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The NM Procurement Code & Dealing with Bid Protests

The NM Procurement Code & Dealing with Bid Protests. By Ramon Vigil & John F. Kennedy Cuddy & McCarthy, LLP NMSBA 2010 Leaders’ Retreat July 13, 2012. Procurement Code Overview. Invitations to Bid (ITBs) Procedures for Procurement Small Purchases Sole Source Purchases

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The NM Procurement Code & Dealing with Bid Protests

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  1. The NM Procurement Code & Dealing with Bid Protests By Ramon Vigil & John F. Kennedy Cuddy & McCarthy, LLP NMSBA 2010 Leaders’ Retreat July 13, 2012

  2. Procurement Code Overview • Invitations to Bid (ITBs) • Procedures for Procurement • Small Purchases • Sole Source Purchases • Procurement Through Existing Contracts • Requests for Proposals (RFPs) • Bid Protests Cuddy & McCarthy, LLP

  3. Procure • To Obtain; • To Acquire; • To Purchase; Cuddy & McCarthy, LLP

  4. NM Procurement Code • Statutes Enacted by Legislation • § 13-1-28 through § 13-1-199 NMSA 1978 • Provide Guidelines & Requirements for the spending of State funds in New Mexico • http://www.generalservices.state.nm.us/spd/index.html • Legal Procurement Methods Cuddy & McCarthy, LLP

  5. NM Procurement Code Allows: • Three Types of Procurement • Competitive • Sole Source • Cooperative Agreements Cuddy & McCarthy, LLP

  6. Competitive Procurement • Procurement through competition is the Code’s preferred method • Invitations to Bid (ITBs) • Request for Proposals (RFPs) • Vendors compete for business Cuddy & McCarthy, LLP

  7. Invitations to Bid (ITBs) • Fastest, generally easiest competitive procurement method • Used to acquire commodity-type products and services • Number of vendors/suppliers can provide the same item at various bid prices • Procurement is advertised with specifications and response requirements to registered vendors Cuddy & McCarthy, LLP

  8. ITBs continued • Sealed bids received • Publicly opened on closing date • Responsible bidder • Supplier’s product or service meets the specified requirement(s) • Lowest price will receive the award • No ability to select a particular vendor, or to negotiate the price Cuddy & McCarthy, LLP

  9. Request for Proposals (RFPs) • More complex and time consuming • Used when varying products or services that could potentially meet the needs • Detailed evaluation of the offeror’s product or solution is necessary to determine which offered product or solution will provide the “Best Value” Cuddy & McCarthy, LLP

  10. RFPs continued • Entails development of a detailed statement of the work defining the entity’s needs • Provides/Explains the criteria to be employed by the evaluation committee in rating the proposals • Frequently used criteria for evaluation • Technical compliance to requirements; stability of offeror; experience and education of key personnel; and price offered Cuddy & McCarthy, LLP

  11. RFPs continued • Unlike ITB process, cost is not the sole criteria in the evaluation • Proposal providing the lowest price will not necessarily receive the bid • Typically used for Professional Services exceeding $50,000.00 Cuddy & McCarthy, LLP

  12. Sole Source (13-1-126) • Sole Source Procurement is disfavored • Pricing and terms and conditions are difficult or impossible to negotiate • No open market to ensure reasonable pricing • When alternative available – issue a contract or agreement for a limited term to provide product or service • Maintenance of proprietary systems and proprietary software are examples of sole source providers Cuddy & McCarthy, LLP

  13. Cooperative Agreements • § 13-1-44 NMSA 1978 • “Cooperative Procurement” is procurement conducted on behalf of more than one state agency or local public body. • § 13-1-135 NMSA 1978 authorizes cooperative procurement • CES – Cooperative Educational Services • RECs – Regional Educational Centers Cuddy & McCarthy, LLP

  14. Small Purchases (13-1-125) • Adopt a local policy regarding procurement of services, construction or items personal property having value not exceeding $20,000 • Less than $10,000 – Best Obtainable Price • $10K - $20K - Informal Procurement (3 Valid Quotes) • $20K or greater – Formal Procurement (ITB or RFP) Cuddy & McCarthy, LLP

