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Procurement Communication Policy

New Illinois Law –Requiring University Employees to Report Procurement Communications

 

 

Introduction

 

"Effective January 1, 2011, the Illinois Procurement Code (30 ILCS 500/1-1 et seq.) requires procurement communications be reported to the Illinois Procurement Policy Board.  In pertinent part, the state reads as follows, "Any written or oral communication received by a State employee that imparts or requests material information or makes a material argument regarding potential action concerning a procurement matter, including, but not limited to, an application, a contract, or a project, shall be reported to the Procurement Policy Board." (30 ILCS 500/50-39(a))

The Illinois Procurement Policy Board has charged Illinois' university ethics officers with the responsibility of communicating to employees the enacted procurement communications requirements, and to offer guidance to employees regarding this reporting process. 

The Southern Illinois University Ethics Office will try to help guide you through questions you may have regarding such communications and reporting.  However, each employee is responsible for making the ultimate determination as to whether a particular communication should be reported. Conversely, employees are permitted to make a good faith determination and may wish to review the FAQs provided below.  Each scenario or question will undoubtedly involve various and unique facts and circumstances for you to consider.  If you feel that the communication should be reported, you are obligated to do so.

It is important to note that the guidance given by the Ethics Office or campus representatives does not constitute legal advice.  The Ethics Office and Office of General Counsel will be monitoring the promulgation of final rules related to the communications reporting requirements and will provide further information if and when it becomes available.

 

You can find further information, including frequently asked questions, at the Procurement Policy Board's website.  You can find the relevant statute.

 

 

***ALERT! Important Updated Information***

 

On February 17, 2011, the Executive Ethics Commission (EEC) repealed the emergency rules adopted on January 7, 2011. The EEC rules were intended to interpret and implement the Procurement Communications Reporting Requirement.

 

As a result of the EEC's repeal of its rules, the Office of the Governor developed and distributed on February 22, 2011 new guidance for Agencies under its jurisdiction, as a temporary measure in response to the repeal by the EEC.

 

There are significant changes you need to be aware. Please carefully read the attached document Guidance for the Agencies under the Jurisdiction of the Governor Regarding Procurement Communications Reporting Requirement 30 ILCS 500/50-39 as it will supersede all other interpretations of the Procurement Communication Reporting statute 30 ILCS/50-39. It is the opinion of the Office of General Counsel that the new Guidance can be relied upon at this time given the authority granted to the Governor as the supreme executive power under the Illinois Constitution.

 

Please note, this new Guidance exempts reporting of any communication regarding purchases under the "bid limit". This should eliminate communications reporting for all small purchases. Please check with your Purchasing department if you do not know the current bid limits for general items, professional and artistic services, and construction.

 

***WARNING***

 

Please note the final rules have not been determined or published by the EEC. Therefore, this new guidance may be overturned when the final rules are published. We will keep you informed as things change during this fluid rules making process.

 

If you have any questions, please do not hesitate to contact the Ethics Office.

 

SOMETHING NEW

Profile instructions

 

 

Who is required to report?

 

Under the statute, all employees who communicate with vendors (verbally or in writing) may be required to report their communication. This may include p-card holders, fiscal officers and delegates, principal investigators, deans, directors, business managers, support staff, and members of a procurement selection committee.  University employees who have no participation/influence on procurement decisions are not required to report communications under the Procurement Code.

 

Please note, University employees who are issued the authority to make procurement decisions may not delegate procurement decisions to individuals that are not recognized as having procurement authority.  In accordance with University policy, improper delegation of authority can lead to removal of procurement authority.

 

All employees involved in the procurement of goods and services will be required to take training on the PPB website.  An employee training module/tutorial is available click here.  Future training will be incorporated in the annual ethics training program.  

 

 

What communication should be reported?

 

The intent of the law is to increase transparency and stop inappropriate interference from vendors, lobbyists, and others into University purchasing decisions.

 

The law requires you to report all material communications with vendors that attempt to influence your purchasing decisions.  A material communication is defined as “any written or oral communication received by a State employee that imparts or requests material information or makes a material argument that a reasonable person would believe was made for the purpose of influencing procurement decisions, including but not limited to:

  • establishing or defining a procurement need or method of source selection;
  • drafting, reviewing, or preparing specifications, plans or requirements;
  • drafting, reviewing, or preparing any invitations for bid, requests for proposals RFP, requests for information, sole source procurement justifications, emergency procurement justifications, or selection information;
  • evaluating bids, responses, and offers;
  • publishing notices to the procurement file or the contract file;
  • letting or awarding a contract;
  • determining the contents of the procurement file or the contract file;
  • resolving protests;
  • determining inclusion on prequalification lists;
  • identifying potential conflicts of interest;
  • determining vendor performance evaluations;
  • approving change orders or renewal or extension of an existing contract;

 

Examples of the procurement communications that require reporting - the following examples assume purchasing will exceed the bid limit. 

