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Procurement Law with Rose Anderson and James Richardson (mp3)


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Procurement Law Podcast Transcript

Host:     Hello, this is John Besselman with the latest installment of the DHS Office of the General Counsel’s podcast series.  Today, I’m speaking with two of our procurement specialists.  Rose?

RA:         Yes, John?

Host:     Last name?

RA:         Anderson.

Host:     And title?

RA:         Associate General Counsel for Acquisition and Procurement Law, Law Division, Office of the General Counsel, Department of Homeland Security.

Host:     That’s a lot.

RA:         It is.

Host:     You brought a friend today.

RA:         I did.  Mr. Richardson.

JR:          Yes.  James Richardson.  Much easier title.  Attorney-advisor.

Host:     Alright, how long have you been with DHS, James?

JR:          About six years.

Host:     Really.  O.k., very good.  And Rose, we’ve talked a little bit earlier.

RA:         I think I came two years after the Department stood up, so I’m, I’m a relatively stable attorney in the Department.  I did take a one year break and went back to the Army.  But I came back.

Host:     And here you are with us for a good long while, now.  Not too long.

RA:         It depends on your perspective, John.

Host:     Oh, [laughter], o.k. 

RA:         It’s all in how you count, John.

Host:     I’m excited about this podcast, you know why, Rose?

RA:         Why?

Host:     I’ve been in the federal government for twenty-three years and I know next to nothing about procurement law. I’ve stayed away from it.  I did a podcast with Mr. Davidson and he talked about fiscal law.  I spend twenty-three years avoiding fiscal law.  I’ve spent twenty-three years avoiding procurement law and now you guys are going to spend a few minutes and tell me a little bit about what I did right by staying away from it, right?

RA:         Actually, John, I would argue that you might have done something wrong by…

Host:     Oh, no.

RA:         …staying away from it.  It’s a great practice of law

JR:          Absolutely.

Host:     Good.  Good.  James, what brought you to the field of procurement law?

JR:          It was pure luck.  No, actually, I was on active duty in the military, um, and my first five years I prosecuted cases.  Those kinds of things as JAG, that a normal JAG would do.  Ah, the next assignment I had they asked me to move to, I asked to move to Atlanta. So, the, so they selected a position for me and they said “hey, it’s in contract law.”  And I said “I don’t know about that.”  And it just so happened that it worked out well for me.

Host:     Good.

JR:          I did that for my last two years and here I am at DHS.

Host:     Here you are.  Wonderful.  Rose I know you’ve had a career in the Army doing this kind of thing. 

RA:         Yes.

Host:     You’ve been around procurement law for, you want to tell us for how many years?

RA:         No.

Host:     O.k., fair enough.  O.k.

RA:         Actually, but I can set the stage a little bit for you.  Except for two years in the Army, my business was contract law.  I did come back to federal service with Missile Defense Agency and then DHS.

Host:     Alright.  So what have I been missing about this procurement law.  James?

JR:          For me, I can, I can tell you from my perspective I learned a lot just coming into the area of the law that, as an attorney, we don’t see.  And I saw it early on in my career when I prosecuted cases.  A specific example, ah, we had a case where we needed working dogs to do a drug inspection at a local unit.  I was unaware that we had to have an agreement with the local county in order to have the working dogs from the local county to come out.  So, understanding procurement would have been a great thing to know for me.  Unfortunately, I didn’t know it at the time and my commander, my commander, my staff judge advocate was very upset with me.  But, when I realize the error of my ways, it was something that I learned and by getting into the area of procurement law, now that I, now that I know, I knew that little piece there.  But by moving into procurement law, it ended up being a great fit for me and I learned a lot of things that I didn’t know that will keep, actually keep you out of trouble.  Because if you don’t understand the rules on how to buy things, and who’s authorized to buy things, that’s, that is a very dangerous place to be in.

Host:     Well, why can’t anyone in the federal government just buy stuff, Rose?

