1. Executive Order Number Providing for Additional State Procurement Disclosure An Overview for Covered Agencies and Authorities Presented by: Lisa Fox OGS, Counsel

2. Introduction
Reference materials available on OGS web site
at entitled “Procurement
Disclosure Guidelines.”

3. Topics to Cover
- Background and Purpose of EO Coverage - Requirements
Seeking Disclosure Recording Contacts Making Responsibility Determinations
- Employee Obligations - Forms and Model Language - Questions and Answers

4. Background Governor Pataki signed Executive Order No
Background Governor Pataki signed Executive Order No. 127 (EO 127) on June 16,   OGS was directed to provide guidance to State agencies and authorities on compliance with EO 127.   The effective date for compliance by State agencies and authorities was August 14, 2003.

5. August 1, 2003. The Guidelines were developed in question and
OGS developed and issued Guidelines on
August 1,   The Guidelines were developed in question and
answer format.   Web links are included in the electronic version of the Guidelines to facilitate use by State agencies, authorities and the business community.

6. The Guidelines include forms and model language to assist State agencies and authorities with compliance.   Please revise these forms and model language to meet your procurement practices and business needs, but ensure that the required information is still collected.   OGS will update, revise and supplement these Guidelines, forms and model language for best practice and relevant guidance on an as needed basis.

7. Purpose of EO 127   EO 127 seeks to further enhance the strength and integrity of the public procurement system.   It maintains public confidence in State procurement through open, efficient and effective contract processes. It establishes standardized information collection on the contracting practices of the covered entities.

8. Nature of an Executive Order   Unlike a statute, an executive order directs the action of State agencies and authorities. It does not have the force and effect of law.   Often times the business community is not familiar with the concept of executive orders with some resulting misunderstanding about how the requirements are implemented and enforced.

9. As a result, it is the State’s obligation to determine when the requirements are triggered and to request the required information from the vendor community.

10. How does EO 127 work?   To meet the goals, State agencies and authorities are directed to systematically seek disclosure of persons or organizations whose intended purpose is to attempt to influence procurement determinations regarding goods and services, real estate transactions and public works.

11. Coverage Knowledge and understanding of definitions is critical
Coverage Knowledge and understanding of definitions is critical.   EO 127 excludes certain transactions from its coverage. It does not apply to any procurement contract with an annual value under $15,000.  

12. Second, it does not apply to procurement contracts that must be awarded to the lowest responsible bidder or that must be awarded on the basis of lowest price under a competitive bid process.

13. Examples of excluded contracts include
- commodity contracts awarded as lowest price
- departmental printing under State
Printing and Public Documents Law §7
- Public works, construction, reconstruction,
alterations, repair or improvement of a state
building under Public Buildings Law §8.

14. So what does EO 127 apply to?   EO 127 applies to contracts for goods or services, real estate transactions and public works projects over $15,000 in annual value awarded on some basis other than lowest responsible bidder or lowest price by a covered entity.  

15. For example, EO 127 applies to. - emergency procurement contracts
For example, EO 127 applies to emergency procurement contracts single source contracts sole source contracts piggybacking, and granting of interests in real property.

16. Definition of “procurement contract” under EO 127 is very broad, including - the purchase of goods or services, - the purchase, sale, lease, acquisition or granting of other interests in real property, and - public works.

17. EO 127 also applies to the amendment or renewal of a procurement contract over $15,000 in annual value that is awarded on some basis other than lowest responsible bidder or lowest price.    

18. What governmental entities are bound by EO 127. - State agencies
What governmental entities are bound by EO 127?   - State agencies - Public benefit corporations (where at least one member is appointed by the Governor) - Public authorities (where at least one member is appointed by the Governor) - State University of New York - City University of New York  

19. List of covered entities identified to date is presented on the Procurement Disclosure Guidelines website.   If your agency is not listed or if you believe your agency is not governed by EO 127, please contact us.

20.   As this is an executive order, its scope is limited to the executive agencies under the direction and control of the Governor. Terms do not apply to the Office of the State Comptroller, Department of Law and State Education Department. 

21. Office of State Comptroller has indicated it is evaluating how it wishes to proceed with respect to EO 127.   State Education Department has sent a letter stating it will voluntarily comply with the EO 127 requirements for certain of its programs.

