PROCUREMENT LOBBYING LAW
FREQUENTLY ASKED QUESTIONS (FAQs)

Replaces previously released version in its entirety

1. Overview  Revised September 21, 2006

2. Additional Help

2.1    Who can I talk to or contact if I need help? Revised April 5, 2006

3. Scope of application of State Finance Law §§ 139-j and 139-k

3.1    Who is covered by the new State Finance Law provisions?

3.2    Is Executive Order 127 still in effect?  Revised September 21, 2006

3.3    How do the new State Finance Law provisions affect the procurement laws that govern the procurement processes of local governmental entities such as cities, towns and counties?

3.4    What is meant by the term “Offerer”?

3.5    How are industrial development agencies covered?  What activities of an industrial development agency trigger the obligations under the law? New FAQ approved by ACPL on March 16, 2006

3.6    How does §§ 139-j and 139-k of the State Finance Law apply to cooperative agreements involving agencies of other states where one Governmental Entity is subject to the requirements thereunder and the lead agency (agency awarding the contract) is not?  Is the Governmental Entity that is subject to the law still required to meet the obligations under the State Finance Law when seeking an Article of Procurement under that cooperative agreement?  New FAQ approved by ACPL on March 16, 2006

3.7    Are preferred source providers exempted from the requirements of the new State Finance Law provisions? It is noted that preferred sources have a limited exception from the requirements to register as a lobbyist under Legislative Law, but are not totally exempt.  New FAQ approved by ACPL on June 8, 2006

4. Kinds of Transactions Covered by State Finance Law §§ 139-j and 139-k

4.1    What kinds of transactions are covered by State Finance Law §§ 139-j and 139-k?

4.2    Are contracts involving an estimated annualized expenditure under $15,000 covered?

4.3    What kinds of contracts are not subject to the new State Finance Law requirements?

4.4    Do §§ 139-j and 139-k of the new State Finance Law provisions apply to the sale of real property by a Governmental Entity?

4.5    Do the new State Finance Law provisions apply to real estate transactions?

4.6    How do the new State Finance Law provisions apply to real estate transactions?

4.7    Do the restrictions on Contacts during the procurement process apply to construction contracts?

4.8    What contacts does the new law allow between Offerers and public officials and court officials during the preparation of specifications, bid documents, Requests for Proposals (RFPs), Invitations for Bids (IFBs), or other solicitations, prior to the Restricted Period defined in the statute?

4.9    Are there permissible Contacts during the Restricted Period?

4.10   Do §§ 139-j and 139-k of the State Finance Law apply to sole and single source contracts?

4.11   When does the Restricted Period begin in instances where there is no written notification such as in Governmental Procurements involving single and sole source contracts?

4.12   If a contract is supplemented, does this require providing vendors with notice of the Restricted Period? In addition, when does the Restricted Period start and end for these supplements? Revised February 8. 2007

4.13   When do these requirements apply?

4.14   Are the new obligations of State Finance Law activated by:

4.15   Do §§ 139-k and 139-j of the State Finance Law apply to procurements over $15,000 that are purchased via Purchase Order, even though these types of procurements do not involve contracts or agreements that require review and approval by the Attorney General's Office? Revised April 20, 2006

4.16   When a Governmental Entity makes purchases from state centralized contracts, do the State Finance Law provisions of §§ 139-j and 139-k apply? New FAQ approved by ACPL on March 16, 2006

4.17   There is a specific type of state centralized contract referred to as a Comprehensive Service Agreement (CSA).  Do acquisitions from CSAs trigger the requirements of State Finance Law §§ 139-j and 139-k for State agencies? New FAQ approved by ACPL on April 20, 2006

4.18   State Finance Law §§ 139-j (1) (e) and 139-k (1) (e) exclude a series of transactions from the statutory requirements.  Can you provide additional guidance regarding these exclusions?  Revised September 21, 2006

4.19   How do the new State Finance Law provisions apply to Revenue Contracts? New FAQ approved by ACPL on April 20, 2006

4.20   A “public work” is considered an Article of Procurement under State Finance Law § 139-j (1) (b).  What does “public work” mean under this statute? New FAQ approved by ACPL on April 20, 2006

4.21   Is the definition of Governmental Procurement in State Finance Law §§ 139-j and 139-k intended to be limited to circumstances where the State purchases or leases property or acquires commodities or services for use by the State? New FAQ approved by ACPL on April 20, 2006

4.22   If there are a number of repetitive small purchases under $15,000 that collectively exceed $15,000 from the same vendor within a one-year period, would these purchases trigger the requirements of State Finance Law §§ 139-j and 139-k? New FAQ approved by ACPL on April 20, 2006

4.23   State Finance Law §§ 139-j and 139-k apply to all procurements with an estimated annualized expenditure in excess of $15,000.  What is meant by these terms? New FAQ approved by ACPL on April 20, 2006

4.24   Oftentimes a Governmental Entity will contact vendors for end of fiscal year purchases. Is this type of procurement activity exempt from the new State Finance Law provisions?  New FAQ approved by ACPL on June 8, 2006

4.25   If a Governmental Entity requests that a vendor add a product to a centralized contract, and the vendor uses the existing contract terms and conditions to have the product added, are the new State Finance Law provisions triggered?  New FAQ approved by ACPL on June 8, 2006

4.26   Does the exemption for intergovernmental agreements cover transactions with other kinds of governmental organizations, such as city school districts or foreign governments?  New FAQ approved by ACPL on June 8, 2006

4.27   There is a specific type of purchase from State centralized contracts referred to as “aggregate purchases”.  In this transaction, the State structures an organized purchase from existing information technology (“IT”) contracts based upon leveraging the volume of planned NYS agency purchases to receive the best possible prices.  Do aggregate purchases from State centralized contracts trigger the requirements of SFL §§ 139-j and 139-k?  New FAQ approved by ACPL on September 21, 2006

4.28   The definition of “governmental procurement” in State Finance Law §§ 139-j(1)(e) and 139-k(1)(e) exempts certain kinds of contract amendments from these requirements.  Can you provide additional guidance regarding this exemption?  New FAQ approved by ACPL on September 21, 2006

4.29   My company has a backdrop contract with the Office of General Services (OGS). In accordance with FAQ 4.15, the mini-bid process associated with the backdrop contracts is subject to the new State Finance Law provisions. What am I authorized to do if a released mini-bid violates the contract requirements? For example, if the mini-bid appears to violate the contract requirements about meal breaks, can I communicate with OGS since it is the body responsible for interpreting the contract without running afoul of the requirements of State Finance Law §§ 139-j or 139-k?  New FAQ approved by ACPL on October 12, 2006

4.30   City A, which is not subject to the requirements of State Finance Law §§139-j and 139-k, enters into a technical communication services agreement (referred to as a Master Services Agreement) that permits other entities to also obtain technical services under the Master Services Agreement. The Master Services Agreement does not incorporate the requirements of State Finance Law §§139-j and 139-k. If City B, which is subject to the requirements of State Finance Law §§139-j and 139-k, seeks to obtain technical services under City A's Master Services Agreement, would City B need to comply with the requirements of State Finance Law §§139-j and 139-k?  New FAQ approved by ACPL on February 8. 2007

5. What Actions are Required

5.1    What does the new State Finance Law require of Governmental Entities?

5.2    What does the new State Finance Law require of the business community?

5.3    Once it has been determined that State Finance Law §§ 139-j and 139-k applies, what should a Governmental Entity do?

5.4    How does State Finance Law §§ 139-j and 139-k impact potential Offerers?

5.5    Are there any communications that do not have to be recorded?

5.6   If a contractor hires a lobbyist after the contractor submits its proposal, what are the contractor’s obligations under the State Finance Law provisions?  New FAQ approved by ACPL on June 8, 2006

5.7   State Finance Law §§ 139-j(9) and (10) state that a referral is made to the ethics officer, inspector general, if any, or other official of the procuring Governmental Entity.  Can you provide further clarification regarding the reference to “inspector general, if any”?  New FAQ approved by ACPL on November 9, 2006

6. When do the new State Finance Law provisions take effect?

6.1    When do §§ 139-j and 139-k of the State Finance Law take effect?

7. Designated Contacts

7.1    What is the definition of “Contacts”?

7.2    Do the persons designated by Governmental Entities to be contacted by Offerers regarding Governmental Procurements have to have knowledge of the specifications or other technical requirements of the procurement?

7.3    Are all contacts that a reasonable person would infer are intended to influence a Governmental Procurement and made during the “Restricted Period” required to be recorded and placed in the Procurement Record, or only contacts made to persons other than persons designated by the Governmental Entity as the contact persons for the procurement?

7.4    Can a Governmental Entity have more than one contact person?

7.5    Who should the contact person be?

7.6    What records does the Governmental Entity have to maintain?

7.7    What information must be obtained from the person making the Contact?

7.8    How do you track multiple calls from one person?  Separate records or running log?

7.9    Can you provide clarification regarding the obligation of the Governmental Entity to complete a Record of Contact under the following circumstances?

- Is a Record of Contact Form required from every one on an Evaluation Committee who reviews a written proposal as a result of an RFP?

- Do discussions among agency personnel who review and rate proposals require Record of Contact forms? Do Record of Contact forms have to be prepared each time these discussions occur?

- Is a record of contact form required when agency personnel contact vendors in the competitive range to set up oral presentations?

- Does each negotiating session with an intended awardee under an RFP require completion of a Record of Contact form?
  New FAQ approved by ACPL on October 12, 2006

7.10   After the low bidder is determined, but prior to the conclusion of the Restricted Period, who can the Offerer Contact regarding proposed terms and conditions, such as insurance provisions?  New FAQ approved by ACPL on November 9, 2006

8. Restricted Period and Restricted Contacts

8.1    When does the Restricted Period begin?

8.2    When does the Restricted Period end?

8.3    During the Restricted Period, does the new law place limitations on what can be discussed during a pre-bid conference?

8.4    What can a Governmental Entity do if it needs further information from the industry during the Restricted Period to clarify a question posed?

8.5    Should permissible Contacts be recorded and placed in the Procurement Record?

8.6    During a Restricted Period, State Finance Law § 139-j (3) requires that an Offerer only communicate with the person or persons designated by the procuring Governmental Entity.  It continues by stating that "the following contacts are exempted from the provisions of this paragraph."  What does this exemption mean?

8.7    Oftentimes a solicitation provides that a Governmental Entity will conduct a pre-award interview with the top potential choices responding to a solicitation.  How should we reconcile this process with the new State Finance Law provisions?

8.8    State Finance Law § 139-j (3) (a) (3) establishes participation in a pre-bidders conference as a permissible contact.  However, after vendors have submitted bids, the Governmental Entity typically invites certain vendors back in for a "second round." Sometimes those who made the "first cut" come in together or separately.  Do such second round meetings fall within the permissible contact category?  Do such meetings have to be set forth in the RFP/IFB/solicitation to fall within the permissible contact category?

8.9    During a Restricted Period, can an Offerer communicate with anyone they choose at a Governmental Entity regarding topics not related to the procurement?

8.10  What do the phrases “attempt to influence” and “intended to influence” mean in State Finance Law §§ 139-j and 139-k?  New FAQ approved by ACPL on October 12, 2006

8.11  State Finance Law §139-j requires a Governmental Entity to make a determination about an Offerer’s responsibility.  This determination is made during the Restricted Period and requires the exchange of information between the Offerer and Governmental Entity.  The State Finance Law does not clearly provide a category of Permissible Subject Matter Communications to facilitate this review.  Would Contacts between an Offerer or an Offerer's attorney and the legal department of the Governmental Entity reviewing an Offerer's integrity or responsibility be classified as a Permissible Subject Matter Communication pursuant to State Finance Law §139-j(3)(a)(7)(a) that authorizes a Contact by Offerer with other than the Designated Contact for "review proceedings ... before the governmental entity conducting the procurement seeking a final administrative determination"?  If not, would this Contact between the Offerer or its attorney and legal department of the Governmental Entity be otherwise exempted from the recording requirements of State Finance Law §139-k(4)?  New FAQ approved by ACPL on November 9, 2006

8.12  State Finance Law §139-j(3)(a) lists seven circumstances when an Offerer is permitted to communicate with someone other than the Designated Contact. While these categories appear to address common steps in the procurement process, several other common steps that may involve someone other than the Designated Contact(s) were omitted. Can you provide additional guidance regarding the process to follow for the following procurement steps?

