Technology Contracting for Transit Projects (2017)

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44 best value procurement.645 The Norwalk Transit District observed that when RFPs are used the FTA allows for a best and final offer. Omnitrans explained that it is permitted [to] evaluate and compare factors in addition to cost in order to select the most advantageous offer. FTA C 4220.1F supports Best Value procurements for technology when the recipient bases its determination [on] which propos- als represent the “best value” [based] on an analysis of the trad- eoff of qualitative technical factors and price or cost factors.646 MARTA stated that depending on the technol- ogy, the Authority may “contract directly with a company and negotiate a contract that is in the best interests of the Authority….”647 The MTA (Maryland) stated that under the Maryland Code of Regulations, the MTA may negotiate “on equiva- lent terms with all eligible vendors during Best and Final Offer prior to project award.”648 B. State Statutes Authorizing Negotiation Although one source states that when negotiat- ing a technology agreement the key is “leverage,”649 state and local laws regulate how state agencies may procure goods and services. One source argues that, although some states rely on a “rigid, rule- driven acquisition process,” such “formalistic acqui- sition techniques…are a very poor fit when complex solutions are sought or where projects call for IT system implementation.”650 Several state statutes were located for the report that permit negotiations when procuring technology. Section 6611 of the California Public Contract Code authorizes the use of a “negotiation process”651 for which the legislature directed the Department of General Services (DGS) to “establish the procedures and guidelines….”652 The procedures and guidelines are to include “a clear description of the methodology that will be used by the department to evaluate a bid such information would violate the Interstate Commerce Commission’s rules protecting trade secrets. In another but more recent case, the Supreme Court of Iowa held that computer data purchased by the legislature with public funds for use in legisla- tive redistricting constituted a trade secret owned by the vendor that prepared it and was exempt from disclosure as a public record.640 Finally, at least one court has held that a state’s Public Records Act “protects a broader range of information than just that covered under the…definition [in] the Trade Secrets Act. The Public Records Act protects from disclosure documents in the hands of a public body ‘which contain trade secrets or confidential commer- cial or financial information….’”641 In sum, the cases hold that electronic data are not necessarily protected from disclosure when requested pursuant to a FOIA, FOIL, or similar open records law. In two cases the courts held that, although the data had to be released, the government could restrict redistribution by requiring a requester to sign an end-user agreement. Unless there is a specific exemption, data compiled by the government is not protected as a trade secret from disclosure; however, information in the possession of the government that if released would reveal a third party’s trade secrets may be protected from disclosure. XIII. NEGOTIATING A BETTER PRICE FOR A TECHNOLOGY PROJECT A. Transit Agencies’ Authority to Negotiate a Better Price In responding to the survey, thirty-one transit agen- cies stated that, even though they are subject to public procurement laws, their states allow an agency to nego- tiate a better price for a technology procurement.642 As one agency stated in its response, when a procurement must be conducted by competitive bidding, no negotiations are permitted.643 However, another agency said that there may be negotiations when a single bid is received and that when using an RFP, negotiations are permitted with the highest ranked firm.644 Other agencies referred to federal procurement guidelines and the use of RFPs and 640 Brown v. Iowa Legislative Council, 490 N.W.2d 551 (Iowa 1992). 641 Caldwell & Gregory, Inc. v. University of Southern Mississippi, 716 So.2d 1120, 1122 (Miss. Ct. App. 1998) (citation omitted). 642 See Appendix C, transit agencies’ responses to question 18. 643 See Appendix C, response of Go Transit to question 18. 644 See Appendix C, response of Northeast Illinois Regional Commuter Railroad to question 18. 645 See Appendix C, responses of Brockton Area Transit Authority, Capital Metropolitan Transportation Authority (citing “best value procurement”), Golden Empire Transit District, Los Angeles County Metropolitan Transportation Authority, and San Diego Metropolitan Transit System to question 18. 646 See Appendix C, Omnitrans’s response to question 18. 647 See Appendix C, Metropolitan Atlanta Rapid Transit Authority’s response to question 18. 648 See Appendix C, Maryland Transit Administration’s response to question 18. 649 Tollen, supra note 26, at xiv. 650 Robert S. Metzger & Lauren B. Kramer, The Impor- tance of Competitive Negotiations to State Information Technology Procurement, 48 tHe Procurement Lawyer 18 (2013), hereinafter referred to as “Metzger & Kramer,” http://www.rjo.com/PDF/TheProcurementLawyer_ Spring2013.pdf (last accessed Feb. 24, 2017). 651 caL. PuB. cont. § 6611(a) (2016). 652 caL. PuB. cont. § 6611(c)(1) (2016).