22. Requirements There are three key requirements under EO 127: 1
Requirements There are three key requirements under EO 127:   1. Require vendor disclosure of persons or organizations designated, retained or employed to attempt to influence the procurement process. Vendor must keep the EO information up to date.   2. Record the identity of others who attempt to influence the procurement process.   3. Make determinations of responsibility.

23. 1st Key Requirement As part of the procurement process you must ask a potential vendor to disclose if it is designating, retaining or employing persons or organizations for purposes of attempting to influence the procurement.   Submission of the identifying information is a term and condition of any resulting contract. While EO 127 does not compel the vendor to undertake action, it does preclude a covered entity from entering into a contract if a vendor does not provide the requested information.

24. Who should be disclosed. Any person or organization who is. Designated
Who should be disclosed? Any person or organization who is Designated Retained, or Employed by a vendor whose purpose is to attempt to influence the procurement process. 

25. Categorizes of “designated” and “retained” persons and organizations are well understood. For example, if a trade organization were “designated” to undertake efforts to influence the procurement process, it would be disclosable under EO 127.

26. Similarly, retaining a person, such as a lobbyist, to influence the procurement process seems to be understood.

27. Determining who is covered by the category of “employed” appears to be the most complicated and relates to how the vendor does business.
For example, employees and owners are included if they influence the procurement process by negotiating a contract.

28. “Attempt to influence the procurement process” is defined in EO 127 and includes other defined terms – procurement contract and proposals. It also includes key terms with common definitions, such as attempt, influence and determination.

29. “Attempt to influence the procurement process” shall mean any attempt to influence any determination of a member, officer or employee of a covered agency or authority by a person other than a member, officer or employee of a covered agency or authority with respect to: (a) the solicitation, evaluation or award of a procurement contract; or (b) the preparation of specifications or request for submissions of proposals for a procurement contract.

30. Attempt – as defined by Random House Webster. 1
Attempt – as defined by Random House Webster   to make an effort at; try; undertake; seek Archaic - to attack; move against in a hostile manner an effort made to accomplish something.

31. Influence – as defined by Random House Webster 1
Influence – as defined by Random House Webster   the capacity or power of persons or things to be a compelling force on or produce effects on the actions, behavior, opinion, etc., of others the action or process of producing effects on the actions, behavior, opinions, etc. of another or others

32. Determination – as defined by Random House. Webster. 1
Determination – as defined by Random House Webster   the act of coming to a decision or of fixing or settling a purpose ascertainment, as after observation or investigation the information ascertained; solution.

33. Applying those common definitions to the phrase “attempt to influence the procurement process” – it’s an effort to produce effects on the decision by a member, officer or employee of a covered entity on a procurement contract or proposals for a procurement contract.

34. Vendors need to disclose those employees whose activities fall within the definition of “attempt to influence the procurement process” – those employees who may engage in efforts to produce effects on the decision making process for a procurement contract.

35. What is disclosed. Information to be supplied by a vendor:
What is disclosed?   Information to be supplied by a vendor: - Name of person - Name of organization - Business address - Telephone number - Place of principal employment - Occupation of person or organization - Whether or not there is a financial interest in the procurement contract

36. How is the information kept up to date
How is the information kept up to date?   Use Form 1 and indicate it is an “updated” filing.   Verify that the specific covered entity has not adopted an electronic process that may require slightly different filing.

37. 2nd Key Requirement Record the identity of those contacting the covered entity.   You may be contacted by a person or organization attempting to influence the procurement process that was not identified by a potential vendor.   Under these circumstances, you are required to obtain and record the same information from the person or organization.

38. Net result of the disclosure and record stages   A compiled listing of persons and organizations who (1) were disclosed by the vendor as possibly contacting the agency to influence the procurement and (2) those who did contact the agency to influence the procurement. It is not a listing of frequency of contacts or what was discussed. It does not capture if the person disclosed did call.

39. 3rd Key Requirement Make determinations of responsibility   Builds on the obligation already present in State Finance Law §163 requiring the State let contracts on the basis of best value to a responsive and responsible contractor.   Responsive contractor – does the proposal comply with the specifications or requirements of the solicitation document?  

