buyers and sellers would reasonably expect to have
a significant effect on price negotiations. Being
factual, these data are that type of information that
can be verified as being fact rather than judgments
or estimates. They do not reflect on the accuracy
of the contractor's judgment about estimated future
costs or projections; they do, however, reflect on
the data upon which the contractor based his judgment."

REASONS FOR RECOMMENDATION

1.

2.

3.

4.

5.

The redrafted section contains the essence of the
approach proposed by Senator Chiles and his staff in
a form which will be more adaptable to the day-to-day
efforts of procurement officials.

The proposal permits the HPA to require cost analysis and cost data for cause for procurements, changes, etc. in excess of $100,000. This reflects current practice.

The certification has been limited to actual prices and to a period of one year.

There is no Defective Price Clause recommended since
one is not used now and is not needed.

The Waiver and Inflation Adjustment provisions, Sections
305 (d) and (e), are added to the Price Analysis Section.
As before they are also recommended for use in the Cost
Analysis Section.

SECTION 306 - ACCESS TO RECORDS

This section has been changed but there is no substantial problem with the language.

RECOMMENDATION

It is recommended that claims under a contract by the Government against a contractor be limited to four years after the date of final payment under the contract.

REASONS FOR RECOMMENDATION

1.

There is currently no statute of limitations for
claims by the Government against the contractor
under a contract. A DCAA audit completed within

2.

3.

4.

the three year period may languish for two or three
years more before a claim is issued by the Govern-
ment. Claims such as warranties, truth-in-pricing,
CAS, etc. leave the contractor's records open for
as much as eight to ten years.

Claims by the contractor against the Government
under a contract are eliminated by final payment
under a fixed price contract and by certification
under a cost type contract.

Such a statute of limitations would permit the con-
tractor to dispose of his records thereby reducing
costs to the Government for record retention.

Such a statute of limitations would motivate the
Government to amass its claims, if any, and file
them while the evidence is reasonably available.

This portion of the statute is acceptable to the Section as written and is similar to that included in S.3005.

Section 501(a) is a clear requirement. 501(b) is redundant.

RECOMMENDATION

Section 501(b) should be deleted.

REASON FOR RECOMMENDATION

Everything in

This section undercuts (a) and is a limitation on
rational judgment.

Again, as before, the Contracting Officer is permitted to cancel or withdraw invitations and solicitations before award.

RECOMMENDATION

As before, it is recommended that a cancellation
and rejection of all bids only be permitted for the
most "cogent and compelling reasons.

REASON FOR RECOMMENDATION

The words "cogent and compelling reasons" are currently
used as a test by the GAO to determine if the cancella-
tion of the procurement and the rejection of all bids
was fair and reasonable. This test protects the bidders
who have invested time and money in preparing their bids
for submission to the Govenment.

This section is acceptable to the Section if one change is made.

RECOMMENDATION

The word "approval" should be added after the
word "findings" in Section 507 (a).

REASON FOR RECOMMENDATION

Unless approval of use of definitive product specifications can be approved as a class by the HPA under Section 202 (d), the HPA would be inundated with thousands of separate requests at places like AFLC, etc.

SECTION 508 - COMPETITIVE BIDDING INFORMATION

This section provides that the procuring officials shall assist the United States Attorney General in any prosecution or other action by the United States under the antitrust laws or other statutes enforced by the Attorney General. There would appear to be no need for this section; however, the Section has no objection to its contents.

This section has been modified to reflect the Section's suggestions.

This title is acceptable to the Section. However, the HPA should be allowed to make judgments under Section 509 for non-statutory requirements and only the Agency Head should be permitted to authorize an award while a protest is pending (Title VI should reflect Section 702 (b) of Title VII).

This title reflects the Section of Public Contract Law's original position taken at its February 1976 Council Meeting, although it is noted that the Section of Administrative Law has raised questions of constitutionality with regard to it and has recommended that action on this portion of S.1264 be deferred until the Section of Administrative Law has had an opportunity to act on it. The Section of Public

Contract Law is informed that Attorney General Bell wrote a letter dated March 17, 1977 challenging the GAO's authority and anticipates that more definitive advice from the Section of Administrative Law and other sources in response to said letter may be available in time for the July hearings.

The Section states that the language of Title VII is not intended to change existing law or cut off de novo judicial review by a federal court and requests that Senator Chiles and his staff make this matter of de novo judicial review a part of the legislative history to accompany the Bill. Similarly, the right to a de novo trial in a federal court is believed by the Section to be responsive to arguments that the "informal procedure" language included in the statute may deny a party to a protest adequate procedural due process.

RECOMMENDATION

Section 703 (b) should be changed by deleting

"...binding upon all interested parties including the executive agency or agencies involved." The following language should be included in lieu of the language deleted:

"...binding upon the contracting agency or
agencies involved."

REASON FOR RECOMMENDATION

The Section considers that the decisions of the Comptroller General should have no greater finality than they presently have, namely, that they be final and conclusive on the contracting agency with other interested parties free to vindicate their claims in the courts, at least to the extent they otherwise have standing to do so. It is believed that the above explanations and changes, together with the anticipated response from the Section of Administrative Law and others with regard to Attorney General Bell's letter of March 17, 1977, will allow these matters to be adequately clarified by the time of the anticipated July hearings so that a definitive position may be taken at that time. If not, the Section of Public Contract Law will be guided accordingly.