Guam Procurement Law Primer v1-6

Procurement Lore or Procurement Law ?
A G UAM PROCUREMENT PROCESS PRIMER

(Ver 1.6 )
(Both more and less than you will ever want to know)
John Thos. Brown
Attorney at Law
A GUAM PROCUREMENT PROCESS PRIMER (Ver 1.6) 1

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.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
II. PURPOSES AND POLICIES of Guam Procurement Law.. . . . . . . . . . . . . . . . . . . . . . . . . . 6

D. to provide for increased public confidence. . . . . . . . . . . . . . . . . . . . . . . . 6
E. to ensure the fair and equitable treatment. . . . . . . . . . . . . . . . . . . . . . . . 6
4. Making and keeping “determinations”.. . . . . . . . . . . . . . . . . . . . . . 6
F. to provide increased economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
G. to foster effective broad-based competition. . . . . . . . . . . . . . . . . . . . . . . 8
H. to provide safeguards. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
I. to require public access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
J. Policy in favor of planned procurement. . . . . . . . . . . . . . . . . . . . . . . . . . 11
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. This is Ver 1.6, June 25,
2009. The author expects it to be revised periodically as new cases and issues arise. You may contact him to obtain the
latest version at jngoz@ozemail.com.au .
Guam Procurement Process Primer Ver 1.6 © John Thos. Brown 2009 Page i
K. Policy in favor of local procurement. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
M. The Procurement Act applies to almost all GovGuam purchases. . . . . . . 14
N. A word from your author. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

3. The Guam legislature chose to forego procurement training and
education when it adopted the Guam version of the Model
Procurement Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
III. PROCUREMENT ADMINISTRATIVE STRUCTURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

A. Centralized Procurement Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
B. Policy Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
C. GSA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
D. DPW.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
E. Public Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
F. Attorney General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
IV. METHODS OF SOURCE SELECTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Contract renewals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
V. “BID BONDING”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
VI. COMPETITIVE SEALED BIDDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

B. The form is always by Invitation for Bids (IFB).. . . . . . . . . . . . . . . . . . . . . 25
C. Distribution, notice and “bidding time”. . . . . . . . . . . . . . . . . . . . . . . . . . 25
D. Withdrawal, cancellation and rejection of all bids. . . . . . . . . . . . . . . . . . 26
E. Bid “mistakes”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
award goes to the lowest responsible and responsive bidder. . . . . . . . . . . . . . . . . . . . . . 28
G. What is a Responsive Bid?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
H. “Materiality” only concerns “Responsiveness”. . . . . . . . . . . . . . . . . . . . . 30
a. Matters of bidder prejudice. . . . . . . . . . . . . . . . . . . . . . . 30
I. What is a Responsible bidder?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
d. Standards of Responsibility. . . . . . . . . . . . . . . . . . . . . . . 33
h. Inquiry into determination of responsibility. . . . . . . . . . . 36
i. The interesting requirement for a writing .. . . . . . . . . . . . 37
(4) “Qualified Bidder lists”.. . . . . . . . . . . . . . . . . . . . 39
J. A Note on “All or None” bids: Why not take part of me?. . . . . . . . . . . . . 40
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K. Wage Determination issues.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
VII. MULTI-STEP SEALED BIDDING.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

D. The first phase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5. Phase two. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
VIII. REQUESTS FOR PROPOSALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

only allowed for “professional services”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
IX. UNSOLICITED OFFERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

shall be subjected to the Competitive Sealed Bidding . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
X. SOLE SOURCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
XI. SMALL PURCHASE PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

H. REQUEST FOR QUOTATION (RFQ). . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
I. BLANKET PURCHASE AGREEMENTS (BPAs). . . . . . . . . . . . . . . . . . . . . . 51
XII. EMERGENCY PROCUREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

A. Requires an existing “threat to public health, welfare, or safety under
emergency conditions”.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
C. “Emergency procurements shall be made with such competition as is
practicable under the circumstances”... . . . . . . . . . . . . . . . . . . . . . . . . . . 53
F. LIMITED TO 30 DAY SUPPLY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
XIII. FEDERAL SUPPLY SCHEDULE PURCHASES MUST ADHERE TO SPECIFIED METHODS OF

SOURCE SELECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
XIV. SPECIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
A. SPECIFICATIONS ARE THE BEDROCK OF PROCUREMENT. . . . . . . . . . 55
C. MINIMUM NEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
D. UNDULY RESTRICTIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
F. NON-PROPRIETARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
I. BRAND NAMES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
J. BRAND NAME OR EQUAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
K. The Who and How of specification preparation and use.. . . . . . . . . . . . 57
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6. Procedures for Development of Specifications. . . . . . . . . . . . . . . 58
XV. VARIOUS CONTRACT TYPES, AND THEIR REQUIREMENTS FOR USE.. . . . . . . . . . . . 60

