Florida’s open-government laws are among the most liberal in the country. So important is public access to government meetings and records, that the right is enshrined in the state constitution, and it takes a two-thirds vote of the Florida Legislature to create an exemption to what is known collectively as the Sunshine Law.
However, a September 29, 2017, decision from the First District Court of Appeal appears to have effectively pulled the shade on a portion of the government procurement decision-making process.
State agencies use three types of solicitations to procure goods and services from the private sector: invitations to bid; requests for proposals; and invitations to negotiate. The last of these, invitations to negotiate, or ITNs, give agencies the greatest latitude in obtaining the best value for the state. When responses to an ITN are received, an agency evaluates the responses against criteria spelled out in the ITN, and then identifies one or more qualified, responsive vendors to negotiate with. Following negotiations, the agency selects the vendor the agency determines will provide the best value, based on the selection criteria.
Although government decisions generally are required to be made “in the sunshine,” Florida law provides exemptions for certain agency negotiation team discussions within the ITN process. Specifically, any portion of a meeting at which a negotiation with a vendor is conducted, at which a vendor makes an oral presentation as part of a competitive solicitation, or at which a vendor answers questions as part of a competitive solicitation, is exempt from the Sunshine Law. Also exempt is any portion of a negotiation team meeting at which “negotiation strategies” are discussed.
In Carlson v. Department of Revenue, a case seeking to void a contract award by the agency for violating the Sunshine Law, the First District Court of Appeal considered what matters constitute negotiation strategies, and at what point a negotiation team meeting that covers various subjects is or isn’t exempt. As to what negotiation strategies include, and thus, what is exempt from the Sunshine Law, the court held:
- Discussions among and decisions by the negotiation team about which vendor(s) the agency will negotiate with are negotiation strategies.
- Discussions between an evaluation team and a negotiation team discussing what additional information to seek from vendors are negotiation strategies.
- Discussions about which vendor to seek a “Best and Final Offer” from constitutes a “strategic negotiation decision.”
The portions of agency negotiation team meetings involving these activities were held exempt and properly closed.
However, the court also deemed exempt the team’s discussion and final decision that a particular vendor should win the contract—and the team’s formalization of that decision by signing an award memorandum. Although acknowledging that such an award decision normally must be made “in the sunshine,” the court held the team’s final decision was “inextricably intertwined” with negotiation strategy discussions. This was so, the court reasoned, because the team still had other potential negotiation options, and in deciding to award the contract to one vendor, the team was necessarily deciding not to pursue competing options. Consequently, the decision-making portion of the meeting was exempt from the Sunshine Law.
Agencies must make a complete recording of any part of a procurement meeting that is exempt from the Sunshine Law, and such recording becomes public when the agency provides notice of its intended decision or 30 days after opening the bids, proposals, or final replies, whichever occurs earlier. In the ITN context, the term “final replies” likely means Best and Final Offers.
Thus, the takeaway from Carlson v. Department of Revenue, for companies doing business – or wanting to do business – with the state via ITN is that once negotiations begin, state agencies can conceivably proceed to a final decision completely outside the sunshine.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
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