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. Cuddy & McCarthy, LLP2 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

3. Cuddy & McCarthy, LLP3 Procure To Obtain; To Acquire; To Purchase;

4. Cuddy & McCarthy, LLP4 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/i ndex.html http://www.generalservices.state.nm.us/spd/i ndex.html Legal Procurement Methods

5. Cuddy & McCarthy, LLP5 NM Procurement Code Allows: Three Types of Procurement Competitive Sole Source Cooperative Agreements

6. Cuddy & McCarthy, LLP6 Competitive Procurement Procurement through competition is the Code’s preferred method Invitations to Bid (ITBs) Request for Proposals (RFPs) Vendors compete for business

7. Cuddy & McCarthy, LLP7 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

8. Cuddy & McCarthy, LLP8 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

9. Cuddy & McCarthy, LLP9 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”

10. Cuddy & McCarthy, LLP10 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

11. Cuddy & McCarthy, LLP11 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

12. Cuddy & McCarthy, LLP12 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

13. Cuddy & McCarthy, LLP13 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

14. Cuddy & McCarthy, LLP14 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)

15. Cuddy & McCarthy, LLP15 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

16. Cuddy & McCarthy, LLP16 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

17. Cuddy & McCarthy, LLP17 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

18. Cuddy & McCarthy, LLP18 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

19. Cuddy & McCarthy, LLP19 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

20. Cuddy & McCarthy, LLP20 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.

21. Cuddy & McCarthy, LLP21 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

22. Cuddy & McCarthy, LLP22 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

23. Cuddy & McCarthy, LLP23 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

24. Cuddy & McCarthy, LLP24 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

25. Cuddy & McCarthy, LLP25 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

26. Cuddy & McCarthy, LLP26 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

27. Cuddy & McCarthy, LLP27 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

28. Cuddy & McCarthy, LLP28 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

29. Cuddy & McCarthy, LLP29 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

30. Cuddy & McCarthy, LLP30 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

31. Cuddy & McCarthy, LLP31 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

32. Cuddy & McCarthy, LLP32 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)

33. Cuddy & McCarthy, LLP33 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

34. Cuddy & McCarthy, LLP34 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

35. Cuddy & McCarthy, LLP35 Bribes, Gratuities, & Kickbacks Prohibited (13-1-191) All contracts and solicitations SHALL contain reference to the criminal laws prohibiting bribes, gratuities and kickbacks!!

36. Cuddy & McCarthy, LLP36 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

37. Cuddy & McCarthy, LLP37 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

38. Cuddy & McCarthy, LLP38 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

39. Cuddy & McCarthy, LLP39 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

40. Cuddy & McCarthy, LLP40 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

41. Cuddy & McCarthy, LLP41 Misdemeanor (13-1-199) Any business or person which violates the Procurement Code is guilty of a misdemeanor

42. Cuddy & McCarthy, LLP42 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