Procurement Lobbying Legislation State Finance Law Provisions

Procurement Lobbying LegislationState Finance Law Provisions

March 7, 2006

Welcome

Overview of Presentation

What is the Procurement Lobbying Law?

Two separate amendments in Chapter 1 of theLaws of 2005, amended by Chapter 596 of the Laws of 2005

Legislative Law – interpreted and enforced by the NYS Temporary Commission on Lobbying also establishes Advisory Council on

Procurement Lobbying State Finance Law §139-j and §139-k –

addresses actions of governmental entities and the business community

The Advisory Council on Procurement Lobbying

Created by Legislative Law §1-t

Eleven members, chaired by Office of General Services

Three general obligations of CouncilReportsGuidanceAdvice to Lobbying Commission on

procurement lobbying

The Advisory Council on Procurement Lobbying (cont.)

ReportsPreliminary report due December 31, 2005 on

potential implementation issues regarding those provisions that take effect January 1, 2006.

Annual report to Legislature on problems in implementing the provisions relating to procurement lobbying and including recommendations to increase effectiveness.

Second report due October 30, 2007 on potential changes to Procurement Lobbying provisions.

The Advisory Council on Procurement Lobbying (cont.)Guidance on the State Finance Law provisionsAuthorized to establish model guidelines

for permissible contacts during the “restricted period”

Developed model forms and language for implementation of and compliance with the State Finance Law

The Advisory Council on Procurement Lobbying (cont.)Guidance developed by the Advisory Council on Procurement Lobbying, and other materials, are present on the internet at

http://www.ogs.state.ny.us/aboutOgs/

regulations/defaultAdvisoryCouncil.html

The Advisory Council on Procurement Lobbying (cont.)Provide advice to Lobbying Commission on Procurement Lobbying

Builds on the pre-existing requirements governing procurement activities, such as State Finance Law Articles 9 and 11, the Freedom of Information Law, the Open Meeting Law, Public Officers Law Code of Conduct and Executive Order Number 127

Formalizes practices already in place documenting the procurement process and clarifies responsibilities and expectations when expending public funds

The Purpose of the Procurement Lobbying Law

Reemphasizes the values of the government procurement process described in State Finance Law.

Prudent use of public moneyEfficient and timely acquisitions of

commodities and servicesHighest quality purchases at the lowest

practicable costEmphasis on open, transparent, and fair

procurement process

The Purpose of the Procurement Lobbying Law (cont.)

The new statutory requirements supplement the obligations under Executive Order Number 127

Covered entities, such as State agencies, will need to comply with both sets of requirements

Be mindful of the differences between the two requirements


While both use a threshold of $15,000 annualized value, EO 127 only applies to contracts awarded on basis other than lowest responsible priceEO 127 requirements are triggered earlier in the processSFL regulates who can receive certain communicationsDifferences in the records to be maintained


What are the SFL Changes?

Obligates Governmental Entities and Offerers to undertake specific actions as part of the procurement processSets forth specific requirements regarding communications during the procurement processEstablishes specific contractual requirementsImposes new consequences if Offerers have impermissible communications

What are the SFL Changes? (cont.)

Record of Contact - Requires disclosure by officials and employees of communications that attempt to influence a procurement

Impermissible contacts or providing inaccurate or untruthful certification may result in a finding of non-responsibility and debarment of the Offerer from state contracts for four years

Applicability of State Finance Law Provisions

Every State Agency

Public Authorities of which at least one member is appointed by the Governor

Unified Court System

Legislature

Certain Industrial Development Agencies

Public Benefit Corporations

Types of Contracts Subject to the Law

ConstructionProcurement (commodities, services and technology)Real Estate (Purchase, Sale, Lease of Real Property including interest therein.)Certain Revenue ContractsAssignments, renewals, extensions and certain amendments

When the estimated annualized expenditure willexceed $15,000

Types of Contracts Subject to the Law (cont.)

Definition of Procurement Contract expressly exempts the followingGrantsSFL Article 11-B contracts Intergovernmental agreementsRailroad and utility force accountsUtility relocation agreementsEminent domain transactions

State Finance Law Provisions

General Rule is:State Finance Law restricts and directs

communications by Offerers with Government Entities about procurement contracts

However, it also recognizes that some communications are necessary to the conduct of Government Procurement

Most Important Definitions in State Finance Law

Restricted Period:Represents the time period from the

earliest solicitation of a proposal to the final approval of the contract

Start point differs based on the nature of the contract. For example, with a single source contract it appears to start when the Governmental Entity asks for a proposal

Most Important Definitions in State Finance Law (cont.)During the Restricted Period, the Offerer is limited in whom it can communicate with in an attempt to influence the procurement

The Restricted Period must be in effect for any Contact to occur, including an impermissible Contact.

