the

law of surety, is well beyond the scope of this paper.
2. Services or supplies. As discussed above in the section on Bid Bonding, the

bid security for supplies and services is intended to carry over, without
release, to cover the period “until delivery of the supplies or services”.
Thus, in this case, the bid bond also serves as the performance bond, and no
separate performance bond is required. (5 GCA § 5212(g).)
a. Note, however, that some solicitations require service and warranty

and perhaps other conditions, and to the extent those conditions
cover any executory contract performance obligation after delivery,
this provision does not provide the full security for contract
performance that the government should reasonably require.
b. Note, again, as with bid bonds, that the regulations have not taken
into account the change in the law, and continue to purport to
allow, a performance bond for contracts for supplies or services.
(See, 2 GAR §§ 3102(f) and 3109(c)(4).) This regulation is nullified
by the changes to the law, however.
3. Construction contracts. As with the wide variety of management and

contract types, the considerations regarding the need of bonding for
construction is varied and dependent on unique circumstances.
a. Performance bond: A performance bond indemnifies the territory
against loss resulting from the failure of the contractor to perform a
construction contract in accordance with the plans and
specifications. 2 GAR § 5104(1)(b).) A performance bond is
required for all construction contracts in excess of $25,000 in the
amount of 100% of the contract price, but it can be reduced in some
circumstances to as little as 50% of such value, or more as portions
of the work is completed. (§ 5104(1)(a).)
b. Payment bond: A payment bond guarantees payment and

protection for those furnishing labor and materials to the contractor
or its subcontractors for the work bonded. The payment bond is
required in the same percentage amount, and can be reduced, as
with performance bonds. (2 GAR § 5104(2).)
C. Contract disputes. Contract disputes concern a controversy between a contractor

and the government arising after the solicitation and award, including “without
limitation controversies based upon breach of contract, mistake, misrepresentation,
or other cause for contract modification or rescission.” (5 GCA § 5427(a).) “The
word controversy is meant to be broad and all-encompassing. It includes the full
spectrum of disagreements from pricing of routine contract changes to claims of
breach of contract.” (2 GAR § 9103(b).)
1. Who hears contract disputes?
a. “The Chief Procurement Officer, the Director of Public Works, the

head of a purchasing agency, or a designee of one of these officers is
authorized, prior to commencement of an action in a court
concerning the controversy, to settle and resolve a controversy
described in Subsection (a) of this Section.” (5 GCA § 5427(b).)
(1) This provision clearly delegates authority to settle and

resolve contract “controversies” between contractors and the
government to procurement officials. How is that
substantively different from a “claim” based on a contract
within the purview of the Government Claims Act (see, 5
GCA § 6105(a), which for the purposes of the Claims Act,
waives government immunity “for all expenses incurred in
reliance upon a contract to which the Government of Guam
is a party”)?
(2) The procurement regulations, in the context of the

delegation of settlement and review authority over contract
controversies, proclaim “[t]he settlement or resolution of
controversies involving claims is subject to the Government
Claims Act.” (2 GAR § 9103(c)(2).)
(3) The Procurement Regulations, moreover, create more
confusion by stating, “Subject to Subsection 9103(c)(2) of
[the Claims Act], unless a provision of the contract specifies
that the authority to settle and resolve controversies and to
issue decisions is reserved to the Chief Procurement Officer,
the Director of Public Works, or the head of a Purchasing
Agency, such authority is hereby delegated to the
Procurement Officer.” (2 GAR § 9103(c)(1).)
(4) These are unsatisfactory and confusing provisions. If,

indeed, the Claims Act prevails, only a Claims Officer could
settle and resolve such contract disputes, notwithstanding the
provisions of the Procurment Law.
2. Procurement Act or Claims Act? As noted above, the simple matter of

resolving contract disputes is muddied by possible confusing jurisdictions
and procedures caused by possibly conflicting provisions between the
Procurement Act and the Government Claims Act.
a. In Pacific Rock Corporation, supra, the Guam Supreme Court

reviewed the inconsistencies between the Claims Act and the
Procurement Act, and came down on the side of the Procurement
Act as the controlling regime. It said, “[s]trict compliance with the
Claims Act would mean that party must twice seek administrative
relief when litigating a cause of action under a procurement
contract. First a party would be required to exhaust the
administrative remedies prescribed by the Procurement Law, seeking
settlement with the CPO and obtaining a final decision, then it
would have to follow Claims Act procedures.... This result produces
policy violations which the Procurement Law expressly proscribes....
Thus we hold that a party who seeks judicial relief from an
administrative action taken pursuant to the Procurement Law should
not seek relief under the Government Claims Act.” (At ¶ 19, and see
¶¶ 23, 26, 27.)
b. See also, Sumitomo Construction, Co. vs. Government of Guam,

discussed below regarding pre-judgment interest.
3. Contract dispute procedure. The Procurement Act contemplates that

contract controversies will, where possible, be “resolved by mutual
agreement”. (5 GCA § 5427(c).) The procurement regulations flesh this
concept out as follows:
a. “It is the territory's policy, consistent with this Act, to try to resolve
all controversies by mutual agreement without litigation. In
appropriate circumstances, informal discussions between the parties
can aid in the resolution of differences by mutual agreement and are
encouraged. If such informal discussions do not resolve the
controversy, individuals who have not participated substantially in
the matter in controversy may be brought in to conduct discussions
if this is feasible. Independent committees and panels which review
controversies expeditiously and informally with a view to fair
settlement possibilities also are encouraged at this stage.” (2 GAR §
9103(a)(1).)
b. Where mutual agreement does not result in a resolution to the

government’s satisfaction, it must “promptly issue” a final written
decision stating the reasons for the decision and advising the
contractor of its rights of review. (5 GCA § 5427(c).)
(1) Again, the regulations take an unfounded liberty with the law
here, saying, “the Procurement Officer shall, after written
request by the contractor for a final decision, promptly issue
a written decision.” This provision is useful because it
provides a remedy if the decision is not timely made after
such a request, as next discussed.
c. If the government does not promptly issue a decision, the contractor

can request one, and the agency has 60 days from that request to
issue the decision, upon failure of which the contractor can proceed
as though there was an adverse decision taken. (5 GCA § 5427(f).)
(1) Note that this is in contrast to a Protest of a solicitation,

where a protester cannot proceed until the agency renders a
decision. The author suggests a similar provision should be
added to the protest procedure.
D. Appeals from Contract Disputes.
1. A contract dispute decision is final and conclusive as between the contractor

and the government unless fraudulent or unless the contractor timely
appeals the decision to the OPA. (5 GCA § 5427(e).)
2. The contract dispute appeal must be filed by an “aggrieved contractor”

within 60 days of receipt of the contract dispute decision or, if no decision is
promptly forthcoming as expected, within 60 days after the contractor gives
the government agency a written request for final decision. (5 GCA §
5706(b); see, 2 GAR § 12301(a).)
3. There are no specific rules or regulations adopted concerning the manner of

taking a contract dispute appeal to OPA, but it could be expected that the
procedure and form would substantially mirror solicitation protest
procedure.
4. Guam Pacific Enterprises, supra, (OPA-PA-09-003) was the first contract

dispute appeal to reach the OPA Decision stage and it did, generally, follow
procurement appeal procedure. The main substantive difference is that,
rather than Procurement Law issues, contract disputes involve, obviously,
contract law, a subject matter OPA has not had much experience with to
date.
a. The central contract dispute in Guam Pacific Enterprises concerned

the liquidated damages provisions of a typical supply contract. The
Appellant argued it was unfairly assessed liquidated damages when
it sought, and was denied, extensions of time to perform based on
the inability of its stateside supplier to meet anticipated schedules.
b. The Public Auditor’s decision, however, relied solely on a strict

application of procurement law and did not consider contract law
implications in discussing the efficacy of the liquidated damages
clause. It said, “[t]he propriety of an assessment of liquidated
damages is dependent on the presence of a liquidated damages
clause in a contract and governed by the wording of that clause”. (P.
8.) The only evidence considered was a history of strict application
of the liquidated damage provision by the agency, which the
Decision found to be evidence that the liquidated damages clause
would not be waived. (Pp 9-10.)
c. In contract law, the propriety of an assessment of liquidated

damages is dependent on factors beyond, and not governed by, the
wording of the clause, and would apply regardless of waiver.
(1) Under general contract law, only damages, and not

