Biggs, Ingram and Solop PLLCBy LYNN PATTON THOMPSON,
Special to the Sun
Changes to Mississippi’s procurement system for personal services and other contracts are coming. H.B. 1109, which was passed by the Legislature and approved by Governor Bryant earlier this year, will take effect on January 1, 2018. It amends the current Miss. Code Ann. §27-104-7 that will, among other things, reconstitute the Public Procurement Review Board (PPRB), abolish the Personal Services Contract Review Board (PSCRB).
H.B. 1109 also creates statutory standards that the new PPRB will be required to use in promulgating its rules for state agencies when making procurements using sealed proposals or requests for qualifications. Generally, these are the sort of procurements where subjectivity of evaluators and the concept of a “best value” are part of the selection process. The new requirements do not apply to procurements using sealed bids where the standard of “lowest and best” bid is applied to determine the awardee.
Within the Department of Finance and Administration (DFA), there is already a PPRB. Under current legislation, the PPRB has only three members: the Executive Director of the DFA (who serves as chairman), the head of the Office of Budget and Policy Development, and an employee of the Office of General Services who is familiar with the purchasing laws of Mississippi. Any action of the PPRB requires approval of the chairman and one other member of the PPRB. The PPRB has authority to approve purchasing regulations for commodities, equipment (except computer equipment), approval of contracts for construction and maintenance of state buildings, and regulations governing any lease or rental agreement by any state agency or department.
The authority of the PPRB with respect to these requirements, in its current form, is set forth in the Mississippi Procurement Manual issued by the DFA. With some exceptions, contracts for personal or professional services have been within the purview of the PSCRB, which has its own regulations that agencies must follow in soliciting and making contract awards for such services.
Beginning January 1, 2018, the PSCRB will not exist. Under Section 14 of H.B. 1109, the PPRB “shall be the [PSCRB] and shall retain all powers and duties granted by law to the [PSCRB].” Thus, the PSCRB’s authority will be transferred to the PPRB, and all of the contracts for personal and professional services previously procured pursuant to PSCRB rules and regulations will be subject to the PPRB’s rules and regulations. This will improve uniformity in procurement standards and rules for many of the state’s procurements, because the same procurement rules will now apply to different types of procurement and will be administered by a single contract review board.
The PPRB membership will also expand from just three (3) members to five (5) voting members plus the executive director of the DFA, who will serve as a non-voting member. The members of the PPRB will be political appointees whose appointment must be with the advice and consent of the Senate. The Governor will make three of the appointments and the Lieutenant Governor will make two, and their terms will be staggered. Further, in making their appointments, the Governor and Lieutenant Governor are required to consider persons with management experience of at least five (5) years in general business, healthcare or finance or for an organization, corporation, or other public or private entity. No member of the board can be a voting member if he or she is also an officer or employee of the state. No action by the board will be effective unless approved by a majority of the members present, entered upon its minutes, and those minutes signed by the chair. Minutes of each meeting must be kept and submitted on a monthly basis to the Accountability, Efficiency and Transparency Committees of the Senate and House of Representatives and the chairs of the Appropriations Committees of the Senate and House of Representatives.
H.B. 1109 prescribes in Sections 1 through 12 certain “best practices” that the PPRB must ensure are implemented. Section 1 states that “[a]ny agency that is required to receive approval by the [PPRB] before entering into a personal or professional services contract … shall implement the best practices specified in Sections 1 through 12 of this act. The … board shall promulgate any necessary rules and regulations to administer the provisions of Sections 1 through 12 of this act.”
These “best practices” are similar to some of the requirements that already appear in the PSCRB regulations and the DFA’s Mississippi Procurement Manual. For instance, the “best practices” will require that agencies identify what the evaluation factors for determining the awardee will be and how they are weighted; the evaluation committee must consist of people who have relevant experience necessary to make competent or knowledgeable assessments, and evaluations can only be made based on the terms advertised in the request for proposals. Such requirements - and others specified in H.B. 1109 - are essential to a level playing field and the integrity of the public procurement system.
The “amended” version of §27-104-7 to take effect January 1, 2018, does not include these “best practices”. However, by enacting these and other “best practices” as statutory requirements, there is a legislative directive for their implementation. They should be treated as non-waivable requirements for the PPRB to enforce and for any reviewing court to consider should violation of them be challenged.
With regard to price, H.B. 1109 Section 7(2)(a) requires that “price as an evaluation factor shall be given the highest criteria weighting and at least thirty-five percent (35 percent) out of the one hundred percent (100 percent) total weight of all the other evaluation factors.” H.B. 1109 Section 12 requires the evaluation committee to prepare a report of the evaluation and selection process that will include the names of all the offerors, their rank, the recommended selection of awardee(s), and “shall be clear in the reasons why the offeror or offerors have been selected…and shall detail the terms, conditions, scope of services, fees and other matters to be incorporated into the contract.” This report “shall be available to the public at least forty-eight (48) hours before the awarding of the contract.”
Protests by “interested parties” can be very useful in ensuring public procurements are conducted in accordance with the law and that award decisions are fair and impartial. However, at the state level, there has always been a disconnect between the protest process (which starts out at the agency level) and the access to information relevant to challenging the award. This is because access to sealed proposals is governed by the Mississippi Public Records Act. That Act allows offerors on procurements to seek protection from the chancery court to prevent disclosure of confidential commercial, financial, and proprietary information in their proposals. Typically, this requires a battle in court to get records (or protect them) and then continue the protest process if any records are obtained through a Public Records Act request.
In federal procurements, the disclosure of records relevant to a procurement is handled as part of the protest process. The General Accountability Office can issue a Protective Order that allows protesters counsel to see “protected material” that their clients cannot. There are very strict requirements imposed for handling both protected and non-protected material. Significant sanctions can be imposed for any counsel who violate the Protective Order. Some clients may not like the idea that only their lawyers have complete access to their competitors’ proposal information, but operating under a Protective Order allows for a more robust protest process and still protects proprietary and competitive interests. Offerors’ counsel can review information relevant to their clients’ protests without having to seek permission from a separate court.
H.B. 1109 prescribed no changes to the protest procedures concerning handling of proprietary proposal information. Any authority for the PPRB to devise its own “protective order” process to allow disclosure of proposals as part of a protest would likely require additional legislation - if there is any appetite for such a change. It is certainly a useful tool to allow a more accurate review of the procurement process, which ultimately benefits Mississippi and its taxpayers.
Look for the newly-constituted PPRB to promulgate revisions to the Mississippi Procurement Manual consistent with H.B. 1109 and to improve public procurement in Mississippi. All who do business with the state should be well-versed - from start to finish - in how our agencies select their contractors.
Lynn Patton Thompson is a Member of Biggs, Ingram and Solop PLLC. She has practiced in government contracts and procurement since 1992 and has extensive experience representing contractors at all stages of federal and state procurements.
Lynn Patton Thompson