  15. Small Purchase – Professional Services (13-1-125) • Professional Services – require specialty skills • Examples: Consultants, Attorneys, Auditors • Less than $50K – informal procurement • 50K or greater - RFPs Cuddy & McCarthy, LLP

  16. Emergency Purchases (1-13-127) • Exists a threat to public health, welfare, safety or property requiring procurement under emergency conditions • Made with completion as is practicable under the circumstances • Basis of emergency and for selection of particular contractor – included in the procurement file Cuddy & McCarthy, LLP

  17. Emergency Purchase (cont.) • Floods, epidemics, riots, equipment failures or similar events • Seriously threaten • Functioning of government • Preservation or protection of property • Health and safety of any person Cuddy & McCarthy, LLP

  18. Procurement Under Existing Contracts (13-1-129) • Called “Piggyback” contracts • May contract for services, construction or items of tangible personal property without use of competitive bids or sealed proposals • With business that has price agreement with state purchasing agent or purchasing office of other local public body meeting same standards and specifications Cuddy & McCarthy, LLP

  19. Procurement Under Existing Contract (cont.) • Quantity purchased does not exceed the quantity which may be purchased under the applicable price agreement; • The purchase order adequately identifies the price agreement relied upon Cuddy & McCarthy, LLP

  20. Irregularities in Bids / Proposals (13-1-132) • A central purchasing office may waive technical irregularities in the form of the bid or proposal of the low bidder or offeror which do not alter the price, quality or quantity of the services, construction or items of tangible personal property bid or offered. Cuddy & McCarthy, LLP

  21. Rejection or Cancellation of Bids or RFPS (13-1-131) • CFB or RFP can cancelled • All bids or proposals can be rejected • When in the best interest of the public body • New CFB or RFP must be issued • If bids or proposals for second CFB or RFP are unacceptable or no bids are received, then central purchasing office may purchase in the open market at best obtainable price Cuddy & McCarthy, LLP

  22. Right to Protest (13-1-172) • Any bidder or offeror who is aggrieved in connection with a solicitation or award of a contract may protest • Protest must be • In writing • Within 15 calendar days after knowledge of the facts or occurrences giving rise to the protest Cuddy & McCarthy, LLP

  23. Written Protest • May be from vendor who submitted bid or proposal • May be from Attorney representing vendor who submitted bid or proposal • May be a letter signed by vendor but obviously from an attorney • Involve your attorney to assist in response/determination to protest Cuddy & McCarthy, LLP

  24. Procurements after Protest (13-1-173) • In event of timely protest, shall not proceed further with the procurement • Unless, central purchasing office makes a determination that the award of the contract is necessary to protect substantial interests of the local public body Cuddy & McCarthy, LLP

  25. Authority to Resolve Protests (13-1-174) • A central purchasing office or a designee shall have the authority to take any action reasonably necessary to resolve a protest of an aggrieved bidder or offeror • May not award money damages or attorney’s fees Cuddy & McCarthy, LLP

  26. Bid Protests Procedures - 1 • Send letter to all bidders/offerors • Let all bidders/offerors know about the bid protest • Copy of the bid protest written letter • Ask for responses and information from the bidders that may assist in the determination of the bid protest • Set a date specific for all responses for prompt determination • Attorney can assist with this and Local Purchasing Office can designate Attorney to assist in the determination procedures Cuddy & McCarthy, LLP

  27. Bid Protest Procedures - 2 • Send copy of all responses from bidders/offerors to other bidders/offerors • Use information obtained from all sources to determine whether bid protest is valid • Review applicable facts • Review applicable laws • Make a determination • If complex issues – use attorney to assist you Cuddy & McCarthy, LLP

  28. Bid Protest Procedures - 3 • Local purchasing office may use a hearing instead of reviewing facts and laws through correspondence – Local Purchasing Procedures • Bidders can provide testimony and documentary evidence • Protesting bidder submits evidence first • Apparent low bidder submits evidence • Both parties can provide legal arguments Cuddy & McCarthy, LLP