G. Policy Regarding Selection of Contract Types. . . . . . . . . . . . . . . . . . . . . . 61
H. Multi-term contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
I. Fixed-Price .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
J. Indefinite Quantity.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
K. Requirements contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
L. Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
M. Options to purchase, renew, extend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
N. Multiple Source Contracts.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
1. An Incremental Award is a variety of Definite Quantity. . . . . . . . 64
2. A Multiple Award is a variety of Indefinite Quantity. . . . . . . . . . 64
XVI. PROCUREMENT PROTESTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

B. ONLY “AGGRIEVED” BIDDERS CAN PROTEST. . . . . . . . . . . . . . . . . . . 65
D. TIMING FOR PROTEST FILING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
1. General Rule: 14 days from knowledge of aggrievement... . . . . . 66
4. POSSIBLE EXCEPTION FOR PRE-BID-OPENING ISSUES:.. . . . . . 66
F. Request for Reasons for Rejection of Bid. . . . . . . . . . . . . . . . . . . . . . . . . 68
G. FORMAT OF PROTEST.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
H. RESOLUTION OF THE BID PROTEST. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
I. Requests for Reconsideration of Protest Decision. . . . . . . . . . . . . . . . . . 73
XVII. THE AUTOMATIC STAY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
XVIII. APPEALS OF BID PROTESTS TO THE PUBLIC AUDITOR.. . . . . . . . . . . . . . . . . . . . . . . 75

A. Prerequisites of Appeal are Protest and Decision. . . . . . . . . . . . . . . . . . . 75
B. 15 Day Filing Deadline. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
1. Equitable Tolling.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
C. Jurisdiction of the Public Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5. OPA jurisdiction does NOT include direct review of Ethical
violations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
D. OUTLINE OF AN APPEAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
c. CAVEAT: This outline is bare bones.. . . . . . . . . . . . . . . . 81
2. First step, the Notice of Appeal.. . . . . . . . . . . . . . . . . . . . . . . . . . 82
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3. Second Step, the Procurement Record. . . . . . . . . . . . . . . . . . . . . 83
a. Within five (5) days from filing the Notice of Appeal. . . . 83
4. Objections to OPA jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . 84
5. Third Step, the Agency Report. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
b. The Agency Report is meant to be filed ten (10) days after
receiving the Notice of Appeal. . . . . . . . . . . . . . . . . . . . . 85
6. Fourth Step, the Appellant’s Comments on Agency Report. . . . . 85
c. Comments on the Agency Report must be filed within ten
(10) days of the filing of the Agency Report. . . . . . . . . . . 86
7. Fifth Step, the agency’s Rebuttal to Appellant’s Comments on
Agency Report... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
b. Rebuttals are meant to be filed within five (5) days of filing
the Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9. Discovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
10. Role of the Hearing Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11. The Hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
12. The Decision.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
E. Dateline flow of simple, ideal appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
1. Filing of Notice of Appeal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
3. Agency must file Procurement Record. . . . . . . . . . . . . . . . . . . . . 91
4. Any party must file objections to qualification (recusal) of Public
Auditor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
5. Agency must file Agency Report. . . . . . . . . . . . . . . . . . . . . . . . . . 91
6. Appellant’s or any Interested Party’s Comments. . . . . . . . . . . . . . 91
8. Notice of Hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9. Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
F. Appeal Remedies:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
2. Money.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
3. Other remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
a. Prior to award. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
b. Remedies after award.. . . . . . . . . . . . . . . . . . . . . . . . . . . 93
XIX. Some issues relating to contract performance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

B. Performance Bonding.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
C. Contract disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
1. Procurement Act or Claims Act?. . . . . . . . . . . . . . . . . . . . . . . . . . 97
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2. Who hears contract disputes?. . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
XX. Getting paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

A. Prompt Payment Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
1. Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
2. Discounted settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
B. Non Prompt Payment Act Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
C. Promissory notes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
XXI. Public enforcement of unauthorized procurement spending. . . . . . . . . . . . . . . . . . . . 102