- Interview Scheduling

- Oral presentations by individual Offerers which are usually held before the Governmental Entity's evaluation committee

- Correspondence initiated by the Governmental Entity's evaluation committee requesting clarifications from the Offerer

- Reference checks/interviews with an Offerer's staff members
New FAQ approved by ACPL on February 8. 2007

8.13  One of the permissible contacts occurs when a contract has been "tentatively awarded." Can you tell me what constitutes a "tentatively awarded contract?"  New FAQ approved by ACPL on February 8. 2007

8.14  Does the provision of factual information by an Offerer to a Governmental Entity during the Restricted Period need to be recorded?  New FAQ approved by ACPL on February 8. 2007

9. Responsibility Determinations, Non-responsibility and Debarment

9.1    What is a determination of responsibility?

9.2    Does the new law change the responsibility determination requirements?

9.3    Can an Offerer be debarred for violations of §§ 139-j and 139-k of the State Finance Law?

9.4    How will another Governmental Entity learn whether a vendor has been deemed non-responsible or debarred?

9.5    Can an Offerer be held responsible for impermissible Contacts by another (knowing and willful) party on behalf of the Offerer but without the knowledge of the Offerer? New FAQ approved by ACPL on March 16, 2006

9.6    Does the ineligibility for award after repeated findings of non-responsibility refer to repeated findings in my Governmental Entity or all Governmental Entities? New FAQ approved by ACPL on March 16, 2006

9.7    Does debarment apply to persons as well as to vendors or contractors?  New FAQ approved by ACPL on March 16, 2006

9.8    Does a single finding of non-responsibility under State Finance Law §139-j(10)(b) by a Governmental Entity reported for inclusion on the OGS website preclude award of other procurement contracts to such Offerer?  Or to state another way, if Vendor A is found non-responsible by Governmental Entity 1 due to a knowing and willful impermissible Contact, can Governmental Entity 2 still award a procurement contract to Vendor A?  New FAQ approved by ACPL on November 9, 2006

9.9    Does an Offerer’s inclusion on the List of Debarred Offerers maintained by the Office of General Services under State Finance Law §139-j(10)(b) require the Governmental Entities to remove the Offeror from their bidders list(s) for the four years?  New FAQ approved by ACPL on November 9, 2006

9.10  If an Offerer is determined to be non-responsible twice within a four-year period, is it the Governmental Entity's obligation to debar the Offerer or is the process for debarment carried out by the Office of General Services (OGS)?  New FAQ approved by ACPL on February 8. 2007

10. Legislative Contacts

10.1     Are contacts with the Legislature permittedduring the Restricted Period?

10.2     Are there any limitations on legislative contacts?

10.3     The State Finance Law makes exemptions for the State Legislature and its staff in State Finance Law § 139-j (4) and § 139-k (6) regarding Contacts. Is communication from a member of Congress or NYC Council or their respective staff members similarly exempt from the prohibitions of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

11. Ethics Law

11.1     How do the provisions of the new State Finance Law work with the ethics provisions of the Public Officers Law?

12. Enforcement and Violations

12.1     What should an employee do if s/he becomes aware that an Offerer has violated the requirements regarding permissible contacts under State Finance Law § 139-j (3)?

12.2     How should a Governmental Entity address an allegation of violation of the permissible contact provision?

12.3     Who should be involved with compliance with the new State Finance Law?

12.4     What action does a Governmental Entity need to take if there is failure to comply with the new State Finance Law by an officer or employee?

12.5     If a vendor or contractor violates the State Finance Law §§ 139-j and 139-k, what are the penalties?

12.6     Can a vendor or contractor be debarred for violations of §§ 139-j or 139-k of the State Finance Law?

12.7     Who is to determine whether an Offerer "knowingly and willingly" violates § 139-j of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

12.8     Must a type of trial be conducted to determine whether an Offerer has violated § 139-j of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

12.9     Can a Governmental Entity terminate a contract with an Offerer who has failed to provide information that is complete, true and accurate pursuant to § 139-k (5) of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

12.10  Must an investigation of a proposed awardee for potential violations of State Finance Law §§139-j and 139-k be concluded before the contract can be completed?  New FAQ approved by ACPL on February 8. 2007

13. Model Language and Forms

13.1     Are there forms I can use to make compliance easier?

14. Miscellaneous

14.1     Can you maintain contact records only in an electronic format?

14.2     Are the contact records subject to the Freedom of Information Law (FOIL)?

14.3     What is a procurement record?

14.4     How long must these records be retained?

14.5     How is this information made accessible to the public?

14.6     Should a Governmental Entity develop a written policy or guidelines implementing the new State Finance Law?

14.7     Does §§ 139-j or 139-k of the State Finance Law specify procedures for disciplining employees of a Governmental Entity who violate this law?

14.8     Can a Governmental Entity impose sanctions on Offerers which are more severe than the requirements of §§ 139-j and 139-k of the State Finance Law?

14.9     Does the new law require a centralized collection point or database for the records on Contacts?

14.10    If a Governmental Entity finds that a prospective awardee knowingly and willfully made impermissible Contacts, should the contract be denied?

14.11   Do subcontractors have to provide the affirmations and certifications required by §§ 139-j and 139-k of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

14.12   If the initial estimated annualized value of a contract or agreement is less that $15,000 and subsequent amendments increase the estimated annualized value to greater than $15,000, is a Governmental Entity required to notify the Offerer and obtain an affirmation and certification in accordance with §§ 139-j (6)(b) and 139-k(5)?  New FAQ approved by ACPL on March 16, 2006

14.13   Do State Finance Law §§ 139-j and 139-k address what Governmental Entities can say to other Governmental Entities when they call requesting a reference for a potential Offerer?  New FAQ approved by ACPL on March 16, 2006

14.14   Legislative Law §1-t(e)(1) raises the issue of an Offerer and certain others providing technical services to explain, clarify or demonstrate the qualities, characteristics or advantages of a particular article of procurement under specific circumstances.  How does this language reconcile with the requirements of State Finance Law §§ 139-j and 139-k, which only recognizes “communications” and “Contacts” (defined as attempts to influence)?  New FAQ approved by ACPL on September 21, 2006




1.     Overview

In response to numerous requests for guidance from governmental entities and businesses that are impacted by the new State Finance Law, these Frequently Asked Questions (FAQ) have been developed as model guidelines with the intent that the guidance provided in the FAQs will be revised, updated and supplemented, as appropriate.   The reader is urged to periodically review these materials to determine if additional materials have been posted that may be relevant to its procurement related activities.  The FAQs can be found on the Office of General Services website at www.ogs.ny.gov.

Chapter 1 of the Laws of 2005, as amended, establishes significant changes to the development of procurement contracts with governmental entities.

In 2003, Governor Pataki issued Executive Order Number 127 Providing for Additional State Procurement Disclosure (“EO 127”), to increase disclosure requirements for persons and organizations contacting State government about procurement contracts and real estate transactions.   While EO 127 was subsequently rescinded, its purpose was to require state agencies and certain public authorities to collect and record information from contractors seeking a procurement contract, and those who advocate on behalf of the contractors to influence procurement contracts.

Chapter 1 of the Laws of 2005 (the “Procurement Lobbying Law”) expands upon EO 127 and the former lobbying statute.   Among other things, the new law:

Generally speaking, two related aspects of procurements were amended:  (i) activities by the business and lobbying community seeking procurement contracts (through amendments to the Legislative Law) and (ii) activities involving governmental agencies establishing procurement contracts (through amendments to the State Finance Law).

Additionally, a new section 1-t was added to the Legislative Law establishing an Advisory Council on Procurement Lobbying (Advisory Council).   This Advisory Council is authorized to establish the following model guidelines regarding the restrictions on contacts during the procurement process for use by governmental entities (see Legislative Law §1-t (e) and State Finance Law §139-j).   In an effort to facilitate compliance by governmental entities, the Advisory Council has prepared model forms and language that can be used to meet the obligations imposed by State Finance Law §139-k, Disclosure of Contacts and Responsibility of Offerers.   Sections 139-j and 139-k are collectively referred to as “new State Finance Law.”

The new State Finance Law sections establish newly defined terms that are critical to the understanding of the requirements.   For the reader’s convenience, these defined terms are identified through the use of initial capital letters.   It is strongly recommended that the reader develop a working understanding of these defined terms.

It should be noted that while this Advisory Council is charged with the responsibility of providing advice to the New York Temporary State Commission on Lobbying (Lobbying Commission) regarding procurement lobbying, the Lobbying Commission retains full responsibility for the interpretation, administration and enforcement of the Lobbying Act established by Article 1-A of the Legislative Law (see Legislative Law §1-t (c) and §1-d).   Accordingly, questions regarding the registration and operation of the Lobbying Act should be directed to the Lobbying Commission.

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2.     Additional Help

2.1   Who can I talk to or contact if I need help?

A:  The Advisory Council on Procurement Lobbying has designated the Office of General Services to serve as its secretariat and staff.  Please contact the Office of General Services at the following address for additional help regarding State Finance Law §§ 139-j and 139-k. Please also send any questions or comments you may have regarding the Advisory Council on Procurement Lobbying and its responsibilities and guidance to the Office of General Services:

Office of General Services
Legal Services
41st Floor
Tower Building
G.N.A.R. Empire State Plaza
Albany New York 12242-0001
e-mail:  LegalServicesWeb@ogs.ny.gov
Telephone:  (518) 474-5607

B:  The New York Temporary State Commission on Lobbying (Lobbying Commission) is responsible for the interpretation, administration and enforcement of the Lobbying Act as codified in the New York State Legislative Law.  Please contact the Lobbying Commission at the following address for help regarding registration and lobbying requirements under the Legislative Law:

New York State Temporary Commission on Lobbying
Two Empire State Plaza, Suite 1701
Albany NY  12223-1254
Facsimile (518) 474-7126
e-mail: lobcom@nytscol.org
Telephone (518) 474-7126

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3.      Scope of application of State Finance Law §§ 139-j and 139-k

3.1    Who is covered by the new State Finance Law provisions?

A:  The following Governmental Entities are required to comply with the new State Finance Law provisions when conducting Governmental Procurements:

a.  State Agencies (departments, boards, bureaus, commissions, divisions, offices, councils, committees and officers of the state including those which are temporary);
b.  NYS Senate and Assembly;
c.  Unified Court System;
d.  Public Authorities and Public Benefit Corporations and any subsidiary or affiliate thereof;
e.  Industrial development agencies in jurisdictions with a population of 50,000 or more; and
f.   Local public benefit corporations.

      See State Finance Law § 139-j (1) (a).  The law also covers individuals and entities and /or their employees or other representatives who desire to contact a Governmental Entity about a Governmental Procurement.

3.2      Is Executive Order 127 still in effect?

A:  No. Citing the recommendation of the Advisory Council, on June 30, 2006, Governor George E. Pataki revoked and rescinded Executive Order No. 127.

3.3       How do the new State Finance Law provisions affect the procurement laws that govern the procurement processes of local governmental entities such as cities, towns and counties?

A:  Neither State Finance Law § 139-j nor § 139-k changes the procurement laws of governmental entities such as cities, towns and counties.  Section § 139-j of the State Finance Law imposes restrictions on Contacts with a Governmental Entity during the Restricted Period of a Governmental Procurement.  Governmental Entity, in turn, includes “a municipal agency, as that term is defined in paragraph (ii) of subdivision (s) of section one-c of the legislative law.”  See State Finance Law § 139-j (1)(a)(6).  Such a “municipal agency” consists of “an industrial development agency, located in a jurisdictional subdivision of the state with a population of more than fifty thousand, or local public benefit corporation, as that term is defined in section sixty-six of the general construction law.”  See Legislative Law § 1-c(s).  Thus, the new State Finance Law provisions do not directly affect local governmental entities such as cities, towns and counties.

      The new Lobbying Act provisions do, however, apply to lobbying of a broader category of municipal agencies, defined in paragraph (i) of subdivision (s) of section 1-c of the Legislative Law to include any department, board, bureau, commission, division, office, council, committee or officer of a municipality, whether permanent or temporary, in addition to any industrial development agency and local public benefit corporation, as defined in paragraph (ii) of the same subdivision and described above.

See Legislative Law § 1-c(s).

3.4       What is meant by the term “Offerer”?

A:  “Offerer” is a term defined in State Finance Law.  It refers to 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.

See State Finance Law §§ 139-j (1) (h) and 139-k (1) (h).

3.5       How are industrial development agencies covered?  What activities of an industrial development agency trigger the obligations under the law?  New FAQ approved by ACPL on March 16, 2006

A:  An industrial development agency (IDA) located in jurisdictional subdivisions of the State with a population of more than 50,000 is included in the definition of Governmental Entity under §§ 139-j and 139-k of the State Finance Law.  An IDA that engages in contracts or other agreements for an Article of Procurement involving an estimated annualized expenditure in excess of $15,000 is required to comply with the obligations under §§ 139-j and 139-k of the State Finance Law.

3.6       How does §§ 139-j and 139-k of the State Finance Law apply to cooperative agreements involving agencies of other states where one Governmental Entity is subject to the requirements thereunder and the lead agency (agency awarding the contract) is not?  Is the Governmental Entity that is subject to the law still required to meet the obligations under the State Finance Law when seeking an Article of Procurement under that cooperative agreement?   New FAQ approved by ACPL on March 16, 2006

A: Although operating under a cooperative agreement involving agencies of other states, the Governmental Entity subject to the law must proceed with the Governmental Procurement according to the requirements of §§ 139-j and 139-k of the State Finance Law.

3.7       Are preferred source providers exempted from the requirements of the new State Finance Law provisions?  It is noted that preferred sources have a limited exception from the requirements to register as a lobbyist under Legislative Law, but are not totally exempt.

A: There are different requirements and exemptions provided under the Legislative Law and State Finance Law.  As you noted, the Legislative Law provides a limited exemption from the requirements to register as a lobbyist for preferred sources.  There is no similar exemption provided under the requirements of the State Finance Law.  The exemptions in the State Finance Law are set forth in section 139-j(1)(g) within the definition of "procurement contract".  Accordingly, transactions with preferred sources are governed by State Finance Law §§ 139-j and 139-k.

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4.         Kinds of Transactions Covered by State Finance Law §§ 139-j and 139-k

4.1       What kinds of transactions are covered by State Finance Law §§ 139-j and 139-k?

A:  In general, these provisions apply to every Governmental Procurement involving an estimated annualized expenditure in excess of $15,000 for:

- commodity;
- service;
- technology;
- public work;
- construction;
- Revenue Contract as defined in State Finance Law § 139-j(1)(i);
- the purchase, sale or lease of real property; or
- the acquisition or granting of other interest in real property.