RA:         Well, first let me say, John, we do buy dogs in DHS.  So, just for the record, we buy everything from I’m just going to say small purchases up to large IT systems, and we buy dogs.  So, what happens if we let everyone run amuck, is that what you’re asking?

Host:     Yes, ma’am.

RA:         O.k.  I think the best evidence of what happens is a case that’s dated 1990.  It’s call the City of El Centro versus the United States.  And there’s a, my favorite quote in it, in this document.  “The United States government employees over three million civilian employees.  Clearly, federal expenditures would be wholly uncontrollable if government employees could, of their own volition, enter into contracts obligating the United States.”  Now, can you even imagine having as many employees as we have, everyone thinking they were empowered to go out and buy on behalf of the Department? 

Host:     I…

RA:         Because in order to buy you have to have money.

Host:     I think it would be a mess.

RA:         It would be a big old mess.

Host:     Now, you must, over your career, run into a handful of folks like in James’ situation, where somebody thought they could do something.  And that’s why, why, quite frankly, why I’m terrified of procurement law.  Because I would have no idea what my authority so I’d assume I have zero.  And so far, that’s worked out for me.  However, I’m, in dealing with my, our own procurement specialist, James Caine down there at the Federal Law Enforcement Training Center, his stories always tend to start off with…somebody did something, like you described James, …

JR:          That’s right.

Host:     …that they thought they had the authority for.  But, the law doesn’t allow it.  So how does an employee, or, more importantly, an attorney within DHS, find out how, who, or who as the authority to make a purchase?

JR:          First need do, reach out, they should reach out, especially an attorney in DHS, they should reach out to the procurement attorneys.  Reach out to your counterparts.  That’s the first step.  That’s what I always advise.  If I don’t know another area of the law I always reach out to an expert in that area of the law.  So, that’s your first step.  And then, from there, they’re going to help walk you through the steps you need to follow to get there.  And the main thing, ah, they are going to tell you is you’ve got to have someone with authority and that means a contract, a warranted contracting officer.  Not a program manager, not a manager within that division, a warranted contracting officer.  Because there are a lot of individuals, sen…even senior leaders, and people make this mistake, ah, inherently, you know, naturally because they, they, they’re in charge and they think they have the authority but they just don’t.  So, you have to make sure that the first person you’re reaching out to is the warranted contracting officer.  But, before that, reach out to your counterparts within the divisions.

Host:     And how will I know who is a warranted officer, because I used that phrase earlier and Rose thought I knew what I was talking about.  I didn’t.  I just threw it out there because I’d heard the word before.

JR:          Well, it, it’s a person, ah, within your local contracting office.  So you, so you would need to find out if you don’t have a local attorney, you need to find out where your nearest contracting office is.  And then, you’ll be able to find out who a warranted contracting officer is.  Ah, if not, you can certainly go on to the Homeland Security web, um, webpage and look under the Chief Procurement Officer’s division.  And I’m sure that there will be links to the various components.

Host:     Now, I’m teasing just a little bit.  I, I know, like, this much, and I’m describing to, to our audio listeners, of course, about two inches of knowledge on what a warranted officer is.  Warranted officers come in different levels, don’t they?  I mean, don’t they earn their way up to be able to grant someone…what’s a, what…Do you know anything about how they earn that status?  Do they have to get training?  Do they have to have….what is it, what?

JR:          It’s all the above.

RA:         Without getting too much into the contracting business, John, you’re right.  There is a process.  It’s a training requirement.  Ah, the contracting specialist and the contracting officers are required to go to X amount of training per year, X amount of training to get their warrants, and they do have to work their way up.  Starting with the small dollar warrant up to our…probably….an unlimited warrants.

Host:     And those are the persons that are able to authorized major construction.  Is that how that works?

RA:         They’re the folks that have to sign on the dotted line to award the contract.

Host:     O.k.

