Transcript Selling Your Products and Services To the State of Florida

Best Practices When Contracting
With State & Local Government
United Partners for Human Services
The 15th Annual Conference for Excellence in
Nonprofit Management & Leadership
May 14, 2014
Karen D. Walker
Executive Partner
Holland & Knight LLP
315 S. Calhoun Street, Suite 600
Tallahassee, Florida 32301
(850) 425-5612
[email protected]
1
Bidding on Government Contracts
2
Procurement
Types of Competitive Solicitations:
• Invitation to Bid
• Request for Proposals
• Invitation to Negotiate
3
Procurement
Purchases That Do Not Require Competition:
• Sole source purchase
• Exempt purchase
• Purchase below specified dollar threshold ($35,000 for state
contracts)
• Emergency purchase
4
Procurement
Tips for Bidders:
• Highlight the mandatory requirements of the solicitation and make
sure you meet all such requirements (pay attention to use of "shall" or
"must").
• Review the solicitation document (and any addenda) immediately
upon receipt. For state procurements (and some local government
procurements) you have a 72 hour window to protest any
specifications that you cannot live with or your rights are waived.
• Use the question and answer process to seek clarification regarding
any aspect of the solicitation that you do not understand.
5
Procurement
Tips for Bidders (continued):
• Do not take exception to the specifications or include conditions or
assumptions in your proposal, unless authorized by the specifications.
• Fully disclose all information required by the specifications.
• Monitor postings relating to the procurement. For state procurements
(and some local governments) you only have 72 hours to file a notice
of intent to protest any contract award or you waive your rights.
6
Ethical Considerations
• Cone of Silence
• Procurement Lobbying Registration and Reporting –
§ 112.3215, Fla. Stat.
• Expenditure Prohibitions and Gift Law, §§ 112.3148,
112.3215, Fla. Stat.
7
Contract Negotiations
Unique Provisions in Florida Government Contracts
• No indemnification by the public agency.
• Requirement that bills for fees or other compensation for services or
expenses be submitted in detail sufficient for a proper preaudit and
postaudit. § 287.058, Fla. Stat.
• Requirement that bills for any travel expenses must be submitted in
accordance with Section 112.061, Florida Statutes. § 287.058, Fla.
Stat.
8
Contract Negotiations
• A provision allowing unilateral cancellation by the agency for refusal
by the contractor to allow public access to all documents, papers,
letters, or other material made or received by the contractor in
conjunction with the contract, unless the records are exempt from s.
24(a) of Art. I of the State Constitution and Section 119.07, Florida
Statutes. § 287.058, Fla. Stat.
• A provision dividing the contract into units of deliverables that must be
received and accepted in writing by the contract manager prior to
payment. § 287.058, Fla. Stat.
• A provision specifying the financial consequences the agency must
apply if the contractor fails to perform in accordance with the contract.
§ 287.058, Fla. Stat.
9
Contract Negotiations
• Termination for non-appropriation. § 287.0582, Fla. Stat.
("The State of Florida's performance and obligation to pay
under this contract is contingent upon an annual
appropriation by the Legislature.")
• Audit rights.
• Intellectual property ownership.
• Sponsorship - § 286.25, Fla. Stat.
10
Contract Negotiations
Considerations for Nonprofits in Contract Negotiations:
• You can ask for changes in negotiations.
agreement of both parties.
A contract requires
• Make the contract as specific as possible, especially with respect to
deliverables and reports.
• Avoid language that gives the agency or contract manager unbridled
discretion when approving or disapproving deliverables for payment.
• Although financial penalties for non-performance are required to be
specified, that does not necessarily mean that the contractor must
agree to liquidated damages.
11
Government
Contract Performance
12
Subcontracting
Selection of Subcontractors
• Conduct due diligence on prospective subcontractors.
• Most state and local governmental agencies must approve
subcontractors.
13
Subcontracting
Development of the Subcontract Document
• Most state and local government contracts require certain provisions
to flow down to subcontractors. These usually include things like
record keeping and audit requirements.
• In developing subcontracts, all provisions required by the prime
contract to apply to subcontractors must be included in the
subcontracts.
• Subcontracts should also be developed to include other standard
provisions designed to protect the prime contractor such as
indemnification, insurance requirements, intellectual property rights,
and audit rights.
• Give the prime contractor the right to terminate the subcontract without
cause, if at all possible.
14
Subcontractor Performance
• Remember that the prime contractor is responsible to the
public agency for the work of the subcontractor.
• Regularly monitor subcontractor performance.
• Flow through financial penalty provisions to subcontractors
so that you can look to a subcontractor for relief if you are
subjected to a financial penalty due to a subcontractor's nonperformance.
15
Contract Compliance
Increased focus on governmental accountability in contracting in Florida
means increased focus on contractor compliance.
• Transparency Florida
– FACTS (on-line access to government contracts)
– State Contract Audits
For Florida state contracts that involve state funding or state or federal
financial assistance, Florida law now requires such contracts to include a
financial penalty provision for non-performance. § 215.971, Fla. Stat.;
§ 287.058, Fla. Stat.
16
Contract Compliance
Default
• Rule 60A-1.006 sets forth the procedure by which a
contractor may be declared in default by a state agency.