See State Finance Law § § 139-j(1)(e) and 139-j(1)(g).

4.2       Are contracts involving an estimated annualized expenditure under $15,000 covered?

A:  No, these smaller value contracts are not covered by the requirements of State Finance Law §§ 139-j and 139-k.

4.3       What kinds of contracts are not subject to the new State Finance Law requirements?

A:  The following are excluded from the definition of “procurement contracts:”

-   Contracts or other agreements for an article of procurement involving an annualized expenditure of $15,000 or less;
-   Grants;
-   Contracts covered by the Article 11-B of the State Finance Law, Prompt Contracting Law (i.e., any contract providing for a payment under a program appropriation to a not-for-profit organization)
-   Intergovernmental agreements;
-   Railroad and utility force accounts,
-   Utility relocation project agreements or orders; and
-   Eminent domain transactions.

See Legislative Law § 1-c(r), SFL § 139-j(1)(g), and SFL § 139-k(1)(g).

4.4       Do §§ 139-j and 139-k of the new State Finance Law provisions apply to the sale of real property by a Governmental Entity?

A:  Yes.  The law applies to the purchase or sale of real property by a Governmental Entity.  It also applies to purchases or sales of real property interests, such as a lease or an easement, by a Governmental Entity.

See State Finance Law § 139-j(1)(b).

4.5       Do the new State Finance Law provisions apply to real estate transactions?

A:  Yes.  The law applies to the purchase, sale or lease of real property, or an acquisition or granting of other interest in real property.

4.6       How do the new State Finance Law provisions apply to real estate transactions?

A:  The new State Finance Law provisions apply to a real estate transaction at the point in time when the Governmental Entity provides written documentation evidencing its decision or determination to proceed with a real estate transaction which includes the purchase, sale, or lease of real property, and also includes the acquisition or granting of other interest in real property.

See State Finance Law § 139-j (1) (b).

4.7       Do the restrictions on Contacts during the procurement process apply to construction contracts?

A:  Yes, construction contracts with a value in excess of $15,000 are subject to the restrictions on Contacts.

See State Finance Law § 139-j (1) (b).

4.8       What contacts does the new law allow between Offerers and public officials and court officials during the preparation of specifications, bid documents, Requests for Proposals (RFPs), Invitations for Bids (IFBs), or other solicitations, prior to the Restricted Period defined in the statute?

A:  The new State Finance Law states that contacts between the Governmental Entity (public officials and court officials included) and an Offerer are restricted at the point in time when the Governmental Entity issues its first written document soliciting a response from Offerers which is intended to result in a Procurement Contract.  See State Finance Law § 139-j(1) (f).  As such, the new law does not restrict contacts between Offerers and the Governmental Entity prior to the Restricted Period of a Governmental Procurement.  Therefore, communications between Offerers and the Governmental Entity during the preparation of specifications, bid documents, RFPs, IFBs, are not governed by State Finance Law §§ 139-j and 139-k.  Communications at this stage, however, are governed by the provisions set forth at State Finance Law §§ 163 and 163-a and other applicable law, including registration and reporting requirements of the Lobbying Act.

      It is also important to note here that the new law specifically allows Offerers and a Governmental Entity to communicate prior to the Restricted Period in the form of a Request for Information (RFI) by the Governmental Entity and the response thereto by the Offerer.  RFIs are generally used as a means to collect information upon which to base a decision by a Governmental Entity to proceed with a Governmental Procurement; they are not a tool employed to award a Procurement Contract.

4.9       Are there permissible Contacts during the Restricted Period?

A:  Yes.  In general, Contacts must be made to the designated person or persons for the Governmental Procurement, but the following constitute exceptions to this requirement:

-   Submission of a bid, proposal or response for a procurement contract;
-   Submission of written questions when written responses are to be provided to all Offerers;
-   Participation in a pre-bid conference;
-   Complaints by an Offerer to office of general counsel where the designated person for the procurement contract of the Governmental Entity fails to respond in a timely matter;
-   Negotiations with the Governmental Entity after a tentative award;
-   Debriefings about a procurement contract award; and
-   Filing of written disputes in administrative hearings, judicial proceedings and to the attorney general, inspector general, district attorney or state comptroller.

      Impermissible Contact with a Governmental Entity occurs when the Offerer contacts a person in a Governmental Entity who is not the designated contact person for the Governmental Procurement in an attempt to influence that Governmental Procurement.  For example, an Offerer contacts a person, other than the designated person, in the Governmental Entity and engages in communication which a reasonable person would infer was intended to influence the Governmental Procurement.  This Contact with the Governmental Entity is not permitted under the law and is required to be recorded by the person contacted, reported and made a part of the procurement record.

See State Finance Law § 139-j (3).

4.10    Do §§ 139-j and 139-k of the State Finance Law apply to sole and single source contracts?

A:  Yes.  The requirements would be triggered when a Governmental Entity solicits a response from an Offerer with regard to a Procurement Contract, including single and sole source contracts.  An example would be requesting a statement of work from the single or sole source.

4.11    When does the Restricted Period begin in instances where there is no written notification such as in Governmental Procurements involving single and sole source contracts?

A:  In the case of single and sole source contracts, in which Governmental Entities typically do not initiate the bid process with a RFP or IFB, the Restricted Period will begin with the earliest method used by that Governmental Entity to solicit a response from Offerers intending to result in a procurement contract.

See State Finance Law § 139-j (1)(f).

4.12    If a contract is supplemented, does this require providing vendors with notice of the Restricted Period? In addition, when does the Restricted Period start and end for these supplements?

A:  A Governmental Procurement is defined in State Finance Law §§139-j(1)(e) and 139-k(1)(e) as, in pertinent part, " ….(v) 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)." This definition expressly exempts certain kinds of transactions. If the exemption applies, the transaction in question does not trigger the requirements of State Finance Law §§139-j and 139-k. Therefore, amendments that are authorized and payable under the terms of the Procurement Contract as it was finally awarded or approved by the comptroller are not subject to the Restricted Period.

Supplements to a contract incorporating other amendments, renewals, extensions or any other material change in the Procurement Contract resulting in a financial benefit to the Offerer would be subject to the Restricted Period. A supplement to a Procurement Contract that was not contemplated in the original Procurement Contract would not fall within the exemption and would be subject to a Restricted Period, if it meets the definition of a Procurement Contract contained in State Finance Law §§ 139-j (1)(g) and 139-k (1)(g). In such instances, the Restricted Period would begin with the earliest written notice by the Governmental Entity to the Offerer that an amendment, renewal or extension is being requested and end upon final approval of the supplement by the Governmental Entity and, where applicable, the state comptroller.

4.13    When do these requirements apply?

A:  The requirements apply when a Governmental Entity issues a written notice, advertisement or solicitation of a request for proposal, invitation for bids, or solicitation of proposals, or any other method for soliciting a response from Offerers with regard to a Procurement Contract.

See State Finance Law §§ 139-j (1) (f) and § 139-k (1)(f).

4.14    Are the new obligations of State Finance Law activated by:

A.  Receipt of advertising material?

A:  In general, the receipt of advertising material will not trigger the obligations under the State Finance Law because it does not appear that a reasonable person would infer that this communication is intended to influence the Governmental Procurement.

B.  Intra-agency communications?

A:  No, the new State Finance Law is not activated by intra-agency communications.  These provisions govern Contacts by Offerers, which is defined to mean both the individual or entity seeking the procurement contract and an individual or entity “acting on behalf” of the entity seeking the Procurement Contract.

See State Finance Law § 139-j(1)(h).

C.  A response by a contractor to Request for Information (RFI) issued by a Governmental Entity?

A:  No, responding to a RFI is not a triggering activity under the new law and thus it is permissible for an Offerer to contact a Governmental Entity in this regard without triggering the obligations under the law.  An RFI, by design, is a tool used to collect information about possible options and solutions available in the market place.

D.  Do the new State Finance Law provisions apply to a telephone conversation?

A:  Yes, the obligations under the law are activated when an Offerer or anyone working on behalf of the Offerer has any oral, written, or electronic communication with a Governmental Entity which a reasonable person would believe is intended to influence the Governmental Procurement.

See State Finance Law§ 139-j (1)(c).

E.  Must there be financial interest present for there to be an attempt to influence the procurement process?

A:  No.  Simply contacting the Governmental Entity in a manner that a reasonable person would infer constitutes an attempt to influence the procurement during the Restricted Period triggers the law.  A financial interest is not necessary for the law to be activated.  Once the Governmental Entity provides written documentation evidencing its decision or determination to proceed with a procurement, the law is activated and a record is required to be made of the identity of each person or organization that attempts to influence the procurement process regardless of whether such person or organization has a financial interest in the procurement.

See State Finance Law §§ 139-j (1) (f), 139-k (4) and 139-k (1)(f).

4.15    Do §§ 139-k and 139-j of the State Finance Law apply to procurements over $15,000 that are purchased via Purchase Order, even though these types of procurements do not involve contracts or agreements that require review and approval by the Attorney General's Office?   Revised April 20, 2006

A:  The issuance of a purchase order against an OGS centralized contract does not necessarily trigger the new State Finance Law provisions. Generally in such an event, no action is undertaken that would create a procurement contract, and there is no written solicitation that would commence a Restricted Period.  An exception occurs for purchases from centralized contracts that involve a solicitation that triggers a Restricted Period, such as "backdrop" contracts that by design require an Authorized User to engage in a “mini-bid” process with subsequent formal approval of the selected contractor.

     The defined terms used in State Finance Law §§ 139-j and k are of critical importance in determining the scope of its application.  The definition of Restricted Period in general indicates that this time frame commences with the solicitation of a document from an Offerer that is intended to result in a Procurement Contract.  Thus, there is only a Restricted Period when there is both a solicitation and the solicitation would result in a Procurement Contract.  Solicitations that do not result in a Procurement Contract do not trigger the Restricted Period and the statutory requirements.  The term Procurement Contract is also a defined term that references a contract or other agreement for an Article of Procurement involving an estimated annualized expenditure in excess of fifteen thousand dollars ($15,000).  An Article of Procurement is defined as a commodity, service, technology, public work, construction, revenue contract, purchase, sale or lease of real property or an acquisition or granting of other interest in real property, that is the subject of a Governmental Procurement.  The term Governmental Procurement is defined to include five specific activities, each of which relates to the process resulting in a Procurement Contract.  The definition of Governmental Procurement, however, does not include the exercise of provisions of an existing Procurement Contract, such as making a purchase from the contract or other actions undertaken by the contractor to fulfill the contractual obligations.

     In general, all OGS centralized contracts include terms and conditions that authorize the Governmental Entity to obtain more favorable pricing from the Contractors and several centralized contracts sets forth a formalized process of exercising such terms and conditions.  (For an example of processes to obtain better pricing see Appendix B and Appendix B-1, clause 40 entitled “Modification of Contract Terms” for the language regarding more advantageous pricing, and the document entitled “Networking Hardware and Software: How to Purchase off the Contract” at http://www.ogs.ny.gov/purchase/snt/awardnotes/tcgNetworking.htm.)  The exercise of such contractual terms and contracts do not result in aProcurement Contract.

     While the term “solicitation” is undefined in statute, in this context the term is being used as a noun to describe a written document that requests a response from an Offerer that is intended to result in a Procurement Contract.  Common examples of documents that would be considered solicitations are requests for proposals and invitations for bids.  Such term would not include a request for information where such document is not intended to result in a Procurement Contract.

     In contrast, the group of centralized contracts referred to as “backdrop” contracts by design require an Authorized User to engage in a “mini-bid” process with subsequent formal approval of the selected contractor.  The “backdrop” contracts establish a pool of pre-qualified contractors, subject to the same terms and conditions, with “not to exceed” pricing.  A key feature of that “mini-bid” process is that the Authorized User must develop a project definition outlining the specific requirements of the acquisition, soliciting proposals from the backdrop contractors pre-qualified in the area of expertise called for the in project definition.  A separate, unique contract number is assigned, thus establishing a Procurement Contract.  Thus, in the “mini-bid” process there is both a solicitation, and the solicitation results in the issuance of a Procurement Contract.

4.16    When a Governmental Entity makes purchases from state centralized contracts, do the State Finance Law provisions of §§ 139-j and 139-k apply?  New FAQ approved by ACPL on March 16, 2006

A:  Generally, provisions of the State Finance Law do not apply to purchases from centralized contracts. However, where there is a solicitation of offers, such as “mini-bids”, that triggers a Restricted Period, the State Finance Law §§ 139-j and 139-k would apply.

4.17    There is a specific type of state centralized contract referred to as a Comprehensive Service Agreement (CSA).  Do acquisitions from CSAs trigger the requirements of State Finance Law §§ 139-j and 139-k for State agencies?   New FAQ approved by ACPL on April 20, 2006

A:  CSAs allow certain Governmental Entities to purchase consulting/technical services and maintenance/support services from standard contracts made available through the Office of General Services.  The CSAs differentiate how a Governmental Entity obtains these two types of services, with maintenance/support services obtained through a purchase order process.  The acquisition of consulting/technical services involves the development of a scope of work by the State agency and vendor and an additional step, whereby the Office of the State Comptroller reviews the proposed usage when the acquisition exceeds $30,000, examining the State agency’s justification establishing the need for the contractor’s expertise or skills.