penalties, are allowed as compensation. (See, 20 GCA §§
2201, et seq.; § 2281) The Guam Uniform Commercial
Code, Title 2, which provides substantive supplementation
of the Procurement Law as mentioned above (5 GCA §
5002), governs the efficacy of liquidated damages in the sale
of goods.
(2) 13 GCA § 2718 says that the parties to an agreement may

liquidate damages (that is “fix” the amount of damages for a
particular breach) “in the agreement but only at an amount
which is reasonable in the light of the anticipated or actual
harm caused by the breach, the difficulties of proof of loss,
and the inconvenience or nonfeasibility of otherwise
obtaining an adequate remedy.” As Comment to the UCC
version of this provision elucidates (see, Appendix XX, UCC
2005 Edition), this provision “sets forth explicitly the
elements to be considered in determining the reasonableness
of a liquidated damage clause.” The UCC 2005 Comment
adds further guidance, saying, “[t]his section thus respects
the parties’ ability to contract for damages while providing
some control by requiring that the term be reasonable under
the circumstances of the particular case.”
(3) Thus, the efficacy of a liquidated damages includes evidence

beyond the mere presence of a liquidated damages clause in
a contract of supply. The fact that the agency uniformly
enforced the liquidated damages clause, rather than going to
course of conduct as the Decision focused upon, could have
been evidence that its application, without regard to “the
circumstances of the particular case”, constituted a penalty or
forfeiture and not allowed contract damages. Without
discussing the enforcability of the liquidated damages clause,
the Public Auditor found “there has been no evidence
presented by GPA demonstrating an urgent need for exact
day delivery for all eight purchase orders...”
(4) Furthermore, the ubiquitous nature of the liquidated damage

clause, which must be accepted when in a bid or else the bid
is non-responsive, coupled with the uniform extraction of
liquidated damages regardless of particular circumstance,
raises an issue of adhesion and unconscionability. An
adhesion contract is one that is totally one-sided due to
superior and overwhelming bargaining structure, though
admittedly typically (but not exclusively) applied to non-
commercial transactions. Unconscionability is specifically
made a part of the Guam UCC, 13 GCA § 2203, and, while
again more often invoked in consumer cases, is not by its
own language restricted to non-commercial contracts. As the
Comment to UCC 2-302 (2005 Edition) notes, “[c]ourts have
been particularly vigilant when the contract at issue is set
forth in a standard form. The principal is one of prevention
of oppression and unfair surprise and not of disturbance of
allocation of risks because of superior bargaining power.
The basic test is whether, in the light of the general
commercial background and the commercial needs of the
particular trade or case, the term or contract involved is so
one-sided as to be unconscionable under the circumstances
existing at the time of the making of the contract.”
d. The author here is not judging the merits of the Guam Pacific
Enterprises Decision, indeed he reaches the same result on the
substantive issue, but is merely pointing out that, in an appeal to
OPA from a contract dispute, the Public Auditor is bound to
consider all the broader contract law and not just the Procurement
law.
(1) Indeed, the Guam Pacific Enterprises Decision did key in on

the broader good faith and fair dealing requirements of the
UCC and the Restatement of Contracts to reach a result that
would have been reached under a scrutiny of the efficacy of
the liquidated damages clause, and without even referring to
5 GCA § 5003, requiring all parties involved in the
performance or administration of government contracts to act
in good faith. (See, discussion of Good Faith and Fair
Dealing in the Decision, pp. 10 et seq.) In so doing it, in
effect, invoked the limitations of a proper liquidated
damages provision and the adhesion and unconscionability
notions discussed above:
(a) “There are a number of instances in which GPA has

dealt from its superior bargaining position to
administer GPS’s contracts in a one-sided manner”,
notwithstanding that, “GPA has insisted GPE rigidly
adhere to the contract delivery dates”.
(b) “GPA holds a superior economic and bargaining

position and has an obligation, particularly to small
local contractors ... to properly exercise its discretion
and to administer its contracts fairly and in good
faith.”
XXI. Getting paid, or not, as the case may be
A. Prompt Payment Act (5 GCA § 22501, et seq.). That’s the official title, not reality.
1. Interest
a. Each government agency which receives property or services from a

business but which does not make payment for each such complete
delivered item of property or service by the required payment date,
shall pay an interest penalty to such business on the amount of the
payment which is due as specified in this Article. (5 GCA §
22503(a).)
b. Interest shall be computed at the same interest rate assessed on

unpaid income taxes owed by taxpayers. (5 GCA § 22503(b).)
c. Any amount of an interest penalty which remains unpaid at the end
of any thirty-day period shall be added to the principle amount of
the debt and thereafter interest penalties shall accrue on such added
amount. (5 GCA § 22503(c).)
d. Claims for interest penalties which a government agency has failed

to pay may be filed under statutes governing contract disputes with
the government of Guam. (5 GCA § 22506(a).)
e. Interest penalties shall not continue to accrue after the filing of a

claim for such penalties, or for more than one (1) year, whichever
comes first. (5 GCA § 22506(b).)
f. Note a couple of things. First, although called a “claim”, demands

for payment of interest fall under the rubric of contract disputes,
procedurally, so are not pursued under the Government Claims Act
procedures. Second, you can only get up to one year’s interest,
which ain’t much ado about anything and does absolutely nothing to
assure prompt payment.
2. Discounted settlements
a. If a business offers a government agency a discount from the amount

otherwise due under a contract for property or services in exchange
for payment within such specified period of time, the government
agency may make payment in an amount equal to the discounted
price only if payment is made within such specified period of time.
5 GCA § 22504(a).)
b. If you’re willing to take pennies on the dollar for your marginal

contract profits, here’s your chance.
B. Non Prompt Payment Act Interest
1. Interest on amounts ultimately determined to be due to a contractor or the

Territory, based on a contract dispute, shall be payable at the statutory rate
applicable to judgments from the date the claim arose through the date of
decision or judgment, whichever is later. (5 GCA § 5475.)
a. In Sumitomo Construction, Co., vs. Government of Guam, CV 1589-

99, the Superior Court judge declared that prejudgment interest is
payable to a contractor in a contract dispute based on that
Procurement Code provision notwithstanding the Claims Act does
not allow prejudgment interest in tort claims.
2. This rate is currently 6% and this authority for interest is not limited to one
year.
C. Promissory notes (5 GCA § 22415)
1. Any creditor of the government of Guam (other than a tort claimant with an
unadjudicated claim) who is not paid within thirty (30) days of filing his
claim may request that the Director of Administration issue a registered,
nontransferable promissory note in the amount of his claim from the
government of Guam, bearing interest at six percent (6%) per annum and
maturing one year from its date of issue.
2. This is another empty remedy, with plenty of limitations and little practical
utility. Promise them anything, but give them a page.
D. Once a contract is fully performed, if the government fails to pay as promised, the
appropriate avenue for direct payment on the contract is by first making a claim
under the Government Claims Act, not the contract dispute mechanism. (5 GCA §
6105(a): “if the contract has been substantially completed, expectation damages
may be awarded”.)
1. A full review of the Government Claims Act is beyond the scope of this
paper. See generally, 5 GCA § 6101, et seq.
2. The claim must first be made to the Claims Officer of the agency involved,
must exceed $1,000 and be made within 18 months from “the date the
claim arose”.
XXII. Public enforcement of unauthorized procurement spending
A. Guam taxpayers have standing to bring suit against improper spending.
B. “Any taxpayer who is a resident of Guam shall have standing to sue the government
of Guam and any officer, agent, contractor, or employee of the Executive Branch of
the government of Guam for the purpose of enjoining any officer, agent, contractor,
or employee of the Executive Branch of the government of Guam from expending
money without proper appropriation, without proper authority, illegally, or contrary
to law, and to obtain a personal judgment in the courts of Guam against such
officers, agents, contractors, or employees of the government of Guam and in favor
of the Government of Guam for the return to the Government of Guam of any
money which has been expended without proper appropriation, without proper
authority, illegally, or contrary to law.” (5 GCA § 7103.)
C. “The Attorney General shall take all steps necessary to collect any judgment
obtained under this Chapter. If no collection on such judgment is made by the
Attorney General within six months of the date of the judgment, then the taxpayer
and resident who originally obtained the judgment shall have standing to pursue
execution and collection on the judgment on behalf of the government of Guam,
under the supervision of the Superior Court.” (5 GCA § 7109.)
D. “The court shall award reasonable costs and attorney’s fees in favor of the taxpayer
and resident who brings suit under this Chapter, against any defendants found liable
under this Chapter.” (5 GCA § 7112.)
E. “The Senators and the Guam Legislature shall have standing to sue under this
Chapter. The Legislative Counsel, or Assistant Legislative Counsel, may, as a part of
his or her duties for the Guam Legislature, represent members of the Guam
Legislature or the Guam Legislature, or both, in bringing suit under this Chapter,
provided that in such cases, attorney=s fees will not be allowed.” (5 GCA § 7115.)
XXIII. The Courts
A. This paper will not venture into the bailiwick of the courts, insofar as matters of
procurement are concerned. But, as has already been noted, particularly for the
Aggrieved Person, there are many advantages to be had to taking an Appeal, first, to
the Public Auditor rather than the courts.
B. Court review of bid protests: 5 GCA § 5425(e) indicates protest decisions may be
taken to the Public Auditor, and 5 GCA § 5480(a) states the Superior Court “shall
have jurisdiction over an action between the Territory and a bidder, offeror, or
contractor, either actual or prospective, to determine whether a solicitation or
award of a contract is in accordance [with the laws and regulations].” This would
seem, at first blush, to make it optional whether to appeal a protest decision to
either the OPA or the Superior Court. However, note the following:
1. 5 GCA § 5480(f) says all actions permitted by § 5480(a) “shall be conducted