Restricted Period ends when the contract receives all the necessary approvals

Most Important Definitions in State Finance Law (cont.)Contact defined asoral, written or electronic communication

with a governmental entity under circumstances where a reasonable person would infer that the communication was intended to influence the governmental procurement

Most Important Definitions in State Finance Law (cont.)Number of factors to consider

“Reasonable person” standardConsider totality of the circumstance

Most Important Definitions in State Finance Law (cont.)

Factual exchanges of information are generally not ContactsWhen is the bid due?Where is the bid due? I am missing pages 38 – 47 from the RFP.

Can you please send to me?

Most Important Definitions in State Finance Law (cont.)Communications that a reasonable person would probably consider an attempt to influenceYou should award the bid to my company

because …You shouldn’t award the contract to

Company X because …

Most Important Definitions in State Finance Law (cont.)Record of Contact – Requires collection of certain information, recordation of and placement in procurement record of communications that attempt to influence a procurement

ALL CONTACTS MUST BE RECORDED


Designated Contact SFL requires the Governmental Entity to

identify a person or persons who may be contacted by Offerers about a procurement

The Designated Contact may receive all communications from Offerers, including attempts to influence (Contacts)

Communications to Designated Contact are limited by Public Officers Law and Penal Law (ie., bribery)

Most Important Definitions in State Finance Law (cont.)There can be more than one designated contact for a procurement

Best practice would be to have at least two designated contacts to facilitate responsiveness to the Offerers


Permissible Subject Matter Contacts - State Finance Law §139-j(3)(a) recognizes a specific series of communications and contacts that can go to other than the Designated Contacts

Important that Offerer’s Contacts be limited to the specific subject matter

Permissible Subject Matter Contacts - #1

The submission of written proposals in response to a request for proposals, invitation for bids or any other method for soliciting a response from offerers intending to result in a procurement contract.


The submission of written questions to a designated contact set forth in a request for proposals, or invitation for bids, or any other method for soliciting a response from offerers intending to result in a procurement contract, when all written questions and responses are to be disseminated to all offerers who have expressed an interest in the request for proposals, or invitation for bids, or any other method for soliciting a response from offerers intending to result in a procurement contract.


Participation in a conference provided for in a request for proposals, invitation for bids, or any other method for soliciting a response from offerers intending to result in the procurement contract.

Appears that term “conference” can be broadly interpreted to include all types of pre-proposal activities that are provided for under a written solicitation


Complaints by an Offerer regarding the failure of the person or persons designated by the procuring governmental entity pursuant to this section to respond in a timely manner to authorized Offerer contacts made in writing to the office of general counsel of the procuring governmental entity, provided that any such written complaints shall become a part of the procurement record.


Offerers who have been tentatively awarded a contract and are engaged in communication with a governmental entity solely for the purpose of negotiating the terms of the procurement contract after being notified of tentative award.Additional personnel can be involved in the

negotiation process


Contacts between designated governmental entity staff of the procuring governmental entity and an Offerer to request the review of a procurement contract award.Debriefing are covered by this category

Permissible Subject Matter Contacts #7 (a) – (d)

Contacts by offerers in protests, appeals or other review proceedings (including the apparent successful bidder or proposer and his or her representatives) before the governmental entity conducting the procurement seeking a final administrative determination, or in a subsequent judicial proceeding.Complaints of alleged improper conduct in a governmental procurement to the attorney general, inspector general, district attorney, or court of competent jurisdiction.

Permissible Subject Matter Contacts - #7 (a) – (d) (cont.)

Written protests, appeals or complaints to the state comptroller’s office during the process of contract approval, where the state comptroller’s approval is required by law, and where such communications and any response thereto are made in writing and shall be entered in the procurement record pursuant to section one hundred sixty-three of the state finance law.

Complaints of alleged improper conduct in a governmental procurement conducted by a municipal agency or local legislative body to the state comptroller’s office

Impact on Offerers

Offerer is limited on who can be Contacted about specific topicsDesignated Contacts – communications

and Contacts okayPermissible Subject Matter Contacts – only

the specific subject matter

Impact on Offerers (cont.)