     With respect to the requirements of the new State Finance Law provisions, acquisition from the CSAs does not trigger the requirements of the new law.  As discussed in questions 4.15 and 4.16, two factors must be present to trigger the requirements: a solicitation for proposal and the creation of a Procurement Contract.  While the acquisition of consulting/technical services may arguably involve a type of solicitation process through the development of a statement of work, the maintenance/support services do not involve a solicitation.  Further, the review performed by the Office of State Comptroller is not of a Procurement Contract, but instead of the business case established by the State agency for the consulting/technical services.  Unlike the “mini-bids” discussed in questions 4.15 and 4.16, there is no separate Procurement Contract resulting under the CSA.  Detailed information on how to use the CSAs can be found at http://www.ogs.ny.gov/purchase/snt/awardnotes/780CSA_HowToUse.pdf.

4.18    State Finance Law §§ 139-j(1)(e) and 139-k(1)(e) exclude a series of transactions from the statutory requirements.  Can you provide additional guidance regarding these exclusions?    Revised September 21, 2006

A:  Yes.  As noted in question 4.3, certain transactions are excluded from the definition of Procurement Contract and are not subject to these statutory requirements.  The guidance is presented in order of appearance in the statute.

A.    Grants

     While the term “grant” is not defined in the State Finance Law, or elsewhere in New York State law, the term “grant” is commonly used in the context of government spending or receiving funds or property.  It usually refers to situations where the government gives, confers, or receives something of value for services or goods which benefit the public.  Depending upon the underlying authority, a grant can be awarded to individuals, public or private entities, whether for-profit or not-for-profit, that provide support or stimulation to accomplish a public purpose.  The kinds of public purposes supported by grants are wide-ranging, from the arts to criminal justice to health care and prevention to recreational activities.  Underlying authority for the distribution of grants varies, and can include block/formula awards, specific statutory programs, and instances where an entity has been specifically designated by law or legislative resolution to receive such funding for a public purpose.

     It is not possible to list or define all the types of grants that can be conferred or received by a Governmental Entity.  Consistent with the directions in the NYS Accounting System User Procedures Manual, the guidance given under Executive Order Number 127 and Bulletin G-217 issued by the Office of State Comptroller (updated 4/4/06), each Governmental Entity is responsible for determining if a transaction is a “grant.”  Once the Governmental Entity determines that a transaction is a grant, such transaction is exempted from the requirements of State Finance Law §§ 139-j and 139-k.

B.    State Finance Law Article 11-B contracts

     Article 11-B of the State Finance Law, entitled “Prompt Contracting and Interest Payments for Not-For Profit Organizations,” regulates the contract process between not-for-profit organizations (generally recognized as such pursuant to New York State and federal law) and state agencies.  It sets forth prompt contracting and prompt payment procedures for contracts between not-for-profit organizations and state agencies.  See State Finance Law § 179-q through § 179-ee.  The term “not-for-profit organization” has a specific statutory definition.  Such funding is provided through a “program appropriation” as the term is statutorily defined and is part of a program plan developed by  a governmental entity.  Thus, contracts between such not-for-profit organizations and state agencies covered by Article 11-B are not subject to the new State Finance Law provisions.

C.   Program Contracts between Not-For-Profits and the Unified Court System

     The statute was amended in 2006, retroactive to January 1, 2006, to exempt program contracts between not-for-profit organizations (as defined in State Finance Law Article XI-B) and the Unified Court System from the new State Finance Law provisions.

D.   Intergovernmental agreements

     An intergovernmental agreement can generally be defined as an agreement between two or more governments for accomplishing common goals, providing a service or solving a mutual problem.  An intergovernmental agreement includes agreements between the federal government and New York State, New York State and other states, among state agencies, local governments (i.e., town, village, city or county), public authorities, and public benefit corporations created by the State, and between local governments and the State of New York.  For example, the Attorney General has provided guidance on the definition of intergovernmental agreements in a 1980 opinion and stated that these agreements should simply be “understandings about who is to do what, whose budget is to support what expenditures and who is to report to whom about the progress of the undertaking and the like.” 1980 Op. Att'y Gen. 81.  Therefore, the requirements of State Finance Law §§ 139-j and 139-k would not be applicable when a Governmental Entity enters into an agreement or similar document detailing the understanding of the parties with the federal government, another state, another agency, public authority or public benefit corporation created by the State or a local government body.

E.   Railroad and utility force accounts

     A force account is an agreement between a governmental entity and the railroad or utility in which the expenses of the railroad and utility are reimbursed under a statutorily governed force account method of payment.  This method of reimbursement provides for the actual costs of labor, fringe benefit and overhead, and materials used in support of the project.  For example, this mechanism is used by the New York State Department of Transportation (DOT) to reimburse railroads and utilities that relocate or modify their facilities to accommodate the needs of DOT in the construction or safe operation of State highways where such reimbursement for relocation or modification is required.  For example, see Highway Law § 10 (21), (24-b), (24-c) and (26).

F.    Utility Relocation project agreements or orders

     Utility relocation project agreements or orders are a product of the need for the a governmental entity, in certain instances,  to provide compensation for the removal, relocation, replacement or reconstruction of privately, publicly or cooperatively owned utilities as result of work on a project due to construction, reconstruction or maintenance thereof.  For example, see Highway Law § 24-a regarding New York State Department of Transportation highway projects.

G.    Eminent domain transactions

     In general, an eminent domain transaction results in the taking of private real property for government or public use which is subject to just compensation.  There are a variety of different statutes authorizing eminent domain transactions.  In general, these statutes set forth approved methods for determining just compensation.  Thus, these transactions are exempted from the scope of the new State Finance Law provisions.

4.19    How do the new State Finance Law provisions apply to Revenue Contracts?   New FAQ approved by ACPL on April 20, 2006

A:  In general, the new State Finance Law provisions only apply to certain kinds of revenue contracts engaged in by certain Governmental Entities.  State Finance Law §§ 139-j(1)(i) and 139-k(1)(i) set forth two requirements for a revenue contract to be governed by the new provisions.  The first part addresses which Governmental Entities’ revenue contracts are subject to the new requirements.  It provides that only the revenue contracts of the following Governmental Entities are subject:

-   state agencies [State Finance Law § 139-j(1)(a)(1)];
-   public authorities created by the Public Authorities Law [State Finance Law § 139-j(1)(a)(4)];
-   public authorities with at least one gubernatorial appointee or who serves by virtue of office [State Finance Law § 139-j(1)(a)(5)];
-   the industrial development authorities and public benefit corporations covered by this law [State Finance Law § 139-j(1)(a)(6)]; and
-   subsidiaries and affiliates of such a public authority [State Finance Law § 139-j(1)(a)(7)].

     Thus, revenue contracts entered into by either house of the Legislature or the Unified Court System are not covered by these new requirements.

     Second, it provides that the new provisions are only applicable to those revenue contracts where the covered Governmental Entity gives or grants a concession or franchise.  Thus, in order to trigger the new requirements, the written agreement must give or grant a concession or franchise.

     Definitions of “franchise” may vary. General Business Law Section § 681 (3) defines the term “franchise” as a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which: (a) a franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services under a marketing plan or system prescribed in substantial part by a franchisor, and the franchisee is required to pay, directly or indirectly, a franchise fee; or (b) a franchisee is granted the right to engage in the business of offering, selling or distributing goods or services substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising or other commercial symbol designating the franchisor or its affiliate, and the franchisee is required to pay, directly or indirectly, a franchise fee.  Applying this definition in the context of the State Finance Law, a franchise involves a Governmental Entity conferring the right to engage in a specific business of the State of New York or to exercise State powers under a contract or agreement with a Governmental Entity where the recipient is required to pay a fee to engage in such activity.

     While the definition of “concession” also varies, it is generally defined as a government grant for a specific privilege.  A concession is usually given in the context of the private operation of any business within a public park that generates revenue.  In this context, the important aspects of a concession appear to be a service which might properly be operated in a park, terminable at will by the Governmental Entity and granted for a reasonable fee.  According to a 1988 opinion by the Office of the State Comptroller, whether an agreement grants a concession “is a question of fact which must be resolved by examining the elements of the agreement.” Op. State Compt. 88-60.  Therefore, a covered Governmental Entity should make a fact-specific determination whether the terms of a revenue contract involve the giving or granting of a concession.

     Additionally, a covered Governmental Entity must keep in mind that in accordance with statute, revenue contracts with an estimated annualized expenditure under $15,000 would not trigger the new requirements.

4.20    A “public work” is considered an Article of Procurement under State Finance Law § 139-j(1)(b).  What does “public work” mean under this statute?   New FAQ approved by ACPL on April 20, 2006

A:  Public Work is not defined in State Finance Law §§ 139-j and 139-k.  However, the Department of Labor, which is charged with regulating the prevailing wages for public works, defines public work as a project for construction, reconstruction or maintenance done on behalf of a governmental entity where a governmental entity is a party to a contract involving the employment of laborers, workers or mechanics and which the project's primary objective must be to benefit the public.  See Labor Law § 220.  For more information on what constitutes a public work, please contact the New York State Department of Labor, Bureau of Public Works.

4.21    Is the definition of Governmental Procurement in State Finance Law §§ 139-j and 139-k intended to be limited to circumstances where the State purchases or leases property or acquires commodities or services for use by the State?   New FAQ approved by ACPL on April 20, 2006

A:  There is no statutory requirement that the Article of Procurement be used by the Governmental Entity.

4.22    If there are a number of repetitive small purchases under $15,000 that collectively exceed $15,000 from the same vendor within a one-year period, would these purchases trigger the requirements of State Finance Law §§ 139-j and 139-k?   New FAQ approved by ACPL on April 20, 2006

A:  It depends on the nature of the transaction.  As indicated in question 4.15, if acquisitions are made from a state centralized contract that does not require a solicitation that results in a Procurement Contract, then the obligations of State Finance Law §§ 139-j and 139-k are not triggered.  Similarly, if these small purchases are made from an existing single-agency contract, while the establishment of the single-agency contract would probably be governed by the new laws, the individual purchases would not trigger a new Restricted Period.  A Procurement Contract is subject to the requirements of State Finance Law §§ 139-j and 139-k when it has an estimated annualized expenditure that is in excess of $15,000.  Whether a Procurement Contract meets this threshold must be evaluated on an annual basis.

4.23    State Finance Law §§ 139-j and 139-k apply to all procurements with an estimated annualized expenditure in excess of $15,000.  What is meant by these terms?

A:  The definition of Procurement Contract contained in State Finance Law § 139-j(1)(g) and State Finance Law § 139-k(1)(g) imposes these additional requirements on transactions where estimated annualized expenditure will exceed $15,000.  While this phrase is undefined, the rules of statutory construction state that legislative intent should be generally construed according to its natural and most obvious sense.  See McKinney’s Statutes § 94.  The word “estimated” refers to a process undertaken by a Governmental Entity to determine the approximate cost of an acquisition.  The word “annualized” refers to the calculation or adjustment based on a twelve-month period.  Thus, in this context, the Governmental Entity is required to determine how much would be expended for a particular acquisition over a twelve-month period.  If a Governmental Entity elects for administrative convenience or other reasons to use a term of less than twelve months for a contract, then its obligation is to estimate how much will be expended over a twelve-month period to determine whether the new State Finance Law requirements apply.

4.24    Oftentimes a Governmental Entity will contact vendors for end of fiscal year purchases.  Is this type of procurement activity exempt from the new State Finance Law provisions?

A:  The timing of an acquisition is irrelevant and the same rules apply.  For example, if the amount of the purchase falls under the $15,000 estimated annualized expenditure threshold or if the item is acquired through a centralized state contract, §§ 139-j and 139-k of the State Finance Law would not be triggered.  However, a purchase that does not fall under one of the exemptions, exceeds the threshold and results in a Procurement Contract would be subject to the new requirements and obligations of State Finance Law §§ 139-j and 139-k.

4.25    If a Governmental Entity requests that a vendor add a product to a centralized contract, and the vendor uses the existing contract terms and conditions to have the product added, are the new State Finance Law provisions triggered?

A:  In general, when a Governmental Entity purchases off an already existing state centralized contract, the provisions of §§ 139-j and 139-k of the State Finance Law are not triggered.  Most centralized state contracts contain language which allows the vendor to automatically add products to the contract without requiring a contract amendment.   Under these circumstances, §§ 139-j and 139-k of the State Finance Law would not be triggered.

4.26    Does the exemption for intergovernmental agreements cover transactions with other kinds of governmental organizations, such as city school districts or foreign governments?

A:  Yes, the intergovernmental agreement exemption to the provisions of §§ 139-j and 139-k of the State Finance Law would apply to school districts and foreign governments.  An intergovernmental agreement can generally be characterized as an agreement between two or more governments.  If a Governmental Entity enters into an agreement with a school district or foreign government, the requirements of §§ 139-j and 139-k of the State Finance Law would not be applicable.

4.27    There is a specific type of purchase from State centralized contracts referred to as “aggregate purchases”.  In this transaction, the State structures an organized purchase from existing information technology (“IT”) contracts based upon leveraging the volume of planned NYS agency purchases to receive the best possible prices.  Do aggregate purchases from State centralized contracts trigger the requirements of SFL §§ 139-j and 139-k?

