By Christopher Hughes DISCLAIMER The views expressed in this presentation are not meant to offend any party These have been collected from various public sources and are being used as teaching moments In reviewing this presentation always consult with your legal counsel before implementi ID: 1044151
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1. New (Non-Legislative) Developments with Procurement in the State of UtahBy Christopher Hughes
2. DISCLAIMERThe views expressed in this presentation are not meant to offend any party. These have been collected from various public sources and are being used as “teaching moments”. In reviewing this presentation always consult with your legal counsel before implementing any changes to your procurement process. Also, and most important, it is not wise to ever say in a meeting “because Chris said so in a training”. Please educate yourself on all of the examples discussed today, so that you can become the best public procurement professional you can be. And consult with your legal counsel before you become the “best” public procurement professional you can be.
3. Virtual Presentation DisclosureThis virtual presentation is occurring from my home. So I apologize now for any yelling, crying, barking, or sudden moments of silence that occur during this presentation. I have taken every known precaution to ensure that the room I am in remains quiet, but my current co-workers do not adhere to the social norms of a traditional office. As such, I may need to mute myself in order to stop: a fight; an accident; a mutiny; or any other unexplainable event that kids create.Thank you for your patience.
4. Before we begin… Let us always remember
5. Recent Appellant Court Decision
6. So what happened… In simple termsICS Corrections (the Petitioner) filed an appeal of a protest decision to the Utah Procurement Policy Board.The Utah Procurement Policy Board denied the appeal because the Petitioner did not include a copy of the written protest decision.
7. Language from the DecisionCf. Pugh v. Draper City, 2005 UT 12, ¶¶ 3, 15–17, 114 P.3d 546 (explaining that language in a statute requiring election officers to remove a candidate’s name from the ballot if the candidate failed to timely file an interim report of campaign contributions and expenditures supported a determination that the filing deadline was mandatory). And thus, strict compliance was required. See Moore v. Schwendiman, 750 P.2d 204, 206 (Utah Ct. App. 1988) (“[O]ne must comply precisely with a mandatory requirement or the transaction or process is invalidated.”).“Once [a] statute is determined to require strict compliance, all bets are off for any actions other than exactness.” Salt Lake City Corp. v. Kunz, 2020 UT App 139, ¶ 35. Thus, the Board did not clearly err, nor did it act arbitrarily or capriciously, in dismissing CenturyLink’s appeal.
8. Language from the DecisionCONCLUSION¶10 In light of the statutory language, it is clear that the requirements for filing an appeal with the Board demand strict compliance. The failure to strictly comply justified the Board’s dismissal of the appeal. Accordingly, we decline to disturb the Board’s dismissal decision.
9. SO WHAT CHRIS?!??!!??! I have legal counsel… I don’t need to read this opinionThe word “shall” shows up in the Utah Procurement Code ___ times.231The majority of these “shalls” primarily pertain to our responsibilities as procurement professionals.63G-6a-603 Invitation for bids -- Requirements -- Publication.(1) A procurement unit that intends to award a contract for a procurement item using the bidding process shall issue an invitation for bids.(2) A procurement unit shall include in an invitation for bids:
10. SO WHAT DOES THIS MEAN….It means our solicitations must follow certain requirements.If language requires us to do something then we must do it.“[O]ne must comply precisely with a mandatory requirement or the transaction or process is invalidated.”“Once [a] statute is determined to require strict compliance, all bets are off for any actions other than exactness.”
11. Application…First, “shall” means “must”.So…Utah Code Section 63G-6a-703:(2) A procurement unit shall include in a request for proposals:(a) a description of the procurement item that the procurement unit seeks;(b) instructions for submitting a proposal, including the deadline for submitting a proposal;(c) the objective criteria, including, if applicable, cost, and subjective criteria that the procurement unit will use to evaluate proposals;(d) information about the time and manner of opening proposals; and(e) terms and conditions that the procurement unit intends to include in a contract resulting from the request for proposals process.
12. Special Audit by State Auditor’s Office
13. What did the Audit Say?“We analyzed various aspects of the evaluation and award processes. We note concerns about certain factors and conditions that call into question the independence of the process.”
14. Specifically…Significant Score Correlation: Two committee members’ initial (raw) scores (the Former Director and the Deputy) were highly correlated. For example, among their top ten scoring applicants, they both ranked the same seven applicants in similar order.Significant Modifications to Scores Aligned with Senior Management Preferences: No significant adjustments were made to the Former Director’s or the Deputy’s raw scores. However, significant adjustments were made to the raw score of other UDAF staff serving as committee members, resulting in their final scores being more aligned with those of senior management.
15. And more…Possible Conflict of Interest Not Disclosed: The Former Director asserted that she had no conflicts of interest, and the possible conflict of interest was undisclosed. Non-compliance with the disclosure requirement impairs transparency of the process.
16. Recommendations…We recommend that …:Implement blind evaluations, facilitated by Purchasing, to help prevent
17. In practice…First, we are only as good as the information provided to us. And no amount of legislative action can fix the procurement process if information is withheld or not disclosed to our procurement offices.Second, a true “blind” evaluation process in practice is very difficult because must ensure that the following are not provided to the evaluation team:Company name;Names;Addresses;Client list;Etc.