as provided in the Government Claims Act”. As discussed above, the
Guam Supreme Court, in the Pacific Rock Corporation contract dispute
case, supra, reconciled the Procurement Act and the Government Claims
Act inconsistencies by stating, “we hold that a party who seeks judicial relief
from an administrative action taken pursuant to the Procurement Law should
not seek relief under the Government Claims Act.” (Emphasis added.) The
Court ruled that the Procurement Act provisions, including procedural
provisions, prevail over inconsistent or duplicative Claims Act provisions.
2. 5 GCA § 5481(a) restricts the filing of any § 5480(a) court action within 14
days after receipt of “a final administrative decision”. (This 14 day limit
applies to a review of an agency protest decision; as discussed above in the
Article on Procurement Protests, there is a 30 day filing period for bringing
protest actions directly to the court provided by 2 GAR § 9109(1)(a).) In
contrast, 5 GCA § 5425(e) allows protest appeals to OPA within 15 days
after receipt of “the notice of decision”, referring to the notice of decision
required after protest in § 5425(d). 5 GCA § 5425(f) says an OPA decision
“is final” unless appealed to the Superior Court under § 5480.
3. The language of these sections, and more importantly the general notion of
exhaustion of administrative remedies, suggests that no court action should
be commenced unless a protest has been first administratively determined to
finality by the OPA. However, the possibility of initiating a protest action in
the Superior Court under the 30 day filing limit provided in 2 GAR §
9109(1)(a) does distract from this suggestion.
4. The case for a less deferential standard of Court review of procurement

matters under Guam law.
a. The author believes there is Guam law and legislative history which
would suggest that courts are not bound to the traditional highly
deferential standard of review in all procurement cases or issues;
indeed, in certain instances they are bound to use a less deferential
standard.
b. As originally enacted by PL 16-124, Guam Government Code §

6975(e) said an agency protest decision “shall be final and
conclusive, unless fraudulent, or any persons adversely affected by
the decision commences an action in court....” This was a statement
consistent with the tradition deferential review standards.
c. PL 18-44, however, repealed and reenacted GC § 6975, in

consequence of which the standard arguably became less deferential
by deleting the “unless fraudulent” condition along with the whole
final and conclusive clause. Thus, there is no longer any general
legislative presumption of conclusiveness of agency decisions, nor is
the review bar set at a level of fraud. Indeed, the act of repealing
those prior presumptions and standards arguably implies a relaxation
of them.
(1) Subsections (e) and (f) of the reenacted GC § 6975 allow for
administrative appeals to a review board (now OPA) rather
than the courts, and, as for finality, say the administrative
review decision “is final unless a person adversely affected”
appeals to the court.
d. The most exact statement of the deferential standard is that decisions

are deferred to unless they are clearly erroneous, arbitrary,
capricious or contrary to law. The Procurement Act has precisely
identified those very few and specific instances where that
standard is to be applied in 5 GCA § 5245:
“The determinations required by §§ 5211(f),
5212(a), 5212(g), 5214, 5215, 5216(e),
5230(a), 5232(c), 5235, 5236 and 5237(b) of
this Chapter are final and conclusive unless
they are clearly erroneous, arbitrary,
capricious or contrary to law.”
This section derives from the beginning of the Procurement Act in PL
16-124, codified then as GC § 6964.
(1) These specific determinations are:
(a) § 5211(f): decision to permit a correction or

withdrawal of a bid.
(b) § 5212(a): decision regarding requirement for bid
security
(c) § 5212(g): regarding no requirement for
performance bond
(d) § 5214: determination of only one source for use of
sole source method of source selection
(e) § 5215: determination of emergency method of
source selection
(f) § 5216(e): determination of best qualified in RFP
method of source selection
(g) § 5230(a): determination of nonresponsibility
(h) § 5232(c): determination not to require cost or
pricing data
(i) § 5235: determination of contract type
(j) § 5236: determination of adequacy of contractor’s
accounting system
(k) §3237(b): determination to use multi-year contract
(2) The specificity with which the deferential standard of review

is to be applied evinces an intent that it not be applied in any
other circumstance.
(3) This supposition is confirmed by 5 GCA § 5480(d),

applicable to the Superior Court’s jurisdiction over
procurement matters, which says: “In any judicial action
under this Section, factual or legal determinations by
employees, agents or other persons appointed by the
Territory shall have no finality and shall not be conclusive,
notwithstanding any contract provision, or regulation, except
to the extent provided in §§ 5245 [above], 5705 [dealing
with suspension and debarment reviews] and 5706 [dealing
with contract and breach of contract reviews] of this
Chapter.” This provision was adopted by the original law
enacted by PL 16-124, modified only slightly in 1985 by the
overhaul in PL 18-44, adding the references to §§ 5705 and
5706.
(4) It should be mentioned here that 5 GCA § 5245 which
expressly applies the deferential standard of review in those
particular instances discussed above does not apply to the
OPA de novo standard of review because § 5245 was
enacted before § 5703, which expressly gives the Public
Auditor unqualified “power to review and determine de
novo any matter properly submitted”.
5. In In the Appeal of O&M Energy, S.A. [#2], OPA-PA-09-008, the

Government Agency has, during the pendency of the OPA appeal, brought
a very curious court action, Guam Power Authority v. O&M Energy, S.A.,
Guam Superior Court, CV 1896-09, styled simply as a “verified complaint”,
citing the jurisdiction of 5 GCA § 5480(a). (See copy attached to Notice of
Filing Superior Court Case in the OPA action.) The intent is to simply oust
the OPA of its jurisdiction in the matter (dismiss the OPA appeal), based on
the argument that the Appellant’s case does not adequately state grounds for
protest. This is a curious move for several reasons, among them:
a. Foremost, this would work a complete injustice on the procurement

appeals process. Persons who may be aggrieved are given due
process rights to protest, and then appeal a denial of the protest to
the OPA. (5 GCA §§ 5425(a) and (e)). The agency denied the
protest on the same grounds it seeks to avoid OPA review of the
protest. However valid the agency’s claims may be, the law allows
those claims to be tested by administrative review, and this action
seeks to negate that.
b. As noted, the agency’s claims to the Superior Court are essentially

nothing more than a rehash of its denial of protest in the first
instance. OPA has not heard nor rendered its decision in the matter
at the time the action has been commenced. In essence, then, this
case is an appeal to the Superior Court by the agency from its own
protest decision, which rather turns things on their head; if the
agency was not injured by its protest decision, what injury is being
appealed?
c. The complaint acknowledges that its protest decision was rendered

on October 7th. The OPA, as noted, has not rendered a decision.
The agency commenced the court action December 31st. The action
appears to be procedurally defective because it is either too late or
too early. It is too late to bring an action on the protest, since 5 GCA
§ 5481(a) requires it to be initiated withing 14 days after receipt of
final administrative decision. It is too early to bring an action on the
appeal, since 5 GCA § 5425(f) requires a final decision by the Public
Auditor before initiating a § 5480(a) action.
C. Court review of OPA decisions. The explicit language of 5 GCA § 5707, which
authorizes an appeal of an OPA decision (as opposed to a protest decision) to the
court is a bit confusing to the author, referring to appeal procedures to be
conducted pursuant to “Article D of Chapter 9 of this Chapter”, which is not found
under the Compiler’s codification; the author suspects the intended reference is to
Article 9, Part D of the Chapter (i.e., § 5480 et seq.). More importantly, it is
permissive, saying an appeal may be taken to the Superior Court, which does not
expressly pre-empt the writ of mandate procedure under the Administrative
Adjudication Law. While § 5707 was enacted later in time than § 5480, and would
therefore prevail in the event of any inconsistency, they are so intertwined as to
make the procedural issues a bit murky. It will likely be the case that some
experience and guidance will be necessary from future Court cases to determine the
proper means by which to seek review of an OPA Decision, and whether there are
procedural or substantive advantages to one course of action over another or
whether they will all be handled substantively similarly however styled or brought.
1. Recall that the Court’s standard of review is specified in 5 GCA § 5704.

