Docstoc

Title Arial 40 pts.ppt

Document Sample
Title Arial 40 pts.ppt Powered By Docstoc
					  LEGAL AND ETHICAL CONSIDERATIONS IN
          NYS PROCUREMENT




           NYS Forum
       IT Procurement Workgroup


DOING IT BUSINESS WITH NEW YORK STATE
   AND NEW YORK CITY GOVERNMENT
               June 9, 2010
         LEGAL AND ETHICAL CONSIDERATIONS IN
                 NYS PROCUREMENT

AGENDA

•   Procurement Lobbying Law

•   Debriefings

•   Protests

•   Q &A


                                           2
   Procurement Lobbying Law




        Anne Phillips
     Associate Counsel
NYS Office of General Services
                        Hypothetical


•State Agency X has determined that it needs to procure widgets
 that should result in energy efficiency savings. It issues a press
 release announcing that it plans to release a Request For
 Proposals (RFP) in the next month.

•During that month, a potential bidder, the CEO of Company Y,
 calls the head of the purchasing office at Agency X to inquire
 whether the RFP will include product specifications for a newer
 version of widgets that has been on the marketplace for the past
 year and which is manufactured by Company Y (as well as
 Companies Z and A).
                     Hypothetical


•The purchasing officer informs the CEO of Company Y that
 the draft RFP does not contain those specifications. The CEO
 then forwards information to assist Agency X in
 reconsidering its design. A month later, Agency X issues the
 RFP for widgets.

•The specifications were revised so that widgets, such as those
 manufactured by Companies Y, Z and A, can now
 successfully bid on the RFP.

•Potential bidders are advised in the RFP that there will be a
 conference call scheduled to address any questions they may
 have.
                   Hypothetical

•In addition, according to the RFP, a representative of any
 potential bidder may schedule an interview with the head of
 purchasing to obtain answers to questions that are not
 satisfactorily answered on the conference call.

•Jeremy B., who works in Agency X’s Finance office, but is
 unfamiliar with this particular procurement, is named as the
 designated contact for the widget bid.

•State Agency X’s purchasing officer is contacted twice, after
 the RFP is issued, by the CEO of Company X, who is
 seeking further information as to how his company can best
 present its response to meet Agency X’s specifications. The
 purchasing officer speaks generally with the CEO about the
 RFP but declines to provide any specific information.
                  Hypothetical

•Company X is selected by State Agency X as the lowest
 responsible and responsive bidder on the widget RFP.

•Company Y protests that decision to OSC in writing and by
 phoning the Contract Review Section at OSC.

•In reviewing the procurement record from State Agency X,
 OSC finds no record of any contact by the CEO of Company
 Y.
                  Hypothetical


Questions:

  •In what ways, if any, does this procurement violate the
   Procurement Lobbying Law?

  •What is the remedy for the violation(s)?
            State Finance Law §§ 139-j and 139-k


                     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.
            State Finance Law §§ 139-j and 139-k


• 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
A vendor should try to ascertain the following before talking to an agency.

          •   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).

          •   Be mindful if you have other communications with the agency
           State Finance Law §§ 139-j and 139-k

Do’s
       •   Follow the processes in the solicitation.

       •   Generally, submit all questions be submitted in writing to the
           Designated Contact listed in the solicitation.

       •   Work with agency on agenda for any meetings that are
           conducted and stick with the agenda.

       •   Confirm that a record of Contact is to be recorded – even if you
           are dealing with the Designated Contact.
         State Finance Law §§ 139-j and 139-k


Don’ts

   • Don’t discuss procurements with other than Designated
     Contacts in a Restricted Period – it lasts until OSC
     approves the contract!

   • Don’t miss opportunities for process improvements.
              Formalize information exchanges with State
              agency.
              Follow procurement processes.
       2010 Amendments to the Procurement
                 Lobbying Law

•   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.

