Wednesday, November 10, 2004
The federal government may enter into contracts just as private parties do, but the law that governs those agreements is vastly different from the law that governs similar private transactions. Federal contracts are different, and not merely because they are subject to the mighty Federal Acquisition Regulation (with its myriad supplements) and a host of unsual statutes and doctrines.
The exceptional nature of federal procurement law, argues Joshua Schwartz of GWU in a new paper, The Centrality of Military Procurement: Explaining the Exceptionalist Character of United States Federal Public Procurement Law, is driven in part by the importance of military procurement in the process.
This study builds upon prior work that delineates opposing tendencies of exceptionalism and congruence that measure the degree to which a body of public contracts law diverges or adheres to the norms of private contract law. This study has two objectives. First, it seeks to define more precisely, and track the incidence and locus of a phenomenon described as exceptionalism in public procurement law. Exceptionalism enhances the powers or reduces the liabilities of the government with respect to its private contracting partners. The first branch of this study also seeks to distinguish such true exceptionalism from a phenomenon of reverse exceptionalism that imposes duties on the government that private parties engaged in procurement do not share. This study concludes that true exceptionalism is strongly associated with the law governing performance of federal public procurement contracts, while reverse exceptionalism is associated characteristically with the law of federal public contract formation.
The second objective of this study concerns the role of military procurement - which historically has been central to the development of the procurement law system in the United States. This feature of the United States public procurement regime distinguishes it from the national law of many other nations, and from the requirements of many transnational public procurement regimes. This study demonstrates the strong causal role played by military procurement, in the emergence of this exceptionalist tendency in the United States law governing performance of federal public procurement contracts. These findings have particular relevance for developing nations and transitional economies emerging from state socialism. Although the common practice of excluding military procurement from the field of newly established competitive procurement regimes in such nations is entirely understandable, this study suggests that this approach fosters the adoption of regime that lacks appropriate flexibility. The experience of the United States should caution other nations to consider the unrecognized costs of broadly excluding military procurement from their procurement regimes at the threshold.