Any determination of an issue or a finding of fact by the Public Auditor is
final and conclusive unless arbitrary, capricious, fraudulent, clearly
erroneous, or contrary to law: i.e., the deferential standard of review. Any
decision, including any determination regarding the application or
interpretation of the procurement law or regulation is entitled to great
weight and the benefit of reasonable doubt.
D. The first OPA Decision (that is, an Appeal from a Public Auditor decision, as
opposed to an appeal to the court from a protest decision) finally reviewed nd
determined by the Superior Court was taken not by way of appeal of the OPA
decision under the appeal authorized by 5 GCA § 5707(a) of the Procurement Act,
but by way of writ of mandate as contemplated by the Administrative Adjudication
Law, 9 GCA § 9241. See, TRC Environmental Corporation SP 160-07, at page 4.
1. Two other appeals have been taken, as noted in the Public Auditor’s 2008
Public Report, page 14
(http://www.guamopa.org/docs/2008AnnualReport.pdf ). One of those
pending matters, In the Appeal of Town House Department Stores, Inc., dba
Island Business Systems & Supplies, by Xerox Corporation, Appellant, SP
240-08 (arising from the OPA Decision in In the Appeal of [IBSS vs GPSS(2)]
), was commenced by action denominated “Complaint and Appeal of
Decision by the Office of the Public Auditor...”, invoking the jurisdiction of
5 GCA § 5707.
E. It must also be remembered, should any part of the Appeal to OPA be taken up in a
court action (for instance, an injunction action), the OPA matter will be, at best, put
on hold, if not entirely removed to the court, until or unless the court returns the
matter to the Public Auditor.
1. “If an action concerning the procurement under Appeal has commenced in

court, the Public Auditor shall not act on the Appeal except to notify the
parties and decline the matter due to Judicial involvement. This section
shall not apply where a court requests the decision of the Public Auditor.”
(2 GAR § 12103(b).)
2. Note also that the automatic stay is re-instituted upon an appeal to the court
from an OPA decision. This results from the interplay of 5 GCA §§ 5425(f)
and (g). Subsection g imposes the automatic stay “prior to final resolution
of” the protest. Subsection f defines that finality to include appeals from
decisions of the Public Auditor: “A decision of the Public Auditor is final
unless” court action is taken to appeal it. This condition of finality implies
re-imposition of the stay upon filing the court appeal.
a. Query how a court would deal with any actions adverse to the
appellant taken during the gap between the OPA decision and filing
of the appeal?
F. It must also be remembered that Decisions and Rulings of the courts pre-empt or
over-rule the Decisions of the Public Auditor, and provide their own unique
contributions to the body of Guam Procurement Law.
1. Recall, however, that decisions and determinations of the Public Auditor

“shall be entitled to great weight and the benefit of reasonable doubt,
although it shall not be conclusive on any court having competent
jurisdiction.” (5 GCA § 5704.)
XXIV. A review (with commentary and full disclaimer) of some of the OPA Decisions, or issues
in Decisions, not discussed or only touched upon, in the Outline above, and with all due
respect to the authors. This review is entirely the opinion of this author and rendered
humbly, warts and all. All Decisions of the Public Auditor are found on the OPA website,
as mentioned above. In addition, the Public Auditor has included her own Summary of all
OPA appeals through OPA-PA-08-010 in Appendix 5 to her 2008 Annual Report,
http://www.guamopa.org/docs/2008AnnualReport.pdf .
1. OPA-PA-06-001, In the Appeal of the Debarment of Rex International, Inc.

(vs GWA)
a. This case is fascinating as being the first case ever heard by the
Public Auditor, but more so because it is the only case to date
dealing with the power of an agency (here, GWA) to debar a
contractor/bidder and the authority of the Public Auditor to hear the
appeal.
b. The Appeal and Agency Report were filed. Unfortunately for
students of Guam procurement, the appeal was withdrawn without
explanation, and the case dismissed.
2. OPA-PA-06-002, In the Appeal of Far East Equipment Company, LLC (vs

PAG)
a. This case involved an apparent multi-step IFB for crane gantry at the
Port of Guam. The issues involved the appropriate amount of
bidding time for a complex bid, and the alleged failure of the agency
to respond timely to questions, and the agency’s material changes to
the bid, and the agency’s failure to communicate answers and
changes to all bidders.
b. The Appeal, Agency Report and other matters were filed and a
hearing date set before the agency cancelled the bids and the appeal
was dismissed.
3. OPA-PA-06-003, In the Appeal of RadioCom (vs GSA for Office of

Homeland Security)
a. This case went all the way through hearing and Decision, so this is
the Public Auditor’s first Decision.
b. This was an appeal of a sole source procurement (neither IFB nor

RFP). The contractor prepared the specifications, and GSA accepted,
without question, and incorporated in its own determination, the
contractor’s and OHS’ assessment that the supplies were
incompatible with other equipment, justifying the sole source
procurement. The procurement was funded from Federal funds.
c. The Decision held that
(1) the Procurement Act controlled notwithstanding the use of

Federal funds.
(2) the specifications did not include any reference to

compatibility, and the compatibility argument was
manufactured after the fact to justify sole source.
(3) the CPO must monitor specifications and make an

independent assessment whether there are other potential
contractors, and cannot simply rely on the representations of
vendors or the using/purchasing agency, especially “when a
responsible source has expressed interest in the
procurement, the agency must make reasonable efforts to
permit the source to compete”.
4. OPA-PA-07-002, In the Appeal of Emission Technologies, Inc. (vs GPA)
a. Discussion of this OPA Decision must begin with the caveat that it
has been vacated by the Guam Superior Court, TRC Environmental
Corporation, SP 160-07. Thus, the OPA Decision is purely
academic and without legal precedent.
b. This Appeal involved issues of the timeliness of filing an Appeal, and

the “responsiveness” of a bid when the bidder does not hold a
Guam business license at the time the bid is submitted, as well as an
issue of “local preference”. The Appeal was brought by a qualified
offeror under an RFP who had been determined not to be the most
best qualified offeror.
(1) The Superior Court vacated the Decision on the grounds of

timing, finding the Public Auditor lacked jurisdiction to
consider the Appeal to her office because it was untimely
filed beyond the 15 day filing period. Along the way, the
Court disagreed with the OPA’s Decision as to the need for
an offeror to have business license at the time when an offer
is submitted in response to an RFP.
c. An issue not argued or considered was that the solicitation was in

the form of an RFP, and the services sought were for a continuous
emissions monitoring system. As indicated in the outline above, it is
questionable whether these services fall within the scope of
“professional services”. But, anyway, that is why the appeal is from
a disappointed offeror rather than a higher bidder.
d. The timing issue is complicated by whether communications

constituted a request for reconsideration or a second protest. The
Decision seemed prepared to accept it was a request for
reconsideration and telegraphed the impression it would consider
whether that tolled the appeal filing time, but found that the appeal
to OPA was timely anyway, so we didn’t get a firm decision on the
reconsideration tolling question. The Superior Court construed the
communications between the protestor, agency and OPA to the
effect that the initial protest and reply constituted the full protest and
denial, making the “formal” appeal to the OPA untimely.
e. On the substantive issue of the Guam business license, the Decision

held that, because the RFP required a Guam business license to be
considered for award, the failure to have it rendered the offeror’s
proposal nonresponsive. The author suggests the J&G Construction
case (a “matter of first impression”) contradicts and overrules this
holding because, first, qualification to conduct business is what the
Guam business license issue is all about and that is a matter of
bidder responsibility, not responsiveness; and, second, the
solicitation documents (IFB/RFP) cannot by any mandate convert an
issue of responsibility into an issue of responsiveness.
f. The local preference issue arose because there was only one
apparent supplier of the services sought on-island, and GPA sought
offers for an off-island offeror. The Decision held there could be no
award to an off-island offeror until its offered price is compared to a
local offeror’s price and the 15% local preference differential is
determined.
5. OPA-PA-07-006, In the Appeal of Great West Retirement Services (vs

