New York StateNew York State Office of General ServicesOffice of General Services 2011 Purchasing Forum

Changes to Public Officers Law Gifts Conflicts of Interest Outside Employment Financial Disclosure Post Employment Restrictions Agenda Procurement Lobbying

Public Officers Law §73(5) Framework for determining whether a gift to a State officer or employee is permissible Public Officers Law

Legislative Law §1-c(j) – What constitutes a gift? $75 rule is no longer in effect. The new standard is nominal value-gift may be: Money Service Loan Travel Lodging Meals Entertainment Discount Forbearance Promise Legislative Law

Legislative Law §1-m provides that lobbyists are prohibited from offering or giving a gift to any public official Legislative Law

Legislative Law §1-c(l) defines who is a public official for purposes of the prohibition on gifts Legislative Law

Public Officers Law §74 sets forth a Code of Ethics for State officers and employees Public Officers Law

Commission on Public Integrity – Advisory Opinion updates prior opinions relative to gifts Gifts

What is a gift? What is nominal value? The Aggregation Rule Disqualified Source Impermissible Gifts to Third Parties Gifts

Exceptions: Complimentary attendance at Charitable or Political Events Complimentary attendance at widely attended event Promotional items Gifts

Public Officers Law §74 establishes the State Code of Ethics which prohibits conflicts of interest Potential conflicts of interest can arise in a number of different situations You have responsibilities as a public sector employee that differ from those of private sector employees Conflicts of Interest

General rule is that officers and employees of State government may not engage in activities that would create or appear to create a conflict with their public duties, nor raise suspicion among the public that they are likely to be engaged in acts that are in violation of their public trust Conflicts of Interest

Public Officers Law §74 sets out a series of standards to determine if there is a conflict of interest, including the concept of “appearance of impropriety”. Conflicts of Interest

Personal outside employment or investments Employment of, contracts to, or benefits for family members Release of confidential information Gifts Potential Areas for Conflict of Interest

Prohibits accepting other employment that will impair independence of judgment or require disclosure of confidential information Prohibits engaging in transactions with any business entity where employee has financial interest that can conflict with duties Must abstain from investments that may be directly related to the employee’s decisions or which otherwise create a substantial conflict with duties Public Officers Law §§73 & 74 Outside Employment or Investments

Concept of “employment” is broadly defined There is no general prohibition against employees engaging in outside employment or compensated activity However, prior approval for such employment must be obtained from your state agency and in some instances from the State Ethics Commission Violation of the laws and policy, as well as of the following guidelines, may be grounds for disciplinary action Outside Employment or Investments

POL standards prohibiting use of official position to secure unwarranted privileges for self or others Cannot give reasonable basis for appearance that employee is affected by kinship, rank, position or influence of any party or person Cannot raise suspicion among public that you are likely to be engaged in actions in violation of trust Cannot give reasonable basis for impression that any person can improperly influence you or unduly enjoy your favor in the performance of your official duties (Public Officers Law §74) Employment of, Contracts to, or Benefits for Family Members or Others

Public Officers Law §73(4)(i) prohibits sales of goods or services greater than $25 to a State agency by a State employee or a firm where the employee has more than 10% stock unless there is a competitive bid. Important to make inquiry and document in the procurement record. Employment of Current State Employees

Code of Conduct has several prohibitions about release of confidential information Information confidential to the agency (information about the agency or decisions by the agency not otherwise known) Information confidential to the process Information obtained from a vendor either as part of the procurement process or as the result of the procurement Release of Confidential Information (Public Officers Law §74)

(Public Officers Law §§73(5) and 74) While some would argue that public employees “can’t be bought for a lunch”, it is an issue of perception, the appearance of impropriety or fairness. Look at it from the perspective of the other vendors and the general public and the message that it sends other agency employees. There are circumstances under which a state employee can accept a gift. Gifts

Public Officers Law §73-a Policy Makers or Salary Threshold: Over SG-24 Subject to certain exemptions File Annually by May 15 th (this year May 16 th ) or within 30 Days of Joining State Service Financial Disclosure Statements currently available on-line at: Financial Disclosure

(Public Officers Law §73 (8)) Two-Year Bar on activities before employee’s former agency. Lifetime Bar on transactions that the employee worked on while in state service-agency is irrelevant. Government-to-Government Exceptions Solicitations or discussions of employment opportunities with an individual or entity that has a pending matter before the state employee is prohibited. Post-Employment Restrictions

Procurement Lobbying Law State Finance Law §§ 139-j and 139-k (the Law) restricts communications between the business community (offerers) and the government about procurement contracts. It recognizes there are different kinds of communications. Communications that are an “attempt to influence” have specific rules (referred to as Contacts). The Law requires each Governmental Entity to develop a policy on permissible Contacts and to inform Offerers of the policy.

