98.09

OPINION NO. 98-09

An opinion has been requested regarding application of the procurement ethics provisions of §15-508 of the Ethics Law (State Government Article, §15-508, Annotated Code of Maryland) to the potential disqualification of a consulting firm (the Requestor) from an ongoing Department of Public Safety and Correctional Services procurement for Master Plan Design of a Corrections Information System, and to a subsequent procurement for implementation of the reengineering and systems integration that will be the follow on of the ongoing design contract. We advise based on the information provided regarding the status of this project, that in view of the noninvolvement in current design activities, participation by the Requestor in subsequent contract actions does not appear to be limited by application of §15-508.

The broadly defined transaction at issue here is a three-stage procurement process by which the Department of Public Safety and Correctional Services (DPSC) would reorganize, or "reengineer," the Department's organizational structure, and necessarily, its information management systems. The purpose is to meet the demands for incarceration of more violent offenders in the face of financial pressures to reduce or at least maintain expenditures with the existing levels of funding, by improving efficiency in management of offenders by reorganization of functions to enable greater availability of information and identify and process non-violent offenders into non-confinement programs. The Requestor was a contractor on a contract with the Department of Budget and Management when in 1995 the DPSC reorganization project was initiated, and, pursuant to that DBM contract, conducted a study for DPSC that resulted in a "Blueprint for a Master Plan" for the Department (the Blueprint), which was submitted on April 25, 1996. The Blueprint contained three components—a vision statement, an assessment of then-current operations, and "a blueprint for reengineering of business processes, defined as the 'To Be' model, and an implementation plan for achieving change."

The focus of the Blueprint was on the four core business processes of the agency—admissions, incarceration, community supervision, and information and communications technology. It included a review of the current process for managing offenders, discussing a list of processes related to the Department's booking, incarceration and community follow up functions. It identified five functions related to offender management that are performed across the Department (admissions, classification, program assignment, case management and release and discharge) and analyzed gaps currently existing between the current business strategies and operational realities, with the goal of developing reengineering initiatives that would bridge the gaps. Chapter V of the Blueprint then redefined the business model for the Department's organization and developed implementation recommendations, which model lists and describes a new list of functions, and is itself described as "form[ing] the basis for the reengineering initiatives." The Blueprint also addresses three reengineering initiatives—implementation of a standardized admissions process, enhancement of the OBMIS offender tracking process, and expansion of community supervision programs, identifies several "quick hit" items that could be potential improvements in the near term, and deals with implementation impacts both as to organizational structure and legisltive impacts. All of the various discussions include cost and benefit analysis and projections.

In June 1998 the Department's Division of Information Technology and Communications issued an RFP requesting proposals for the development of a master plan for a correctional information system. The RFP references the Blueprint and indicates that it "is a guide that the Department will follow to develop its Correctional Information System (CIS)." The Blueprint is attached to the RFP as Attachment A. According to the Division's Director, the Blueprint attached to the RFP has been only slightly modified from that submitted by the Requestor in 1996. The cost figures have been omitted, certain inaccuracies have been corrected (apparently primarily regarding parole and probation functions), and there have been a few updates to reflect changed information. Otherwise, the Blueprint is identical to the original. The RFP indicates that the Department intends through it to contract for services to, among other things, develop a CIS Detail Master Plan which must be consistent with the business functions defined in the Blueprint, and analyze and document the required reengineering to meet the business functions as defined in the Blueprint. The successful vendor will work with Department staff to identify agency needs and assess current systems, working, however, from the Blueprint. The initial phase—to develop and conceptually design a new corrections system data base, is anticipated to be about 9 months, and the second phase (a three-month effort) would entail writing an RFP for the next phase, the actual implementation.

According to the Division Director, the Blueprint is the foundation for the design and current bidders need to have a working knowledge of it and rely on it for an understanding of the scope of the project. She points out that the RFP says that the Blueprint is a working document that is to be built upon by the design contractor. She says, however, that she would not anticipate the Blueprint figuring in any significant way in the new RFP to be developed by this contractor for implementation of the CIS. She expects that the outcome of this contract would be a totally new document quite detailed and much more specific than the information in the Blueprint. It will rely on the basic framework of the Blueprint but could be significantly and substantially reworked, including, for example, additional modules such as a medical section in the incarceration area and discussion of "break-the-cycle projects." The Director indicates (and the RFP specifically provides) that the bidders for the master plan design contract know that they may not bid on the implementation contract.