  1. I am a medical doctor and am having a discussion with a medical equipment vendor regarding the best equipment option for a particular medical procedure. Am I required to report this communication via the Procurement Communications Reporting System?

Yes, this communication may develop into to a “sales pitch,” and steer the purchaser towards a certain product and if it does, it is probably material and should be reported.  If, however, the communication is limited to facts such as the features and price of the equipment, it might not be material and need not be reported. 

 

  1. A committee of 10 housing staff has been formed to review furniture for a new residence hall. This committee is responsible for meeting with vendors while the vendors showcase their product and answer committee members' questions. Ultimately, a furniture purchase will be made based on results of the bid responses. Am I responsible for reporting each of these meetings within the Procurement Communications Reporting System?

    Yes, unless the communications with the vendors are made publicly in a public forum.  Otherwise, each university employee who “receives” this communication must report it separately.

 

  1. Do most change orders, including those with negative dollar values (overall contract price decrease) or changes to scope that may contain increases or decreases in price, have to be submitted to the Procurement Policy Board's Web site?

Yes, Section 50-39(a) of the Procurement Code specifically mentions change orders, so they need to be reported so long as the vendor or another person is attempting to influence the decision to make the change order, i.e., it is a “material” communication.  Please note, the EEC insists that change orders are effectively new procurements, so you can’t avoid the procurement code law by calling something a change order.

 

  1. A committee is evaluating an RFP for a Bookstore provider and we want to invite 2 to 3 vendors to campus for presentations.   Do I have to report my communication with each vendor to invite them to campus?  Will each committee member who sits in on the presentation be required to file a report for each vendor separately?   

It appears that the communication to invite the vendors to campus is not an attempt to influence a procurement decision, so no reporting is required.  However, the communication with the vendors during the presentations would be material and an attempt to influence a purchasing decision; therefore, it should be reported unless it was held in a public forum.

 

What types of communications are excluded?

  • Unsolicited communications with vendors where no action is taken or used by the receiving employees in a procurement decision. 
  • Communications with vendors in a public forum or during a meeting subject to the Open Meetings Act
  • Communications about procedural matters (due dates, how many copies are required, etc.)
  • Communications made between employees
  • Communications with an existing vendor about rendering services or goods for a current contract.  Note any change order or contract extension discussions require reporting.
  • Contact with vendors where the purpose of the communication was not to influence a procurement decision under consideration or to be considered in the near future
  • Statements made to the employees of the Executive Ethics Commission (but, pursuant to the statute, not statements received from the EEC if material and not otherwise exempt).
  • Communications which are privileged, protected or confidential under law including, but not limited to, the attorney-client privilege.
  • Communications regarding the administration and implementation of an existing contract, except communications regarding change orders or the renewal or extension of a contract.
  • Communications regarding matters exempt from the Illinois Procurement Code in section 30 ILCS 500/1-10;
    1. Contracts between State governmental bodies
    2. Grants
    3. Purchase of care
    4. Hiring of an individual as an employee and not as an independent contractor, whether pursuant to an employment code or policy or by contract directly with that individual
    5. Collective bargaining contracts
    6. Purchase of real estate
    7. Contracts necessary to prepare for anticipated litigation, enforcement actions, or investigations
    8. Procurement expenditures by the Illinois Conservation Foundation when only private funds are used
    9. Procurement expenditures by the Illinois Health Informtion Exchange Fund
  • Communications regarding small purchases pursuant to 30 ILCS 500/20-20
  • Communication regarding change orders, contract amendments or contract extensions that do not contain any other material changes and are at or below the small purchase dollar threshold

 

Examples of the procurement communications not required to be reported:

  1. If I use my p-card to make a purchase do I need to report the purchase? 

 

In the vast majority of cases reporting would not be required.  Only if there is a communication from the vendor that requests a change in how the University conducts business or suggests or proposes changes in a purchasing decision.