18. Evaluation Committee Members (R33-7-703 and 705)Prior to participating in any phase of the RFP process, all members of the evaluation committee must sign a written statement certifying that they do not have a conflict of interest as set forth in Section 63G-6a-707 and Section R33-24-107.Using the provisions set forth in Section R33-7-705, the evaluation committee shall exercise independent judgement in the evaluation and scoring of the non-priced technical criteria in each proposal.Evaluators must not allow their scoring to be inappropriately influenced by another person's wishes that additional or fewer points be awarded to a particular offeror
19. A Limited Review of State Emergency Contracting Practices by the Office of the Legislative Auditor General
20. What it says…“Utah Code 63G-6a-803 anticipates the need for periodic emergency purchases to “mitigate a circumstance that is likely to have a negative impact on public health, safety, welfare, or property.” Anticipating the impacts of COVID-19 on public health, Governor Herbert’s State of Emergency declaration on March 6, 2020 led the Director of the Division of Purchasing to allow for statutory emergency procurement provisions. As a result, state agencies have spent approximately $97 million as of July 10, 2020 on personal protective equipment (PPE) and other supplies and services outside of the normal procurement process, …”
21. What it says…“We did not observe any violations of statute and noted that the vast majority of purchases appear to be appropriate. The swift onset of the COVID-19 virus created a scarcity of materials leading the state to speedily bid against other states, municipalities, countries, and the private sector for some supplies. To the credit of those working on emergency procurements, they were able to procure much needed supplies in the face of an uncertain pandemic.”
22. It continues… “However, while the state took advantage of the flexibility component with the Twenty contract, based on interviews we conducted and documentation we reviewed we believe there could have been more room for competition.”
23. Lessons Learned…Improved communication and collaboration were a consistent theme.Include in contract negotiations thoseactors that may oversee the contractEnsure concerns raised by legal counsel are carefully considered Notify other relevant agencies of the desire to procure contracts Current statute may be outdated in that technology has allowed for improved competition in a short amount of time for procurement even during an emergencyInclude state purchasing expertise as much as possibleIf there is a private and public partnership, be clear on requirements for each partyUtah Code for emergency procurement does not contemplate the different situations of what constitutes an “emergency”Certain emergency procurements may not need to be fulfilled in such a short timeframe, allowing for greater competition• To prepare for future emergencies, predrafted solicitations that are reviewed on a regular basis and predetermined stakeholders should be included innegotiations
24. In practice… In the next emergency…Public buyers have several options they can consider, which may be considered in a “waterfall” approach during an emergency/urgent situations:Firstly, public buyers have access to thousands of pre-negotiated contracts established by the Division of Purchasing or other agency contracts that have been negotiated by other agencies . These contracts have already gone through a competitive, standard procurement process.Secondly, public buyers can utilize the small purchase procurement processes to make quick purchases after quotes from at least two vendors. The quotes can be completed by telephone, email, or other electronic process. See Utah Code 63G-6a-506, Utah Administrative Rules R33-5-107 and R33-5-108. To resolve short term emergencies.Thirdly, in cases of urgency they can avail themselves of possibilities to substantially reduce the deadlines to accelerate open or restricted procedures. See Utah Code 63-6a-112(2) .Fourthly, should those flexibilities not be sufficient, a negotiated procedure without publication can be imagined. Eventually, even a direct award to a preselected vendor could be allowed, provided the latter is the only one able to deliver the required supplies within the technical and time constraints imposed by the extreme urgency. See Utah Code 63G-6a-803.Note: State Purchasing will be issuing a Proposed Guidance on Emergency Purchasing soon.
25. LIMITED REVIEW OF STATEEMERGENCY PROCUREMENTS ANDEMERGENCY RESPONSE
26. Some of the same, but some differences…B. Lack of Documentation of Reasonable Due DiligenceGOMB determined the vendors used and negotiated the prices for those goods and services. Often, the approvals were verbal and not documented. In addition, the Governor’s Office represented that, “any competitive cost analysis was done informally based on the best knowledge, experience, and judgment of respective decision-makers and advisors at that time.” If written documentation exists of a competitive analysis, the Governor’s Office was unable to provide it to us for this review.State Administrative Rule R33-8-401(5) indicates that “While a standard procurement process is not required under an emergency procurement, when practicable, procurement units should seek to obtain as much competition as possible through use of phone quotes, internet quotes, limited invitations to bid, or other selection methods while avoiding harm, or risk of harm, to the public health, safety, welfare, property, or impairing the ability of a public entity to function or perform required services.”
27. Lessons learned from this auditDDODOCDOCUDOCUMDOCUMEDOCUMENDOCUMENT, DOCUMENT, and DOCUMENT AGAINAND USE YOUR PROCUREMENT OFFICE
28. Lesson from COVID
29. Questions, Comments, or Accidently unmuting your microphone