JR:          And your warrant will tell you how much you are authorized to buy and what you’re authorized to buy.  So it, it limits, so your warrant it is limited to the things you can do, ah, and it, and it specifies not only dollar type but also contract type.

Host:     So, you have to have some pretty stable relationships with your warrant officers, is that what you call them?

RA:         I would just call them contracting officers.

Host:     O.k.

RA:         Because inherent in that title is you have to have a warrant to do business.

JR:          And that warrant is issued by the head of the contracting activity.  So.

Host:     O.k.

JR:          That’s how it works.  So, if it…and that’s why I say, always look out for, look for your contracting, local contracting office, because that local contracting office should know who the head of contracting activity is, who issues the warrants to those local contracting officers.

Host:     Let’s talk about relationships for a second.  I do not understand the relationships between finance, budging and procurement. However, at the Federal Law Enforcement Training Center they are three distinct divisions.  And I occasionally insult one or another by misapplying language or responsibility.  Can you help me out with that?

RA:         Let’s start with your budget personnel.  Those are the personnel which know how much money FLETC has, how much money is appropriated to FELTC and allocated for specific programs within FLETC.  So, your finance people.  They’re going to be, in most cases, probably co-located with your budget people because they have to know what each other is going. Now, at the headquarters, they are co-located, or at least on the same floor in the same building.  I don’t know that I can draw a specific line between their duties other than the finance people may interact more with the individuals than the budget people.  At the headquarters, however, I attend meeting with both, so, I’m not sure I’m the person who can draw that line for you.  Let’s leap to the procurement shop.  So, what does the procurement shop have to do with the budget people and the finance people?  As part of the procurement process, as we say, no money no contract.  So, you have to have money on the books.  And that would be money that’s been appropriated to DHS down to FLETC.  And probably for a specific program at FLETC but I don’t know your specifics down there.  But let’s just say, we want, you want to buy at FLETC a sack full of dogs treats to, to use something very elementary.  So, that’s a small dollar purchase.  It’s not going to raise to the level of the threshold for doing a lot of legal work on it but nonetheless, it has to be purchased.  So, sometimes you can use a purchase card to make purchases.  I’m not sure you want us to go into that but since, let’s just, since I used the dog treat example.  That’s a small dollar item.  Could probably be purchased on a purchase card.  That’s not a contracting officer.   Moving on from small dollar purchases, let’s say that there is a requirement.  I know there is some barracks or some billeting, ah, rooms that folks stay in when the go to FLETC.  And you need sheets, pillowcases, I’m assuming, those sorts of things.  And let’s just say that you go through a lot of that in a year so you want to make sure you have an adequate stock.  That might be a larger purchase that you would have to do by contract.  So, in order to do that, let’s say you had a program manager for the billeting.  He would go or she would go to the contracting officer and say “I need 20,000 sets of sheets.  How would I do that?”  The contracting officer would first say “do you have the money and what is your requirement?  Do you need white sheets, blue sheets, twin sheets, regular sheets?”  And so, really, heart and soul of the process is determining what the minimum requirements are to meet the government’s needs.  So, that’s a process, first of all, that you have to sort through.  So, you’ve got your requirement.  Your program managers is going to go to the finance office as a part of this whole process of planning their acquisition/procurement and make sure the money is there.  So, the money is put into an automated system so that we can make sure, from a contracting perspective, we can look into the system and see that the money is there so that the contracting officer knows that they can do the contract and award the contract.

JR:          And, and, and that, and that, I think, the key there is the program manager.  That was one of the individuals that, I think, when you looked at the difference between those entities, that you failed to identify.  The program manager really drives this train.  They’re the coordinating piece between finance the contracting officer.  So, in order to make this requirement come to fruition and get the sheets that they need, you’ve got to have that program manager actively involved and they’re, and they’re doing things between those entities.

RA:         The program manager also, John, brings the technical expertise to the effort.  We do a lot of IT purchases, hardware, software, support services, at DHS.  And that program manager’s technical expertise is critical to that as well.