 

  1. As a faculty member and grant applicant, I am required to develop a preliminary budget for grant applications. My project will require the acquisition of equipment. To develop a reasonable budget, I need to contact potential vendors for an informal/non-binding estimate. Am I required to report each of these communications via the Procurement Communications Reporting System, realizing that I may not be awarded the grant or have the opportunity to procure the equipment in future years?

    No. If the faculty member is simply seeking quotes, it would not appear that the communication was made for the purpose of influencing a procurement decision. Instead, the vendor is communicating facts about a current price.

 

  1. If I attend a vendor expo or similar event whereby multiple vendors are on-site showcasing their products, do I need to report the discussions I have at the event?

    Discussions that are more general in nature where you are simply learning basic facts about companies and their offerings would not need to be reported under the public forum exemption.  Also, the routine collection of literature or promotional items does not need to be reported as well. However, any discussions that go into greater detail regarding a current or future need, extending beyond the basic information-gathering, could be considered material in regard to procurement decisions and would therefore need to be reported.

 

  1. My department is purchasing commodities through an existing IPHEC contract. Are procurement communications related to an IPHEC contract required to be reported?

 

No. Contracts exist for commodities available through an IPHEC agreement; hence, no reporting is required. Per the Procurement Policy Board, communications related to purchases under an existing contract do not require reporting unless the communication is related to the execution of a change order.

 

  1. If I call three vendors for prices on an item or service and place an order with the vendor offering the lowest price, do I need to report any of the calls? 

 

Normally no; but, if a vendor tries to influence the University’s buying habits in addition to or rather than offering a price, the communication should be reported.

 

  1. If I have contact with a potential sub-grant contractor to obtain information on a grant request, do I need to report the communication?  Do I need to report contract communications with a sub grant agency?   

 

No, since grants to the University or issued by the University are exempted from the procurement code.

 

  1. If I contact multiple vendors for information that I intend to use for creating bid specifications, do I need to report each of the vendor communications? 

 

Not necessarily.  If the communication is simply about prices, parts numbers, availability, dates of delivery, etc., the communication would not be material and need not be reported. 

 

  1. If I contact a vendor and ask for a price to repair office furniture and then place an order, do I need to report the communication? 

 

No, only if the vendor tried to change your buying decision.  An example would be if a vendor told you that you needed to replace rather than repair the furniture.

 

  1. I contacted a vendor asked for a price to repair a piece of equipment, issued a requisition, and found additional repairs were needed after the vendor started the project.  Do I report the change order if I found the additional needed repair?

 

No, unless the vendor is attempting to change your purchasing decision.  Furthermore, in this change order example, the communication is not material, so it need not be reported.

 

How do I file a report?

 

Communications are to be reported to the Procurement Policy Board via an on-line reporting tool created for this purpose.  University employees will have to self-register to use the PPB reporting system at the PPB website http://pcrs.illinois.gov.  University employees will be required to create an Illinois.gov ID before accessing the reporting system.  Employees will be instructed to establish a user name and password.   The domain name employees will use is for employees with an Illinois.gov ID.  Click here for Reporting Tool.

 

SIU has no control over the PPB reporting system. So, you may contact the Procurement Call Center at 800-366-8768 select option 1 and then option 13 with systems questions and/or log-in issues. Please note, employees may request a manual registration from the call center if they do not have an Illinois driver's license to self-register online.

 

 

What needs to be reported?

  • When:  date and time of the communication along with the duration
  • Where: location of people involved, or phone numbers for callers
  • Who: the identity of each person involved (name & job title)
  • What was communicated:  Detailed summary of the discussion, request, and response

The on-line reporting tool will allow you to enter your information and to submit your report directly to the PPB. 

 

What happens to my communication report after it has been filed?

 

All reported procurement communications are reviewed by the SPO and made public on the PPB website.

 

Is there a deadline or timeframe for filing a report?

 

Reports should be submitted upon receipt of a communication; however, the amended Procurement Code requires communications be submitted monthly.

 

Are there penalties for not reporting a procurement communication?

 

Guilty of a Class A misdemeanor. Also, State employees who knowingly and intentionally fail to comply with the reporting requirements will be subject to suspension or discharge. 30 ILCS 500/50-39(e).

 

 

If I need some guidance who can I contact?

 

Frequently Asked Questions have been developed by the PPB and may be found on the PPB website under Procurement Communications Reporting.  Click here.

 

If you have questions or require further guidance please contact Brenda Martin Assistant Director of Compliance and Ethics at:bjmartin@siu.edu or 618-536-3464.

 

 

 

910 South Elizabeth, MC 6810  •  Carbondale, IL 62901
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