Cannot Contact other entities unless falls within one of the permissible subject matter (SFL §139-j(4))

For example, okay to file written protest or complaint with OSC, but not to otherwise Contact

Cannot Contact DOB to complain about a procurement


However, statute does permit Offerer to contact Legislature about governmental procurements (unless Legislature is conducting the procurement) and the Legislature may contact the procuring agency (in its official capacity)

If you are Contacted by the Legislature, the statute indicates you shall not record the Contact under the SFL provisions


Offerer shall not attempt to influence the governmental procurement in a manner that would result in a violation or an attempted violation of Public Officers Law sections 73 or 74 (or equivalent law)


Offerer must provide written affirmation on understanding of and agreement to an agency’s policy on permissible contacts

Offerer must disclose additional information about prior findings of non-responsibility


Offerer must certify that the information provided under SFL section 139-k is complete, true and accurate

Offerer must agree to the inclusion of specific termination clause in contract

Consequences to Offerer

Failure to timely disclose accurate and complete information equals no award.Failure to cooperate equals no award.Finding of non-responsibility equals no award and the Offerer is listed on the OGS maintained list of bidders determined to be non-responsible under this statute.

Consequences to Offerer (cont.)

If there is a finding that an Offerer knowingly and willfully violated the requirements about permissible contacts, no awardThis determination can only be made after Offerer is given reasonable notice that an investigation is ongoing and an opportunity to be heard

Consequences to Offerer (cont.)

Second finding of non-responsibility equals debarment absent compelling governmental interest (public property, public health or safety) and sole source statusOfferer is listed on the OGS maintained list of bidders debarred sue to violations of this statute

Agency Obligations

Designate Contact Person or Persons

Incorporate the required information into your procurement process (both competitive and noncompetitive)

Establish the necessary policies and procedures regarding permissible contacts, and the reporting of possible violations of the permissible contacts requirements.

Record Contact and file in Procurement Record.

Agency Obligations (cont.)

Establish a process for reviewing and investigating allegations of violations of the permissible contacts requirements and imposition of sanctions

Notify OGS about all determinations of non-responsibility or debarment under this statute

Record all Contacts (including the permissible subject matter contacts)

Place in Procurement Record

Determine if the Contact must be reported for investigation as a violation of the permissible contacts requirements


Many questions have been received on two key agency obligationsWhen to make a Record of ContactWhen to report/refer a Contact for review or

investigation


When to Record

Whether a communication needs to be recorded depends on several factors Is there a transaction? Is it a covered transaction?What is the value of the transaction?

When to Record (cont.)

Is there a Restricted Period?

Was the communication from an Offerer?

Does the communication constitute a Contact?


Determining whether a communication is a Contact is fact specific It is a “reasonable person” standardMust look at the circumstancesMust look at the intent of the speaker


If it is determined that a Contact occurred, a Record of Contact must be completed.

The completed Record of Contact must be filed in the procurement record.

Statute sets out the information that must be obtained.

When to Report or Refer a Contact for Investigation

Whether a Contact must be reported/referred for investigation depends on the person’s role in the procurement

To state another way, it depends on who the Offerer Contacts

Roles During a Restricted Period

Designated Contact(s) – those employees specifically named to receive all communications from the Offerers during the Restricted PeriodPermissible subject matter contacts – those employees who may receive only specific subject matter communications during Restricted PeriodAll other employees – may only receive factual inquiries (not Contacts)Non-procuring entity – only may receive specific subject matter Contacts from Offerer during the Restricted Period

When to Report or Refer a Contact for Investigation

Designated Contact – would only need to report a Contact that was in violation of Public Officers Law or Penal Law (ie., bribery)

Report/refer generally to the ethics officer or inspector general of the procuring governmental entity, who has specific obligations to investigate

Reporting/Referring of Contacts (cont.)

Permissible Subject Matter Contacts – must report any Contact that is outside of the specific subject matter



All Other Employees of the Procuring Governmental Entity – report all Contacts


Reporting/Referrals of Contacts (cont.)

Non-procuring agency communications SFL section 139-j(3) and (4) specifies limited

instances when an agency other than the procuring governmental agency can be Contacted by an Offerer during the Restricted Period

If the Contact is not within the permissible subject matter area, the Contact must be immediately reported to the official at that agency responsible for investigations


Such official shall in turn notify the ethics officer, IG or other official at the procuring agency that is responsible for reviewing or investigating, who shall conduct an investigation

Example of Restricted Period for a Competitively Bid State Agency Contract

Definition of business

need

Restricted Period(limits who can

receive communications)

Ad in Contract Reporter

Approval of

contractby OSC

Example of Restricted Period for a Competitively Bid

State Agency Contract (cont.)

Contract administration(no restricted period)

New restricted period

Approvalby OSC

For example, certainamendments will

trigger a new restricted period

(no restricted period)

Model Language and Forms

The Advisory Council on Procurement Lobbying has approved the posting of model language and forms to comply with the new State Finance Law requirements.Available at http://www.ogs.state.ny.us/aboutogs/regulations/ AdvisoryCouncil/ModelLang.html.

