The Use of Public The Use of Public Procurement to Effect Procurement to Effect Economic Recovery: Economic Recovery:

The Case of the United The Case of the United StatesStates

Christopher YukinsChristopher YukinsGeorge Washington University George Washington University

Law SchoolLaw SchoolWashington, DCWashington, DC

African Development BankAfrican Development BankThe High Level Forum on Public Procurement The High Level Forum on Public Procurement

Reforms in AfricaReforms in AfricaTunis, November 16, 2009Tunis, November 16, 2009

2Assessing Procurement Under the Recovery Act

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The United States Is Seeing a Surge in The United States Is Seeing a Surge in Recovery Act SpendingRecovery Act Spending

From recovery..gov

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Two Pathways for Two Pathways for Recovery Act FundsRecovery Act Funds

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HANDLING HANDLING SOCIOECONOMIC SOCIOECONOMIC

PRESSURESPRESSURES

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From Recovery.govFrom Recovery.gov Q: Q: To what extent does the Recovery Act preserve access to To what extent does the Recovery Act preserve access to

Federal contracts and procurement opportunities for Federal contracts and procurement opportunities for women- and minority-owned businesses? women- and minority-owned businesses? A: A: There is nothing in the Recovery Act that changes any There is nothing in the Recovery Act that changes any existing Federal laws or regulations in place dedicated to existing Federal laws or regulations in place dedicated to establishing or fostering the growth of women- or establishing or fostering the growth of women- or minority-owned businessesminority-owned businesses.. Moreover, as noted more fully Moreover, as noted more fully in Section 1.6 of OMB's Initial Implementing Guidance to in Section 1.6 of OMB's Initial Implementing Guidance to agencies for the Recovery Act, dated February 18, 2009, agencies for the Recovery Act, dated February 18, 2009, the Executive Branch shall distribute Recovery Act funds in the Executive Branch shall distribute Recovery Act funds in accordance with all anti-discrimination and equal accordance with all anti-discrimination and equal opportunity statutes, regulations, Executive Orders, and opportunity statutes, regulations, Executive Orders, and policies that apply to the expenditure of funds under policies that apply to the expenditure of funds under Federal contracts, grants, cooperative agreements, loans, Federal contracts, grants, cooperative agreements, loans, and other forms of Federal assistance. Generally applicable and other forms of Federal assistance. Generally applicable civil rights laws also continue to applycivil rights laws also continue to apply

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But . . .But . . .– The Office of Management The Office of Management

and Budget guidance of and Budget guidance of April 3, 2009 said:April 3, 2009 said:

Targeting assistance consistent with Targeting assistance consistent with other policy goals. other policy goals. Federal agencies Federal agencies

should take additional policy should take additional policy considerations into account, to the considerations into account, to the

extent permitted by law and extent permitted by law and practicable, practicable, when determining how best when determining how best to use Recovery Act funds for achieving to use Recovery Act funds for achieving

the Act's objectivesthe Act's objectives, , such as such as supporting projects that ensure supporting projects that ensure

compliance with equal opportunity compliance with equal opportunity laws and principles, support small laws and principles, support small

businesses including disadvantaged businesses including disadvantaged business enterprises, engage in business enterprises, engage in sound labor practices, promote sound labor practices, promote

local hiring, and engage with local hiring, and engage with community-based organizationscommunity-based organizations. .

These policy goals are outlined further These policy goals are outlined further in the attached guidance document, at in the attached guidance document, at

Section 1.6. Section 1.6.

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““SHATTERING THE SHATTERING THE PRINCIPAL”: SOCIOECONOMIC PRINCIPAL”: SOCIOECONOMIC INITIATIVE?INITIATIVE?

12The Principal-Agent The Principal-Agent

RelationshipRelationship

PrincipalPurchase

Principal Agent

Purchase

Principal

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Controls Against Controls Against Conflicts of InterestConflicts of Interest

Agent

Purchase

Principal

MonitoringCosts

BondingCosts

ResidualCosts

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Obama Administration:Obama Administration:Shattering the PrincipalShattering the Principal

Agent

PurchasePrincipal

MonitoringCosts

BondingCosts

ResidualCosts

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CONCLUSIONCONCLUSION