New York State
Ethics Commission


Advisory Opinion No. 98-20: Application of the post-employment restrictions of Public Officers Law §73(8)(a) to an employee of [a State Authority] who will work for a supplier which may seek a contract with [another supplier] under contract with his former agency.

Introduction

The following advisory opinion is issued in response to a request submitted by the law firm of [ ] on behalf of its client, [ ], an employee of [a State Authority] who expects to shortly accept a position with a supplier of heating, ventilating and air conditioning ("HVAC") equipment. The firm asks whether the lifetime bar restrictions of Public Officers Law §73(8)(a)(ii) would preclude [the former State employee] from becoming involved in a subcontract to supply HVAC equipment to a [supplier] selected by the [State Authority] in connection with a procurement for which [the former State employee] oversaw the development of the technical specifications.

Pursuant to the authority vested in it by Executive Law §94(15), the New York State Ethics Commission ("Commission") renders its opinion that, while the two year bar would not prohibit [the former State employee] from working for the supplier, the lifetime bar would prohibit him from assisting the supplier in its activities related to or flowing from the technical specifications for the procurement, as he was directly concerned with and personally participated in the specifications.

Background

[The former State employee] has, since [date], served as the [job title]. He is responsible for directing the ongoing activities of equipment engineering for the existing [State Authority] fleet. In this position, he oversees approximately seventeen [State Authority] employees.(1)

The [State Authority] is in the process of procuring new [ ] vehicles through what is known as the "[ ] procurement." It has requested but not yet received proposals from [suppliers].

As part of his duties, [the former State employee] is responsible for overseeing the engineering staff, which, in turn, directed the [State Authority] consultant who prepared the proposed technical specification for the [ ] procurement. He also coordinated specification review with other [State Authority] departments and was responsible for obtaining agency consensus and approval of the specification. [The former State employee] neither created nor wrote the technical specification for any component, nor did he have any material involvement in the development of the technical specification for the HVAC system or its individual components.

The specification for the HVAC system describes the required performance characteristics, but it does not specify a particular design. The system could be provided by any one of a number of manufacturers, and the specification could still be modified after negotiations with [suppliers].

The law firm that submitted the request characterizes [the former State employee's] involvement as "that of senior manager, overseeing the development and coordination of the specification as a whole" (emphasis in firm's submission). [The former State employee's] department has not managed the procurement process or the contracting strategy, and neither [the former State employee] nor his staff serves on either the selection or negotiating committees formed by the [State Authority] to conduct the procurement.

[The former State employee] has been offered and plans to accept the position of [title] at [ ], a manufacturer of HVAC equipment. [The company] does not currently supply and has never supplied HVAC or any other equipment to the [State Authority], either directly or as a subcontractor to a [supplier]. To date, [the company] has had no contact with the [State Authority] concerning potential business opportunities. However, it intends to evaluate the possibility of supplying equipment as a subcontractor to one or more of the [suppliers] who are competing to win the [ ] procurement from the [State Authority]. The subcontract would be awarded by the successful [supplier] some time after its contract with the [State Authority] is finalized.

The law firm characterizes [the former State employee's] future position with [the company] as one with commercial, not technical, responsibilities. He will be primarily involved in obtaining new business opportunities for [the company], and his scope will be nationwide. In conversation with the Commission staff, the law firm stated that [the former State employee] will not be involved with writing technical specifications. In his new position, he will not have contact with employees of the [State Authority], but he might be involved in the commercial aspects of any contract between [the company] and the future [suppliers] for the [State Authority], including contract negotiations. Those negotiations would not involve the [State Authority].

Applicable Statute

Public Officers Law §73(8)(a)(i) provides:

No person who has served as a state officer or employee shall within a period of two years after the termination of such service or employment appear or practice before such state agency or receive compensation for any services rendered by such former officer or employee on behalf of any person, firm, corporation, or association in relation to any case, proceeding or application or other matter before such agency.

Public Officers Law §73(8)(a)(ii) provides:

No person who has served as a state officer or employee shall after the termination of such service or employment appear, practice, communicate or otherwise render services before any state agency or receive compensation for any such services rendered by such former officer or employee on behalf of any person, firm, corporation or other entity in relation to any case, proceeding, application or transaction with respect to which such person was directly concerned and in which he personally participated during the period of his service or employment, or which was under his or her active consideration.

Discussion

The above provisions, known as the "two year bar" and "lifetime bar" respectively, set the ground rules for what individuals may do with the knowledge, experience and contacts gained from public service after they terminate their employment with a State agency. The two year bar prohibits former State officers and employees from appearing, practicing or rendering services for compensation in relation to any case, proceeding, application or other matter before their former agency for two years following their separation from State service; the lifetime bar prohibits them from rendering services for compensation in relation to any case, proceeding, application or transaction with respect to which they were directly concerned and in which they personally participated during the period of their State service, or which was under their active consideration during that period.

The two year bar would not preclude [the former State employee] working for [the company] and seeking commercial opportunities for the company, including the opportunity to become a subcontractor for a [supplier] eventually chosen by the [State Authority]. Since there would be no contract between [the company] and the [State Authority], [the former State employee] would not be rendering services for compensation in relation to a contract with the [State Authority], which would be prohibited (see Advisory Opinion No. 94-4).

In carrying out his duties, [the former State employee's] work product could not be subject to the approval or review by the [State Authority] (Advisory Opinion No. 90-21), nor could he meet with [State Authority] employees or ask, or respond to, their substantive questions regarding his employer's product (Advisory Opinion Nos. 90-7 and 94-5).