•   A new restricted period will apply each time a
    procurement is amended, extended or renewed, or there is
    a change order unless the amendment, extension, renewal
    or change order is authorized and payable under the
    terms of the underlying contract as it was finally awarded
    or approved.
          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.
            2010 Amendments to the Procurement
                      Lobbying Law
•   The types of contacts that are permissible now expressly include:

     •   participation in a demonstration or other means for exchange
         of information in a setting open to all potential bidders
         provided for in a request for proposals”;

     •   presenting oral protests, appeals or complaints to OSC;

     •   providing information to offerers “regarding the status of the
         review, oversight, or approval of a governmental procurement
         that has been submitted to or is under review by that
         governmental entity”; and

     •   “communications between offerers and governmental entities
         that solely address the determination of responsibility by a
         governmental entity of an offerer.”
        2010 Amendments to the Procurement
                  Lobbying Law

• 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.

• Communications between certain preferred sources and
 governmental entities are permissible unless they constitute
 an attempt to influence the governmental entity during a
 restricted period.

• The written affirmation that an offerer signs or otherwise
 acknowledges signifying that he or she understands and
 agrees to comply with the governmental entity’s procurement
 lobbying procedures, is deemed to apply to any amendments
 to the procurement.
                                   Resources


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.ht
ml

Access through OGSNow “Procurement Lobbying” at
http://ogsnow/ogspolicy/viewpolicy.asp?policyID=169

Access through the public web site under “About OGS” at
http://www.ogs.state.ny.us/aboutOgs/regulations/defaultSFL_139j-k.html

Business Unit specific policies
                        Hypothetical


•State Agency X has determined that it needs to procure widgets
 that should result in energy efficiency savings. It issues a press
 release announcing that it plans to release a Request For
 Proposals (RFP) in the next month.

•During that month, a potential bidder, the CEO of Company Y,
 calls the head of the purchasing office at Agency X to inquire
 whether the RFP will include product specifications for a newer
 version of widgets that has been on the marketplace for the past
 year and which is manufactured by Company Y (as well as
 Companies Z and A).
                        Hypothetical

•The purchasing officer informs the CEO of Company Y that the
 draft RFP does not contain those specifications. The CEO then
 forwards information to assist Agency X in reconsidering its
 design. A month later, Agency X issues the RFP for widgets.

•The specifications were revised so that widgets, such as those
 manufactured by Companies Y, Z and A, can now successfully
 bid on the RFP.

•Potential bidders are advised in the RFP that there will be a
 conference call scheduled to address any questions they may
 have.
                       Hypothetical

•In addition, according to the RFP, a representative of any
 potential bidder may schedule an interview with the head of
 purchasing to obtain answers to questions that are not
 satisfactorily answered on the conference call.

•Jeremy B., who works in Agency X’s Finance office, but is
 unfamiliar with this particular procurement, is named as the
 designated contact for the widget bid.

•State Agency X’s purchasing officer is contacted twice, after the
 RFP is issued, by the CEO of Company X, who is seeking further
 information as to how his company can best present its response
 to meet Agency X’s specifications. The purchasing officer
 speaks generally with the CEO about the RFP but declines to
 provide any specific information.
                      Hypothetical

•Company X is selected by State Agency X as the lowest
 responsible and responsive bidder on the widget RFP.

•Company Y protests that decision to OSC in writing and by
 phoning the Contract Review Section at OSC.

•In reviewing the procurement record from State Agency X, OSC
 finds no record of any contact by the CEO of Company Y.
               Hypothetical



Questions

 •In what ways, if any, does this procurement
  violate the Procurement Lobbying Law?

 •What is the remedy for the violation(s)?
Questions




            25
             Debriefings
 State Finance Law Section 163 (9) (c)



          Vanessa Saiid
         Attorney Trainee
NYS Office of the State Comptroller
            Good Debriefings




          Transparency

     More Viable Competition



Better New York State Contracts
Debriefings & American Idol
             State Finance Law § 163 (9) (c)

• Priorto it’s amendment in 2008, SFL 163 (9) (c) was
 very ambiguous and there was no express, statutory
 requirement that debriefings be provided.