• The agency must notify vendor in writing of failure to perform
and provide a time certain for correcting the failure.
• Unless the contractor corrects its failure to perform within the
time provided, or the agency determines on its own that the
failure to perform is legally excusable, the agency is required
to find the contractor in default.
17
Contract Compliance
Default (continued)
• Upon finding the contractor in default, the agency is to issue
a second notice stating: (a) the reasons the contractor is in
default, (2) that the agency will reprocure or has reprocured
the commodities or services, and (3) the amount of the
reprocurement, if known.
• The defaulting contractor is not eligible for award of a
contract by the agency unless the agency is reimbursed for
all of its reprocurement costs.
18
Contract Compliance
Tips for Avoiding Compliance Issues
• Keep detailed records of all payments received and expenditures made
with contract funds.
• Make sure all contract deadlines are met.
• Only charge allowable costs to the contract. If federal funds are
involved, make sure you comply with applicable federal laws and
regulations, including OMB circulars (such as OMB Circular A-122Cost Principles of Non-Profit Organizations).
• Correspondence does not amend a contract, only a signed contract
amendment changes the contract terms.
• Keep lines of communication open with the public agency.
19
Contract Compliance
Considerations Useful for Avoiding Compliance Issues (continued)
• Cooperate with audit or monitoring requests that comply with audit or
monitoring rights in contract.
• Respond promptly to notices of non-performance or other deficiencies
and complete any corrective action in a timely manner.
• Never spend government contract funds on lobbying.
• Submit audits as required under audit language of contract and the
Florida Single Audit Act, § 215.97, Fla. Stat.
20
Open Government Issues
There are two different types of open government laws in Florida:
(1) The Sunshine Law (§ 286.011, Fla. Stat.) - the open
meetings law; and
(2) The Public Records Act (Chapter 119, Fla. Stat.)
the open records law.
-
21
Requirements of the
Sunshine Law
(1) Open Meeting
(2) Reasonable Notice
(3) Minutes
22
Requirements of the
Public Records Act
An agency that has custody of a public record must:
(1)
permit the record to be inspected and examined by any person
desiring to do so at a reasonable time, under reasonable
conditions, and under the supervision of the custodian of the
records or a designee;
(2)
furnish a copy of the record upon payment of a fee (if not
prescribed by law, the fee cannot exceed 15 cents per onesided copy or 20 cents per two-sided copy);
23
Requirements of the
Public Records Act (continued)
An agency that has custody of a public record must:
(3)
delete or excise from the records produced only those portions
of the records that are subject to an exemption from the Public
Records Act; and
(4)
state the basis of any exemption applicable to the records
requested, including the statutory citation, and if requested, the
reasons for the conclusion that the record is exempt.
§ 119.07, Fla. Stat.
24
Applicability of Sunshine Law and
Public Records Act to Non-Profit
Contracting With Government
Definition of “agency” in the Public Records Act includes any
“private agency, person, partnership, corporation, or business
entity acting on behalf of any public agency.” § 119.011(2),
Fla. Stat.
Courts and the Florida Attorney General look to applicability of
Public Records Act to determine applicability of the Sunshine
Law and vice versa. When in doubt, the applicability of both
are broadly construed.
25
Applicability of Sunshine Law and
Public Records Act to Non-Profit
Contracting With Government
The fact that a private entity has a contract with a public agency
alone does not subject the private entity to the Public Records Act.
A private entity can be subject to the Public Records Act if:
• It has contracted for services where it steps into the shoes of the
public agency to perform what would otherwise be a public function;
• It meets the “totality of the factors test” articulated by the Florida
Supreme Court; or
• The contract language itself makes the private entity subject to the
Public Records Act.
26
Applicability of Sunshine Law and
Public Records Act to Non-Profit
Contracting With Government
The factors considered by courts in applying the “totality of the factors”
test include (continued):
• the extent of a public agency’s involvement with, regulation of, or control
over the private entity;
• whether the private entity was created by the public agency;
• whether the public agency has a substantial financial interest in the
private entity; and
• for whose benefit the private entity is functioning.
News & Sun-Sentinel Co. v. Schwab, Twitty & Hanser Architectural Group, Inc., 596 So. 2d
1029, 1031 (Fla. 1992).
27
Public Records Requirements for
Services Contracts:
HB 1309 (2013) - Now Codified at
Section 119.0701, Fla. Stat.
Each services contract entered into by any state or local
governmental agency with a contractor who is acting on behalf of
the agency as provided in Section 119.011(2), Florida Statutes,
must include provisions that require the contractor to:
• Keep and maintain records as required by the public agency.
• Provide the public with access to public records on the same
terms and conditions as the public agency.
28
Public Records Requirements for
Services Contracts:
HB 1309 (2013) - Now Codified at
Section 119.0701, Fla. Stat.
(continued)
• Ensure that confidential and exempt records are not disclosed
except as authorized by law.
• Meet all requirements for retaining public records and transfer, at no
cost, to the agency all public records in the possession of the
contractor upon termination of the contract. Electronically stored
records must be provided in a format compatible with the IT systems
of the public agency.
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Questions
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