40. Responsible contractor – does the contractor have the qualifications, financial stability and integrity to perform the required work? Concepts applied to this determination are generally based on case law. Information on best practices for responsibility determinations can be found on OGS web site.

41. EO 127 adds another element to consider when making a responsibility determination. The covered entity is required to have the vendor disclose, for the prior 5-year period, whether it had been found non-responsible for failure to comply with EO An admission of past findings of non-responsibility may constitute the basis for not awarding the contract to the vendor.  

42. EO 127 provides for a waiver by the covered
entity if the contract award would otherwise be
in the best interest of the State. A finding for
the basis of the waiver needs to be included in
the procurement record.

43. Other Requirements EO 127 requires the covered entity to obtain a contractual certification from the vendor that information supplied by it pursuant to EO 127 is complete, true and accurate.

44. The procurement contract must also include a provision allowing the covered entity to terminate the contract if the certification is subsequently found to intentionally be incomplete, false or inaccurate.

45. This compiled list must be made part of the procurement record.
EO 127 imposes record keeping requirements on the covered entity. The covered entity must prepare a compiled list of all persons and organizations that were identified by a potential vendor or who separately contacted the covered entity.
This compiled list must be made part of the procurement record.

46. The list may include persons or organizations initially reported by potential contractors and must be supplemented with subsequent reports of contacts or updated information. Procurement record means that file documenting the actions taken with respect to the procurement. It is submitted to OSC as part of the approval process.  

47. Availability of Compiled List   EO 127 requires the compiled list be accessible to the public upon request. Such information may be made available from the onset of its receipt in the procurement process.   It does NOT require that a covered entity maintain these records at a central collection point.

48. So when are the requirements of EO 127 triggered
So when are the requirements of EO triggered?   The initial decision or determination by the covered entity to proceed with a procurement activates the requirements: seeking disclosure, recording contacts, making determinations of responsibility and recordkeeping.  

49. The EO is NOT triggered by certain activities typically arising in the course of a procurement:   Receipt of advertising materials   Intra-agency communications   Inter-agency communications (except in certain circumstances)   Requests for information issued by the State  

50. In general, these are information collecting steps carried out in the ordinary course of business.   The EO is not triggered by factual exchanges of information.

51. Inter-Agency Communications As a general rule, the EO does not regard inter-agency communications as attempts to influence the procurement process.   However, there are situations where inter-agency communications will be subject to the EO’s recording requirements. These are generally referred to as “record and refer” circumstances.

52. For example,  1. If a State agency is benefiting from a procurement contract awarded for its use and possibly for the use of others, and that State agency is contacted by a vendor in a manner that reasonably appears to be an attempt to influence, it should record and refer the contacts(s) to the awarding State agency.

53. 2. If the State agency is a control agency involved in the awarding or review of the procurement contract by another State agency and that control agency has been contacted in a manner that reasonably appears to be an attempt to influence the procurement process, it should record and refer the contact to the awarding agency.   Department of Civil Service Division of Budget Office for Technology

54. The EO is triggered by amendments and renewals
The EO is triggered by amendments and renewals.   If the contract does not have the EO 127 language within it already, the covered entity will need to comply with all the requirements. Obtain the disclosure of contacts, the non-responsibility question, certification and termination clause.  

55. This issue comes up most frequently with those contracts already in place when the EO took effect. If the contract already has the EO 127 language in it, ensure the vendor’s disclosures are up to date. The vendor has a continuing obligation to keep this information current.

56. How does EO 127 impact potential vendors
How does EO 127 impact potential vendors?   It sets up a condition precedent to contract with the State.

57. If the vendor wishes to enter into a procurement contract that is covered by the EO, it must provide the requested information and it must certify to the completeness, truthfulness and accuracy of such information.

58. It must agree that the contract can be terminated if such information is found to be intentionally false or intentionally incomplete.

59. What are an employee’s obligations regarding EO 127
What are an employee’s obligations regarding EO 127?   Staff must be aware of the requirements of the EO and the appropriate processes must be in place for employees to solicit information and refer it for inclusion in the procurement record.

