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Procurement Lobbying Guidelines - New York Department of State

Note: The Guidelines and Procedures contained on these pages are subject to revision or modification based on the Procurement Lobbying Council’s Guidelines.

Applicable PDF Forms


Offer Disclosure of Prior Non-Responsibility Determination (pdf)
Offer Acknowledgment Form (pdf)
Integrity Compliance (pdf)
Report of Contact (pdf)

 

Table of Contents | Lobbying Guidelines | Integrity Procedures | DOS Documentation


DEPARTMENT OF STATE
Procurement Lobbying Guidelines

Overview

Chapter 1 of the Laws of 2005 was signed by Governor Pataki on August 23, 2005. Provisions of this law which affect the Department of State (DOS) took effect on January 1, 2006. The new law establishes reforms in the area of procurement lobbying, including restrictions on whom and when Offerers1 or their representatives may contact State governmental agencies for the purposes of influencing the procurement process. The law also places new requirements on State governmental agencies.

This policy document provides an overview of the requirements impacting DOS created by the new law, which is codified as sections 139-j and 139-k of the State Finance Law. The law also establishes an Advisory Council on Procurement Lobbying which is authorized to create guidelines.

The Policy outlined below is subject to revision or modification based on the Procurement Lobbying Council’s Guidelines.

It is important that all DOS employees familiarize themselves with these guidelines. As noted below, guidance materials for completing DOS Employee Reports of Contacts will be accessible on the DOS website or from our Ethics officer.

DETAILED DOS GUIDELINES ON THE
NEW PROCUREMENT LOBBYING LAW

The New Procurement Lobbying Law Applies to DOS

DOS is subject to and required to comply with the new Procurement Lobbying Law.

Because the law places the compliance obligation on government entities, DOS employees are subject to the law and required to comply with it where applicable.

Purpose of the New Procurement Lobbying Law

The new law amends the Legislative Law and the State Finance Law to regulate and require disclosure of lobbying of the State procurement process.

The new law establishes, among other things, a “Restricted Period” for certain procurements during which:

- Offerers, or others acting on their behalf, are PROHIBITED from attempting to influence a procurement except by contacting a Designated Agency Contact.

- DOS employees are required to record attempts to influence a procurement received on behalf of Offerers during the “Restricted Period.”


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Effective Date

The provisions of the Procurement Lobbying Law which are addressed in these Guidelines were effective on January 1, 2006.
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Executive Order 127 has been revoked and is now rescinded.

On June 30, 2006 the Governor revoked and rescinded EO 127. Therefore, EO 127 is no longer in effect.

COVERED PROCUREMENT ACTIVITIES

Types of Procurement Activities Subject to the Procurement Lobbying Law

The law applies when a “Governmental Procurement” is taking place. The law defines “Governmental Procurement” as the following activities:

1. The preparation or terms of the specifications, bid documents, request for proposals, or evaluation criteria for a procurement contract;

2. Solicitation of proposals,

3. Evaluation of a proposal,

4. Award, approval, denial or disapproval of a procurement contract, or

5. Approval or denial of an assignment, amendment (other than amendments that are authorized and payable under the terms of the procurement contract as it was finally awarded or approved by the comptroller, as applicable), renewal or extension of a procurement contract, or any other material change in the procurement contract resulting in a financial benefit to the offerer.

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Types of Procurement Activities Covered by the New Law

- Purchases of Commodities;
- Purchases of Services;
- Purchases of Technology;
- Public Works;
- Construction;
- Revenue Contracts;2
- Purchase, sale or lease of real property;
- Acquisition or granting of other interest in real property

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Dollar Threshold for Procurements Subject to the Law

The dollar threshold is an estimated annualized expenditure in excess of $15,000.
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Procurement Activities Not Subject to the Procurement Lobbying Law

The following transactions are not subject to the law:

- Grants
- SFL Article 11-B contracts (for non-profits)
- Intergovernmental agreements (MOUs and MOAs)
- Railroad and utility force accounts
- Utility relocation project agreements or orders
- Eminent domain transactions
- Procurements for $15,000 or less.
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DOS “DESIGNATED AGENCY CONTACT”

Restrictions Imposed on Procurement Lobbying

Where a “Governmental Procurement” as defined above is involved, agencies are required to designate a person or persons in the agency to serve as the Designated Agency Contact person(s) for the procurement.