A:  As indicated in 4.15 and 4.17, the requirements of §§ 139-j and 139-k of the State Finance Law are not triggered when a Governmental Entity purchases from a state centralized contract because there is no solicitation on the part of the Governmental Entity which results in a Procurement Contract.  Aggregate purchases from a state centralized contract also adhere to this rule.  The PC Aggregate Purchase Initiative, for example, is a contract administered by the Office of General Services (OGS) which solicits bid documents from contractors and awards the purchase to the lowest bidder(s).  The obligations under State Finance Law §§ 139-j and 139-k are followed by OGS when it initially establishes these contracts, but are not applicable during the aggregate purchase process.  The State Finance Law requirements would apply to any subsequent solicitations seeking to create a new procurement contract.

4.28    The definition of “governmental procurement” in State Finance Law §§ 139-j(1)(e) and 139-k(1)(e) exempts certain kinds of contract amendments from these requirements.  Can you provide additional guidance regarding this exemption?

A:  SFL §§ 139-j(1)(e) and 139-k(1)(e) provide the definition of “governmental procurement”.  In pertinent part, it provides:

“Governmental procurement” shall mean:  ….(v) 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) … .

     This definition sets forth several requirements that must be met for the exemption to apply.  First, the transaction in question must be an amendment to a contract that has received all necessary approvals (i.e., finally awarded or approved).  Second, the scope of the amendment must be “authorized and payable” under the terms of the procurement contract as awarded or approved.  For example, it is not uncommon for a construction Procurement Contract to include language in the terms and conditions that authorizes the parties to make changes by altering, adding to or deleting from the scope of work and adjusting the contract price according to a prescribed method to pay for the altered, added or deleted tasks.  All such changes in the work shall be executed in conformity with the terms and conditions of the Procurement Contract.  The changes in work may result from any number of issues, arising in connection with the scope of the original contract,  such as previously unknown conditions or a change necessary in order to perform the work.

     Such a contract amendment would satisfy the two requirements of the exemption and such an amendment would not trigger a Restricted Period.  Similarly, a Procurement Contract for commodities and services might include contractual terms and conditions that authorize the addition of new offerings in a product or service line and establish the means of determining the amount of payment for the new offerings.  Such a contract amendment would also satisfy the two requirements of the exemption and the amendment would not trigger a Restricted Period.  In contrast, an amendment to a Procurement Contract that seeks to add a new phase to a project that was not contemplated in the final contract would not fall within the exemption.

4.29    My company has a backdrop contract with the Office of General Services (OGS). In accordance with FAQ 4.15, the mini-bid process associated with the backdrop contracts is subject to the new State Finance Law provisions. What am I authorized to do if a released mini-bid violates the contract requirements? For example, if the mini-bid appears to violate the contract requirements about meal breaks, can I communicate with OGS since it is the body responsible for interpreting the contract without running afoul of the requirements of State Finance Law §§ 139-j or 139-k?

A:  This question raises the issue of the contract administrator’s responsibilities for ensuring that the terms and conditions of a contract are met. The terms of the contract set out specific instructions for use and provide OGS with binding authority to interpret the contract terms.  A vendor’s communications with OGS about whether the requirements of a backdrop contracts are being followed are a matter of contract administration. OGS, as the Governmental Entity that is obligated to manage the backdrop contracts, may receive such communications which would constitute factual exchanges of information and not be deemed a Contact.  In accordance with its contract administration responsibilities, OGS would communicate with the procuring governmental entity about how it has not met the contractual requirements. To the extent that OGS deems the communication to be outside of the contract administration role and a reasonable person would deem the communication to be an attempt to influence the governmental procurement during the Restricted Period, OGS would need to record it and refer it to the Governmental Entity conducting the mini-bid.

4.30    City A, which is not subject to the requirements of State Finance Law §§139-j and 139-k, enters into a technical communication services agreement (referred to as a Master Services Agreement) that permits other entities to also obtain technical services under the Master Services Agreement. The Master Services Agreement does not incorporate the requirements of State Finance Law §§139-j and 139-k. If City B, which is subject to the requirements of State Finance Law §§139-j and 139-k, seeks to obtain technical services under City A's Master Services Agreement, would City B need to comply with the requirements of State Finance Law §§139-j and 139-k?

A:  A Governmental Entity (state, public authority or locally created) must comply with all applicable rules when making a purchase from a contract regardless of whether the entity that created the contract was subject to such rules. Therefore, Governmental Entities would be required to comply with applicable requirements for entering into contracts as well as the requirements of State Finance Law §§139-j and 139-k when making a purchase from a contract. For example, public authorities making such purchases would not be bound by the requirements of Article 11, but would be bound by the requirements of State Finance Law §§139-j and 139-k. Therefore, if City B is subject to the requirements of State Finance Law §§ 139-j and 139-k, it would need to comply with those requirements when purchasing from a contract regardless of whether those requirements applied to the entity that created the contract.

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5.       What Actions are Required

5.1     What does the new State Finance Law require of Governmental Entities?

A:  The law requires a Governmental Entity to collect and record certain information pertaining to those who contact it in an attempt to influence a Governmental Procurement and restricts the time frame and manner in which the business community may contact a Governmental Entity with regard to attempting to influence a Governmental Procurement.  A Governmental Entity must collect, record, report, if applicable, and maintain specific information about Contacts made during the Restricted Period.  Under the law, the business community is obligated to make only permissible Contacts during the Restricted Period and may only Contact those who are designated by the Governmental Entity regarding a procurement.

5.2       What does the new State Finance Law require of the business community?

A:  Under the law, the business community is obligated to make only permissible contacts during the Restricted Period and may only contact those who are designated by the Governmental Entity regarding a Governmental Procurement.  The business community also has a duty to disclose past findings of non-responsibility.

See State Finance Law §§ 139-j (10) and 139-k (4).

5.3       Once it has been determined that State Finance Law §§ 139-j and 139-k applies, what should a Governmental Entity do?

A.  Require Disclosure

A:  The State Finance Law §§ 139-j and 139-k requires a Governmental Entity to collect certain information about a person or organization contacting it about a Governmental Procurement in attempts to influence such procurement during the Restricted Period.  In addition, a Governmental Entity must obtain information from Offerers about any findings of non-responsibility made within the previous four years by any Governmental Entity and if the finding of non-responsibility was due to (1) engaging in impermissible Contacts with a Governmental Entity or (2) the intentional provision of false or incomplete information to a Governmental Entity.

See State Finance Law§ 139-k (2).

      It is the responsibility of the Governmental Entity to request such information in its solicitation or initial bid documents.

B.  Record keeping by Governmental Entity

A:  Under the State Finance Law § 139-k, it is recognized that a Governmental Entity may be contacted by an individual or entity that reasonably appears to be attempting to influence the procurement during the Restricted Period.  If the Governmental Entity is contacted, it must record the contact, obtaining the following specific information for each contact:

      Information to be obtained consists of:

-   Name of Person and Organization
-   Address
-   Telephone Number
-   Place of Principal Employment
-   Occupation
-   Record Whether the Person/Organization Making the Contact was the Offerer or was Retained, Employed or Designated by or on behalf of the Offerer to appear before or contact the Governmental Procurement.

See State Finance Law § 139-k (4).

      These records of Contact shall be included in the procurement record for the Procurement Contract.

      Good practice by a Governmental Entity will include a written process for consistent record keeping and appropriate referral if someone other than the designated contacts(s) is contacted during the Restricted Period.

C.  Determination of responsibility by a Governmental Entity

A:  The State Finance Law requires a Governmental Entity to make a determination of responsibility before awarding a Procurement Contract to an Offerer.  In addition to responsibility factors such as financial and organizational capacity, legal authority, integrity, and past performance, the new provisions of the State Finance Law now require Governmental Entities to consider in responsibility determinations any violation of the permissible Contact requirements of State Finance Law § 139-j and the disclosure requirements of State Finance Law § 139-k.  There must be a determination of non-responsibility if it is found that the Offerer knowingly and willfully made an impermissible Contact or failed to timely disclose accurate and complete information or otherwise cooperate in providing the information required by State Finance Law § 139-k.

See State Finance Law §§ 139-k (2), (3) and (7).

      A Governmental Entity is precluded from awarding a Procurement Contract to an Offerer that has been determined to be non-responsible because of a knowing and willful violation of the prohibitions of State Finance Law § 139-j against impermissible Contacts during the Restricted Period unless the Governmental Entity finds that the award of the Procurement Contract to the Offerer is necessary to protect public property or public health safety, and that the Offerer is the only source capable of supplying the required Article of Procurement within the necessary timeframe.

See State Finance Law §§ 139-j (10)(b) and 139-k (3).

      In addition, refer to other FAQs herein regarding the obligations of Governmental Entities under the State Finance Law.

5.4     How does State Finance Law §§ 139-j and 139-k impact potential Offerers?

A:  Under the law, subject to the exceptions set forth in § 139-j (3) of the State Finance Law, an Offerer or his/her representative is prohibited from contacting anyone other than the designated contact persons at the Governmental Entity with regard to the Governmental Procurement during the Restricted Period.  Offerers are also required to disclose whether there has been a finding of non-responsibility with regard to their compliance under the law within the past four years.  Furthermore, an Offerer must affirm that they understand and agree to comply with a Governmental Entity’s procedures relating to permissible Contacts during a Governmental Procurement and certify that all information provided to the procuring Governmental Entity is complete, true and accurate.

See State Finance Law § 139-j (6) (b), § 139-k (2), (3), (4), (5) and (6).

5.5       Are there any communications that do not have to be recorded?

A:  Yes.  Communications received by a Governmental Entity from legislative staff or members of the state legislature when the subject Governmental Entity is not the state legislature and he or she is acting in their official capacity are not considered “Contacts” during the Restricted Period and thus shall not be recorded pursuant to this new law.  Also, communications that a reasonable person would infer are not intended to influence a Governmental Procurement do not have to be recorded.

See State Finance Law § 139-j (6).

5.6       If a contractor hires a lobbyist after the contractor submits its proposal, what are the contractor’s obligations under the State Finance Law provisions?

A:  The obligations of the contractor with regard to complying with the requirements of §§ 139-j and 139-k of the State Finance Law in this situation do not change simply because the contractor hires a lobbyist.  Both the contractor and the lobbyist, who would have to meet additional obligations pursuant to the Lobbying Act, would have to comply with §§ 139-j and 139-k of the State Finance Law.

5.7       State Finance Law §§ 139-j(9) and (10) state that a referral is made to the ethics officer, inspector general, if any, or other official of the procuring Governmental Entity.  Can you provide further clarification regarding the reference to “inspector general, if any”?

A:  Reference to the inspector general in §§ 139-j(9) and 139-j(10)(a) of the State Finance Law can be construed as extending an additional choice to a Governmental Entity that has an inspector general within its organization (such as the Department of Correctional Services and the Workers’ Compensation Board) to have that officer conduct the required reviews and investigations.  A Government Entity not having an internal inspector general must otherwise choose to have the requisite reviews and investigations conducted by either its ethics officer or some other person within the organization responsible for reviewing and investigating such matters.

Notably, and regardless of which official is designated to perform these internally-referred reviews and investigations, any Governmental Entity that is also defined as a “covered agency” by Executive Law §51 has an independent and additional legal obligation to separately report to the State Inspector General any information concerning corruption, fraud, criminal activity, conflict of interest or abuse in the procurement process.  The State Inspector General's Office can be reached by e-mail at inspector.general@ig.state.ny.us or by telephone at 1-800-367-4448.

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6.         When do the new State Finance Law provisions take effect?

6.1       When do §§ 139-j and 139-k of the State Finance Law take effect?

A:  Chapter 1 of the Laws of 2005 has a multi-part effective date.  State Finance Law §§ 139-j and 139-k take effect on January 1, 2006.  However, in accordance with section 16 of Chapter 1 of the Laws of 2005, Procurement Contracts for which bid solicitations have been issued prior to the effective date of the act shall be awarded pursuant to the provisions of law in effect at the time of issuance.

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7.         Designated Contacts

7.1       What is the definition of “Contacts”?

A:  Contacts are defined as any oral, written or electronic communication with the Governmental Entity under circumstances where a reasonable person would infer that the communication was intended to influence the Governmental Procurement.

See State Finance Law § 139-j (1) (c).

7.2       Do the persons designated by Governmental Entities to be contacted by Offerers regarding Governmental Procurements have to have knowledge of the specifications or other technical requirements of the procurement?

A:  The statute includes no such requirement.  However, best practices dictate that the contact person or persons have as much of such technical knowledge as possible.

7.3       Are all contacts that a reasonable person would infer are intended to influence a Governmental Procurement and made during the “Restricted Period” required to be recorded and placed in the Procurement Record, or only contacts made to persons other than persons designated by the Governmental Entity as the contact persons for the procurement?

A:  All written or oral communications that a reasonable person would infer are intended to influence the procurement and made during the Restricted Period are “Contacts” as defined by the statute and must be recorded and placed in the Procurement Record regardless of to whom they were directed.

See State Finance Law § 139-k (4).

7.4       Can a Governmental Entity have more than one contact person?

A:  Yes, in fact, the law does not specify the number of contact persons that can be designated.

See State Finance Law § 139-j (2) (a).

7.5       Who should the contact person be?

A:  The Governmental Entity must make the appropriate designation under § 139-j (2) (a) of the State Finance Law.  Best practices dictates that the designated person or persons be informed about the Governmental Procurement.