• The amendment to the law added an express requirement
 that an agency provide a debriefing to any unsuccessful
 offeror who requests one.
              SFL § 163 (9) (c) Requirements


1.   Notice of the opportunity for a debriefing must be
     provided in the solicitation documents.

2.   Reasonable time to request a debriefing must be
     given.

3.   Upon request by offeror, agencies must provide a
     debriefing.
        What May Be Disclosed in the Debriefing

• Weaknesses of the proposal submitted by the vendor
 being debriefed?

• Strengths   of the winning vendor’s proposal?

• Strengths
          and/or weaknesses of other competitors
 proposals?

• All   of the above?
          What May Be Disclosed in the Debriefing

•   SFL § 163 (9) (c) specifically requires agencies to disclose the
    “…reasons that the proposal…by the unsuccessful offeror was
    not selected for award.”

•   Clearly, the debriefing must address the deficiencies of the
    proposal submitted by the vendor being debriefed.

•   The law does not specifically mandate nor prohibit an agency
    from disclosing information on the successful proposal.
    Because of this, agency practices differ widely concerning the
    disclosure of information during debriefings.
             3 Different Agency Approaches to
                   Conducting Debriefings

1.   Full Disclosure: specify why the winning proposal was
     determined to be better than the proposal submitted by the
     vendor being debriefed/give a comparative analysis.

2.   Minimum Disclosure: no disclosure of information on the
     successful proposal, focusing rather on the strengths and
     weaknesses of the debriefed parties proposal only.

3.   Middle Ground: provide scores and limited information
     concerning the winning proposal.
             Do’s in the Procurement Process

• DO   – Ask questions before submitting the proposal.

• DO – Understand what is being asked for in the
solicitation and be responsive.

• DO– Provide the agency with questions prior to the
debriefing.

• DO   – Come to the debriefing prepared.

• DO   – Take advantage of the debriefing.
Questions




            35
              PROTESTS



           John Dalton
        Associate Counsel
NYS Office of the State Comptroller
                              PROTESTS



AGENDA

 •   OSC Bid Protest Procedures

 •   Dos and Don’ts in the Protest Process

 •   Frequent Issues Raised In Procurement Protests

 •   Questions and Answers/Discussion
     PROTESTS



OSC BID PROTEST
 PROCEDURES
                       Authority to Hear Protests


•   Pursuant to Section 112 of the State Finance Law, most State
    agency contracts require the Comptroller’s approval
     • Expenditure contracts over $50,000
     • Revenue contracts over $10,000


•   In reviewing contracts, the Comptroller reviews both the legal
    and business bases for contract awards

•   As part of the Comptroller’s review of contracts, OSC will
    consider protests by interested parties and has promulgated
    procedures governing such protests.
                 How Protests Come to OSC



• Part   of Procurement Record

• Appeal of    Agency Determination Filed with
 OSC

• Initial   Protest Filed with OSC
                              Applicability


• Procedures    apply to all contracts submitted to OSC for
 approval

 •   Section 112 of the State Finance Law

 •   Contracts voluntarily submitted to OSC for Approval (e.g.,
     Thruway Authority contracts)
                                         Definitions

•   Generally, they are consistent with the definitions contained in Section 163 of
    the State Finance Law
•   However, two are worthy of note:
     • Interested party - “A participant in the procurement process and those
       whose participation in the procurement process has been foreclosed by the
       actions of the contracting agency.”
        • Provides for broad scope of parties that could have standing to bring a
          protest.
     • Contract award - “A written determination from a contracting agency to an
       offerer indicating that the contracting agency has accepted its bid or offer.”
        • Note, an interested party may file a protest with OSC after the contracting
          agency has made a “contract award” and need not wait for a final contract
          to be signed to initiate a protest
        • Pursuant to the Procurement Lobbying Law (see State Finance Law
          §139-j), a protest can only be made to OSC during the process of contract
          approval
                Initial Protest Filed with OSC