During the “Restricted Period” (discussed below), Offerers are PROHIBITED from attempting to influence the governmental procurement by contacting anyone other than the Designated Agency Contact.

Note: For purposes of these Guidelines, a contact which violates this Prohibition may be referred to herein as a “PROHIBITED CONTACT.”

DOS’s “Designated Agency Contact” for Procurements Subject to the Law

DOS’s designated agency contact will be stated on the first page of each solicitation which is subject to the provisions of the new procurement lobbying law.

Timing of Restrictions Placed on Offerer Attempts to Influence the Procurement

The restrictions on attempting to influence the governmental procurement apply during a “Restricted Period” established by the new legislation.
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THE “RESTRICTED PERIOD”

Explanation of “Restricted Period”

The “Restricted Period” is essentially a blackout period during which attempts to influence the procurement must only be made to the DOS Designated Agency Contact person. This person will make a record of information identifying the individual who made the attempt to influence. Generally, the restricted period begins with the earliest written notice of an agency solicitation of bids and ends upon OSC approval of the contract.

Earliest written notice ←-----------Restricted Period ----------→ OSC approval

Note: The new law does not prevent the Offerer, or person acting on its behalf, from attempting to influence DOS personnel other than the DOS Designated Agency Contact, before or after (but not during) the Restricted Period.
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The New Law Applies to Attempts to Influence Made By Persons Other than Lobbyists Acting on Behalf of the Offerer

The scope of the new law is not limited to communications from lobbyists. The law’s definition of “Offerer” encompasses employees, agents, consultants and “person[s] acting on its behalf:

"Offerer" shall mean the individual or entity, or any employee, agent or consultant or person acting on behalf of such individual or entity, that contacts a governmental entity about a governmental procurement during the restricted period of such governmental procurement.
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DOS Notification Process for a Particular Procurement

DOS staff will be notified by an all-agency e-mail when the “Restricted Period” begins for a particular procurement. This memo will also provide the name of the designated contact for the procurement.

Note: As a matter of DOS policy, during the Restricted Period of a procurement, all contacts, whether attempts to influence or not, should be referred to the Designated Agency Contact.
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Notification to the General Public (including the Offerer and Lobbying Communities) that a “Restricted Period” is in Effect for a Particular Procurement

Notification of the commencement of a Restricted Period will be stated in the Contract Reporter.
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Attempts to Influence Another State Governmental Entity’s Procurement by Contacting Someone at DOS

This would be a PROHIBITED CONTACT. Attempts by an Offerer to influence another state governmental entity’s procurement by contacting someone at DOS violates the new Procurement Lobbying Law and is a prohibited contact.

“ATTEMPTS TO INFLUENCE” PROCUREMENT ACTIVITIES

Explanation of “Attempt to Influence”

The law addresses “attempt to influence” in the definition of “Contacts” found in State Finance Law section 139-j(1) (c) as follows:

“…[A]ny oral, written or electronic communication with a governmental entity under circumstances where a reasonable person would infer that the communication was intended to influence the governmental procurement

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Note That An “Attempt to Influence” Can Take Various Forms:

- Telephone conversations
- Correspondence
- Electronic Mail
- Person to Person Discussions
- Any other form of discussion

The fact that the communication could have been initiated by an DOS employee rather than the Offerer is irrelevant.
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Explanation of “Reasonable Person” Standard

The use of the “reasonable person” standard means that whether a contact is an “attempt to influence” the procurement is to be decided objectively, not subjectively based on an individual recipient’s particular views and experiences.
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Determination of Whether the Contact is an “Attempt to Influence”

Generally, a contact urging action or seeking to impact or cause a determination with respect to a covered procurement should prompt the employee to consider whether the contact is an attempt to influence.