7.6       What records does the Governmental Entity have to maintain?

A:  During the Restricted Period, the Governmental Entity must maintain a Procurement Record detailing any oral, written or electronic communication which is intended to influence any Governmental Procurement of a Governmental Entity.  The Procurement Record must contain the following information:

a.  Name, address, telephone number, place of principal employment and occupation of the person or organization making the Contact (State Finance Law § 139-k (4)).
b.  Whether the person or organization making the Contact was the Offerer or a lobbyist (State Finance Law § 139-k (4)).
c.  If applicable, a statement providing the basis for termination of a procurement contract award due to the failure of the Offerer to provide a certification that all information provided relating to the requirements of State Finance Law § 139-k are complete, true and accurate (State Finance Law § 139-k (5)).
d.  A statement describing the basis for any award to an Offerer in which the Governmental Entity determines to be non-responsible or have failed to disclose a previous determination of non-responsibility (State Finance Law § 139-j (10) (b)).

7.7       What information must be obtained from the person making the Contact?

A:  The Governmental Entity must obtain the following information from the person making the Contact:

a.  Name, address, telephone number, place of principal employment and occupation of the person or organization making the Contact (State Finance Law § 139-k (4)).
b.  Whether the person or organization making the Contact was the Offerer or was retained, employed or designated by or on behalf of the Offerer or a lobbyist (State Finance Law § 139-k (4)).

7.8       How do you track multiple calls from one person?  Separate records or running log?

A:  There are no uniform directions on this question, so a Governmental Entity is free to decide how to handle multiple calls from one person.  The Governmental Entity may choose to use separate records, a running log or another method as outlined in the policy and procedures of such Governmental Entity.

7.9    Can you provide clarification regarding the obligation of the Governmental Entity to complete a Record of Contact under the following circumstances?

- Is a Record of Contact Form required from every one on an Evaluation Committee who reviews a written proposal as a result of an RFP?

- Do discussions among agency personnel who review and rate proposals require Record of Contact forms? Do Record of Contact forms have to be prepared each time these discussions occur?

- Is a record of contact form required when agency personnel contact vendors in the competitive range to set up oral presentations?

- Does each negotiating session with an intended awardee under an RFP require completion of a Record of Contact form?

A:  State Finance Law §§ 139-j and 139-k obligate a Governmental Entity to create a Record of Contact for every Contact, but not for every communication. It is intended to make a record of those attempts to influence a governmental procurement that occur between an Offerer and a Governmental Entity. There is no obligation to create a Record of Contact when agency personnel review and rate proposals or when agency personnel communicate among themselves about a proposal. Similarly, there is no obligation to create a record when it is a factual exchange of information, such as determining the availability of a vendor to attend a meeting and identification of who will attend the meeting.

A Governmental Entity is obligated to create a Record of Contact when the vendor’s communication constitutes an “attempt to influence” the Government Procurement. Since a negotiation with a vendor is typically an “attempt to influence” then a Record of Contact should be completed by each of the agency personnel and filed in the procurement record. A record would be created for each negotiation session that constitutes a Contact.

7.10    After the low bidder is determined, but prior to the conclusion of the Restricted Period, who can the Offerer Contact regarding proposed terms and conditions, such as insurance provisions?

A:  The State Finance Law provisions recognize two types of “Permissible Contacts.”   The first is commonly referred to as a “Designated Contact” and the second is commonly referred to as a “Permissible Subject Matter Communication”.   See FAQ 4.9 for the listing of permissible subject matter communication established by State Finance Law §139-j(3)(a)(1-7).  All other Contacts are commonly referred to as “Impermissible Contacts.”  A “Designated Contact” is a specific person(s) that has been identified to receive Contacts from an Offerer regarding a procurement.  An Offerer can Contact the Designated Contact during the Restricted Period with any type of communication; and is expressly instructed to direct “attempts to influence” to the Designated Contact.  In addition, if there has been a tentative award of contract, an Offerer may make a Permissible Subject Matter Communication with other employees of the procuring Governmental Entity pursuant to  State Finance Law §139-j(3)(a)(5).  That clause authorizes an Offerer who has been tentatively awarded a contract to Contact additional agency personnel to negotiate terms of the Procurement Contract.  It is important to note that the Permissible Contacts included in the statutory exceptions as Permissible Subject Matter Communications are limited to the specific subject matter contained in the statute.  Contacts (attempts to influence) that fall outside of that specific subject matter are deemed to be Impermissible Contacts.  As a matter of practice, a Governmental Entity often identifies individuals authorized to negotiate contracts on its behalf and an Offerer should direct its communications and contacts in accordance with the direction provided by the procuring Governmental Entity.

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8.         Restricted Period and Restricted Contacts

8.1       When does the Restricted Period begin?

A:  The Restricted Period begins with the earliest written notice, advertisement or solicitation of a request for proposal, invitation for bids, or solicitation of proposals, or any other method for soliciting a response from Offerers with regard to a Procurement Contract.

See State Finance Law §§ 139-j (1) (f) and 139-k (1)(f).

8.2       When does the Restricted Period end?

A:  The Restricted Period ends with the final contract award and approval by the Governmental Entity and if applicable, approval by the state comptroller.

State Finance Law §§ 139-j (1) (f) and 139-k(1) (f).

8.3       During the Restricted Period, does the new law place limitations on what can be discussed during a pre-bid conference?

A:  The law allows Contacts during a pre-bid conference provided for in a request for proposals, invitation for bids, or any other method for soliciting a response from Offerers intending to result in a procurement contract.

See State Finance Law § 139-j (3) (a) (3).

8.4       What can a Governmental Entity do if it needs further information from the industry during the Restricted Period to clarify a question posed?

A:  A Governmental Entity’s designated staff is authorized to seek out information from bidders or potential bidders to explain, clarify or demonstrate the qualities, characteristics, or advantages of an Article of Procurement.

8.5       Should permissible Contacts be recorded and placed in the Procurement Record?

A:  Yes.  Governmental Entities are advised to record and place in the Procurement record any Contact, whether permissible or impermissible, made during the Restricted Period.

See State Finance Law § 139-j (4).

8.6       During a Restricted Period, State Finance Law § 139-j(3) requires that an Offerer only communicate with the person or persons designated by the procuring Governmental Entity.  It continues by stating that "the following contacts are exempted from the provisions of this paragraph".   What does this exemption mean?

A:  Under State Finance Law section 139-j (3) and (4), during the Restricted Period an Offerer is generally only permitted to Contact the procuring Governmental Entity's Designated Contact(s).  Section 139-j(3)(a)(1-7) permits an Offerer to contact additional state employees under certain specified circumstances.  These circumstances are generally reflective of typical steps in a procurement (such as the submission of a proposal or the negotiation of a contract after a tentative award) or of recognized roles provided by other governmental entities during the procurement (such as the filing of a judicial action challenging a procurement decision).  Thus, an Offerer may Contact someone other than the Designated Contact(s) if the communications falls within one of the seven specified topic areas and only if the communications falls within the specified topic area.  Please click here to see the listing of seven specified topic areas.

8.7       Oftentimes a solicitation provides that a Governmental Entity will conduct a pre-award interview with the top potential choices responding to a solicitation.  How should we reconcile this process with the new State Finance Law provisions?

A:  Conducting a pre-award conference as required by the Governmental Entity’s bid solicitation would fit under the exception provided for in State Finance Law § 139-j(3)(a)(3) which allows participation in a conference provided for in a Governmental Entity's solicitation which is intended to result in a procurement contract.  The term “conference” can be broadly interpreted to include all types of pre-award activities that are provided for under a Governmental Entity’s written solicitation in which the result is to provide an opportunity for a Governmental Entity to further evaluate and access the qualifications of the Offerers beyond their written response to the solicitation.

8.8       State Finance Law § 139-j (3) (a) (3) establishes participation in a pre-bidders conference as a permissible contact.  However, after vendors have submitted bids, the Governmental Entity typically invites certain vendors back in for a "second round." Sometimes those who made the "first cut" come in together or separately.  Do such second round meetings fall within the permissible contact category?  Do such meetings have to be set forth in the RFP/IFB/solicitation to fall within the permissible contact category?

A:  The exception pursuant to State Finance Law § 139-j(3)(a)(3) only applies to conferences that are provided for in a request for proposal, invitation for bid, or any other method for soliciting a response from Offerers intending to result in a procurement contract.  Therefore, the Governmental Entity must notify Offerers in its solicitation of any pre-award activities in which the result is to provide an opportunity for a Governmental Entity to further evaluate and access the qualifications of the Offerers beyond their written response.  In this example, the second round and other such meetings would fall under the exception as long the Governmental Entity notified Offerers of this process in its solicitation.

8.9       During a Restricted Period, can an Offerer communicate with anyone they choose at a Governmental Entity regarding topics not related to the procurement?

A:  Yes. The State Finance Law places restrictions on all communications between an Offerer and the Governmental Entity during the Restricted Period only regarding that particular transaction.  Designated Contacts are those employees that are specifically named by the Governmental Entity who can receive all communications from an Offerer during the Restricted Period.  Employees, other than the Designated Contacts, who are engaged in activities which are deemed as permissible Contacts as outlined in § 139-j(3)(a)(1)-(7) of the State Finance Law may receive only those communications related thereto.

8.10    What do the phrases “attempt to influence” and “intended to influence” mean in State Finance Law §§ 139-j and 139-k?

A:  State Finance Law §139-j (3)(b) in part states “[e]ach offerer that contacts a governmental entity about a governmental procurement shall only make permissible contacts with respect to the governmental procurement, which shall mean that the offerer: … shall not attempt to influence the governmental procurement in a manner that would result in a violation ….” State Finance Law §139-j(1)(c) defines “contact” to mean communications where a reasonable person would infer that the communication “was intended to influence the governmental procurement.” Neither provision, however, defines the phrases “attempt to influence” and “intended to influence.”

The New York State Lobbying Act (“Lobbying Act”) also uses the phrase “attempt to influence” and has provided the following guidance regarding the phrase: “Attempts to Influence" means any activity intended to support, oppose, modify, delay, expedite or otherwise affect any of the governmental actions specified in § 1-c(c).”

Under the State Finance Law, the determination of whether a communication is an “attempt to influence” or is “intended to influence” a governmental procurement should be made on a case by case basis through application of the “reasonable person” standard. The question that must be asked is whether or not a reasonable person would believe that the activity, regardless of the form, is intended to make the governmental entity take or not take affirmative action with respect to a governmental procurement. However, it should be noted that the State Finance Law analysis is limited to the duration of the Restricted Period.

8.11    State Finance Law §139-j requires a Governmental Entity to make a determination about an Offerer’s responsibility.  This determination is made during the Restricted Period and requires the exchange of information between the Offerer and Governmental Entity.  The State Finance Law does not clearly provide a category of Permissible Subject Matter Communications to facilitate this review.  Would Contacts between an Offerer or an Offerer's attorney and the legal department of the Governmental Entity reviewing an Offerer's integrity or responsibility be classified as a Permissible Subject Matter Communication pursuant to State Finance Law §139-j(3)(a)(7)(a) that authorizes a Contact by Offerer with other than the Designated Contact for "review proceedings ... before the governmental entity conducting the procurement seeking a final administrative determination"?  If not, would this Contact between the Offerer or its attorney and legal department of the Governmental Entity be otherwise exempted from the recording requirements of State Finance Law §139-k(4)?

A:  Materials and information exchanged between a Governmental Entity and an Offerer in the process of rendering a responsibility determination fall within the Permissible Subject Matter Communication categories set forth at State Finance Law §139-j(3)(a)(5), (6) and (7)(a).  Therefore, an Offerer and its representatives may communicate with other employees of the procuring Governmental Entity regarding a responsibility review and determination.  As noted, the statute obligates the Governmental Entity to make a final determination as to the Offerer’s responsibility, examining whether the Offerer has a prior determination of non-responsibility as a result of a violation of State Finance Law §139-j, the intentional provision of false or incomplete information to a Governmental Entity or the other factors referenced in applicable law (see State Finance Law §139-j(7)).  If such communications are a Contact, then State Finance Law §139-k(4) requires the creation of a record setting forth the required information.

8.12    State Finance Law §139-j(3)(a) lists seven circumstances when an Offerer is permitted to communicate with someone other than the Designated Contact. While these categories appear to address common steps in the procurement process, several other common steps that may involve someone other than the Designated Contact(s) were omitted. Can you provide additional guidance regarding the process to follow for the following procurement steps?

- Interview Scheduling

- Oral presentations by individual Offerers which are usually held before the Governmental Entity's evaluation committee

- Correspondence initiated by the Governmental Entity's evaluation committee requesting clarifications from the Offerer

- Reference checks/interviews with an Offerer's staff members

A:  The State Finance Law requirements only apply to Contacts. Interview scheduling is not ordinarily an activity that a reasonable person would infer was intended to influence the governmental procurement. Accordingly, interview scheduling would not be a Contact and the requirements of State Finance Law §§139-j and k would not be applicable. See also FAQ 7.9.

Second, the State Finance Law provisions provide a Governmental Entity with substantial flexibility regarding the determination of the appropriate Designated Contact(s). A Governmental Entity is free to designate additional Designated Contacts as it goes through the procurement process to ensure that all Contacts are either to a Designated Contact or within the scope of the permissible subject matter communications of State Finance Law § 139-j(3)(a)(1-7). Thus, a Governmental Entity should consider the advisability of naming additional Designated Contacts to cover those circumstances that do not fall within the scope of State Finance Law §139-j(3)(a)(1-7).

