Advisory Opinion No. 98-95

Re: Denise Lombardo Myers, Esq.

A. QUESTION PRESENTED

The Petitioner, on behalf of the New Shoreham School Committee (School Committee), municipal elected positions, requests an advisory opinion as to 1) whether two members of the School Committee may submit bids in response to a public Request for Proposals (RFP) for renovations to the façade of the existing school facility where the School Committee received no responses to two previous requests; and, 2) whether the School Committee may then consider the bids of its members and award a contract to a member.

B. SUMMARY

It is the opinion of the Rhode Island Ethics Commission, based on a finding of hardship pursuant to R.I. Gen Laws § 36-14-5(e), that 1) New Shoreham School Committee (School Committee) members, municipal elected positions, may reply to the Request for Proposals regarding the renovation of the façade of the existing school building given that the School Committee received no responses to two previous requests; 2) the School Committee may then consider the bids of two of its members in response to a RFP provided that the members responding to the RFP have not participated in the bid development process; and 3) the School Committee may award a contract to a member pursuant to an RFP, provided that the member prospectively recuses on all matters regarding said contract.

Under Section 5(h) of the Code of Ethics, a School Committee member may enter into a contract with the School Committee so long as it has been awarded through an open and public bidding process. This requires prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. Also, the Commission concludes that the difficulties encountered by the School Committee in soliciting bids from a limited pool of possible applicants on Block Island constitutes a hardship under Section 5(e).

A.DISCUSSION

1. Facts

The Petitioner, counsel for the New Shoreham School Committee, advises that the School Committee has received no responses to a Request for Proposals (RFP), despite the fact that it publicly advertised the RFP on two occasions. However, two School Committee members have expressed interest in submitting bids in response to the RFP. The School Committee inquires as to whether these members may respond to the RFP and, if so, whether the School Committee may then award a contract to a member.

2. Analysis

The central issue in this advisory opinion request is whether and under what circumstances members of a municipal board may respond to a request for proposals circulated by their own board. The Code of Ethics provides that a public official may not use in any way his or her public office or confidential information received through his or her holding such office to obtain financial gain for him or herself, other than that provided by law. See R.I. Gen. Laws § 36-14-5(d). The Code also prohibits a public official from representing him or herself before the agency of which he or she is a member and for one year after officially leaving his or her public position. See R.I. Gen. Laws § 36-14-5(e)(1) and (e)(4). Additionally, R.I. Gen. Laws § 36-14-5(h) prohibits a public official from entering into a contract with a state or municipal agency unless the contract has been awarded through an open and public process.

A public official may enter into a contract with a municipality where the contract has been awarded through an open and public process, including public notice and subsequent public disclosure of all proposals considered and contracts awarded. See R.I. Gen. Laws § 36-14-5(h). In a related advisory opinion, the Commission recently held that a New Shoreham School Committee member could submit a bid in response to an RFP so long as he did not participate in the bid development process and the contract at issue was awarded through an open and public bidding process. See A.O. 98-46. The Commission consistently has ruled that officials who participate in the bid development process place themselves in a privileged position with respect to other bidders and consequently diminish, if not eliminate, the “open and public process” required under the Code. Accordingly, individual School Committee members may respond to the RFP so long as they have not participated in the bid development process.

If individual members bid or intend to bid on the proposal, they should recuse from participation as School Committee members regarding all matters concerning the proposal, including, but not limited to bid development, review of proposals and awarding of the contract. If a member bids but is not selected as the general contractor for the project, he or she may participate in matters concerning the contract either after it is awarded or after he or she is eliminated from consideration for the award, whichever comes first. However, if the member is successful, he or she should recuse prospectively on all matters regarding the contract.

Although the Commission has held that public officials may enter into contracts with governmental entities under the provisions outlined above, the analysis by which it has reached this conclusion has been inconsistent. In earlier opinions, the Commission found that such contractual relationships constituted employment from one’s board, prohibited under Commission Regulation 36-14-5006. See A.O. No. 95-68; A.O. 94-39; A.O. 90-87. However, the Commission has granted exceptions to the prohibition where denial of such employment created a substantial hardship for the governmental entity. As defined in the Code of Ethics, however, these types of contractual arrangements do not constitute employment. Rather, successful bidders are independent contractors, not employees. Therefore, Commission Regulation 5006 is not applicable when the awarding of a contract is at issue. The proper provision to review is Section 5(h) of the Code.

Pursuant to Section 5(h) the Commission concludes that the members of the School Committee may submit bids in response to an RFP. Further, the successful bidder may enter into a contract with his own school district so long as the entire bidding and award process satisfies the open and public requirements of Section 5(h). Having determined that Section 5(h) of the Code does not bar the School Committee members from acting here, we now look at R.I. Gen Laws § 36-14-5(e).

Under R.I. Gen. Laws § 36-14-5(e)(1), a public official is prohibited from representing him or herself before any state or municipal agency of which he or she is a member. Section 5(e)(4) extends this prohibition for a period of one year after an official or employee leaves his or her position. Absent an express finding of hardship by this Commission, these prohibitions are absolute. No definition for “hardship” is found in the statute, nor has the Commission promulgated a definition. In considering questions of hardship on a case by case basis, the Commission has focused on factors such as whether the matter to come before an agency involved a vested property right, pre-existing or recently acquired property rights or employment, or whether the matter involved a significant economic impact.

In past opinions, the Commission has found hardship where a request for proposals or a position vacancy does not attract any applicants or when only a few uniquely qualified individuals are available to fill a particular position or apply for a particular contract. See A.O. 95-68; A.O. 94-39; A.O. 90-87. That appears to be the case here. The School Committee twice placed public notices requesting bid proposals. None were received. This lack of public response to requests publicly noticed creates a significant hardship for the School Committee. For whatever reasons, economic or otherwise, prospective builders have opted not to submit bids. Two members of the School Committee who are builders, and who did not submit bids in response to the initial proposals, seek to fill the void. Based on these circumstances the Commission finds economic hardship warranting an exception to Section 5(e). The members of the School Committee may appear before their own board for purposes of responding to the RFP and the successful bidder may appear before the School Committee for purposes of carrying out the terms of the contract.

Code Citations:

36-14-5(d)

36-14-5(e)

36-14-5(h)

Related Advisory Opinions:

98-46

97-148

97-90

97-66

97-50

95-60

95-68

95-24

94-39

90-87

Keywords:

Contracts

Hardship exception

Private employment