A. Guam taxpayers have standing to bring suit against improper spending.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
XXII. The Courts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
XXIII. A review (with commentary and full disclaimer) of some of the OPA Decisions. . . . . 104
1. OPA-PA-06-001, In the Appeal of the Debarment of Rex. . . . . . 104
2. OPA-PA-06-002, In the Appeal of Far East Equipment. . . . . . . . 104
3. OPA-PA-06-003, In the Appeal of RadioCom. . . . . . . . . . . . . . . 104
4. OPA-PA-07-002, In the Appeal of Emission Technologies. . . . . 105
5. OPA-PA-07-006, In the Appeal of Great West Retirement Services
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
6. OPA-PA-07-007, In the Appeal of Dick Pacific. . . . . . . . . . . . . . 106
8. OPA-PA-07-009, In the Appeal of Pacific Security Alarm. . . . . . 109
9. OPA-PA-07-010, In the Appeal of Far East Equipment . . . . . . . . 109
10. OPA-PA-07-011, In the Appeal of JMI Medical . . . . . . . . . . . . . 110
11. OPA-PA-08-009, In the Appeal of Captain, Hutapea. . . . . . . . . 112
12. OPA-PA-08-008, In the Appeal of Latte Treatment Center. . . . . 112
INDEX OF PERTINENT DECISIONS, APPEALS and AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . 117
Guam Procurement Process Primer Ver 1.6 © John Thos. Brown 2009 Page vi
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
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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 part of Guam daily life and 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 Act, 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 5 GCA § 5030.)
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 Appeals:

http://www.msbca.state.md.us/
2. Note difference between detail and General 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
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 directly 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. 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 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.
II. PURPOSES AND POLICIES of Guam Procurement Law
A. 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.
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 Act] 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)).
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. This Chapter requires all parties involved in the negotiation, performance, or

administration of territorial contracts to act in good faith. (5 GCA § 5003.)
2. A Member will conduct its business fairly, honestly and with integrity.
(Guam Chamber of Commerce Code of Ethics, Principle I.)
3. A Member should conduct its business within the spirit as well as the letter
of the law. (Guam Chamber Ethics, Ethical Commentary IV-1.)
4. Making and keeping “determinations”. Throughout the procurement law

and regulations, procurement officers are meant to make “determinations”.
The author takes the view that any determination, including a determination
of what is “the best interests of the Territory”, while deferring to agency
judgment, should be kept in some record form, requires a deliberative
balancing of all the competitive policies of the procurement act, including
fair and equitable treatment of all parties, and not be impulsive, partial,
deceptive, arbitrary, unreasonable or capricious.
a. “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.)
(1) That code is adopted verbatim from MPC §1-301. There are
Model Regulations intended to implement that code, which
do not seem to have made their way into the Guam
Procurement Regulations, notwithstanding the 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, 5 GCA §
5030.)
(2) Model Regulations implementing the Code 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.)
b. 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.) 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.)
F. 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).)
G. to foster effective broad-based competition within the free enterprise system (5

GCA § 5001(b)(6)).
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 §
1102.03.)
2. All specifications shall seek to ... encourage competition in satisfying the

Territory’s needs, and shall not be unduly restrictive. (5 GCA § 5265.)
3. 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.. (5 GCA § 4102(a)(1).
4. 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.)
5. Unless other wise authorized by law, all territorial contracts shall be

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

practicable under the circumstances.... (5 GCA § 5215.)
7. 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).)
8. “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, # 3, §3-201, which is the same as 5 GCA § 5210(a).)
9. A Member should engage in fair, free and open competition with its
competitors (Guam Chamber Ethics, Ethical Commentary III-2.)
H. 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.)
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.)
I. to require public access to all aspects of procurement consistent with the sealed
bid procedure and the integrity of the procurement process.
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.
2. 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 is
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.
J. 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.”
K. 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.
L. 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.
M. 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).)
2. Exceptions are made (id.) for
a. Pre-emptive federal government funding regulations, if any.
b. Grants or inter-governmental contracts.
c. Gifts, bequests and other such private grants and donations, or

cooperative agreements.
N. 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. 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).)
2. 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. 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).
b. 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.)
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 a limited role to play generally, although a

primary role as attorney for any Agency it represents. Of course, the
Attorney General should strive to uphold the law and not undermine it. The
AG serves as legal counsel and provides legal services to the Policy Office
and the GSA (and even the Public Auditor in some circumstances – 1 GCA
§ 1909(d)). 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.)
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. Direct purchases from the United States (5 GCA § 5122) are not
“otherwise authorized” – see section below on Federal Supply
Schedule purchases.
E. Contract renewals.
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 ....”
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 answer the
“what do we want from you and when do we want it” question.
2. A purchase description of what it is 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
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).)
b. Cogent and compelling reasons for cancellation need not be given