Host:     I think the biggest mistake I could have made or could make as a federal employee or an attorney working in this field would be with a credit card.  What is the biggest mistake from your perspective I can make as a federal employee with a federal credit card?

RA:         Misuse of that credit card for personal expenses is probably the biggest issue, I would say, federal government wide.  Having seen this in both the military and other federal agencies, that is the big problem that we have with credit cards.  I have seen everything from plastic surgery put on those credit cards.  I’ve seen bar bills put on credit cards. And folks…

JR:          Gambling.

RA:         [Laughter]…folks, to, to my amazement, folks don’t seem to learn when they see articles in the newspaper or they hear about federal employees who are fired or have adverse action taken for misuse of the credit card.  So, you are entrusted with that credit card to be used for business expenses.  But it is amazing how often misuse comes about.

JR:          The second error is splitting, splitting your requirement.  So, basically what that means is if your requirement threshold used to support you, it is $3500 for your government purchase card for those transactions, in, individual transactions.  So what some individuals will try to do is split a given requirement.  Let’ say, you need someone to come in and mop your floors.  The total cost for that service, if you’re going to do it for a year, maybe $10,000.  Some individuals will try to split the requirement and get the service paid for on the card each time. That is impermissible.  You have to go to a contract, a warranted contracting officer, and do a purchase order request in order to get that done.  That is a, from a technical perspective, an usually done by a program manager and sometimes it’s done by individuals that have a purchase card in the local, in the local offices, that is one of the more technical issues.  The other issue, of course, is, is fraudulent use.  But the secondary is the actual technical misuse.  It’s explained to folks time and time again, ah, but a lot of folks, at, at times, can’t help but to push that envelope and it’s unfortunate.  The main thing that I always advise folks to do, is if you’re in doubt, ask questions before you swipe the card.

Host:     So in the use of my credit card, can you give me just a punch list of things.  What can I do with this thing?

JR:          So, the main thing individuals can do with their government purchase card is actually reach out to the coordinator, the individual that’s in charge of issuing you your purchase card.  Reach out to that individual and figure out what your left and right parameters are, whenever you’re in doubt.  They may also be able to provide you with helpful information, refresher training, if necessary.  But again, it’s reaching out to that local CFO coordinator, program coordinator that would deal with issuing you that card.  And I’m sure you would also get annual training as you need.

Host:     Oh, I definitely get annual training and I, unfortunately for me, I…enough stays with me just to remember “boy, it just seems like there was something out there.”  I don’t remember the details and maybe that’s enough for…

JR:          Right.

Host:     …annual training.  I, I know enough to stop and say “I better call Rose because I’m not sure.” 

JR:          Exactly.  And, and that’s the main thing.

Host:     Then it’s doing its purpose.

JR:          The hard…yeah, it, it’s doing its purpose.  Make sure, you know, you’re just doing your annual refresher training but then, if you’re in doubt, always asks questions before you utilize the card.

RA:         I was just going to say, if there’s any doubt, ask.  No one minds answering a question, especially if it will help someone stay out of trouble.

Host:     Well, it sounds like the biggest thing that I need to be aware of is an employee, in particular is, if I have a doubt, call somebody.  What other mistakes do you see get made in the field of procurement that we could, maybe, solve through just a little more knowledge?

JR:          Well, the first thing is, ah, ah, of course, is identifying the requirement properly.  And that requires involvement of the program manager.  So, you may be able to identify, you may be able, you may be able to say, “hey, I need X.”  But you will also need to get your program manager involved to help define what X is, so that it is clearly articulated to the contracting community so they can properly propose solutions to your needs.

Host:     We don’t want to see a series of amendments to a contract once written.  You, you, you…

JR:          Absolutely.

Host…   You in the procurement field hate that stuff.

JR:          Absolutely.