The Law also tells the business community where to direct advocacy efforts. If an Offerer does not follow the Law, the Contacts are considered “impermissible Contacts”. Violation of such rules has severe consequences – including public notice of non-responsibility, non-award of contract and debarment. The Law requires each state agency to conduct a review and investigation about impermissible Contacts. OGS is responsible for maintaining on the Internet lists of businesses that have violated the Law’s requirements. State Finance Law §§ 139-j and 139-k

General Rule Offerer can always contact the Designated Contact. Offerer cannot Contact other employees or governmental entities once the procurement has begun and until it is concluded (“restricted period”) unless the communication falls within one of the permissible subject matter exemptions (SFL §139-j(3)(a)(1-9)). State Finance Law §§ 139-j and 139-k

Do’s Find out what a vendor wants to discuss before agreeing to talk. Determine if there is a Restricted Period. If there is a Restricted Period, determine who is the Designated Contact for that procurement; and Direct communications correctly (namely to the Designated Contact). Follow the processes in the solicitation. Generally, request all questions be submitted in writing to the Designated Contact listed in the solicitation. State Finance Law §§ 139-j and 139-k

Do’s Develop agendas for any meetings that are conducted and stick with the agenda. Create a record of Contact for every Contact – even if you are the Designated Contact. Send the record of Contact to the Designated Contact for inclusion in procurement record. If not a Designated Contact, do refer for investigation all impermissible Contacts. You don’t make a decision: you are obligated to make a referral! Do cooperate with your counsel or Ethics Officer in his/her investigation. State Finance Law §§ 139-j and 139-k

Don'ts Don’t discuss procurements in a Restricted Period  it lasts until OSC approves the contract! Don’t miss opportunities for process improvements.  Clearly identify when Restricted Period commences.  Formalize information exchanges with business.  Formalize procurement processes.  Don’t hesitate to call or your Counsel or Ethics Officer with any questions about the Law or if additional training is needed. State Finance Law §§ 139-j and 139-k

2010 Amendments to the Procurement Lobbying Law The definition of an “offerer” has been clarified so that a person or entity is subject to the Law even if he, she or it does not have a financial interest in the procurement. A governmental agency that contacts a procuring agency as part of its oversight responsibilities is not subject to the Law. Persons selected as designated contacts must be knowledgeable about the procurement. Any communications that are considered within the Law’s listing of permissible subject matter contacts do not have to be made to a designated contact.

The Law’s restrictions can now apply before the issuance of the bid, request for proposal or other method used for commencing a procurement, where the governmental agency (1) has made a determination of need for a procurement, and (2) communicates such determination in a public manner, such as a public announcement or public communication, to any potential vendor. In September 2010, the Advisory Council on Procurement Lobbying (ACPL) updated its Frequently Asked Questions to provide further explanation of this change. Amendments to the Procurement Lobbying Law (continued)

In sum and substance, the ACPL wrote: A determination of need generally occurs when a Governmental Entity decides what it will be procuring. Governmental Entities often publicly communicate a determination of need by disseminating the specifications, bid documents, requests for proposals or evaluation criteria for the procurement of an article of procurement. The potential exists that a determination of need may be conveyed through some other form of public announcement, notice or communication. While such communications do not need to be in writing, the intent is that they be widely disseminated statements that are reasonably expected to reach potential vendors Amendments to the Procurement Lobbying Law (continued)

Governmental Entities should decide if a determination of need for a procurement has been made and if there has been a public announcement, notice or communication to potential vendors of that determination of need. If both events occurred, a Governmental Procurement exists. In addition, as a best practice, the Governmental Entity may post notice of commencement of a Restricted Period on its website once it has initiated a Governmental Procurement. Amendments to the Procurement Lobbying Law (continued)

Questions: In what ways, if any, does this procurement process violate the statutory controls in procurement? In what ways, if any, does this procurement process “skirt the edges” of the statutory controls in procurement? What could be changed to improve this procurement? What is the remedy for any violation(s)? Hypothetical

Resources Guidance developed by the Advisory Council on Procurement Lobbying, model forms and language and other materials, are present on the internet at State Finance Law §§ 139-j and 139-k

Howard L. Zwickel, Esq. Deputy Commissioner & Counsel Office of General Services (518) Anne G. Phillips, Esq. Acting Deputy Commissioner Office of General Services (518) OGS Website: Public Integrity Website: Presenters Contact Information