to disappointed bidders, but such reasons must exist; 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.) In
that case, the plaintiff tried, unsuccessfully, to enjoin an agency from
cancelling a bid based on the sparseness of the information given in
the notice of cancellation, and the remedy and factual posture of the
case was an uphill battle from the start.
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. Here note that
the right to request reasons granted to an “unsuccessful” bidder or
offeror probably does not apply to a rejection of all bids; the Court’s
emphasis on “the best interests of the Territory” in the J&B Modern
Tech case (supra), which is also a test for rejection of all bids, lends
support to this argument.
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 “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.
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))
F. 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.
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).)
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.
G. 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 subsequently to Guam
Publications, and specifically declared its distinctions between
responsive and responsible were matters “of first impression”.)
H. “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.)
I. 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”.
(Formation of Government Contracts, Third
Edition, John Cibinic, Jr., and Ralph C. Nash,
Jr., CCH/ Wolters Kluwer, p545, cited
hereafter as Cibinic and Nash.)
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.
(4) “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”.
(a) 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.
i) This is broadly reminiscent in notion to the

Federal government’s Central Contractor
Registration (http://www.ccr.gov/ ), but the
CCR is much more blinkered and restrictive
than the local procurement requirements to
seek out competition.
(b) 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.)
(c) 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).)
(d) The fact that a prospective contractor has been

prequalified does not necessarily represent a finding
of responsibility. (Id.)
(e) 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.
J. 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 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, and the
referenced regulation makes that part of the clause proper.
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.
K. Wage Determination issues: 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.
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.)
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§(r)(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.
5. 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 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. 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. The procurement process for RFPs is built around a negotiation process, and has its
own procedural 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) 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, 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.
5. As in the competitive sealed bid process, proposals must only be evaluated

based on factors stated in the RFP. (§ 3114(f)(2).)
6. 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).) Remember, RFPs are only allowed
for solicitation of professional services, so the only authorized process of
ranking offers allowed anywhere in the Procurement Act is in the context of
solicitation of professional services; in all other cases, lowest cost prevails.
a. While normally responsibility-related factors must not be used to

evaluate bids or offers, the evaluation of such factors for the sole
purpose of ranking offerors already evaluated as qualified, is
appropriate in the RFP process.
b. “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.)
7. 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 discussed or considered until 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.
a. The purpose of negotiations is to reach agreement on compensation

which must be “determined in writing to be fair and reasonable”
(which presumably means to both parties, but the author is not
making that call without further research).
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”. (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 qualifier to conclude acceptable

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(3)(3(B).)
8. When the dust settles and an award 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.
9. Each agency is required to submit annual reports identifying every RFP

issued in the preceding year to the CPO.
D. 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 “professional services” above does not

specifically include them. 5 GCA § 5216(a), which defines when an RFP for
professional services can be used, 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.” But Article 5 only deals with the “alternative methods of
construction management” (5 GCA § 5302) and not methods of source
selection, that is, the procurement methods. 5 GCA § 5301 does, however,
refer to “professional services within the scope of the practice of
architecture, professional engineering, or land surveying”.
3. The regulations refer to the professional services method of source selection

only for architecture, professional engineering, or land surveying services
and not the more broadly described “construction” services.
a. The provision of these Regulations applies to every procurement of

services within the scope of the practice of architecture, professional
engineering, or land surveying.... For the purpose of acquiring the
services, described in this Chapter the provisions of §3114
(Competitive Selection Procedures for Services, specified in §2112)
of this Guam Procurement Regulations shall be followed. (2 GAR §
5108.)
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 a thing to be constructed
which necessarily involves such 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).)
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 includes 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 vendores 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.)
E. A record of all contracts made under the sole source procurement shall be
maintained and a copy of such record shall be submitted to the Legislature
annually. (2 GAR § 3112(d).)
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).)
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.)
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).
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.
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. 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. 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” (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. In fact, the 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 is 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, in
complete disregard of Guam procurement law and regulation. 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).
F. The Public Auditor has recently 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.)
XIV. SPECIFICATIONS
A. SPECIFICATIONS ARE THE BEDROCK OF PROCUREMENT: “The purpose of a

specification is to serve as a basis for obtaining a supply ... item adequate and
suitable for the territory’s needs in a cost effective manner.... It is the policy of the
territory that specifications permit maximum practicable competition consistent
with this purpose. 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. “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”.
C. 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 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).
D. 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)
E. “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))
F. 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).)
G. 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).)
H. 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).)
I. 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
should seek to identify multiple, competitive sources of brand name items. (§
4103(b)(2)(c).)
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.
J. 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.
K. 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.)
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.)
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 duty of the CPO and Director DPW to prepare and utilize
specifications may be delegated to the Using Agencies. (2 GAR §
4103(a)(1).)
5. 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.).
6. 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))
7. 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 implicated 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” (5 GCA § 5237) provided:
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. 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.”
4. 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 must be in the best interests of the territory and “not used to circumvent
normal procurement procedures.” (2 GAR § 3119(j)
a. 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).)
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.
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).)
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”.