RA:         There are a couple of other key points, John, that I think folks need to bear in mind.  And one is, again, you have to have the money.  If you don’t have the money, don’t start down this path.  Second of all, as James pointed out, you really do need to be able to clearly define your requirements.  That is the hardest, most difficult think we see in my office, especially with technical requirements. The third thing is, the procurement system is built on the idea of competition.  To get the best value it can for the taxpayers, and that is why we’re built on the competitive system.  There are limited exceptions to that.  And what we often see is personnel will get fixated on what we would normally call a name brand.  Let’s say I pass by a Hewlett-Packard or, what used to be a Xerox copy machine and I’m in love with it.  So, I think the only thing that will meet my need is one of those names, and that’s the kind of copy machine I want.  Well, in the federal government, again, there’s a statutory mandate that we compete that because there are I don’t know how many brands of copier that would be available to meet our needs.  So, it’s very simple.  When you think you need something, you need to do market research.  The contracting shop can help you do that.  We can help give you some guide lines.  But basically we need to figure out what’s in the marketplace so that we can compete it and get the best price that we can get for the taxpayer, for the department and for the user.

Host:     That’s a little bit different from the term that I “wowed” you with earlier when we were talking this afternoon about a “request for proposal.”  No.  A “proposal for request.”  No.  Which one is it again, Rose?

RA:         We do request for proposals, otherwise known in the lingo as RFPs.  That’s something that you will hear.  And that’s the documentation…sometimes we do it in an initial announcement and we often do that in writing.  In fact, it’s quite a lengthy document to do a, what we call an RFP, request for proposal.  It’s very complete, very thorough and sometimes a very lengthy document.

Host:     And as I understand it, that is a, an, a, an announcement to the field, in whatever field you’re looking at.  Be it copiers or software of what have you, that the government is interested in making a purchase.  And is it an invitation for those companies to respond?

RA:         That’s exactly what it is, John.  We send this out and tell vendors who may be able to meet our need to come back to us with their proposal, which would include their solution and their pricing.

JR:          And then they, ah, and we give them a specified time in which to do it.  And after that’s done, we review those proposals based on what we said at the outset, how we would conduct that review.  However that’s done, that’s how we do it.  Once that’s completed, a decision is made.  An unsuccessful offeror that’s not happy with that decision, of course, they can protest.  Which makes it all the more important to identify the requirements up front. And then the other thing is, throughout the process, make sure that we’re treating all the offerors fairly.

Host:     I’m assuming that’s posted in some accessible place where…

JR:          Yes.

Host:     …the whole world can see these requests.

JR:          Yes.  It, it depends, um, generally speaking, yes.  We go out on what’s called federal business opportunities.  And we push out a request for proposals.  But sometimes we have contracts where we have multiple awards that have already been made.  So, we have what’s called fair opportunity within a federal supply schedule by award with an indefinite delivery indefinite quantity contract.  There, you have contracts that have already been awarded so you have a suite of vendors that have just competed amongst one another for a specific commodity.

RA:         So, that can vary, John

JR:          Right.

Host:     I’ve also heard some frustration from friends who worked in the procurement field with their clients, federal employees, that were looking to find a single vendor.  Does that happen very often and what does that mean?  I, I, I’m polite and I listen and I nod…

JR:          Right.

Host:     …while they talk but I’m not really sure what they’re after.

JR:          It’s sometimes…it could be a combination of things.  Either they’re looking for one vendor because they, they have a certain thing or thing the or a commodity that they’ve used and they like, as Rose discussed earlier.  Or it could be they that they only want to have one vendor to buy from over a number of years, meaning going out, competing and, in most cases, we want to have multiple awards.  But sometimes people want to have one awardee, so they can just go that vendor every day for the thing or things they need.

Host:     It’s easy for the consumer, the federal employee, but it cuts against this principle that you talked about earlier, at least Rose did, about the open competition.