• If
   the contracting state agency has a protest procedure,
 and provides notice of its procedure, initial protest
 should be filed with state agency

  not, an “interested party” may file initial protest with
• If
 OSC
                     Filing Initial Protest with OSC


•   Protest must be in writing and filed with the OSC Bureau of
    Contracts

•   If provided with notice of the contract award, protest must be
    filed within 10 days of such notice

•   If no notice was provided, protest may be filed anytime after
    award and prior to Bureau of Contract’s action on the contract

•   Protesting party must simultaneously file notice of protest with
    contracting state agency and successful bidder
                     Filing Initial Protest with OSC

•   Contracting agency may file an answer to protest with the delivery
    of the contract to OSC or 7 days after filing of the protest,
    whichever is later

•   A copy of the answer must be simultaneously delivered to
    protestor and successful bidder

•   The successful bidder may also file an answer to the protest,
    within the same time frame

•   The protestor may file a reply to the answer(s), within 3 days of
    the filing of the answer(s)

•   Reply should only respond to the answer and should not raise new
    issues
                   Appeal of Agency Determination


•   Upon receipt of contracting agency’s determination, interested
    party has 10 days to file an appeal with the OSC Bureau of
    Contracts

•   A copy of the appeal must be filed with contracting agency,
    successful bidder and any other participant in the protest
    process.

•   Appeal must set forth basis on which it challenges contracting
    agency’s determination
                    Appeal of Agency Determination


•   Contracting agency may file an answer to appeal with the
    delivery of contract to OSC or 7 days after the filing of protest,
    whichever is later

•   Contracting agency must copy protestor and successful bidder
    on answer

•   Successful bidder may also file an answer within the same time
    frame, and must copy contracting agency and protestor
             OSC Bureau of Contracts Determination


General Authority of BOC in Protest Process:
• May, on written notice to parties, act on an expedited basis


•   May summarily deny the protest

•   May require further information concerning the procurement

•   May conduct a fact finding hearing (formal or informal)
    • A recent amendment to the Procurement Lobbying Law
      makes this easier
              OSC Bureau of Contracts Determination

• Bureau of Contracts will issue a written determination of the
  appeal
• Determination will address all issues raised by protest, as well as
  issues identified in Bureau’s review of procurement
• All interested parties will be provided with a copy of the
  determination
• Bureau of Contracts’ determination will either:
   • Deny the protest and approve the contract
    •   Uphold the protest and require a new procurement (where
        procurement itself was flawed)
    •   Uphold the protest but leave to agency decision of whether to
        make a new award (consistent with OSC determination) or
        conduct a new procurement
    •   Indicate that the protest is moot because of other fatal flaws in
        the procurement found as part of OSC’s review of the contract
                    General Information


• Link
     to OSC G-Bulletin 232
“OSC Contract Award Protest Procedures”

 http://www.osc.state.ny.us/agencies/gbull/g_232.htm
                Do’s & Don’ts For Participating in Protests



•   Do’s For Protesters:

    •   Be Specific

    •   Fully and clearly state the legal and factual grounds for the
        protest, the relief requested and include all relevant
        documentation
                Dos & Don’ts For Participating in Protests



•   Don’ts For Protesters

    •   Be vague or conclusory - “My proposal was better and I should
        have won.”

    •   This rarely succeeds since OSC generally gives deference to
        agency determinations regarding the merits of the proposals
        submitted
               Dos & Don’ts For Participating in Protests


•   Dos for Winning Bidders:
     • Carefully respond to issues raised in protest, particularly where
       assertions relate to winning bidder or its proposal



•   Don’ts for Winning Bidders:
     • Assume there is no need to reply
     • Assume OSC will deny the protest
     • Assume the agency will provide a sufficient response
                    Legal Representation in Protests


•   Do I need to hire a lawyer to succeed on a bid protest?