By contrast, contacts which are routine or purely factual in nature (e.g., “Who is the winning bidder?” “What is the status of contract approval?” “When are you likely to announce the award?” “What is the status of my payment?”) are not attempts to influence.
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Applicable Activities Subject to Prohibition

1. The preparation of specifications, bid documents, request for proposals, or evaluation criteria;

2. The terms of the specifications, bid documents, request for proposals, or evaluation criteria;

3. The solicitation of bids, quotes, offers or other vendor responses;

4. Evaluation of bids, quotes, offers or other vendor responses to the solicitation;

5. Award, approval, denial or disapproval of a procurement contract; or

6. Approval or denial of an assignment, amendment (other than amendments that are authorized and payable under the terms of the procurement contract as it was finally awarded or approved by the comptroller, as applicable), renewal or extension of a procurement contract, or any other material change in the procurement contract resulting in a financial benefit to the offerer.

[See also definition of “Governmental Procurement” in “Covered Procurement Activities” above].
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Example of “Attempts to Influence” a Procurement:

Lobbyist calls to advocate for an award of a procurement contract to his client; Offerer’s Contract Manager urges DOS to withdraw a requirement in the RFP.
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Examples of Contacts That are Not “Attempts to Influence” a Procurement:

· Vendor sends the agency unsolicited advertising materials in the ordinary course of business;
· Communications among personnel within the agency;
· Communications between the agency personnel and other state agency personnel;
· Vendor demonstration of a new product where the vendor describes the product and advocates its use in a cold call which is not in conjunction with a specific procurement;
· Lobbyist merely asks whether the agency has awarded a contract.
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THE DOS EMPLOYEE’S DUTY TO REPORT “ATTEMPTS TO INFLUENCE” DURING THE “RESTRICTED PERIOD”

Responsibilities of DOS Employees During the “Restricted Period” of a Procurement

If a DOS staff member receives an attempt to influence from someone on behalf of an Offerer during the “Restricted Period” that staff member MUST obtain the following information:

-Name
-Address
-Telephone number
-Place of principal employment
-Occupation

· The staff member must also ask whether the person making contact is the Offerer or was retained, employed or designated by or on behalf of the offerer to appear before or contact the governmental entity about the governmental procurement and record the answer.

Reporting an Attempt to Influence a Procurement During a Restricted Period

The contacted DOS employee must complete a form available from the agency’s Ethics Officer (Counsel’s Office) and return this form to the DOS Ethics Officer.

Note: A report of a contact within the Restricted Period should be completed as soon as practicable after the contact has occurred. This is important, as compliance with the Procurement Lobbying Law is an element in determining Vendor Responsibility.

In addition, the employee reporting the contact need not be the employee who received the contact. Support staff may complete a report of contact at the request of a supervisor who has received the contact.
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Contents of a “Report of Contact”

The law does not require that a Report of Contact contain information beyond that specified under responsibilities of DOS employees above. However, upon filing the report of contact, the DOS individual responsible for receiving reports of contacts may follow up with you for additional information.
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When an Attempt to Influence a Procurement Does not have to be Reported because of the Time Period when it was Made

Attempts to influence a procurement which occur before or after, but not during, the restricted period need not be recorded.
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Other Situations Where an Attempt to Influence Does not Have to be Reported

In addition to attempts to influence a procurement before or after the restricted period, there are certain communications which may constitute attempts to influence a procurement which do not have to be recorded by DOS employees. The law permits the following types of contacts to be made during the Restricted Period to DOS persons other than the Designated Contact for the Procurement. Therefore these contacts do not have to be recorded:

· The act of submitting a bid, quote or proposal;

· Submission of Questions as instructed in the RFP, IFB, RFQ or other solicitation, where the questions and answers are to be disseminated to all interested potential bidders;