JR:          Right.  So, even, yeah, even with those open contracts where we go out and compete to, with the world, and say “hey, we want to have multiple vendors for one major contract.”  We try to get multiple vendors, not one.  One, of course, would make it easier for the procurement timelines.  So if you only have one vendor you could just go to whatever you use to them.  Multiple vendors means you have to provide fair opportunity which could add additional time, thirty to sixty days, to actually get your requirements competed.

Host:     I also presume that a relationship develops between the end user and the winner of the initial contract and they understand what the needs of the federal government are so there’s got to be some efficiencies there but I can see it rubbing against the other principle of…

JR:          Competition.

Host:     …open competition.

JR:          Right.

Host:     Very good.  Well, what else am I missing about procurement law that I should know about?

JR:          So that, the major thing you’re missing is contract administration.  The issues related to contract administration.  Issues related to performance during the contract.  Is the contractor providing me with the goods and services I requested at the outset?  Howe does that work?  The way it’s monitored is the program manager and the contracting officer work hand-in-hand to review the deliverables, the goods and services, that are supposed to be provided by the contractor and ensuring that we get those in the time and in the manner specified.  If we’re not getting them in the time and manner specified, then the contracting officer and, the program manager is supposed to notify the contracting officer of the deficiency or deficiencies, and the contracting officer is supposed to communicate with the contractor and notify them of the deficiencies and work with ways to remedy and get a solution.  If they cannot remedy and, and get a solution then we take additional steps,  Those additional steps could be a “stop work” order all the way to termination of the contract.  And contractors try to avoid terminations because those are bad marks on their government record and they don’t want to have those.

RA:         Also, what you may find is what we call a core in that mix.  The contracting officer’s representative who would be part of that process and normally, generally that person is sort of a go-between between the contracting officer and the program folks that is very helpful in that process.

JR:          Right.

RA:         Because initially that core is going to be probably the person the deficiencies would come to the attention of that individual.  And then that process to begin to deal with it would start.  There’s also another problem during contract administration that pops up, and that is the friendships and relationships that develop between contractors and federal personnel.  And you sort of touched on that a moment ago but I wanted to take a moment while we are sitting here talking about it to address that.  It is a single work place.  You do get to know the person sitting next to you.  Friendships are going to form.  Those things happen in the work place. However, folks in, really need to be aware of, that there is a distinction between a federal employee and a contractor employee.  And there are rules that apply to each of those.  Rules apply to me as a federal employee.  Rules that apply to a contractor employee.  And those issues that occur with a contractor employee….how do you handle those…through the contract.  So, if you bear in mind that there is a distinction, and we need to be cognizant of that distinction.  And how if problems develop, you resolve those problems, we’re a step forward.  The other thing is, it doesn’t have to be a problem. It can be a good thing.  We have a lot of program managers that want to recognize contractor employees, because they do contribute to the mission.  Those issues come up periodically.  And those are type of issues that, again, should be addressed through the contract, through the contracting officer.  When those arise, it’s probably a mix of personnel law, contract law, and ethics law.  But it is something if a program manager or a federal employee says “John is doing a really good job and I’d like his company to know about that.”  That information can be passed up to the contracting officer to be shared with John’s company.  And he or she should be recognized through the company for that.  That usually is more important to the contractor employee in some instances, I’m told, than other ways the Department might like to recognize that employee.

Host:     Well, I have learned more about procurement law than I anticipated, which really didn’t surprise me, Rose.  We’ve chatted before and I always pick up something in our conversations.  James, it was nice to have met you today and thank you for participating.

JR:          Thank you.

Host:     Is the anything else you want to add before we depart?

RA:         I would just like to say thanks for this opportunity because in my world, the more people know the smarter they are, the better off everyone is going to be.  And I would like to thank James for participating in this today.

Host:     Good.  I’d like to thank you as well because…

JR:          Thank you, both.  I appreciate it.

Host:     …it is with these, it is these kinds of efforts that help us make fewer mistakes.  We can’t get perfect yet, but we’ll get there and we’re shooting for it.  Well, thank you very much.  I appreciate your time.