Simply losing a bid fair and square does not entitle you to protest. You are
aggrieved if there was something particularly improper or irregular in the
solicitation, or at least you have reasonable grounds to believe it..
2. 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.”
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 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.
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.” It must be noted, however, that this
was not a case brought under the review processes of the
Procurement Act, but as a civil action seeking a preliminary
injunction, which had to be judged by those deferential and
unique standards and procedures applicable to such a
remedy, not the administrative standards and procedures of
bid protests under the Procurement Act (see, L.P. Ganancias,
at page 5 et seq.).
c. Neither the Model Procurement nor Guam law expressly support

this possible exception. In contrast, Federal procurement
regulations do. (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.) Cibinic and
Nash also note that Federal agencies have some leeway for
considering protest filed after the 10 [14] day filing limit. (P 1486.)
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.
E. The third key take-away is that if you miss a deadline to file a protest (or appeal),
absent extreme and unjust circumstances, you will have a snowball’s chance on
Guam of ever getting it heard.
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.
4. The three legal bases specifically (but not exclusively) allowed to reject a
bid are:
a. The business that submitted the bid is nonresponsible.
(1) And here there is a transcription error in the Procurement

Regulations, which, though specifically referring to
“Determination of Nonresponsibility”, incorrectly uses the
word “nonresponsive”. Note that the corresponding MPC
provision says “nonresponsible” (MPR R3-301.03(a)(i).)
b. This bid is not responsive. Or,
c. The supply, serve or construction item does not meet the

specifications or other acceptability criteria.
5. The three legal bases specifically (but not exclusively) allowed to reject a
proposal (offer) are:
a. The business that submitted the proposal is nonresponsible (and

here the Guam law got the word transcribed correctly).
b. 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,
c. The proposed price is clearly unreasonable.
d. 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.
6. 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.
7. The regulations speak of no time limit within which to lodge your Request
for Reasons.
8. 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.
9. 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.
10. 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” is more formal and must be in writing. (2 GAR §§
9101(b) and (c).)
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.)
4. 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, where possible, by “mutual

agreement”, which implies an informal dialogue. (5 GCA § 5425(c).)
Information required by either party from the other should be rendered
expeditiously (2 GAR § 9103(d).).
2. In the author’s experience, it is rare for there to be any procedure other than
a written response; and, often, not even that. In the cases where the
Government has instigated a discussion to resolve the protest, issues have
been narrowed or avoided altogether.
3. Any “interested party” is entitled to receive from the Agency any information
bearing on the protest, unless proprietary or otherwise confidential. For this
purpose, it appears an “interested party” is more restricted than usually
thought, including only persons aggrieved who’ve filed a protest (2 GAR §
9101(a)(1)(a)).
4. 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.2
5. 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.
6. 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).)
2
This Ap peal and Decision brings to mind another incident reported by Carlos Madrid’s
Beyond Distances, p 199: ”the repatriation of the deportees served to call the attention of the central
government in Madrid to the administration of Tinian, which had been leased under very obscure terms
under Governor Moscoso. Having made continual requests for information and transmittal of the original
documents, Madrid finally found it necessary to issue a Royal Decree, signed June 15, 1877 to have the
documents sent to Spain. Once this was done, the conclusions were clear: ‘The leasing of Tinian was
made without the knowledge of the government’. The private lease of the island ‘is anomalous and ill-
founded in the legal prescriptions ...’.”
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. This request must be made within 15 days after receipt
by the protester of the decision.
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”).
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 solicitation and award. It does not
apply to stay performance of a contract that has already been
entered into.
2. “Final resolution” would include awaiting the outcome of an Appeal after

the protest. (See, In the Appeal of [IBSS], OPA-PA-08-012, at pp 9-10.)
a. But this would not 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.) Such action would bear on the
ultimate remedy available to an Appellant (see below).
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. 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.
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.
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.)
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), and
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. 15 Day Filing Deadline: 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), 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. The Court reviewed
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. 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. 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. 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.
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 would favor
allowing time for the reconsideration process to take its course, the law
fairly clearly indicates the Appeals process is triggered by the initial
decision, and the author is aware of no case which holds otherwise.
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.
C. 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” in connection with the protest or solicitation. (5 GCA
§ 5703.)
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. 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.
3. “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.
c. The Public Auditor’s power to review agency protest action is “de