Summary of Policy Included in Solicitation

State Finance Law §139-j(6) requires that a Governmental Entity incorporate a summary of its policy and prohibitions regarding permissible contacts during a covered procurement. Model language provides an outline of narrative that can be customized for inclusion in a solicitation.

Model Affirmation

Offerer affirms that it understands and agrees to comply with the procedures of the Government Entity relative to permissible contacts as required by State Finance Law §139-j (3) and §139-j (6) (b).

Model Certification

It is recommended that the certification be obtained as early as possible in the process, such as when an Offerer submits its proposal, bid or other form of offer.Example language: I certify that all information provided to the Governmental Entity with respect to State Finance Law §139-k is complete, true and accurate.

Additional Non-responsibility Question

State Finance Law §139-k(3) mandates consideration of whether an Offerer fails to timely disclose accurate or complete information as part of the responsibility determination. The law further provides that no Procurement Contract shall be awarded to any Offerer that fails to timely disclose accurate or complete information under this section, unless a finding is made that the award of the Procurement Contract to the Offerer is necessary to protect public property or public health safety, and that the Offerer is the only source capable of supplying the required Article of Procurement within the necessary timeframe.

Model Termination Clause

The Governmental Entity reserves the right to terminate this contract in the event it is found that the certification filed by the Offerer in accordance with New York State Finance Law §139-k was intentionally false or intentionally incomplete. Upon such finding, the Governmental Entity may exercise its termination right by providing written notification to the Offerer in accordance with the written notification terms of this contract.

Model Record of ContactNew York State Finance Law §139-k(4) obligates every Governmental Entity during the Restricted Period of a Procurement Contract to make a written record of any Contacts made. The term “Contact” is defined by statute and refers to those oral, written or electronic communications that a reasonable person would infer are attempts to influence the Governmental Procurement. In addition to obtaining the required identifying information, the Governmental Entity must inquire and record whether the person or organization that made the contact was the Offerer or was retained, employed or designated on behalf of the Offerer to appear before or contact the Governmental Entity.

OGS’s Implementation of New State Finance Law ProvisionsStaff trainingUndertaken as a multi-step processConducted by Business Unit to permit

attention to unique issues raised by the different types of procurement contracts undertaken by OGS

OGS’s Implementation

First round of training provided an initial familiarization and introduction to the new State Finance Law requirements

Second round of training has focused on drilling down and conforming business practices to the new requirements

Additional training and legal assistance is provided as requested

OGS’s Implementation

Offerer Training and Outreach In addition to the training provided as

support staff for the Advisory Council on Procurement Lobbying, OGS continues to explore ways to provide more information to the business community.

OGS Implementation (cont.)

In-depth Analysis of Business PracticesReal Estate Implementation Issues

Procurement Contracts dealing with real estate matters present different issues from the traditional commodity purchase

Often involve multiple, simultaneous negotiations resulting in one contract

Involve agents/brokers and client agencies

OGS Implementation (cont.)

Conducted assessment of real estate lease procurement processResulted in development of chart to monitor the commencement of Restricted Period Standardized points in time to provide notice to Offerers regarding Restricted Period and Designated Contacts

OGS’s Implementation (cont.)

Developed language for inclusion in solicitations and contractsCustomized to meet the business practices of OGS A number of areas are still under review

and developmentFor example, procurement contracts

undertaken for hosted agencies is still under review

Similarly, the business practices regarding client agencies is still under review

Non-responsible and Debarred Offerer Listings

State Finance Law requires that all Governmental Entities notify OGS if it finds an Offerer to be non-responsible or debarred due to violations of section 139-jOGS is required to post this information on the internetInformation available at

http://www.ogs.state.ny.us/aboutogs/regulations/advisoryCouncil/NonResponsible.htm

Non-responsible and Debarred Offerer Listings (cont.)

Information is available at: http://www.ogs.state.ny.us/aboutogs/regulations/ advisoryCouncil/NonResponsible.htm (Non-responsible Offerer List)and at: http://www.ogs.state.ny.us/aboutogs/regulations/ advisoryCouncil/Debarred.htm (Debarred Offered List)

Non-responsible and Debarred Offerer Listings (cont.)

Please immediately notify the General Counsel at the NYS Office of General Services if you havedetermined a bidder as non-responsible or debarred a pursuant to this law.

Office of the General CounselNYS Office of General Services41st Floor - Corning TowerAlbany, New York [email protected] 518-474-5988Facsimile 518-473-4973

Questions

Documents

Procurement Lobbying Legislation State Finance Law Provisions