60. Who should be involved in the implementation and compliance with EO 127?   Staff whose responsibilities include purchasing, bidding, contracting, and real estate transactions should be involved with EO 127. Compliance is also required from executive or senior management, legal and ethics staff and staff dealing with financial administration of the covered entity.

61. What action needs to be taken if there is a failure to comply with EO 127 by an officer or employee? The consequences of non-compliance with EO 127 should be addressed under normal procedures. For instance, EO 127 could be referenced in the Code of Conduct or any general administrative governance material. Internal communications routinely used to advise officers and employees of information affecting their operations are also a good means for introducing the requirements of EO 127.

62. Enforcement of EO 127 EO 127 expressly provides that any member, officer or employee who fails to comply with its provisions shall be subject to appropriate disciplinary action by the covered entity.

63. Further, a covered entity must report to the Office of the State Inspector General and the State Ethics Commission if the failure to comply with EO 127 violates the Public Officers Law.

64. CONTRACTOR DISCLOSURE
FORM 1
CONTRACTOR DISCLOSURE
OF CONTACTS

65. The following person or organization was retained,
employed or designated by or on behalf of the
Contractor to attempt to influence the procurement
process:
Name:________________________________________
Address:______________________________________
Telephone Number:_____________________________
Place of Principal Employment:___________________
Occupation:___________________________________
Does the above named person or organization have a
financial interest in the procurement? (Please circle)
yes no

66. CONTRACTOR DISCLOSURE
FORM 2
CONTRACTOR DISCLOSURE
OF PRIOR
NON-RESPONSIBILITY
DETERMINATIONS

67. Has any covered agency or authority made a finding of non-responsibility regarding the Contractor in the last five years?
(Please circle): No Yes
If yes, was the basis for the finding of the Contractor’s non-responsibility due to the intentional provision of false or incomplete information required by Executive Order Number 127? (Please circle): No Yes

68. If yes, please provide details regarding the finding of non-responsibility below.  Covered Agency or Authority:___________________ Year of Finding of Non-responsibility:_____________ Basis of Finding of Non-responsibility:_____________ Has any covered agency or authority terminated a procurement contract with the Contractor due to the intentional provision of false or incomplete information required by Executive Order Number 127? (Please circle): Yes No

69. FORM 3
CONTRACTOR
CERTIFICATION

70. Contractor certifies that all information provided to the Agency with respect to Executive Order Number 127 is complete, true and accurate.

71. MODEL CONTRACT TERMINATION PROVISION
FORM 4
MODEL CONTRACT TERMINATION PROVISION

72. The Agency/Authority reserves the right to terminate this contract in the event it is found that the certification filed by the Contractor in accordance with New York State Executive Order Number 127, signed by Governor Pataki on June 16, 2003, was intentionally false or intentionally incomplete. Upon such finding, the Agency/Authority may exercise its termination right by providing written notification to the Contractor in accordance with the written notification terms of the contract.

73. STATE AGENCY OR AUTHORITY
FORM 5
STATE AGENCY OR AUTHORITY
RECORD OF CONTACT

74. I was contacted by the below named individual regarding the above identified procurement. It reasonably appears that this contact was an attempt to influence the procurement process as defined in Executive Order Number The contact took the form of:
( )correspondence ( )in person ( )by telephone
( )electronic mail ( )other
with respect to the following procurement:

75. Name:_______________________________ Address:_____________________________ Telephone Number:___________________ Place of Principal Employment:_________  Occupation: _________________________   Does the above named person or organization have a financial interest in the procurement? (Please circle) yes no

76. FORM 6
COMPILED
RECORD OF CONTACT
UNDER
EXECUTIVE ORDER NO. 127

77. ****************************
Subject: Compiled Record under
Executive Order Number 127
Name of Contractor: ______________________
Address: _______________________________
****************************
Name:_________________________________________________
Address:_______________________________________________
Telephone Number:______________________________________
Place of Principal Employment:____________________________
Occupation:_____________________________________________
Does the above named person or organization have a financial interest in the procurement? (Please circle)
yes no

78. Future Developments OGS continues to provide guidance on EO 127
Future Developments OGS continues to provide guidance on EO Feedback is important. Watch for legislative action in Carry over bills from last year include A S.5696

79. QUESTIONS

80. Contact OGS Legal Services for further information and
questions (518)

81. THE END