novo”. 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.
(1) 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 an 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.
(2) 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/GMHA
s_Supplemental_Response_to_Appellants_Comments_to_Ag
ency_Report_07_005.pdf .
(a) 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.
(3) 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:
(a) “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.)
d. The author takes the view that the Public Auditor must be
considered to be a functional part of the Executive Branch of
government, not subject to the control of the Governor, 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 government of Guam shall consist of three branches,
executive, legislative and judicial....” (Organic Act of Guam,
48 USC 1421a.)
(2) 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.
(3) 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.
4. 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].)
5. OPA jurisdiction does NOT include direct review of Ethical violations.
a. Complaints of ethics violations by Government employees are

handled by the Civil Service Commission. (5 GCA §§ 5675, 5676.)
b. 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.)
c. 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.
D. 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, 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 you file, in triplicate, to start your 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 a copy of the Notice of Appeal. It is up
to the agency to notify any counsel, including the Attorney General.
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:
i) 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;
ii) 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;
iii) sound recordings of all pre-bid conferences;
negotiations arising from a request for
proposals and discussions with vendors
concerning small purchase procurement;
iv) 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
v) 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) There are many other requirements throughout the law and
regulations of 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. Feel free to request them 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).) The author suspects the
meaning to probably be a bit broader than that; that “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.
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.
(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) 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. Ordinarily, only one “hearing” will be held, but there could be

numerous pre-hearing conferences and motions hearings.
c. 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.
d. Testimony is normally given under oath or affirmation.
e. Hearings are normally recorded, and the recording eventually made

available on the OPA website.
f. 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.
g. 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.
E. 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 Interested Parties
(1) Within 24 hours
d. Agency notifies counsel, including AG
(1) No time limit, but why wait?
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.
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.”
F. Appeal Remedies:
1. 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.
2. Money:
a. “Reasonable Costs” are allowed but not damages (5 GCA § 5425(h)):
(1) 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).)
(a) 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. However, “[t]he
Public Auditor shall have the power to assess” the
fees as part of reasonable costs at the Appeal level.
(5 GCA § 5425(h)(2).)
(b) Damages are not allowed. Damages include such

things as lost profits. Bear in mind that, without
award, there is no contract, and no contract, no
contract damages.
(2) 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.
(a) Again, no damages (“costs” but not “damages”), such
as price increases due to delays, expenses incurred to
provide interim needed goods or services, or the like.
b. “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.)
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.
c. 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.
3. Other remedies:
a. Prior to award, improper solicitations and 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)). (5 GCA § 5451.)
(1) 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.)
b. 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):
(1) If the person did (act fraudulently or in bad faith),
(a) The contract may be ratified and affirmed if in the

best interests of the Territory; or
(b) The contract may be declared null and void;
(c) There is no explicit relief offered to the vendor who

lost out on the award, but consider possibility of
bringing civil action against them for the economic
tort of intentional interference with prospective
economic advantage or other unfair competition or
fraud tort.
i) 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.
(d) 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.)
(e) 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.)
(2) If the person did not (act fraudulently or in bad faith):
(a) The contract may be ratified and affirmed if in the

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

and void” when fraud or bad faith] 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??
i) 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).
(c) 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.
(3) 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 as written.
G. 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.
XIX. 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. Procurement Act or Claims Act? 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. It is worth noting that the Procurement Act provisions regarding

contract disputes was adopted by the 18th Guam Legislature while
the Government Claims Act (5 GCA § 6101) was adopted by the 17th
Guam Legislature (and intended to mostly continue the effect of the
prior claims act provisions – 5 GCA § 6107). For this and other
reasons alluded to below, the author believes the Procurement Act
prevails; but, as he has had no practical experience with the Guam
Claims Act, he is not laying his reputation on the line over that
statement.
b. See, Sumitomo Construction, Co. vs. Government of Guam,

discussed below regarding pre-judgment interest.
2. 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) Note, however, that 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
this Section [which refers to 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) The author believes that procurement regulation is invalid, to

the extent it makes an exception for contract controversies
“subject to” the Claims Act, as an interpretation beyond the
clear authority given by the Procurement Act. The only
reason apparent to the author for such a provision is to
reiterate that contract controversies, as governed by the
Procurement Act, involve controversies between a
contractor and the government, and that a controversy
involving any other party (not a contractor) acting in reliance
on a contract must come under the Claims Act. The author
finds it hard to envision how any such other controversy
would arise in any practical sense, but should it, the Claims
Act would prevail.
(5) If, indeed, the Claims Act prevails, only a Claims Officer
could settle and resolve such contract disputes. (See, 5 GCA
§§ 6201 and 6206.)
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 will 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.” That is patently wrong and without legal
authority. There is no precondition to a prompt decision.
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.
XX. 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”.
XXI. 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.)
XXII. 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, 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. 5 GCA § 5425(e) indicates protest decisions may be taken to the Public Auditor,
and 5 GCA § 5480 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 to make it optional
whether to appeal a protest decision to either the OPA or the Superior Court.
However, 5 GCA § 5481(a) restricts the filing of any such action until 14 days after
receipt of “a final administrative decision”, and 5 GCA § 5425(f) says an OPA
decision is final unless appealed to the Superior Court under § 5480. That
language, and the general notion of exhaustion of administrative remedies, indicates
that no such action should be commenced at the Superior Court unless it has been
first administratively determined by the OPA.
C. 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).)
D. 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.
E. At present, there has only been one OPA Decision finally determined by the
Superior Court, and that 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. Two other
appeals have been taken and are at present pending, 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.
F. The explicit language of 5 GCA § 5707 is a bit confusing to the author, referring to
appeal procedures to be conducted pursuant to chapters and articles of law that are
inconsistent with the Compiler’s codification. It is also 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. It will likely be the
case that some guidance will be necessary from the Court 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.
XXIII. 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, with all due
respect. 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. 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 bid 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. The contractor