  29. Bid Protest Procedures - 4 • 13-1-175 • Promptly issue a determination relating to the protest • Reasons action taken • Inform protestant of right of judicial review of the determination pursuant to section13-1-183 Cuddy & McCarthy, LLP

  30. Bid Protest - Determination • Reasons • Findings of Facts • Findings of Law • Conclusion • Right to Judicial Review • Pursuant to 13-1-183 and 39-3-1 NMSA 1978 • Send copy to all bidders/offerors • Required by 13-1-176 Cuddy & McCarthy, LLP

  31. Implement Determination • If determination is that the protest is valid and correct then • Disqualify the bidder/offeror in violation and award to the next best bidder/offeror or • Reject all bids/proposals and request new bids or proposals • If determination is that the facts and/or the law does not support the protest then continue with the award to the lowest bidder or best proposals Cuddy & McCarthy, LLP

  32. Debarment / Suspension (13-1-179) • Vendors / Contractors may be debarred or suspended for • Conviction of criminal offenses related to obtaining contract or subcontract • Conviction of embezzlement, theft, forgery, bribery, falsification or destruction or records or receiving stolen property; or • Serious violations of Procurement Code (willful or history of failure to perform) Cuddy & McCarthy, LLP

  33. Debarment & Suspension • Written notice of debarment (up to 3 yrs) or suspension (up to 3 months) • Reasons for action taken • Right to judicial review per section 13-1-183 Cuddy & McCarthy, LLP

  34. Unlawful Participation (13-1-190) • Employee or Board Member of local public body may NOT participate directly or indirectly in a procurement when the employee /bd member knows the employee / bd member or any immediate family member has a financial interest in the business seeking or obtaining a contract Cuddy & McCarthy, LLP

  35. Bribes, Gratuities, & Kickbacks Prohibited (13-1-191) • All contracts and solicitations SHALL contain reference to the criminal laws prohibiting bribes, gratuities and kickbacks!! Cuddy & McCarthy, LLP

  36. Contemporaneous Employment Prohibited (13-1-193) • Unlawful for public body employee / bd. member who is participating directly or indirectly in the procurement process to become or be, which such an employee, the employee of any person or business contracting with the government body by whom the employee is employed Cuddy & McCarthy, LLP

  37. Contemporaneous Employment Waiver • Board may grant waiver • Contemporaneous employment is publicly disclosed • Employee able to perform procurement functions without actual or apparent bias or favoritism • Employee participation is in the best interest of the local public body Cuddy & McCarthy, LLP

  38. Civil Penalty (13-1-196) • Person, firm or corporation that knowingly violates any provision of the Procurement Code is subject to civil penalty • Up to $1000.00 for each violation Cuddy & McCarthy, LLP

  39. Recovery of Value (13-1-197) • An equal of anything transferred or received in violation of the Procurement Code may be imposed as a civil penalty upon both transferor and transferee Cuddy & McCarthy, LLP

  40. Kickbacks; Additional Penalty (13-1-197) • Upon a showing that a subcontractor made a kickback to a prime contractor or a higher-tiered subcontractor in connection with the award of a contract or subcontract • Conclusively presumed that the amount was included in the price of the subcontract and ultimately borne the local public body • Amount equal to kickback imposed as civil penalty upon recipient and subcontractor Cuddy & McCarthy, LLP

  41. Misdemeanor (13-1-199) • Any business or person which violates the Procurement Code is guilty of a misdemeanor Cuddy & McCarthy, LLP

  42. Q & A Contact Information • Ramon Vigil, Jr. • Cuddy & McCarthy, LLP • 7770 Jefferson St. NE, Suite 305 • Albuquerque, NM • 505-888-1335 • rvigil@cuddymccarthy.com • John F. Kennedy • Cuddy & McCarthy, LLP • 1701 Old Pecos Trail • Santa Fe, NM • 505-988-4476 • jkennedy@cuddymccarthy.com • www.cuddymccarthy.com Cuddy & McCarthy, LLP

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