· Participation in a conference provided for in the RFP, IFB, RFQ or other solicitation;

· Written Complaints to the DOS General Counsel regarding the Designated Contact’s failure to timely respond to authorized offerer contacts;

· Negotiating a tentative contract award with DOS after notification of tentative award;

· Contacts between Vendor and DOS staff to request review of a contract award;

· Bid protests before DOS;

· Complaints to the Attorney General, Inspector General, District Attorney or Court regarding alleged improper conduct in connection with a procurement;

· Written protests, appeals or complaints to OSC during the process of contract approval;

· Complaints to OSC regarding alleged improper conduct in connection with a municipal agency or local legislative body procurement.
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Situations Where an Attempt to Influence the Procurement Must Not be Reported

Contacts from legislators or members of legislative staff acting in their official capacities MUST NOT BE RECORDED. The law states that:

“Any communications received by a governmental entity from members of the state legislature, or legislative staffs, when acting in their official capacity, shall not be considered to be a "contact" within the meaning of this section and shall not be recorded…”
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NOTE: Where the DOS Employee is “Reasonably Sure” that the Contact is not an “Attempt to Influence,” the Contact Need Not be Recorded.

- DOS Employees Who are Unsure if the Contact is an “Attempt to Influence” Should Err on the Side of Caution and Record the Contact.
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Review of the Report of Contact

The Report of Contact will be reviewed by the DOS Ethics Officer.

THE DOS EMPLOYEE’S BROAD DUTY TO REPORT VIOLATIONS
OF THE PROCUREMENT LOBBYING LAW.

Other Reporting Obligations in Addition to the Reporting Attempts to Influence Received by That Employee During the Restricted Period

The duty to report Vendor attempts to influence during the Restricted Period is not limited to such contacts received by the employee. The Employee must report any potential PROHIBITED CONTACT whether the employee was the recipient of the contact or not (e.g., Contact received by a Co-worker.
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Reporting of Potential Violations

The new law requires each “governmental agency” to designate an individual who will be responsible for receiving and investigating reports of potential violations of the procurement lobbying law. The DOS person who will be responsible for this and to whom all potential violations should be reported is the DOS Ethics Officer [(518) 474-6740].

THE AGENCY’S DUTY TO INVESTIGATE REPORTED
VIOLATIONS OF THE PROCUREMENT LOBBYING LAW

DOS Investigations of Potential Violations of the Procurement Lobbying Law

DOS is in the process of developing procedures for reviewing and investigating potential violations of the procurement lobbying law. If the result of an investigation indicates that sufficient cause exists to believe that a violation has occurred, DOS is required to notify the involved Offerer and afford that Offerer an opportunity to be heard.

DOS employees are required to cooperate fully with any investigation of a potential violation of the Procurement Lobbying law.
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Employee Violations of DOS Guidelines and Procedures Governing Improper Attempts to Influence a Procurement.

Where it is found that a Offerer has violated the prohibition on attempts to influence a person other than the designated agency contact during the restricted period, any DOS employee violations of the guidelines and procedures regarding such contacts will be reported to the DOS Bureau of Human Resources Management for appropriate action.
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APPLYING THE PROCUREMENT LOBBYING LAW
IN DETERMINING VENDOR RESPONSIBILITY

Effects of Compliance or Noncompliance With the Procurement Lobbying Law on Vendor Responsibility

The law requires that compliance with the Procurement Lobbying Law must be considered in the determination of Vendor Responsibility. DOS must find the Vendor NONRESPONSIBLE where there is a finding that the Vendor:

· Knowingly and willfully violated the statutory restriction on PROHIBITED CONTACTS.

· Failed to timely disclose accurate and complete information concerning NONRESPONSIBILITY determinations within the previous four years by any governmental entity for violations of the statutory restriction on PROHIBITED CONTACTS.