prepared the specifications, and GSA accepted, and incorporated in
its own determination, without question, 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 of 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 the 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 bidder
who had not been determined to be the best 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 renders the bid non-responsive. In this case that was,
indeed, the holding. While that case was distinguished and
discussed 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 believes that
is a standard whose application is too vague and uncertain to
enforce, or for an agency to judge.
(2) Note also that § 5211 deals specifically and only with
Competitive Sealed Bidding. Thus, § 5211(g) only applies to
award by Competitive Sealed Bids, so this wage limitation on
awards would not appear to apply to other methods of
source selection, the most obvious one being RFPs for
professional services.
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 DPL 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-08-009, 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.
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).).
12. OPA-PA-08-008, In the Appeal of Latte Treatment Center, Inc. (vs DMHSA)
a. This is the most recent Decision by OPA since this paper last
published, decided February 26, 2009. 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.
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, 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.
INDEX OF PERTINENT DECISIONS, APPEALS and AUTHORITIES
Appeal of Island Business Systems & Supplies (v NMC), CNMI OPA, Appeal No. BP-A057,
Decision on Request for Reconsideration dated March 11, 2009. . . . . . . . . . . . . . . . . . . . . 66, 114
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.. 11, 12,
29, 34, 43, 46
Executive Order 2000-25, Relative to Obtaining On-Island Professional Consulting, Education and
Training Services before Off-Island Professional Consulting, Education and Training Services... . 13,
17
Fleet Services, Inc. v. Dept. of Administration, 2006 Guam 6. . . . . . . . . . . . . . 22, 42, 45, 49, 111
Formation of Government Contracts, Third Edition, John Cibinic, Jr., and Ralph C. Nash, Jr., CCH/
Wolters Kluwer, The George Washington University Law School Government Contracts Program
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 68, 107
Guam Imaging Consultants, Inc., v. Guam Memorial Hospital Authority, 2004 Guam 15 . . 17, 23,
66, 74
In the Appeal of Advance Management, Inc., OPA-PA-07-008.. . . . . . . . . . . . . . . . . . . . . . 41, 107
In the Appeal of Captain, Hutapea and Associates, OPA-PA-08-009. . . . . . . . . . . . . . . . . . . . . 112
In the Appeal of Dick Pacific Construction Company, Ltd., OPA-PA-07-007. . . . . . . . . . . . 34, 106
In the Appeal of Emission Technologies, Inc., OPA-PA-07-002. . . . . . . . . . . . . . . . . . . 12, 34, 105
In the Appeal of Far East Equipment Company, LLC, OPA-PA-07-010. . . . . . . . . . . . . . . . . . . . 109
In the Appeal of Far East Equipment Company, LLC, OPA-PA-08-001. . . . . . . . . . . . . . . . . . . . . 85
In the Appeal of Far East Equipment Company, LLC, OPA-PA-06-002. . . . . . . . . . . . . . . . . . . . 104
In the Appeal of Great West Retirement Services, OPA-PA-07-006. . . . . . . . . . . . . . . . . . . 47, 106
In the Appeal of Guam Publications, Inc., OPA-PA-08-007 .. . . . 20, 29, 36, 58, 63, 65, 71, 73, 94,
95
In the Appeal of J&G Construction, OPA-PA-07-005. . . . . . . . . . . . . . . 29, 32, 34, 36, 75, 79, 106
In the Appeal of JMI Medical Systems, Inc., OPA-PO-07-011.. . . . . . . . . . . . . . . . . . . . . . . 28, 110
In the Appeal of Latte Treatment Center, Inc., OPA-PA-08-008.. . 9, 10, 32, 37, 66, 69, 80, 83, 93,
112
In the Appeal of Mega United Corp., OPA-PA-09-001. . . . . . . . . . . . . . . . . . . . . . . . . . . 65, 75, 82
In the Appeal of O&M Energy, S.A., OPA-PA-08-004. . . . . . . . . . . . . . . . . . . . . . . . . . . 31, 78, 110
In the Appeal of Oceania Collection Services, OPA-PA-08-006. . . . . . . . . . . . . . . . . . . . . . . . . . 45
In the Appeal of Pacific Security Alarm, Inc., OPA-PA-07-009.. . . . . . . . . . . . . . . . . . . . . . 27, 109
In the Appeal of RadioCom, OPA-PA-06-003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
In the Appeal of Teal Pacific LLC, OPA-PA-08-010.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 76, 85, 116
In the Appeal of Teal Pacific, LLC, OPA-PA-09-002. . . . . . . . . . . . . . . . . . . . . . 13, 75, 76, 85, 116
In the Appeal of the Debarment of Rex International, Inc., OPA-PA-06-001. . . . . . . . . . . . . . . 104
In the Appeal of Town House Dept. Stores, Inc. dba Island Business Systems and Supplies [IBSS vs
GSA], OPA-PA-08-012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 55, 67, 73
In the Appeal of Town House Dept. Stores, Inc., dba Island Business Systems and Supplies [IBSS vs
GPSS (2)], OPA-PA-08-011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50, 55, 57, 66, 76, 95, 103
GPSS (1)], OPA-PA-08-003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72, 75, 78
UOG], OPA-PA-06-004.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
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). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 27, 80
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). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 28, 56, 67, 68, 74, 79
Pacific Security Alarm, Inc. v DPW, Guam Superior Court CV 0591 - 05 (Decision and Order,
Stephen Unpingco, August 14, 2006). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76, 77
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). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Sumitomo Construction, Co., vs. Government of Guam, Guam Superior Court CV 1589-99
(Decision and Order, Michael J. Bordallo, May 18, 2000). . . . . . . . . . . . . . . . . . . . . . . . . . 97, 101
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)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 34, 73, 75, 76, 103, 105