GovGuam Retirement Fund)
a. This Appeal is from an RFP. The issue was whether the Retirement
Fund improperly refused to negotiate in good faith. The Decision
held it is improper to discontinue negotiations with a best qualified
offeror (and commence negotiations with the next up the list) before
there has been a determination that its best and final offer is not fair
and reasonable.
6. OPA-PA-07-007, In the Appeal of Dick Pacific Construction Company, Ltd

(vs GIAA)
a. This involved the issue whether failure to provide personnel résumés

and proof of a Guam business license in the bid envelope as
mandated by an IFB renders the bid non-responsive. In this case
that was, indeed, the holding. While that case was distinguished
and discussed in the Outline above, in the context of the J&G
Construction appeal which held the IFB cannot convert matters of
responsibility into issues of responsiveness, there was an additional
element worth mentioning.
b. This case involved, also, the requirement that the bidder, or a

bidder’s subcontractor, have a specialty reinforced steel license,
although the main part of the construction work solicited was to
improve airport utilities infrastructure. In the outline above, the
author made the argument that, although usually an issue of
responsibility, issues of speciality licensure can be considered an
issue of responsiveness where the licensed work is the thing which
the government desires. In this case, it is arguable that the licensed
work is only incidental to the broader solicitation for whole
infrastructure, so the specialty steel reinforcement license should be
considered an issue of bidder responsibility, not responsiveness.
c. Cibinic and Nash (at p 414) admit that decisions concerning the
requirement of licenses, as an issue of responsibility, “have been
somewhat confusing”. They distill two rules:
(1) “First, an affirmative determination of responsibility may be

made if the offeror can obtain the license or permit prior to
the time of performance even though it is has not been
obtained prior to award.”
(2) “Second, a [negative] determination of nonresponsibility will

be upheld if the contracting officer reasonably concludes that
a required or necessary license or permit will, if not
obtained, impair performance.”
7. OPA-PA-07-008, In the Appeal of Advance Management, Inc. (vs GPSS)
a. This appeal was dismissed, but raised the interesting issue whether
the OPA has jurisdiction to hear issues of Wage Determination
compliance. The case was dismissed on the jurisdictional ground
that there had been no protest to or decision from the agency.
b. 5 GCA § 5801 imposes on all contractors “for the provision of a

service to” GovGuam to pay those of their employees whose
purpose is the direct delivery of the service contracted, wage rates
established by the Guam DOL Wage Determination schedule. Call
this the Wage Determination law. It is a labor law obligation, not a
procurement obligation. It is nevertheless found in the standard
terms and conditions of most GovGuam IFBs and RFPs, and can be
referred to there as the Wage Determination clause.
c. 5 GCA § 5805 creates procurement confusion by directing the CPO

to “require bidders to submit declarations [made under penalty of
perjury] to demonstrate their compliance with” the Wage
Determination law. Such a demonstration is not language
expressing any promissory or contractual obligation.
d. The Notice of Appeal did not clearly specify the ground for protest,
alleging merely “a serious defect in the bid and award process”, but
the gist of the complaint seemed to be that the winning bidder was
non-responsive or non-responsible because its pricing revealed it
most likely would not comply with the Wage Determination
requirement, and the agency should have realized that and was
somehow “complicit” in the Wage Determination violation by
making the award.
(1) There is a colorable legal basis for making that argument

because 5 GCA § 5211(g) requires that the award only be
given to a bidder “whose bid amount is sufficient to comply
with [the Wage Determination law]”. The problem is, the
law does not require, as a condition of procurement award,
compliance with the specifics of the Wage Determination
law; it requires only that the bid award give the bidder
enough money, in total, to comply. The author notes that
bidders are not required to break down their costings nor
allocate their fees to any such cost accounting, thus believes
that this a standard whose application is too vague and
uncertain to enforce, or for an agency to judge, in the
procurement context.
(2) The author notes that if a prospective contractor has been

found previously to have been in violation of the wage law,
especially when under government contract, that such a
finding should raise a serious issue of bidder responsibility.
Whether that would be grounds to protest would be another
matter; see the discussion in regarding responsibility, under
competitive sealed bidding, above.
e. This is an example of a provision appearing in a solicitation that has

nothing to do with the procurement, solicitation or contract. It is
intended to implement a collateral legal obligation and merely
clouds procurement law. As such, it is not a ground for agency
protest under 5 GCA § 5425(a) (i.e., made in connection with the
method of source selection, solicitation or award), which is a
predicate to a procurement appeal to OPA. It is not, therefore,
within the jurisdiction of OPA to enforce such a provision.
f. Furthermore, 5 GCA § 5803 identifies Guam DOL as the agency

given oversight and enforcement authority of the Wage
Determination law, and § 5804 provides a separate sanction
(disqualification from GovGuam contracting) for a contractor who
violates the clause, which may only be appealed to the Superior
Court. Therefore, any alleged “violation” of the Wage
Determination clause should not even be considered a contract
dispute between the procuring agency and the contractor. The
Wage Determination clause in a solicitation is merely intended to
give notice to bidders/offerors of their labor law obligations; it does
not imply or import any contractual obligation between the
soliciting agency and the contractor.
g. In Pacific Security Alarm, Inc., vs Guam Power Authority, CV 1304-

04, the judge distinguished a New York case that found a bid to be
nonresponsive if it did not comply with the prevailing wage
requirement and noted that, while Guam law mandates payment of
a prevailing wage, “it does not mandate that benefits be included in
price quotes for Invitations for Bids”.
8. OPA-PA-07-009, In the Appeal of Pacific Security Alarm, Inc. (vs GMHA)
a. This involved an IFB. The agency chose to cancel the bids after the
bids were opened and the bid prices made known.
b. The Decision held an agency can only “cancel” a bid prior to bid
opening. After bid opening, an agency may only “reject” all bids (as
a means of disposing of the solicitation).
c. The Decision then held the cancellation was void, and it was up to
the agency as to how to proceed with dealing with the bids.
d. Here there was, however, a game-changing event that occurred

between the time the agency wrongly cancelled the bid and the
time, after the Decision, when it had to consider the bids. At the
time of cancellation, the agency lacked funds to meet the bid, so
clearly that would have been adequate reason to reject “in the best
interests of the agency”. But, by the time the Decision was made,
the agency had obtained sufficient funds, so rejecting all bids was
not then justified by lack of funds. It appears this left the agency
with the only option of awarding the bid to the lowest bidder.
e. Compare the reasons allowed to cancel a bid before opening (2

GAR § 3115(d)(1)(B)) with reasons allowed to reject all bids after
opening (§ 3115(d)(2)(A).
9. OPA-PA-07-010, In the Appeal of Far East Equipment Company, LLC (vs

GSA for PAG)
a. This was an appeal of an IFB, involving a dispute over what the

specifications required and what the 2 bidders could and did offer.
The requirements were for particularly sized and powered fork lifts.
The Decision determined that the Appellant, who bid the lowest
price, admitted it did not meet the exact specifications, but argued
the proposed winner was non-responsive because its offered fork lift
exceeded the minimum specifications; and that Appellant only
deviated from the specifications by an immaterial degree (see, 2
GAR § 3109(m)(4)(B): a minor mistake where the effect on quality is
negligible so does not prejudice other bidders.).
b. The Decision noted the minimal difference between Appellant’s low

bid product and the specifications but did not critically dispute the
agency’s determination of non-responsiveness based on its own
judgment of materiality of Appellant’s deviation from specifications.
c. It is true that as between responsive bids, the lowest price wins even
if another bid offers a product with superior specifications. “The
acceptability evaluation is not conducted for the purpose of
determining whether one bidder’s item is superior to another, but
only to determine that a bidder’s offering is acceptable as set forth in
the [IFB].” (2 GAR § 3109(n)(3).)
d. Second, compare this to the O&M Energy appeal mentioned above