Assuming [the former State employee's] job were structured in such a way as to avoid violation of the two year bar, there is the question of whether the lifetime bar would preclude his proposed work with respect to the fulfillment of the [ ] procurement. To answer this question, the Commission must determine whether [the former State employee's] working to obtain the HVAC contract for his employer would constitute his working on the same "transaction" on which he worked while in State service.

In its submission, the law firm representing [the former State employee] states that the two should not be viewed as the same transaction for the following reasons:

The skills and expertise that [the former State employee] offers to [the company] derive primarily from the commercial expertise obtained at [the company at which he previously worked] rather than the managerial and technical expertise developed at [the State Authority]. His new position is a commercial, not a technical, one. While knowledge of the proposed air-conditioning specification is required for a potential [ ] proposal to a [supplier], that knowledge is, by virtue of the [State Authority's] publication of the specification in its procurement documents, publicly available. [The former State employee's] general knowledge of the [State Authority's] fleet requirements as a whole and certain aspects of the development process for the [ ] project is neither material nor relevant to a separate transaction that [the company] might explore with a [supplier]. That transaction would be legally and commercially distinct and separate from the [State Authority - supplier] transaction, and there would be no privity of contract between the HVAC supplier and the [State Authority] (footnote omitted).

There seems no doubt that [the former State employee] personally participated in the [ ] procurement while with the [State Authority] in overseeing and coordinating the development of the specification. In his new position, he hopes to be able to help his employer secure the contract for the HVAC system on the new [ ] to be purchased by the [State Authority] through this procurement, which would constitute his playing a role in the same procurement. The argument of [the former State employee's] attorneys is essentially that the work he did at the [State Authority] will be of no benefit to him in seeking the subcontract; that is, his involvement in the same procurement for two employers is so unrelated as to be of no advantage to him.

The argument must be rejected. The purpose of the revolving door statute, and, indeed, all of Public Officers Law §§73 and 74, is to offer uniform rules to guide affected individuals. The problem with the approach suggested by [the former State employee's] attorneys is that the Commission would have to look to the benefit derived by each individual to determine whether he or she could engage in any particular activity. This approach would require the Commission to make subjective judgments on a case-by-case basis, and, therefore, would undermine the Commission's efforts to guide State officers and employees by a uniform interpretation of the statutes.

To the extent that the Commission's prior opinions are relevant, it has rejected this approach. For example, in Advisory Opinion No. 95-6, the Commission precluded an engineer who had worked on the early stages of a major landfill project while working for the Department of Environmental Conservation from working on the remedial aspects of the project. While in State service, he worked on the investigation of the problems of the landfill and other aspects, but during those years, the project did not progress to the remedial stage. After he left State service, a new consent order was signed which set forth the remedial requirements. He sought to work on the remediation to be implemented pursuant to the consent order. Although the Commission did not address the issue, it would appear that the engineer's knowledge gained from his earlier activity would have been of little benefit to his working on the remedial aspect of the project. Yet, the Commission held that the lifetime bar precluded this work, and said that "despite all the intervening events, the essence of the transaction -- its subject and purpose, the parties interested and affected, and the ultimate goal -- remains constant." From this opinion, it can be seen that the Commission looks at the transaction, not the individual's role in different aspects of the transaction.

In Advisory Opinion No. 97-9, the Commission barred a former Department of Transportation employee working on the latter phases of a transaction -- a highway interchange project -- where the first stage had been completed almost ten years earlier. Again, the Commission examined only if it was the same transaction, not whether the intervening time period had caused the former employee's knowledge to become outdated.

In [the former State employee's] situation, he oversaw the [ ] procurement "as a whole" and was responsible for overseeing the engineering staff which directed the consultant which prepared the proposed technical specification for the procurement. While [the former State employee] did not write or create the actual technical specifications for the HVAC component, he certainly was in a position to review and become familiar with the overall technical specifications. This is sufficient to bar him from future work relating to or flowing from the specification for the procurement. Whether or not he took advantage of the opportunity to become familiar with the specification is not relevant.

Finally, it is of no consequence that the specification describes performance characteristics rather than specific technical requirements for the HVAC system. The performance characteristics drive the technical requirements, and [the former State employee's] possible familiarity with these characteristics, based on his responsibilities for the procurement "as a whole," demonstrates that these aspects of the procurement are sufficiently inter-related to make the procurement one.

Therefore, given [the former State employee's] responsibilities with regard to the specification for the [ ] procurement, the Commission concludes that the lifetime bar prohibits him from rendering services for a supplier of HVAC equipment relating to or flowing from the specification for the [ ] to be purchased by the [State Authority].(2)

Conclusion

The Commission concludes that the two year bar would not prohibit [the former State employee] from working for [the company]. However, because he was directly concerned with and personally participated in the process of developing the specification for the [ ] procurement, the lifetime bar would prohibit his assisting [the company] in its activities related to or flowing from the specifications for the procurement.

This opinion, until and unless amended or revoked, is binding on the Commission in any subsequent proceeding concerning the person who requested it and who acted in good faith, unless material facts were omitted or misstated by the person in the request for opinion or related supporting documentation.

All concur:

Paul L. Shechtman, Chair

Robert J. Giuffra, Jr.
Henry G. Gossel, Members

Recused:

O. Peter Sherwood, Member

Dated: November 23, 1998


Endnotes

1. [Footnote deleted].

2. [The former State employee] would not be precluded from rendering services for the supplier on commercial aspects of its dealings with the [supplier] that do not relate to the specification and in which the [State Authority] has no interest or knowledge.


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