1. OGS Procurement Services Group 2006 State Purchasing Forum Procurement Lobbying – Rules of the Road

2. 2006 Purchasing Forum – Procurement Lobbying Lisa Fox Legal Services Office of General Services lisa.fox@ogs.state.ny.us (518) 474-0571 OGS Website: www.ogs.state.ny.us Presenter’s Contact Information

3. 2006 Purchasing Forum – Procurement Lobbying What is Procurement Lobbying? What are the requirements placed on Governmental Entities? How can these new requirements be incorporated into your procurement process? Questions

4. 2006 Purchasing Forum – Procurement Lobbying Two separate amendments in Chapter 1 of the Laws 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 What is the Procurement Lobbying Law?

5. 2006 Purchasing Forum – Procurement Lobbying Advisory Council on Procurement Lobbying - Created by Legislative Law §1-t - Eleven members, chaired by Office of General Services - Three general obligations > Reports > Guidance > Advice to Lobbying Commission on procurement lobbying

6. 2006 Purchasing Forum – Procurement Lobbying Guidance developed by the Advisory Council on Procurement Lobbying, model forms and language and other materials, are present on the internet at http://www.ogs.state.ny.us/aboutOgs/ regulations/defaultAdvisoryCouncil.html Use this web site and its materials to educate staff and the business community regarding the new legal requirements The Advisory Council on Procurement Lobbying (cont.)

7. 2006 Purchasing Forum – Procurement Lobbying What is Procurement Lobbying? What are the requirements placed on Governmental Entities? How can these new requirements be incorporated into your procurement process? Questions

8. 2006 Purchasing Forum – 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 and standardizes practices already in place documenting the procurement process and clarifies responsibilities and expectations when expending public funds Emphasis on open, transparent, and fair procurement process The Purpose of the Procurement Lobbying Law

9. 2006 Purchasing Forum – Procurement Lobbying Develops standard governmental procurement practices about: - the kinds of information to be provided to the business community - the kinds of information to be obtained from the business community - the kinds of information to be made part of the formal record for a procurement - provides guidance to the business community about where to direct advocacy efforts The Purpose of the Procurement Lobbying Law

10. 2006 Purchasing Forum – Procurement Lobbying 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 Applicability of State Finance Law Provisions

11. 2006 Purchasing Forum – Procurement Lobbying Construction Procurement (commodities, services and technology) Real Estate (purchase, sale, lease of real property including interest therein.) Certain Revenue Contracts Assignments, renewals, extensions and certain amendments When the estimated annualized expenditure will exceed $15,000 Types of Contracts Subject to the Law

12. 2006 Purchasing Forum – Procurement Lobbying Definition of Procurement Contract expressly exempts the following - Grants - SFL Article 11-B contracts - Intergovernmental agreements - Railroad and utility force accounts - Utility relocation agreements - Eminent domain transactions Types of Contracts Subject to the Law (continued)

13. 2006 Purchasing Forum – Procurement Lobbying General Rule is: - State Finance Law recognizes that communications are necessary to the conduct of Government Procurement - There are different kinds of communications - Certain kinds of communications with Government Entities about Procurement Contracts have specific rules (referred to as Contacts) during certain time periods (Restricted Period) State Finance Law Provisions of the Procurement Lobbying Law

14. 2006 Purchasing Forum – Procurement Lobbying Example of Restricted Period for a Competitively Bid State Agency Contract Definition of business need Restricted Period (limits who can receive Contacts) Ad in Contract Reporter Approval of contract by OSC

15. 2006 Purchasing Forum – Procurement Lobbying Not all communications are Contacts! A Contact is an - oral, written or electronic communication - with a Governmental Entity - under circumstances where a reasonable person would infer - the communication was intended to influence the Governmental Procurement What Communications Must Be Recorded Under this Law?

16. 2006 Purchasing Forum – Procurement Lobbying Obligation is to record ALL Contacts Whether a communication is a Contact dependson several factors - Is there a transaction? Generally speaking, “cold” marketing material would fall under this category and would not require the completion of a record.

17. 2006 Purchasing Forum – Procurement Lobbying Is it a covered transaction? - See prior listing for exempt transactions What is the value of the transaction? - The requirements are only applicable if the estimated annualized value exceeds $15,000.

18. 2006 Purchasing Forum – Procurement Lobbying Is there a Restricted Period? - Has there been a written notice or other solicitation for a proposal? - Has the contract received its final approval? Who was the communication from? - If the communication is from a member or staff of the NYS Legislature (on a non- legislative procurement), the statute provides it is not a Contact and shall not be recorded under the SFL.

19. 2006 Purchasing Forum – Procurement Lobbying Does the communication constitute a Contact? - Defined term - Number of factors to consider - “Reasonable person” standard - Consider totality of the circumstances

20. 2006 Purchasing Forum – Procurement Lobbying Applying the “reasonable person test” factual exchanges of information are generally not Contacts - When is the bid due? - Where is the bid due? Communications that a reasonable person would probably consider an attempt to influence - You should award the bid to my company because…

21. 2006 Purchasing Forum – Procurement Lobbying If the communication is a Contact, then - Complete a Record of Contact – document that collects the statutorily required information about the person Contacting - Place each Record of Contact in the procurement record - Determine if there is a requirement to report/refer for review and investigation because it is an impermissible Contact

22. 2006 Purchasing Forum – Procurement Lobbying Who can receive Contacts during the Restricted Period? - Designated Contact(s) - Permissible Subject Matter Communications An Offerer is limited in who it can Contact Imposes new consequences if Offerers have impermissible Contacts

23. 2006 Purchasing Forum – Procurement Lobbying Person or persons identified by a Governmental Entity who may be Contacted by Offerers about a procurement 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) Designated Contact