Additionally, FAQ 8.7 recognizes that the term "conference" is interpreted broadly to include all types of pre-award activities that are provided for under a Governmental Entity's written solicitation in which the result is to provide an opportunity for a Governmental Entity to further evaluate and access the qualifications of the Offerers beyond their written response to the solicitation. If any of the above referenced activities occur in connection with such a conference, the activities would fall within the permissible subject matter exception set forth in State Finance Law §139-j (3) (a) (3) and the Offerer would be permitted to Contact someone other than the Designated Contact regarding the same.

8.13    One of the permissible contacts occurs when a contract has been "tentatively awarded." Can you tell me what constitutes a "tentatively awarded contract?"

A:  While the concept of a tentative award is not defined in statute, based on a general reading of the State Finance Law, a tentative award refers to a determination by a Governmental Entity as to whom an award of a Procurement Contract should be made. The award is "tentative" until the Governmental Entity determines that the awardee has complied with the requirements of the State Finance Law and other applicable laws and the contract terms are fully worked out, concluded or agreed to through negotiation of the contract.

8.14    Does the provision of factual information by an Offerer to a Governmental Entity during the Restricted Period need to be recorded?

A:  State Finance Law §139-k(4) requires a Governmental Entity to record Contacts received in the Restricted Period and include those records in the procurement record for the procurement contract. Therefore, a Governmental Entity would need to record any oral, written or electronic communications received during the Restricted Period that a reasonable person would infer were intended to influence the procurement. Factual exchanges of information would not need to be recorded unless a reasonable person would infer that the factual exchange of information was intended to influence the procurement process. For example, the following questions may be considered factual exchanges of information:

-  When is the response to the Request for Proposal (RFP) due?
-  Who is the Designated Contact(s)?
-  Can you send the pages I am missing from the RFP?
-  Where do I submit my response to the bid?
-  Am I required to attend a pre-bidder's conference?
-  Where can I get more information about the bid?
-  How long will it take for the award to be finalized?
-  Does this bid allow the use of subcontractors?

This list is not exhaustive and a Governmental Entity should consider each situation on a case-by-case basis in order to determine whether a particular exchange of factual information constitutes a Contact.

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9.         Responsibility Determinations, Non-responsibility and Debarment

9.1       What is a determination of responsibility?

A:  The State Finance Law requires certain Governmental Entities to make a determination of responsibility before awarding a Procurement Contract. The determination must be based on traditional responsibility factors such as financial and organizational capacity, legal authority, integrity, and past performance.  The new provisions of the State Finance Law now additionally require Governmental Entities to consider in responsibility determinations any violations of the permissible Contact requirements of State Finance Law § 139-j and the disclosure requirements of State Finance Law § 139-k.  There must be a determination of non-responsibility if it is found that the Offerer made an impermissible contact or failed to timely disclose accurate and complete information or otherwise cooperate in providing the information required by State Finance Law § 139-k. Often when a procuring entity receives information that calls into question one or more attributes of responsibility, a due process review is undertaken with diligent inquiry into the facts resulting in a determination for the record.

See State Finance Law § 139-j (7).

9.2       Does the new law change the responsibility determination requirements?

A:  Yes, the new law establishes several requirements.  As part of the procurement process, the Offerer must disclose any prior determination of non-responsibility within the last four years if the basis of such determination was a violation of State Finance Law § 139-j or the intentional provision of false or incomplete information to a Governmental Entity.  There must be a determination of non-responsibility if it is found that the Offerer willfully and knowingly made an impermissible Contact or failed to timely disclose accurate and complete information or otherwise cooperate in providing the information required by State Finance Law § 139-k.

See State Finance Law § 139-j (2), (3), (4), and (10).

      For further help and information on the issue of responsibility and making responsibility determinations, refer to the New York State Procurement Bulletin entitled “Best Practices - Determining Vendor Responsibility”, at www.ogs.ny.gov and “Vendor Responsibility: Standards, Procedures, and Documentation Requirements,” at www.osc.state.ny.us/agencies/gbull/g221.htm.

      Specific factors to be considered when determining whether an Offerer has failed to timely disclose accurate and complete information or otherwise cooperate in the implementation of the State Finance Law include, but are not limited to:

-   Has the Offerer made statements indicating an intentional failure to provide information or a refusal to provide information?
-   Has the Offerer refused to provide information?
-   Has the Offerer repeatedly omitted required information?
-   Has the Offerer engaged in one or more flagrant omissions of the required information?
-   Has the Offerer engaged in any impermissible Contacts with the Governmental Entity during the Restricted Period of a Governmental Procurement?

See State Finance Law § 139-j (10).

9.3       Can an Offerer be debarred for violations of §§ 139-j and 139-k of the State Finance Law?

A:  Yes, an offerer can be debarred for 4 years on account of a second violation within a 4-year period of the permissible contact requirements of State Finance Law § 139-j.

See State Finance Law § 139-j (10) (b).

9.4       How will another Governmental Entity learn whether a vendor has been deemed non-responsible or debarred?

A:  Under the law, a Governmental Entity must notify the Office of General Services (OGS) of determinations of non-responsibility or debarment.  OGS is directed to keep a list of debarred vendors and shall make such list available to the public and publish such list on its website.

See State Finance Law § 139-j (10) (b).

9.5       Can an Offerer be held responsible for impermissible Contacts by another (knowing and willful) party on behalf of the Offerer but without the knowledge of the Offerer?  New FAQ approved by ACPL on March 16, 2006

A:  Yes.  Section 139-j (1)(h) defines an Offerer as 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. Therefore, as long as the knowing and willful party was the Offerer’s employee, agent or consultant, the Offerer, even if not aware of any violation, will be held accountable for the actions which violate § 139-j (3) of the State Finance Law.

See § 139-j (1)(h) of the State Finance Law.

9.6       Does the ineligibility for award after repeated findings of non-responsibility refer to repeated findings in my Governmental Entity or all Governmental Entities?  New FAQ approved by ACPL on March 16, 2006

A:  All Governmental Entities must adhere to findings that an Offerer is debarred, which renders the Offerer ineligible for an award because of a second determination of non-responsibility made by any Governmental Entity within four years of an initial determination of non-responsibility due to violations of §§ 139-j and 139-k of the State Finance Law. A list of Offerers which have been determined to be non-responsible and debarred by any Governmental Entity will be maintained by the Office of General Services (OGS), and by law must be published on its website to ensure that all Governmental Entities are aware of which Offerers are non-responsible or debarred.  Governmental Entities are obligated to notify OGS upon making a determination that a bidder is non-responsible or debarred.

      For example, if the Department of Labor (DOL) makes a final determination that Offerer X violated State Finance Law § 139-j (3) , DOL must not award the contract to Offerer X (unless as excepted by § 139-j(10)(b)) and must notify OGS of that determination so that OGS can add Offerer X to the list of non-responsible bidders published on the OGS website.  If the New York State Thruway Authority then finds Offerer X to be non-responsible due to a violation of §§ 139-j or 139-k of the State Finance Law, then Offerer X is ineligible to receive the Thruway Authority contract and the Thruway Authority must report its determination to OGS.  If that second violation (Thruway Authority violation) occurred within four years of the first violation (DOL violation), OGS would add the Offerer to the list of debarred vendors and Offerer X would be ineligible to submit a proposal on or be awarded any procurement contract by any other Governmental Entity for four years from the date of the Thruway Authority determination.

See § 139-j (10)(b) of the State Finance Law.

9.7       Does debarment apply to persons as well as to vendors or contractors?

A:  Yes, the debarment applies to persons as well as to vendors and contractors.  An Offerer is defined as 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.  An individual doing business with a Governmental Entity will be debarred and treated the same with respect to the debarment provisions of State Finance Law § 139-j (10)(b) just as another entity, such as a corporation, doing business with a Governmental Entity.

See § 139-j (1)(h) of the State Finance Law.

9.8       Does a single finding of non-responsibility under State Finance Law §139-j(10)(b) by a Governmental Entity reported for inclusion on the OGS website preclude award of other procurement contracts to such Offerer?  Or to state another way, if Vendor A is found non-responsible by Governmental Entity 1 due to a knowing and willful impermissible Contact, can Governmental Entity 2 still award a procurement contract to Vendor A?

A:  State Finance Law §139-j(10) sets forth the consequences to an Offerer for a single finding of non-responsibility under this statute.  In pertinent part, it provides that if an Offerer is found to have “knowingly and willfully violated the provisions of subdivision three of this section” then there shall be a determination of non-responsibility under this statute and such Offerer, its subsidiaries and related organizations, “shall not be awarded the procurement contract” unless certain factual showings can be established.  There is no debarment unless there is a subsequent determination of non-responsibility due to a violation of State Finance Law §139-j within a four year period from the first determination.  Thus, Governmental Entity 2 is not precluded from awarding a procurement contract to Vendor A if there is a single finding of non-responsibility under State Finance Law §139-j(10)(b).

9.9       Does an Offerer’s inclusion on the List of Debarred Offerers maintained by the Office of General Services under State Finance Law §139-j(10)(b) require the Governmental Entities to remove the Offeror from their bidders list(s) for the four years?

A:  State Finance Law §139-j(10)(b) does not require that Governmental Entities remove a debarred Offerer from bidders’ list(s).  Instead, the statute provides that the debarred Offerer is ineligible to submit a proposal on or be awarded any Procurement Contract for a period of four years from the date of the second final determination that an impermissible Contact was knowing and willful.  Thus, when receiving proposals, it is recommended that the Governmental Entity consult the debarred Offerer listing to ensure that an Offerer is not ineligible to submit a proposal.  The listing can be found at http://www.ogs.ny.gov/aboutogs/regulations/SFL_139j-k/debarred.htm

9.10    If an Offerer is determined to be non-responsible twice within a four-year period, is it the Governmental Entity's obligation to debar the Offerer or is the process for debarment carried out by the Office of General Services (OGS)?

A:  Pursuant to State Finance Law, a Governmental Entity is required to make determinations of responsibility and non-responsibility, which under certain circumstances can result in debarment. When a Governmental Entity determines that an Offerer is non-responsible or debarred, it is required to notify OGS and the Offerer will be added to the lists of Offerers which have been determined to be non-responsible and debarred by any Governmental Entity that OGS maintains and publishes on its website. (See http://www.ogs.ny.gov/aboutogs/regulations/SFL_139jk/NonResponsible.htm and http://www.ogs.ny.gov/aboutogs/regulations/SFL_139j-k/Debarred.htm.) While OGS is required by State Finance Law § 139-j (10)(b) to publish and maintain a list of all Offerers who have been determined to be non-responsible bidders or debarred due to violations of that section, it is Governmental Entities which are required to carry out the process for making a determination of non-responsibility. By operation of statute, a second finding of non-responsibility under State Finance Law §139-j (10)(b) within four years from the date of the prior finding results in debarment. There is not a separate proceeding to determine that an Offerer is debarred.

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10.       Legislative Contacts

10.1    Are contacts with the Legislature permitted during the Restricted Period?

A:  Yes, an Offerer may communicate with a member of the state legislature or legislative staff about a Governmental Procurement being conducted by a Governmental Entity other than the state legislature.  In addition, a member of the state legislature or legislative staff may contact a Governmental Entity about a Governmental Procurement being conducted by a Governmental Entity other than the state legislature as long as that public official or staff member is acting in their official capacity.  See State Finance Law § 139-j (4).  Such contacts shall not be recorded by the Governmental Entity pursuant to the new State Finance Law.

10.2    Are there any limitations on legislative contacts?

A:  Yes, contacts about Governmental Procurements are not allowed by members of the legislature or their staff unless he or she is a designated contact and the procuring Governmental Entity is the State Legislature.  A member of the Legislature or their staff must also be acting in their official capacity if they seek to contact a Governmental Entity about a Governmental Procurement.

See State Finance Law § 139-j (4).

10.3     The State Finance Law makes exemptions for the State Legislature and its staff in State Finance Law § 139-j (4) and § 139-k (6) regarding Contacts.  Is communication from a member of Congress or NYC Council or their respective staff members similarly exempt from the prohibitions of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

A:  No.  The State Finance Law does not specify exemptions for members of the legislature or their staff on the federal or local level.  Therefore, if a Governmental Entity receives a communication from federal or local government officials or their staff members, and that communication falls within the definition of Contact, such Contact must be recorded and maintained in the procurement record.  Consideration must also be given as to whether such Contact must also be reported in accordance with law.

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11.       Ethics Law

11.1    How do the provisions of the new State Finance Law work with the ethics provisions of the Public Officers Law?

A:  The provisions of the new State Finance Law are in addition to those obligations already provided in the Public Officers Law as it relates to Governmental Procurements.  Specifically, under the new State Finance Law provisions, all members, officers or employees of a Governmental Entity have the ethical obligation to immediately notify the ethics officer, inspector general, or other official of the procuring Governmental Entity regarding instances of violations by an Offerer.  In other words, this ethical obligation arises when a member, officer or employee of the Governmental Entity becomes aware that an Offerer has Contacted someone at the Governmental Entity other than the designated contact person or a permissible contact or has attempted to improperly influence a public officer or employee by unethical means prohibited by the Public Officers Law, such as a gift intended to influence or reward official action.  See State Finance Law § 139-j (2) (b) and (8). By definition, a Contact is a 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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12.       Enforcement and Violations

12.1    What should an employee do if s/he becomes aware that an Offerer has violated the requirements regarding permissible contacts under State Finance Law § 139-j (3)?