(OPA-PA-08-004) where the Public Auditor very carefully
scrutinized the agency’s determination of materiality, whereas here
the Decision was deferential. Here, the difference in bid prices was
relatively minimal, but in O&M the difference was extreme.
e. The author observes that where a bidder has a product that is close
but not up to specifications, the better time to protest is as soon as
the specifications are known, not after the bid is opened. This
observation is coupled with a caveat that the usual course is for a
party to seek clarification, but if that is not forthcoming, or coming to
your satisfaction, be mindful of the calendar and timely file your
protest on the IFB on the basis of unduly restrictive specifications. If
the specifications truly are only minimally different from another
product, and particularly where the products wanted are standard,
commercially available ones, the agency should show reasonable
acceptance of enough flexibility in the specifications to encourage
competition, so long as its minimum requirements can be met. But,
once the bids are submitted and opened, it is too late to make that
argument.
10. OPA-PA-07-011, In the Appeal of JMI Medical Systems, Inc. (vs GMHA)
a. This was an Appeal involving an IFB. The Appellant was not the
low bidder; indeed, the low bid was so low that the agency decided
during the course of events to award a contract for double the
quantity of product specified in the IFB. There was much confusion
on Appellant’s part whether the bid was for equipment and supplies
or for the equipment alone. The Appellant protested that the low
bid was non-responsive because it did not include a bid for both
supplies and equipment, although the Appellant had bid both.
b. The agency issued its final decision on the protest after a request for
reconsideration and the next day awarded the contract to the low
bidder, issuing two purchase orders for two pieces of the same
equipment.
c. The Public Auditor found the bid clearly only sought equipment (not
equipment and supplies), so the low bid was responsive.
d. Curiously, the Decision raised an issue of the automatic stay, saying
“after the appeal began, GMHA continued with the award and
purchase.” This is curious because the award and purchase orders
were issued on November 28, yet the Appeal was not filed until
December 12. What was left to be done that violated the
proscription against proceeding “further with the solicitation or with
the award of the contract”? The author would assume that
execution and performance of the contract post-award would be
outside the scope of the automatic stay. This ends up in the author’s
mind as being only of passing interest because the stay was not
invoked.
e. The Decision puzzled over a legal reason to find that an award for 2
pieces of equipment when only one was solicited was improper,
drifting off into discussions of indefinite quantity contracts (this
wasn’t one) and general policy statements.
(1) The author considers the discussion to be needlessly

floundering and off-base on this issue. The government
simply cannot enter into a contract (or issue a purchase
order) to buy something it did not solicit. “[A]ll territorial
contracts shall be awarded by” one of the approved methods
of source selection. (5 GCA § 5210(a).) The contract shall
be awarded to the lowest responsible bidder whose bid
meets the requirements set forth in the IFB. (5 GCA §
5211(g).) The IFB includes the “purchase description” (5
GCA § 5211(b)), which describes “the supplies, services or
construction to be purchased” (5 GCA § 5201(d). Here, the
solicitation plainly was for one piece of equipment, not two.
There was no authority to purchase the second one, which is
the tortuous result the Decision correctly reached.
f. For the author, the most significant holding of this Decision is its
statement that agencies cannot evaluate an IFB using the evaluation
process (negotiations) and standards (selecting “best qualified” rather
than lowest responsive bid) of an RFP, citing the Fleet Services
Guam Supreme Court Decision discussed above. As it was, the best
qualified was also the low bidder in this case, so that was not an
issue, but the Decision did refute the use of negotiations in this case.
g. The result, correctly reached, was to award the IFB for one piece of
equipment and require a new solicitation if the agency remained
intent on purchasing a second piece of equipment.
11. OPA-PA-08-008, In the Appeal of Latte Treatment Center, Inc. (vs DMHSA)
a. This was an appeal of an RFP issued for professional care services
for children with severe emotional conditions and related such. The
Decision cancelled the RFP altogether, principally because the
agency failed to properly document the procurement record. The
author supports the result, but respectfully quibbles with some of the
statements made in reaching the Decision.
b. The agency argued the Appellant could not be an “aggrieved

offeror” because it substantively lacked an essential professional
license to perform the work, therefor the OPA lacked jurisdiction to
hear the appeal. Note that this is a requirement for binging the
protest in the first instance, and not a direct requirement for bringing
an appeal. More substantively, though, this argument puts the
carabao before the cart because that was a contested issue, and the
Decision correctly found Appellant was an “aggrieved offeror”
because the Appellant alleged other “violations of Guam’s
Procurement Laws and Regulations relating to DMHSA’s solicitation
and award”.
(1) But in doing so, the statements were made in the Decision
that “a losing bidder is an aggrieved bidder”, and, “LTC is an
aggrieved offeror because it was not selected for the award.”
The author is concerned those statements venture too far
afield. All that is required to bring an appeal is that the
bidder “may be” aggrieved. If all losing bidders were
aggrieved by definition, as the statements suggest, then every
award is subject to appeal even if the bidder may not be
“aggrieved” by any error or wrongdoing. In Latte Treatment
Center, the Appellant raised several issues by which it may
be aggrieved, and it was on that basis that the OPA had
jurisdiction, not on the basis simply that the Appellant is
aggrieved because it was not selected.
(2) If a rule is recognized that notice of non-selection means the

unselected bidders are aggrieved simply by reason of not
being selected, regardless of knowledge of NO facts by
which they may be aggrieved by error or wrongdoing, then
EVERY losing bidder will be OBLIGED to file a protest when
the award to another bidder is announced to protect the 14
day filing deadline, even if, at that time, they don’t know any
facts of error or wrongdoing by which they may be
aggrieved. That would imperil the whole appeal process,
and cannot be the meaning or intent of the law and
regulations.
(3) Bear in mind that delay in bringing a protest until after facts
of aggrievement are discovered does not mean the
procurement process grinds to a halt. First, the automatic
stay can be lifted. Second, the contract, if already awarded,
is not subject to any automatic stay, nor is any award
necessarily cancelled by the protest because it can be
affirmed even if the person awarded the contract engaged in
fraud. These matters have been discussed above.
(4) This discussion is not intended to be idle nit-picking. This

fine point bears on the timing of when the period for filing
protests begins. The author contested that exact point before
the Public Auditor in the CNMI (which differs only in
requiring a 10 day protest filing period compared to Guam’s
14 day period). There, the agency held that the Protestant’s
protest must have been filed within 10 days of receipt of
notice of intent to award to another bidder, even though the
Protestant did not have, and could not have, any knowledge,
at that time, of facts giving rise to the Appellant’s claim to
being aggrieved. The Protestant discovered, after documents
were later disclosed by the agency, facts indicating it may
have been aggrieved by alleged errors in the evaluation
process, and filed its protest within 10 days of that discovery.
(a) In its Final Decision and Decision on Request for

Reconsideration in Appeal of Island Business
Systems & Supplies, Appeal No. BP-A057, the CNMI
OPA ruled that notice of award to another is
sufficient to trigger the protest filing period,
regardless whether the Protestor had knowledge of
facts by which it may be aggrieved.
i) The Public Auditor acknowledged Appellant

had no knowledge, and could not have had
knowledge, of the facts by which it may have
been aggrieved until such documents were
revealed (“it is possible that IBSS did not
know how it was aggrieved”), but
nevertheless said “it was aggrieved”on the
day it received notice of award to another
bidder., without more.
ii) The CNMI Public Auditor, in his decision on

reconsideration, supported this rule by
saying, “every rejected proposer could
merely bide its time until it found some basis
upon which to protest an award, which
would wreak havoc on the procurement
process and the need for finality, issuance of
a valid contract, and the products or services
that are the subject of the contract.”
iii) The upshot seems to be, in the CNMI, if you

do not win the award, you must protest even
before you have “found some basis upon
which to protest an award”. As the opinion
stated, on the date the Appellant was notified
that another bidder got the award, it may not
have known how it was aggrieved, but “it
certainly knew that it was aggrieved.”
(b) The CNMI regulation (NMIAC § 70-30.3-501(a)(1)),

substantively identical to Guam, only allows protests
to be filed by parties “who may be aggrieved in
connection with” the bid, and the protest must be
filed “within ten days after such aggrieved person
knows or should have known of the facts giving rise
thereto”, which, to the author would mean the
parties cannot protest until they have knowledge or
should have knowledge of a factual basis for the
protest. But that would not appear to be the CNMI
case, based on this decision, which now seems to
require rejected bidders and proposers to protest first,
in order to secure their filing deadline, and seek to
find a basis for the protest afterwards.
(c) In the CNMI case, the Public Auditor’s decision

seemed to turn on his concern that the Appellant
spent too much time (24 days – 16 working days in
the finding of the Public Auditor) puzzling over the
notice of award before it requested documents from
the agency supporting the proposal evaluation and
award.
i) The Public Auditor said such a request for

