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Abstract:
The issue of whether and to what extent a government authority may introduce subsequent changes into a procurement contract signed following a competitive procedure is one of the more practical and problematic questions in the area of procurement law. The article points out the difficulty inherent in this type of change, even if it is made upon mutual consent of the parties.

The article discusses the regulatory regime reached by the courts, under which a later change to a procurement contract is permissible and left to the discretion of the contracting officer (CO). As part of this discretion, the CO can take into account a number of considerations, the main ones being: the extent to which the requested change materially alters the original contract and the extent to which the requested modification could have been anticipated by a reasonable bidder. The article proposes to change this regime on two fronts: first, to adopt a rule by which a change to a contract would be impermissible unless special exceptions exist; second, to allow the CO to take into account a wider variety of considerations in deciding whether or not to permit such change.

government, contract, procurement, competitive bidding

Abstract:
Each year, the federal, state and local governments conduct transactions worth hundreds of billions of dollars, through contracts that are awarded as a result of a competitive bidding process. While competitive bidding procurement mechanisms have given rise to ample literature and research in the fields of economics and game theory, no attempt has yet been made to formulate a legal theory of competitive bidding for government contracts. This article represents a first attempt to deal with this complex issue from a legal perspective.

The article defines the three objectives of the government procurement competitive bidding mechanism and their characteristics, and proposes an appropriate hierarchy to be applied among them when they are in conflict. The article also addresses the courts’ approach to the issue and analyzes the unexpressed rationales for that approach, which are not reflected in the judgments themselves. Based on these rationales, the author proposes an alternative decision-making model (a “disqualification presumption”), to be used by procuring entities when a flaw is discovered in the best offer submitted in a particular competitive bidding situation.

government, contracts, competitive bidding, procurement