•   No. Many protests filed with OSC are not filed by lawyers,
    particularly where the issues raised are strictly technical or
    business in nature

•   However, since the protest process is always adversarial, a lawyer
    may prove helpful and is certainly advisable where legal issues
    are involved
            Frequent Issues Raised in Bid Protests


• Winning  bidder did not meet mandatory/minimum
 specifications

• Must
     be proven by protesting party with specific
 documentation

• SFL 163(10) requires that contracts shall be awarded to
 a responsive and responsible offerer

• “Responsive” means    a bidder meeting the minimum
 specifications in the solicitation
                 Frequent Issues Raised in Bid Protests


Waiving Technicalities, Deviations or Omissions

•    A procuring agency:

    i.   may decline bids that fail to comply with the literal
         requirements of the specifications; or

    ii. may  waive a technical noncompliance with the bid
         specifications if the deviation is minor or not substantial; but

    iii.must  reject a bid if the non-compliance is material or
         substantial.
                Frequent Issues Raised in Bid Protests


Waiving Technicalities, Deviations or Omissions

•   Agencies should always do a review of their RFP to identify every
    “must” “shall” and “will” and then ask whether they really want to
    make that specification mandatory and, therefore, non-waivable.

•   Entering into a contract that materially varies from the bid
    specifications, in favor of the successful bidder, would have the
    effect of altering the specifications after the bidding process and
    would give the successful bidder an unfair advantage over other
    bidders and those who chose not to bid.
             Frequent Issues Raised in Bid Protests


Waiving Technicalities, Deviations or Omissions

A variance is material or substantial when it would:
   i.   impair the interests of the procuring agency,
   ii. place the successful bidder in a position of unfair economic
        advantage, or
   iii. place other bidders or potential bidders at a competitive
        disadvantage.
                Frequent Issues Raised in Bid Protests

The evaluation methodology was not established in advance of
 the initial receipt of offers, or was not followed as described in
 the procurement record

  •   SFL 163(7) requires agencies to document, in the procurement
      record and in advance of the initial receipt of offers, the
      evaluation criteria and the process to be used in the
      determination of best value

  •   While not explicitly stated, OSC interprets this statute to
      implicitly require agencies to also follow the previously
      established evaluation methodology during its selection process
               Frequent Issues Raised in Bid Protests


The Agency failed to establish within its evaluation
 methodology relative weights for technical and cost

  •   SFL 163(9)(b) requires agencies to describe in the solicitation
      the general manner in which the evaluation and selection shall
      be conducted and, where appropriate, the relative weight of cost
      and technical criterion to be considered by a state agency in its
      determination of best value

  •   This must therefore also be done in advance of the agency’s
      receipt of offers
                Frequent Issues Raised in Bid Protests


The evaluation methodology itself was flawed

•   SFL 163(3) requires agencies to award contracts for commodities
    on the basis of low cost

•   SFL 163(4) requires agencies to award contracts for services
    (including technology) on the basis of best value
     • Best Value = A Cost/Benefit Analysis
     • Therefore, service and technology contracts generally require
       an award that considers both cost and technical merit
     • However, an agency may award solely on the basis of low cost
       where, for practical purposes, low cost actually = Best Value
     • For example, where 1) The service/technology is routine, or 2)
       the technical specifications were narrowly prescribed
                  Frequent Issues Raised in Bid Protests


“My proposal was better and I should have won.”

•   As noted above, vague and conclusory assertions such as this rarely succeed
    since OSC review generally focuses on whether methodology established by
    the agency is reasonable, appropriate and in compliance with applicable legal
    requirements
        • Typically OSC does not overturn the actual scoring, particularly where it
          is within the expertise of the procuring agency
        • But there are exceptions:
           • For example, where the argument can be verified with objective data
             and the agency’s choice was egregiously incorrect or obviously wrong

•   Protests are more likely to be successful when based on a flaw in the
    evaluation process itself or in the construction of the solicitation
Questions




            63
For questions involving any of the presented topics, you
                   may contact us at:


                  OSC Legal Services
                   (518) 474-6011


          Or email: jdalton@osc.state.ny.us

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:1
posted:9/11/2011
language:English
pages:64
handongqp handongqp
About