documents may have “possibly” stayed the
time to file a protest, though there is no
provision in the regulation imposing such a
stay nor discretion granted to allow it. Filing
deadlines are generally treated strictly, as
discussed above.
ii) The Public Auditor overlooked the fact that,

by the time the agency actually supplied the
information requested, it would have been
too late to file a protest anyway if the filing
period was triggered by mere notice of
award. He did not provide any authority to
provide any hope that such a request might
have “possibly” stayed the filing deadline.
(d) Note that Guam regulations do not specify any time

limit for making a Request for Reasons, and CNMI
regulations do not make provision for any such
Request at all.
(e) Note that the CNMI regulations do not have the

explicit sanctions for filing frivolous or disruptive
protests that Guam does (2 GAR § 9101(g)(2)), so
filing protests when there is no knowledge of the
facts by which a person may be aggrieved may not
be so perilous a proposition in the CNMI. But
beware the CNMI does have the broad right to disbar
or suspend for any cause determined “to be so
serious and compelling as to affect responsibility as a
government contractor” (NMIAC § 70-30.3-
760(b)(5)). Presumably, following the Public
Auditor’s advice that a bidder is, ipso facto,
aggrieved when notified of award to another would
constitute a defense to any sanction for filing
factually baseless protests in the CNMI; but, beware
of the dilemma.
(f) Finally, note that the CNMI procurement law and

regulations are similar in general principal to Guam
procurement, but differ significantly in technical
detail. Discussion of CNMI procurement law and
regulation is beyond the scope of this paper.
12. OPA-PA-08-009, In the Appeal of Captain, Hutapea and Associates (vs

GHURA)
a. This involved a factual dispute over the requirements of an RFP.

The Appellant argued that it should have been selected as the “best
offeror” because it exclusively had a necessary data base of
information not available to the other offeror. The Public Auditor
was not convinced the database was necessary nor was it required
by the specifications.
b. The take-away from this decision is that the Public Auditor is

deferential to a determination of the agency’s judgment of the
judgmental factors in an RFP, such as the comparative experience
and past performance of the competing offerors and the content of
their competing methodologies, absent clear and convincing
evidence of bias or other partial treatment. Such a standard makes it
incumbent on appellants to produce hard evidence rather than rely
more on vague statements of bias or other paranoia to entice the
Public Auditor to scrutinize the decision makers as opposed to the
decision itself.
c. Note, in comparison to subjective judgmental evaluations of RFPs,

in evaluating an IFB, where price consideration is concerned,
“[t]hose criteria that will affect the bid price and be considered in
evaluation for award shall be objectively measurable.” (5 GCA §
5211(e).).
13. OPA-PA-09-002, In the Appeal of Teal Pacific, LLC (vs GPSS)
a. As with its prior appeal (OPA-PA-08-010), Appellant’s appeal was

dismissed when the Public Auditor recused herself, but here at the
request of Appellant, for the stated reasons that she and her husband
have “doctor/patient relationships” with one principal of the
Appellant, and she and her husband also have had “a casual
acquaintance” with another principal, notwithstanding the Public
Auditor’s belief those relationships would not prejudice her actions
in the matter.
14. OPA-PA-09-005, In the Appeal of Guam Community Improvement

Foundation, Inc., (vs DPW)
a. Ramifications of this appeal are discussed extensively above. This

comment here is merely to note that the Decision in the case went
against the Appellant and to make a couple of additional
observations based on a similar result (though different factual
setting) in Appeal of Baltimore Motor Coach Company, MSBCA No.
1216, Jan 8, 1985.
(1) First, as regards standing, and, noting the discussion of who

is an aggrieved person in the Article on Procurement
Protests, above, that persons who are not competitively
disadvantaged are not aggrieved, the notion may be more
aptly, or at least obviously, applied to IFBs than RFPs. In
Baltimore Coach, involving an RFP, the appellant was
determined to be fourth best qualified, arguably too remote
to be competitively disadvantaged, and therefore
“interested”. The appellant argued that the evaluation
process was so patently and fundamentally unfair that it was
denied an opportunity to compete equally. The Appeals
Board said that such a fundamental issue, affecting its right to
compete (not limited to affecting its place in the
competition), justified standing, because, at that stage, the
Board could not say the appellant was not aggrieved. (At p.
94.)
(2) Second, notwithstanding being determined to be an