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Procurement Lore or Procurement Law ?

A G UAM PROCUREMENT PROCESS PRIMER

John Thos. Brown

A GUAM PROCUREMENT PROCESS PRIMER (Ver 1.6) 1

I. SOURCES of Guam Procurement Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

II. PURPOSES AND POLICIES of Guam Procurement Law.. . . . . . . . . . . . . . . . . . . . . . . . . . 6

N. A word from your author. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

III. PROCUREMENT ADMINISTRATIVE STRUCTURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

IV. METHODS OF SOURCE SELECTION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

VI. COMPETITIVE SEALED BIDDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

VII. MULTI-STEP SEALED BIDDING.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

VIII. REQUESTS FOR PROPOSALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

IX. UNSOLICITED OFFERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

XI. SMALL PURCHASE PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

XII. EMERGENCY PROCUREMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

XIII. FEDERAL SUPPLY SCHEDULE PURCHASES MUST ADHERE TO SPECIFIED METHODS OF

XV. VARIOUS CONTRACT TYPES, AND THEIR REQUIREMENTS FOR USE.. . . . . . . . . . . . 60

XVI. PROCUREMENT PROTESTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

XVII. THE AUTOMATIC STAY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

XVIII. APPEALS OF BID PROTESTS TO THE PUBLIC AUDITOR.. . . . . . . . . . . . . . . . . . . . . . . 75

XIX. Some issues relating to contract performance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

XX. Getting paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

XXI. Public enforcement of unauthorized procurement spending. . . . . . . . . . . . . . . . . . . . 102

XXII. The Courts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

INDEX OF PERTINENT DECISIONS, APPEALS and AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . 117

“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 Act, 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

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 Appeals:

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 author makes no claim to great authority of the subject. He acknowledges

B. to simplify, clarify, and modernize the law governing procurement by this

1. “While it is the intent of the MPC [Model Procurement Act] 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. This Chapter requires all parties involved in the negotiation, performance, or

4. Making and keeping “determinations”. Throughout the procurement law

(2) Model Regulations implementing the Code require:

(a) Where the Procurement Code or these regulations

(b) Each written determination shall set out sufficient

(c) While an officer is responsible for the execution of

(d) Each written determination shall be filed in the

b. Under the original Procurement Act, certain specific determinations

F. to provide increased economy in territorial activities and to maximize to the

2. Objectives of the territory's supply management program include preventing

G. to foster effective broad-based competition within the free enterprise system (5

1. All procurement of supplies and services shall, where possible, be made

2. All specifications shall seek to ... encourage competition in satisfying the

3. It is the policy of Guam that specifications permit maximum practicable