24. 2006 Purchasing Forum – Procurement Lobbying 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 These Contacts are with the procuring Governmental Entity and other Governmental Entities Permissible Subject Matter Communications

25. 2006 Purchasing Forum – Procurement Lobbying #1 - submission of a written proposal from an Offerer #2 - submission of written questions in accordance with a process sent out in the solicitation, that must include sending all responses to all Offerers #3 - participation in a conference provided for in a solicitation Permissible Subject Matter Communications

26. 2006 Purchasing Forum – Procurement Lobbying #4 - complaints by an Offerer that the Designated Contact has not been responsive filed in writing to Counsel’s Office #5 - negotiation of a Procurement Contact after tentative award #6 - review of a procurement contract award (debriefings) Permissible Subject Matter Communications (continued)

27. 2006 Purchasing Forum – Procurement Lobbying #7 - protests, appeals or other review proceedings, such as judicial proceedings or allegations of improper conduct. Category includes the ability of an Offerer to file a written protest, appeal or complaint to the state comptroller’s office during the process of contract approval Permissible Subject Matter Communications #7 (a) – (d)

28. 2006 Purchasing Forum – Procurement Lobbying Offerer cannot Contact other Governmental Entities unless falls within one of the permissible subject matters (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

29. 2006 Purchasing Forum – Procurement Lobbying 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 are Contacted by the Legislature, the statute indicates that the Governmental Entity shall not record the Contact under the SFL

30. 2006 Purchasing Forum – Procurement Lobbying Determine if the Contact must be reported/referred for investigation as a violation of the permissible Contacts requirements - Whether a Contact must be reported/referred for investigation depends on the person’s role in the procurement Governmental Entity Obligations

31. 2006 Purchasing Forum – Procurement Lobbying Designated Contact(s) – - those employees specifically named to receive all communications from the Offerers during the Restricted Period, including Contacts - report/refer all Contacts that violate Public Officers Law or Penal Law Permissible subject matter communications - those employees who may receive only specific subject matter communications during Restricted Period - report/refer all Contacts that are outside of the specific subject matter

32. 2006 Purchasing Forum – Procurement Lobbying All other employees - may only receive factual inquiries (not Contacts) - report/refer all Contacts Control agencies - only may receive specific subject matter Contacts from Offerer during the Restricted Period - report/refer all Contacts that are outside of the specific subject matter

33. 2006 Purchasing Forum – Procurement Lobbying Report/referral generally to agency ethics officer or inspector general, who has specific obligations to review and investigate under the law Each Governmental Entity is obligated to develop policies and procedures on the review and investigation process

34. 2006 Purchasing Forum – Procurement Lobbying Immediately notify the General Counsel at the NYS Office of General Services if you have determined an Offerer as non- responsible or debarred as pursuant to this law. Office of the General Counsel NYS Office of General Services 41st Floor - Corning Tower Albany, New York 12242 LegalServicesWeb@ogs.state.ny.us Telephone 518-474-5988 Facsimile 518-473-4973

35. 2006 Purchasing Forum – Procurement Lobbying If there is a finding that an Offerer knowingly and willfully violated the requirements about permissible contacts, determine to be “non-responsible” and no award - However, award can be made if two specific statutory requirements established - This determination of non-responsibility can only be made after Offerer is given reasonable notice that an investigation is ongoing and an opportunity to be heard - Finding of non-responsibility also results in the Offerer being listed on the OGS maintained list of bidders determined to be non- responsible Key New Consequences Under this Law

36. 2006 Purchasing Forum – Procurement Lobbying Second finding of non-responsibility within four year period results in debarment of Offerer - listed on the OGS maintained list of bidders debarred due to violations of this statute - Offerer ineligible to submit a proposal or be awarded any Procurement Contract for a period of four years from the second determination

37. 2006 Purchasing Forum – Procurement Lobbying Additionally, there are other consequences to the Offerer under the new provisions - Failure to timely disclose accurate and complete information equals no award. - Failure to cooperate results in no award. > Such as refusal to submit certification or affirmation

38. 2006 Purchasing Forum – Procurement Lobbying Review the kinds of transactions commonly engage in and determine the scope of application for new State Finance Law Undertake business analysis of your existing policies and procedures for conducting procurement - You may find that you already conduct the functional equivalent Single point of contact = Designated Contact Requirement to record all significant actions Road Map for Governmental Entities

39. 2006 Purchasing Forum – Procurement Lobbying Review procurement policy for clarity on when a procurement is commenced, especially non-competitive procurements (ie., single and sole source) Identify your review proceeding and make it known to the business community. Identify your dispute resolution proceeding and make it known to the business community.

40. 2006 Purchasing Forum – Procurement Lobbying Review solicitation documents to ensure clearly address the permissible subject matter categories - Formalize processes used to exchange information with the business community - Incorporate the summary of policy, certification, affirmation and non- responsibility requirements into all relevant procurement documents

41. 2006 Purchasing Forum – Procurement Lobbying Develop the required policies and procedures, such as - Determining Designated Contacts - Policy on permissible Contacts - Policy on review and investigation of possible impermissible Contacts - Policy on notifying OGS about SFL §§139-j and 139-k non- responsibility determinations and debarment

42. 2006 Purchasing Forum – Procurement Lobbying Provide training and access to resources to staff – especially on the Restricted Period and the need to direct communications to the Designated Contacts Provide information to business community on these new requirements - use solicitation and other means

43. 2006 Purchasing Forum – Procurement Lobbying Questions ?

44. 2006 Purchasing Forum – Procurement Lobbying Lisa Fox Legal Services Office of General Services lisa.fox@ogs.state.ny.us (518) 474-0571 OGS Website: www.ogs.state.ny.us Presenter’s Contact Information