Failure to otherwise cooperate with DOS in disclosing NONRESPONSIBILITY determinations under the Procurement Lobbying law must also be considered. Upon a finding of NONRESPONSIBILITY, DOS MAY NOT award the contract to the Vendor.

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Effects of a Determination of NONRESPONSIBILITY on Offerer’s Subsidiaries or Related Companies

If an Offerer is found NONRESPONSIBLE for a violation of the procurement lobbying law, the following related entities are ineligible to receive an award:

- The Offerer’s subsidiaries; and

- Any Related or Successor Entity with “substantially similar function, management, board of directors, officers and shareholders.”
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Circumstances Where DOS May Award a Contract to the Offerer Notwithstanding the Finding of NONRESPONSIBILITY Under the Procurement Lobbying Law

There is a limited exception which applies if all of the following conditions are met and documented by DOS:

· The award is “necessary to protect public property or public health or safety”; and
· The Offerer is (i) “the only source capable of supplying the required article of procurement (ii) within the necessary timeframe.”

Note: The facts supporting this exception must be documented in the procurement record and reported to OGS, which will maintain a list of NONRESPONSIBLE and DISBARRED vendors.
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OFFERER DEBARMENT FOR FAILURE TO COMPLY
WITH THE PROCUREMENT LOBBYING LAW

Effect of Multiple Determinations of NONRESPONSIBILITY for Failure to Comply With the Procurement Lobbying Law

If an Offerer is found NONRESPONSIBLE 2 times within FOUR YEARS, the Offerer must be DEBARRED and the debarment must be reported to OGS.
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Period of Debarment

The debarment is for the period of FOUR YEARS from the date of the second NONRESPONSIBILITY Determination.
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REQUIRED LANGUAGE FOR RFPs, SOLICITATIONS,
BID DOCUMENTS AND/OR CONTRACTS

The New Law Requires that the Solicitation of Proposals or Bid Documents or Specifications for all Procurement Contracts Must Contain the Following Language:

· A summary of the DOS policy and prohibitions regarding permissible contacts during a governmental procurement;

· Copies of rules and regulations and applicable DOS guidelines and procedures regarding permissible contacts during a governmental procurement;

· Offerer disclosure of findings of non-responsibility made within the previous 4 years by any governmental entity where such prior finding of non-responsibility was due to: (a) a violation of section one hundred thirty-nine-j of the State Finance Law, or (b) the intentional provision of false or incomplete information to a governmental entity.

· Written Offerer affirmations as to their understanding of, and agreement to comply with, DOS’s procedures relating to permissible contacts during a governmental procurement.
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Additional Contract Language:

· A CERTIFICATION by the Offerer that all information provided to the procuring governmental entity with respect to this section is complete, true and accurate;

· A provision authorizing the governmental entity to TERMINATE the contract in the event such certification is found be intentionally false or intentionally incomplete.

Note: You may obtain the DOS standard language from your Program Area’s assigned Counsel or the Bureau of Fiscal Management.
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DOCUMENTATION FOR THE PROCUREMENT RECORD

The New Law Requires That the Following Information be Included in the Procurement Record:

· All Reports of Contacts filed for the Procurement;
· Any Complaints to the Agency General Counsel regarding the failure of the Designated Agency Contact to Respond to authorized contacts;
· Protests/complaints to OSC;
· Justification for award despite determination of NONRESPONSIBILITY;
· Reasons for termination of the Contract for failure to comply with the procurement lobbying law.
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QUESTIONS and ASSISTANCE

Any questions not addressed above may be directed by telephone to your Program’s assigned Legal Counsel in the DOS Counsel’s Office at: (518) 474-6740.

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1 "Offerer" shall mean the individual or entity, or any employee, agent or consultant or person acting on behalf of such individual or entity, that contacts a governmental entity about a governmental procurement during the restricted period of such governmental procurement. State Finance Law section 139-j(1)(h).

2 Note: For purposes of the law, “Revenue Contract” means a written agreement between a governmental entity and an offerer “whereby the governmental entity gives or grants a concession or a franchise.”