A. Employee of the procuring Governmental Entity?

A:  If it is the employee of the procuring Governmental Entity, such employee should immediately notify the ethics officer, inspector general (if any) or the official responsible for conducting such investigations.

See State Finance Law § 139-j (8).

B. Employee of a Governmental Entity other than procuring Governmental Entity?

A:  If it is an employee of a Governmental Entity other than the procuring Governmental Entity, such employee should immediately notify the ethics officer, inspector general (if any) or the official responsible for conducting such investigations where such employee works.

12.2    How should a Governmental Entity address an allegation of violation of the permissible contact provision?

A:  A Governmental Entity is required to establish a process for review by its ethics officer, inspector general (if any), or other responsible official.  See State Finance Law § 139-j (9) and (10).  In accordance with State Finance Law § 139-j (10), the person responsible for reviewing or investigating such matters shall immediately investigate the allegation and if sufficient cause exists to believe that the allegation is true, the Governmental Entity shall give the Offerer reasonable notice that the investigation is ongoing and an opportunity to be heard.

12.3    Who should be involved with compliance with the new State Finance Law?

A:  In addition to the person(s) the Governmental Entity is required to designate as a contact regarding a Governmental Procurement, staff of a Governmental Entity whose responsibilities include purchasing, bidding, contracting, and real estate transactions should be involved with compliance with the law.  Compliance will also be required from executive to senior management, legal and ethics staff and staff dealing with financial administration of the Governmental Entity.

12.4    What action does a Governmental Entity need to take if there is failure to comply with the new State Finance Law by an officer or employee?

A:  If it is found that an officer or employee violated the statute, guidelines and procedures regarding implementation of the law, the ethics officer, inspector general, or any other official of the procuring Governmental Entity responsible for reviewing or investigating such matters shall report such instances of violation to the Governmental Entity’s head.

See State Finance Law § 139-j (10) (c).

12.5    If a vendor or contractor violates the State Finance Law §§ 139-j and 139-k, what are the penalties?

A:  If it is found that an Offerer has knowingly and willfully violated State Finance Law § 139-j (3), the Offerer and any of its subsidiaries, related or successor entity will be determined to be a non-responsible bidder and shall not be awarded the contract.  A subsequent finding of non-responsibility by the vendor or contractor within fours years of a prior determination of non-responsibility results in the vendor or contractor being ineligible to submit a proposal on or be awarded any procurement contract for four years from the date of the second finding of non-responsibility.

See State Finance Law § 139-j (10) (b).

12.6    Can a vendor or contractor be debarred for violations of §§ 139-j or 139-k of the State Finance Law?

A:  Yes, a vendor or contractor can be debarred for violations of the new State Finance Law if the vendor or contractor is determined to be a non-responsible bidder after a previous determination within four years.

See State Finance Law § 139-j (10) (b).

12.7                Who is to determine whether an Offerer "knowingly and willingly" violates § 139-j of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

A:  The ethics officer, inspector general, if any, or other official of the procuring Governmental Entity responsible for reviewing or investigating any allegations of violations of the provisions of § 139-j (3) of the State Finance Law is responsible for investigating alleged violations of the law and determining whether the Offerer has knowingly and willingly violated State Finance Law § 139-j. If such violations have been found to exist, the Governmental Entity must find the vendor non-responsible and make the required notifications.

See § 139-j (9), (10)(a) of the State Finance Law.

12.8                Must a type of trial be conducted to determine whether an Offerer has violated § 139-j of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

A:  The State Finance Law requires a Governmental Entity to establish a process for reviewing and investigating any allegations of violations and sets forth the minimum elements that must be incorporated into this process.  Upon notification of any allegation of the violation of the provisions of State Finance Law § 139-j (3), the Governmental Entity’s ethics officer, inspector general, if any, or other official of the procuring Governmental Entity responsible for reviewing or investigating such matters shall immediately investigate such allegation and, if sufficient cause exists to believe that such allegation is true, shall afford the Offerer due process by giving reasonable notice that an investigation is ongoing and providing for an opportunity to be heard in response to the allegation.

      Section 139-j of the State Finance Law does not require a Governmental Entity to conduct an actual trial with regard to investigating alleged violations.  The important issue is to make sure that the Governmental Entity incorporates the elements of due process with regard to any investigation and subsequent findings.  At the very least, a Governmental Entity must provide the Offerer with notice, an opportunity to be heard and a final determination in writing.  A Governmental Entity may choose to follow procedures it may already have in place which address instances where a party wishes to be heard regarding an unfavorable decision of a Governmental Entity.  Governmental Entity staff should be made aware of the necessity of affording the Offerer due process where there is an alleged violation.

See § 139-j (10) (a) of the State Finance Law.

12.9                Can a Governmental Entity terminate a contract with an Offerer who has failed to provide information that is complete, true and accurate pursuant to § 139-k (5) of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

A:  Yes.  Section 139-k (5) of the State Finance Law requires an Offerer awarded a procurement contract to certify that the information it provides pertaining to the disclosure of findings of non-responsibility and debarment are complete, true and accurate and requires a Governmental Entity to incorporate a termination clause in the procurement contract.  The contract can be terminated if it is found that the Offerer provided information that was intentionally false or intentionally incomplete.  Section 139-k (5) goes on further to state that a Governmental Entity shall include in the procurement record a statement describing the basis for any action taken pursuant to such termination provision.

12.10    Must an investigation of a proposed awardee for potential violations of State Finance Law §§139-j and 139-k be concluded before the contract can be completed?

A:  Yes. The State Finance Law provisions set forth several related responsibility determinations about a proposed awardee that must be concluded prior to the completion of a Procurement Contract. The term "proposed awardee" is commonly understood to refer to the person or entity tentatively awarded a Procurement Contract by the Governmental Entity. Specifically, the following determinations are required:

-   State Finance Law §139-j(7) - a Governmental Entity cannot award a Procurement Contract until a final determination of responsibility is made regarding the proposed awardee.

-   As applicable, State Finance Law §163(9)(f) provides that prior to making an award of contract, each state agency shall make a determination of responsibility of the proposed contractor which shall supplement, as appropriate, but not supersede the determination of responsibility that may be required pursuant to State Finance Law §139-k.

-   State Finance Law §139-k(2) requires the collection of specific information on prior non-responsibility determinations, including determinations based on violations of State Finance Law §139-j.

-   State Finance Law §139-k(3) mandates that a Governmental Entity consider the failure of an Offerer to timely disclose accurate or complete information to a governmental entity pursuant to State Finance Law §139-j(2) in determining responsibility of an Offerer.

-   State Finance Law §139-j(10) requires an investigation into allegations that an Offerer violated the provisions of State Finance Law §139-j (3).

-   State Finance Law §139-j (10) (b) states that after such investigation, a finding that an Offerer knowingly and willfully violated §139-j (3) shall result in a determination of non-responsibility and prohibit an Offerer from being awarded the procurement contract unless extenuating circumstances exist as set forth therein.

Both State Finance Law §§139-j(7) and, as applicable, 163(9)(f) prohibit award of a contract to a proposed awardee or proposed contractor if such entity is determined to be non-responsible, with limited exception. Therefore, in order for the Governmental Entity to satisfy these statutory requirements, the investigations of the proposed awardee must be concluded prior to the completion of the Procurement Contract.

Please note that a Governmental Entity is not required to complete its investigation of all Offerers prior to the award of a Procurement Contract. The statutory penalty of not being awarded a contract is only applicable to the proposed awardee; the consequences to an Offerer (who is not a proposed awardee) who violates State Finance Law §§139-j or 139-k do not have the same timing requirements.

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13.       Model Language and Forms

13.1    Are there forms I can use to make compliance easier?

A:  Yes, the Advisory Council on Procurement Lobbying has and will be developing and making available model forms and language to facilitate compliance by a Government Entity with the requirements of the new State Finance Law.  Please click here to see the listing of model language and forms.

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14.       Miscellaneous

14.1    Can you maintain contact records only in an electronic format?

A:  While the law does not specify the format in which the contact record should be kept, it does require that the record be maintained as part of the procurement record.

14.2    Are the contact records subject to the Freedom of Information Law (FOIL)?

A:  Yes.  The Governmental Entity will need to make a determination whether any of the information falls within the exceptions set forth in Public Officers Law § 87.

14.3    What is a procurement record?

A:  The term procurement record is commonly understood to refer to that file that is made and maintained by a Governmental Entity that documents the series of decisions made and approaches taken when conducting a procurement.  For the purposes of the new State Finance Law, the procurement record shall include a record of Contacts about a particular Procurement Contract and a determination of vendor responsibility in the procurement process.

See State Finance Law § 139-k (4).

14.4    How long must these records be retained?

A:  The law does not specify a timeframe for retaining the records, however, these records should be treated as contract files and retained in accordance with the requirements of the Arts and Cultural Affairs Law as set forth in the General Retention and Disposition Schedule for New York State Government Records or other applicable law.  Generally speaking, such contract files should be retained for a period of six years after the termination of the contract or until there is no further legal need for the records.

14.5    How is this information made accessible to the public?

A:  The record of contacts and other related documents are “records” under the Freedom of Information Law.  Access to these records is provided in accordance with the Freedom of Information Law.

14.6    Should a Governmental Entity develop a written policy or guidelines implementing the new State Finance Law?

A:  Yes.  Every Governmental Entity must adopt written policies and guidelines outlining the implementation of State Finance Law §§ 139-j and 139-k.  In addition, every Governmental Entity must incorporate a summary of the policy and prohibitions of the law as well as include copies of rules, regulations and the Governmental Entity’s guidelines and procedures regarding permissible contacts during a Governmental Procurement into their solicitation of proposals or bid documents or specifications for each Procurement Contract.

See State Finance Law § 139-j (6) (a).

14.7    Does § 139-j or § 139-k of the State Finance Law specify procedures for disciplining employees of a Governmental Entity who violate this law?

A:  Governmental Entities are required by State Finance Law § 139-j (6) (a) to develop their own policies and procedures regarding Contacts and retain the authority to discipline their own employees for violations.

14.8    Can a Governmental Entity impose sanctions on Offerers which are more severe than the requirements of §§ 139-j and 139-k of the State Finance Law?

A:  The law does not allow Governmental Entities to impose more severe sanctions on offerers than permitted by the non-responsibility and debarment provisions of State Finance Law §§ 139-j and 139-k.

14.9    Does the new law require a centralized collection point or database for the records on Contacts?

A:  The new State Finance Law does not require a centralized record collection point.  All contact information must be maintained in the procurement record.  A Governmental Entity must ensure that information recorded by staff is also included in the procurement record for compliance with the new State Finance Law.  Inclusion in the procurement record will also ensure the public may have access to that information.

14.10  If a Governmental Entity finds that a prospective awardee knowingly and willfully made impermissible Contacts, should the contract be denied?

A:  Yes.  The contract should be denied to a prospective awardee that has been found to have engaged in impermissible Contacts with a Governmental Entity.  However, this determination does not preclude such Governmental Entity or another Governmental Entity from awarding such vendor another Procurement Contract if this denial is the vendor’s first determination of non-responsibility in four years pursuant to §§ 139-j and 139-k of the State Finance Law.

14.11  Do subcontractors have to provide the affirmations and certifications required by §§ 139-j and 139-k of the State Finance Law?  New FAQ approved by ACPL on March 16, 2006

A:  The new State Finance Law affirmation and certification provisions apply only to the Offerers that would enter into the procurement contract.  If the subcontractor does not submit the offer or sign the procurement contract, the affirmation and certification provisions of State Finance Law §§ 139-j and 139-k are not applicable.

14.12  If the initial estimated annualized value of a contract or agreement is less that $15,000 and subsequent amendments increase the estimated annualized value to greater than $15,000, is a Governmental Entity required to notify the Offerer and obtain an affirmation and certification in accordance with §§ 139-j (6) (b) and 139-k (5)?  New FAQ approved by ACPL on March 16, 2006

A:  The definition of Governmental Procurement includes renewals and amendments.  To the extent an amendment increases the estimated annualized expenditure over $15,000, the requirements of the new State Finance Law provisions are triggered.

14.13  Do State Finance Law §§ 139-j and 139-k address what Governmental Entities can say to other Governmental Entities when they call requesting a reference for a potential Offerer?  New FAQ approved by ACPL on March 16, 2006

A:  The new State Finance Law provisions do not apply to communications between one Governmental Entity and another regarding requests for information about a potential Offerer’s performance.

14.14    Legislative Law §1-t(e)(1) raises the issue of an Offerer and certain others providing technical services to explain, clarify or demonstrate the qualities, characteristics or advantages of a particular article of procurement under specific circumstances.  How does this language reconcile with the requirements of State Finance Law §§ 139-j and 139-k, which only recognizes “communications” and “Contacts” (defined as attempts to influence)?

A:  The State Finance Law provisions do not differentiate between types of information provided, but instead focus their analysis on whether under the circumstances a reasonable person would infer the communication was intended to influence the governmental procurement [see State Finance Law §139-j(1)(c)].  The process provided in Legislative Law §1-t(e)(1) authorizes the communication of factual information about an article of procurement in accordance with the terms of the procuring governmental entity’s solicitation or guidelines and procedures.  Guidance has been previously provided that this type of information exchange is permitted under the permissible subject matter communications listed under State Finance Law §139-j(3)(a)(3) [see FAQ 8.8].  To the extent that such an exchange is determined by a reasonable person to constitute a Contact (attempt to influence), a record of Contact shall be prepared and filed in the procurement record.

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