interested party, the Board in Baltimore Coach ruled that “an
Appellant seeking to establish that its competitive position
was affected by discriminatory actions nevertheless carries
the burden [of proof].” It said “bias will not be attributed to
procurement officials based on inference or supposition.”
(At p. 8.) The Baltimore Coach appellant did not prevail on
appeal, either.
INDEX OF PERTINENT APPEALS and AUTHORITIES CITED
Appeal of Island Business Systems & Supplies (v NMC), CNMI OPA, Appeal No. BP-A057,
Decision on Request for Reconsideration dated March 11, 2009. . . . . . . . . . . . . . . . 106, 109, 195
Competitive Negotiation, [cited as Nash, Cibinic and O’Brien] Second Edition, Ralph C. Nash, Jr.,
John Cibinic, Jr., and Karen R. O’Brien, The George Washington University, Law School
Government Contracts Program. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 15, 48, 53, 62, 68, 73
E-Management Consultants, Inc. vs US, __ Fed. Cl.__, No. 08-680 c.. . . . 125, 127, 129, 132, 133,
160
Executive Order 2000-25, Relative to Obtaining On-Island Professional Consulting, Education and
Training Services before Off-Island Professional Consulting, Education and Training Services... . 16,
24
Fleet Services, Inc. v. Dept. of Administration, 2006 Guam 6. . . . . . . . . . . . . . 31, 60, 63, 81, 193
Formation of Government Contracts, [cited as Cibinic and Nash] Third Edition, John Cibinic, Jr.,
and Ralph C. Nash, Jr., CCH/ Wolters Kluwer, The George Washington University Law School
Government Contracts Program. . . . . . . . . . . . . . . . . . . . . 6, 36, 53, 107, 110, 112, 126, 169, 188
Guam Attorney General Legal Memorandum, Legality of Purchasing through Federal GSA
Contracts, GSA 07-1084, June 16, 2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88, 89
Guam Imaging Consultants, Inc., v. Guam Memorial Hospital Authority, 2004 Guam 15 . . 24, 40,
77, 109, 121-123
In re Department of Agriculture v. CSC (Rojas), Amended Opinion on Rehearing, 2009 Guam 19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
In the Appeal of Advance Management, Inc. [vs GPSS], OPA-PA-07-008.. . . . . . . . . . . . . 144, 189
In the Appeal of Captain, Hutapea and Associates [vs GHURA], OPA-PA-08-009. . . . . . . . . . . 197
In the Appeal of Dick Pacific Construction Company, Ltd. [vs GIAA], OPA-PA-07-007. . . . 53, 188
In the Appeal of Emission Technologies, Inc.[vs GPA], OPA-PA-07-002.. . . . . . . . . . . . 15, 53, 187
In the Appeal of Far East Equipment Company, LLC [vs GSA/PAG], OPA-PA-08-001.. . . . . . . . 148
In the Appeal of Far East Equipment Company, LLC [vs GSA/PAG], OPA-PA-07-010.. . . . . . . . 191
In the Appeal of Far East Equipment Company, LLC [vs PAG], OPA-PA-06-002.. . . . . . . . . . . . 186
In the Appeal of Great West Retirement Services [vs GGRF], OPA-PA-07-006. . . . . . . . . . 76, 188
In the Appeal of Guam Cleaning Masters [vs DCA], OPA-PA-09-009.. . . . . . . . . . . . . . . . . . . . 157
In the Appeal of Guam Community Improvement Foundation, Inc., OPA-PA-09-005.. . 32, 65, 67,
77, 80, 104, 105, 107, 109, 115, 116, 123, 124, 126, 128-
130, 141, 198
In the Appeal of Guam Education Financing Foundation, Inc., OPA-PA-09-007. . . 20, 66, 67, 123,
141
In the Appeal of Guam Pacific Enterprises, Inc. [vs GPA], OPA-PA-09-003. . . . 137-139, 151, 175-
177
In the Appeal of Guam Publications, Inc. [vs GSA], OPA-PA-08-007 . . . . 28, 48, 54, 95, 100, 108,
115, 121, 133, 163, 165
In the Appeal of J&G Construction [vs GMHA], OPA-PA-07-005.. . . . 35, 48, 51, 53, 55, 135, 141,
187, 188
In the Appeal of JMI Medical Systems, Inc. [vs GMHA], OPA-PO-07-011. . . . . . . . . . . 34, 47, 192
In the Appeal of Latte Treatment Center, Inc. [vs DMHSA], OPA-PA-08-008. . 10, 11, 51, 55, 109,
113, 143, 147, 159, 193
In the Appeal of Mega United Corp. [vs GIAA], OPA-PA-09-001. . . . . . . . . . . . . . . . 103, 134, 145
In the Appeal of O&M Energy, S.A. [vs GPA], OPA-PA-08-004.. . . . . . . . . . . . . . . 35, 50, 140, 192
In the Appeal of O&M Energy, S.A. [vs. GPA, #2], OPA-PA-09-008. . . . . . . . . . . . . . . . . . . . . . 183
In the Appeal of Oceania Collection Services [vs Dept. Chamorro Affairs], OPA-PA-08-006. . . . 63
In the Appeal of Pacific Security Alarm, Inc. [vs GMHA], OPA-PA-07-009. . . . . . . . . . . . . 44, 191
In the Appeal of RadioCom [vs GSA/OHS], OPA-PA-06-003. . . . . . . . . . . . . . . 17, 26, 82, 95, 186
In the Appeal of Teal Pacific LLC [vs GMHA], OPA-PA-08-010. . . . . . . . . . . . . . . . . 136, 148, 198
In the Appeal of Teal Pacific, LLC [vs GPSS], OPA-PA-09-002. . . . . . . . . . . 16, 134, 135, 148, 198
In the Appeal of the Debarment of Rex International, Inc. [vs GWA], OPA-PA-06-001
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
In the Appeal of Town House Dept. Stores, Inc. dba Island Business Systems and Supplies [IBSS vs
GSA], OPA-PA-08-012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 32, 88, 89, 109, 121
In the Appeal of Town House Dept. Stores, Inc., dba Island Business Systems and Supplies [IBSS vs
UOG], OPA-PA-06-004 (subsequently re-docketed by OPA as OPA-PA-07-001). . . . . . . . 103, 134
GPSS (1)], OPA-PA-08-003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 119, 134, 138
GPSS (2)], OPA-PA-08-011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84, 89, 93, 99, 108, 135, 170, 184
J&B Modern Tech v. GIAA, Guam Superior Court, CV 0732-06 (Findings of Fact and Conclusions of
Law, Elizabeth Barrett-Anderson, June 25, 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42, 142
L.P. Ganacias Enterprises, Inc., dba Radiocom vs. GIAA and Guam Cell Communications, Guam
Superior Court, CV 1787-00 (Decision and Order, Joaquin V. E. Manibusan, Jr., November 13,
2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33, 47, 93, 110, 112, 121, 140
Nortel Government Solutions, Inc., v. USA, __ Ct.Cl. __, No. 08-682C . . . . . . . . . . . . . . . . . . 132
Pacific Rock Corporation v. Dept. of Education, 2000 Guam 19. . . . . . . . . . . . . . . . . . . . 137, 173
Pacific Security Alarm, Inc. v DPW, Guam Superior Court CV 0591 - 05 (Decision and Order
Denying Motion to Dismiss, Stephen Unpingco, August 14, 2006). . . . . . . . . . . 120, 136-138, 180
Pacific Security Alarm, Inc., v. GPA, Guam Superior Court, CV 1304-04 (Findings of Fact and
Conclusions of Law, Arthur R. Barcinas, August 15, 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Petition of Town House Department Stores, Inc., dba Island Business Systems & Supplies [IBSS vs
GSA], OPA-PA-09-011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44, 60, 94, 119
Planetspace Inc. v. USA, __ Ct.Cl. __, No. 09-0099C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132, 133
Rhinocorps Ltd Co. v. USA, __ Ct.Cl. __, No. 08-410C. . . . . . . . . . . . . . . . . . . . . . . . . . . 131, 158
Sumitomo Construction, Co., vs. Government of Guam, Guam Superior Court CV 1589-99
(Decision and Order, Michael J. Bordallo, May 18, 2000). . . . . . . . . . . . . . . . . . . . . . . . . 173, 178
TRC Environmental Corporation vs. Office of the Public Auditor, Guam Superior Court SP 160-07
(Decision and Order on Petition for Writ of Mandate, Alberto C. Lamorena III, November 21, 2008)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 53, 120, 121, 135, 184, 187
Tumon Corporation vs. Guam Memorial Hospital Authority, Guam Superior Court CV 1420-01
(Decision and Order, Michael J. Bordallo, October 22, 2001). . . . . . . . . . . . . . . . . . . . . . . . . . 104

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Procurement Lore or Procurement Law ?

A GUAM PROCUREMENT PROCESS PRIMER

John Thos. Brown

Procurement Lore or Procurement Law ?

I. SOURCES of Guam Procurement Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

II. PURPOSES AND POLICIES of Guam Procurement Law.. . . . . . . . . . . . . . . . . . . . . . . . . . 7

O. Making and keeping “determinations”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

P. A word from your author. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

III. PROCUREMENT ADMINISTRATIVE STRUCTURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

IV. METHODS OF SOURCE SELECTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

VI. COMPETITIVE SEALED BIDDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

VII. MULTI-STEP SEALED BIDDING.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

VIII. REQUESTS FOR PROPOSALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

IX. UNSOLICITED OFFERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

XI. SMALL PURCHASE PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

XII. EMERGENCY PROCUREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86

XV. VARIOUS CONTRACT TYPES, AND THEIR REQUIREMENTS FOR USE.. . . . . . . . . . . . 97

XVI. PROCUREMENT PROTESTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

XVII. THE AUTOMATIC STAY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

XVIII. APPEALS OF BID PROTESTS TO THE PUBLIC AUDITOR.. . . . . . . . . . . . . . . . . . . . . . 134

XIX. APPEAL REMEDIES (such as they are).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156

XX. Some issues relating to contract performance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

XXI. Getting paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

XXII. Public enforcement of unauthorized procurement spending. . . . . . . . . . . . . . . . . . . . 179

XXIII. The Courts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

INDEX OF PERTINENT APPEALS and AUTHORITIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200

“The obligatory legal procedures, which mandated that government requisitions

“The conditions of the auction of palay or unthreshed rice were basically to be

• Don Gregorio Pèrez 210 Cavanes

“The mention of these individuals is very significant since they undoubtedly

1. Originally enacted in 1982, becoming effective in October 1983, and major

2. Based on Model Procurement Code, but not updated

a. “This Chapter is essentially the Model Procurement Code approved

B. The Regulations – Guam Administrative Regulations (2 GAR Div 4, §§ 1101 et

1. Based on ABA Model Procurement Regulations.

2. Note some individual agencies have own regulations.

a. A decision cited in the form “[year] Guam [number]” is a Guam

2. Public Auditor http://www.guamopa.org/

a. A decision cited in the form “OPA-PA-xx-xxx” is a Decision of the

b. Click on “Procurement Appeals” at the OPA website to review all

c. Also note Audit Reports, e.g., General Services Agency, Competitive

D. Other jurisdictions, experts, authors, etc.

1. Other Model Code States, e.g., Maryland, Hawaii

a. Maryland State Board of Contract Appeals3.

2. Note difference between detail and the similarities of general legal

3. There isn’t a huge resource of expert procurement literature. The George

E. Lore: As Carlos Madrid described the incident above, the procurement of

The best and worst of explanation often offered in defense of questioned

The author makes no claim to great authority of the subject. He acknowledges

This effort is most importantly intended to help contribute to a unified knowledge,

II. PURPOSES AND POLICIES of Guam Procurement Law

B. to simplify, clarify, and modernize the law governing procurement by this

1. “While it is the intent of the MPC [Model Procurement Code] to ‘simplify’

C. to permit the continued development of procurement policies and practices (5

D. to provide for increased public confidence in the procedures followed in public

1. “Good faith means honesty in fact in the conduct or transaction concerned.”

G. to provide increased economy in territorial activities and to maximize to the

2. Objectives of the territory's supply management program include preventing

H. to foster effective broad-based competition within the free enterprise system (5

1. The requirement of fair and open competition wherever practicable lies at

2. All procurement of supplies and services shall, where possible, be made

3. All specifications shall seek to ... encourage competition in satisfying the

4. It is the policy of Guam that specifications permit maximum practicable

5. When for any reason collusion or other anti-competitive practices are