Section 15-508 of the Ethics Law provides that

An individual who assists an executive unit in the drafting of specifications, an invitation for bids, or a request for proposals in a procurement, or a person that employs the individual, may not:

(1) submit a bid or proposal for that procurement; or

(2) assist or represent another person, directly or indirectly, who is submitting a bid or proposal for that procurement.

The provision was added to the Law in 1994 (effective October 1, 1994) and grew out of a legislative Joint Task Force on Maryland's procurement law. Established in 1993, the Task Force was to consider possible safeguards for preventing abuse or the appearance of improper influence in the procurement system. The Report suggested the need for increased oversight in the preparation of bid specifications, and addressed conflict of interest concerns arising when participants in the development of specifications and requests for proposals are not precluded from participating in a procurement and thus may be in a position to benefit their own interests. The Ethics Commission in implementing this provision developed an information memorandum, which, in addition to dealing with several other issues under the section, indicated that the bar would still apply even if a person is paid by the government to develop specifications. The memorandum also dealt with the question of what constitutes "assistance," noting that this is largely a factual determination.

The Commission also considered this concept in three advisory opinions, advising that a contractor's definition of operational and performance requirements for a DPSC system, as well as a description of required hardware and software, constituted assistance in drafting specifications for the implementation contract (Opinion No. 94-9); that in a capital project involving a three-stage procurement more like the situation presented here, development of a program document would constitute assisting in the specifications for subsequent phases of a project (Opinion No. 95-13); and that where a program document was viewed as the basis for the procurement of design services, and availability of the program documents were specifically referenced in the RFP for the project's design contract, the bar on subsequent participation would apply (Opinion No. 96-5).

The situation here presents two questions. The first is application of §15-508 to the Requestor's status in connection with the current procurement. It has not participated in the ongoing procurement, but has requested an explanation of why it is not eligible for the award. In this situation the Blueprint seems to serve the same function as the program document in capital projects. Though not a detailed schematic design, it does describe the anticipated organizational and informational structure that is to be generated through the Master Plan design and implementation phases of the process. There is a proposed process flow chart included, and some of the descriptions go into detail as to how the functions would be expected to work. Also, the RFP itself includes the Blueprint as an attachment and specifically states that it is to be the basis on which the design will be developed. The Division Director has indicated that she believes the Blueprint is a major fundamental part of the specifications for what is to be procured in the current procurement. Under the circumstances, we believe based upon the information in the Blueprint and its function in the ongoing procurement that it forms a part of the specifications for the ongoing procurement, and that the Requestor's nonparticipation in the current procurement was appropriate and required by the Law.

The second question presented here is whether §15-508 would continue to apply to bar the Requestor from involvement in the subsequent implementation contract. We have not previously addressed the question of how long a person's involvement in an early stage of a project continues to impact on its later involvement. This in many ways is a factual issue. If in fact the same documents continue to be the substantial basis for subsequent procurements, then assistance in developing the initial documents could be viewed as assistance in specification drafting in later procurement actions. On the other hand, as the Division Director describes the anticipated results of the design contract, it would appear that the actual Blueprint developed by the Requestor will cease to be a significant factor in procuring subsequent implementation services. From the RFP it appears that the Master Plan design document will include significantly more detail and specific information only very generally suggested by the Blueprint. Also, the Director suggests that though the Blueprint is a starting point for the design, the ultimate Master Plan may have changes and additions. She also says that she would not anticipate the Requestor being in any way consulted or included in the Master Plan design development.

In our view, assuming the outcome is actually as described, the Requestor's involvement in the Blueprint development would be sufficiently remote that it would not be viewed as having assisted in the specifications for the implementation contract. We therefore advise that §15-508 of the Law would not apply to bar the Requestor from bidding on or otherwise participating in the implementation contract, as long as in fact it has no role in the design functions to be carried out by the current procurement and the Blueprint it created has been largely superseded by the more detailed ongoing design activities.

Charles O. Monk, II, Chairman,
    Michael L. May
    Mark C. Medairy, Jr.
    April E. Sepulveda

Date: October 23, 1998