COMPLIANCE & CONTRACTING

This session, led by Michael Cohen, focuses on the legal aspects of public procurement. It covers the layers of laws involved, from federal to local, and explains how to navigate compliance issues. The goal is to help you develop an understanding of the rules guiding public procurement and how to use legal resources effectively to ensure smooth operations.

KEY LEGAL CONCEPTS iN PUBLIC PROCUREMENT:

  • Federalism and the Layer Cake Model:
     In the U.S., laws follow a top-down system called federalism. Federal laws are supreme under the Constitution’s Supremacy Clause, overriding state and local laws. However, lower levels—states and local governments—often pass their own procurement laws that work in tandem with or, in some cases, go beyond higher laws. Some states, like California, grant local governments more power (home rule), allowing them to create rules that may conflict with state law.

  • Public Policy Goals in Procurement:
     The primary goals of public procurement laws are to ensure a fair, open, and competitive process that protects both the public agency and bidders, ensures public money is used properly, and addresses ethical concerns like conflicts of interest. These principles ensure that taxpayer funds are spent efficiently and ethically.

  • Importance of Legal Authority Layers:
     Procurement rules come from various sources, including federal law, state law, municipal enabling legislation, and board or council policies. These layers shape how contracts are awarded and managed. Understanding which laws apply to a given contract depends on the specific government entity you’re dealing with and the type of procurement.

SOURCES OF LEGAL AUTHORITY:

  1. State Law:
     States set standards for procurement transparency, bidding procedures, and vendor qualifications. For example, California’s Public Records Act and the Brown Act ensure transparency in public meetings and records. Many states also have specific laws governing labor conditions and conflicts of interest in procurement.

  2. Municipal Enabling Legislation:
     Local laws can shape the procurement process based on whether a city operates under a charter or general law. Charter cities have more autonomy, while general law cities follow state regulations. Municipal codes and charters outline specific rules for procurement, including bidding processes and contract awards.

  3. Board and Council Policies:
     Local governing bodies (like city councils) often develop policies that dictate procurement procedures. These policies can include local business preferences, protest mechanisms, or ethical guidelines, offering flexibility but staying within the bounds of state and federal law.

  4. Federal Law and Grant Restrictions:
     Federal funds come with specific terms and conditions that must be followed. Accepting federal money means complying with a variety of reporting and legal requirements, which can vary by agency. Non-compliance could lead to penalties or the return of funds.

NAVIGATING PROCUREMENT:

  • Know the Entity and Project Type:
     Understanding what type of public entity you're dealing with (e.g., state, city, county) is crucial. Different layers of the legal framework (federal, state, local) can apply based on the project’s nature (construction, services, etc.).

  • Use Attorneys Wisely:
     Attorneys can help you navigate procurement rules, review solicitations, ensure compliance, and advise on contract negotiations. Engaging legal help early can save money and prevent issues later.

  • Relationships Matter:
     Day-to-day decisions by government staff also influence procurement outcomes. Building relationships with key officials can provide insights into discretionary decisions that impact your project.

  • Check Websites for Information:
     Most procurement information can be found on public agency websites. Departments like Public Works or procurement divisions post important documents, and officials can be contacted directly if needed.

  • Read the Fine Print:
     Reviewing procurement policies and guidelines in detail can prevent costly mistakes. Legal documents might seem dense, but understanding them ensures compliance and helps avoid disqualification.

FINAL THOUGHTS:

Public procurement involves navigating a complex system of laws from multiple layers of government. Understanding the goals and rules that guide procurement, and using legal resources effectively, can help you avoid legal pitfalls and improve your chances of success in the bidding process. Compliance is key, but focusing on the small details—like reading the fine print—can make all the difference.