Vendor Responsibility OGS Approach and Learning Lessons State Purchasing Forum May 18 and 19, 2005 Presenters: Noreen VanDoren Monica Wilkes

Approach Standardized forms for OGS and Council of Contracting Agencies include: SVRQ (Standard Vendor Responsibility Questionnaire) or Certificate of No Change and previous questionnaire OR UCQ (Uniform Commercial Questionnaire) Checklist Profile

Agency Conformity Representatives include: OGS VR workgroup consisting of one representative from each program area, OGS host agencies, and Council of Contracting Agencies that contract for both commodities and services

Vendor Responsibility Used the simplified procedure to identify the basics: Are vendors responsible? Do they meet the four VR criteria? Performance Integrity Financial Ability Legal Authority

Visiflow Created the Visiflow Vendor Responsibility System, a centralized document management system Stores all VR questionnaires, profiles and checklists for agency

Multiple Vendors SVRQ for each vendor One profile for all contractors provided all information is identical Attach list of contractors, FEIN and contract numbers to profile Way for OGS to streamline the process for us when awarding to multiple contractors.

Vendors Concerns About the VR Process Ask vendors to document in writing their reasons for concern about the process. Share concerns with OSC.* Forward information to OSC VR unit *Note one written concern received to date! We have shared with OSC verbal complaints. Airlines and Gaylord Bros.

Responsibility Review Checklist completion Discriminatory Jurisdiction DOL GSA – www.epls.gov (excluded parties list system) Completed SVRQ or UCQ Any responses which require further inquiry GSA is the debarment issues Explain difference between UCQ and SVRQ

DOS Registrations NYS corporations and LLCs must be registered in NYS Out of state corporations not registered in NYS require at a minimum the company’s current certificate of good standing within their state.

Financial Responsibility Options Request a report from Dun & Bradstreet Require D&B or financial records directly from company Check DOS site for outstanding tax warrants for vendors Review records by agency finance unit for financial determination

Due Process Advise vendor of information of concern Request written explanation/response within certain time Consider face-to-face meeting Prepare minutes if meet in person to include in procurement record

Each Contract is Unique VR must be considered on the basis of the contract under consideration. Prior experience with vendor without complaints or difficulties is a consideration. One size does not fit all. Industry has the same issues. Decision must be made in the best interests of the State.

Example Vendor A is an International firm. They submitted their SVRQ and a two inch thick document of all issues and concerns that confront their corporation. What actions are necessary to review this company’s VR?

Select the Correct Answer Information overload – send to legal Skim the entire document Read every page and analyze every finding Require the vendor to detail the information that is specific to NYS and address its ability to perform with respect to the NYS contract in question.

Correct Answer Correct Answer: D Based on the contract in question with respect to its requirements, different levels of review may be necessary.

Example How does one address vendors in bankruptcy? Answer: Line up with creditors Reject the bid Award the bid Consider the risk for NYS with respect to the contract in question Award with contingencies

Answer Answer the question with more questions: Did company confirm and complete a plan of reorganization? If so, what is the final decree? If not, what was the resolution to chapter 11? Review current D&B reports. Include a legal review.

Making a determination What effect would this contract have on NYS? If award were made to low bidder? If award were not made to low bidder? If award were made to low bidder with performance measures in place to ensure the vendor’s continued ability to handle the contract? If award were made to low bidder with ability to terminate? If award were made to low bidder with a surety bond in place? What benefits and risks to the state are you undertaking? Take into consideration.

Options to Consider Issue an “Award Pending” until review is completed Issue a Partial Award Withhold a portion of award for set time until vendor can reasonably demonstrate satisfactory performance on a limited portion of the contract Obtain vendor agreement if denying a portion of the award Reject vendor If Line item bid – enter agreement to terminate after certain period of time if can’t reach agreement.

Integrity Example One company’s employee fraudulently used state agency letterhead to send a letter to their internal staff The AG’s office determined the company was not responsible for the action of its employee Employee terminated Company vindicated

Integrity Example Contractor providing temporary service workers (sec. staff, cleaners, general laborers) is sued by EEOC for discrimination based on race, age and medical condition. Contractor denies allegations Claims rogue employees made up claims Recommended them for award and OSC approved.

Agency Consideration Contractor held NY State contract for 5 years without any complaints. Contractor financially able to pay alleged damages. Should a contract be awarded?

Performance Example Company X had a history of unauthorized product substitutions for more than one contract. Company X was provided due process. Company X’s lawyer advised that the error rate was a standard deviation error rate. OGS demonstrated that a pattern existed for more than one contract period. Company agreed to a “partial award” while their performance was monitored.

Performance Example Company Y faxed an authorized user a copy of an OGS award and fraudulently inserted their name as the contractor for an item not awarded them. Due Process was afforded the company and the company was found non-responsible on the basis of misrepresentation of award. Company must meet established criteria of successful completion of public contract for X number of years before consideration of any future awards.

Performance Example Contractor provides temporary service construction workers to State agencies on centralized contract DOL alleges prevailing wage violations Contractor disagrees; waiting for DOL hearing No prior willful DOL violations so debarment will not be automatic should DOL prevail Award contract?

Financial Example Company Y filed for bankruptcy; case dismissed in 2002 Upon investigation, outstanding tax warrant discovered Due process revealed warrant was for company Z D&B revealed no liens, judgments and suits Performance issue surfaced Award pending while review continues.

Legal Authority Example New York State Corporation - Incorporated in 1984 On contract for past 5 years Checked DOS site & corporation listed as inactive Company provides proof of financial ability, prior performance & no new reports indicating lack of integrity Award? Investigate why inactive

Legal Authority Example Bid submitted by a subsidiary/division of a corporation Bid & SVRQ list subsidiary name but FEIN of parent corporation SVRQ responses relate to subsidiary not parent What should you do? Noreen to discuss

Legal Authority Example Department of State (DOS) requires Vendor A to be licensed to provide security guard services to NYS Vendor A is found to be non-compliant with the New York State Security Guard Act contained within Articles 7 and 7-A of the General Business Law Vendor A is non-responsible as determined by OGS

Questions??

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