45 guidelines “do not address crucial questions such as when should negotiations be utilized, what conditions or benefits justify negotiations, how negotiations can be used to encourage competition, or why negotiations will advance the State’s needs or save it money.”659 A North Carolina statute, applicable to all manner of public contracting, states that “[i]n recog- nition of the complex and innovative nature of infor- mation technology goods and services,” the state’s political subdivisions may contract for information technology as provided in the statute or other proce- dure available under North Carolina law.660 More- over, the law provides that contracts are to be awarded to the person or entity that submits the best overall proposal as determined by the awarding authority based on factors that are to be identified in a request for proposals.661 North Carolina allows an “awarding authority” to “negotiate with any proposer in order to obtain a final contract that best meets the needs of the awarding authority.”662 Section 279B.060 of the Oregon Revised Statutes applies to “competitive sealed proposals.” Under the statute, “[a] contracting agency may solicit and award a public contract for goods or services…by requesting and evaluating competitive sealed proposals.”663 An RFP, inter alia, must describe the procurement and include all applicable contractual terms and conditions.664 Furthermore, as provided in an RFP, a “contract- ing agency may conduct site tours, demonstrations, individual or group discussions and other informa- tional activities with proposers before or after the opening of proposals for the purpose of clarifica- tion….”665 A contracting agency may use a method of selection that includes discussions leading to best and final offers (in which a contracting agency may not disclose private discussions leading to best and final offers), discussions leading to best and final offers (in which a contracting agency may not disclose information derived from proposals submit- ted by competing proposers), competitive simultane- ous negotiations, or a combination of methods.666 In Oregon, state agencies are specifically allowed to negotiate the statement of work, the contract price, for the procurement of goods, services, information technology, and telecommunications.”653 The DGS may use a negotiation process for contracts for goods, services, information technology, and telecommunications when the department finds that one or more of the following conditions exist: (1) The business need or purpose of a procurement or contract can be further defined as a result of a negotiation process. (2) The business need or purpose of a procurement or contract is known by the department, but a negotiation process may identify different types of solutions to fulfill this business need or purpose. (3) The complexity of the purpose or need suggests a bidder’s costs to prepare and develop a solicitation response are extremely high. (4) The business need or purpose of a procurement or contract is known by the department, but negotiation is necessary to ensure that the department is receiving the best value or the most cost-efficient goods, services, infor- mation technology, and telecommunications.654 An unsuccessful bidder does not have a right to protest the results of the negotiating process but may file a petition for a writ of mandate as provided in section 1085 of the Code of Civil Procedure.655 Furthermore, when it is in the state’s best inter- ests, the DGS “may negotiate amendments to the terms and conditions, including scope of work, of existing contracts for goods, services, information technology, and telecommunications, whether or not the original contract was the result of competition, on behalf of itself or another state agency.”656 Thus in California, state agencies may negotiate only “where it will enable the state to better define the ‘business purpose or need’ of a procurement; where it will assist the state in identifying different types of solutions to fulfill a known business need or solution; where the purpose of need is complex and the cost of a bidder’s response is high; or where it will endure a ‘best value’ or ‘most cost-effective’s solution.”657 A 2012 study of California’s negotiation process concluded, however, first, that although the state “has a unique power to use a negotiations process,” the state has been reluctant to use it.658 Second, although the DGS issued guidelines as instructed, the 653 Id. 654 caL. PuB. cont. §§ 6611(a)(1)–(4) (2016). 655 caL. PuB. cont. § 6611(d) (2016). 656 caL. PuB. cont. § 6611(b) (2016) (emphasis supplied). 657 Metzger & Kramer, supra note 650, at 22. 658 Robert S. Metzger, California’s Use of Negotiations Authority for State Technology Contracts, A White Paper Pro- duced for and in Conjunction with TechAmerica’s California Procurement Committee, at 1 (June 20, 2012), http://www.rjo. com/PDF/TechAmerica_Section_6611_White_Paper_ 20June2012_FINAL.pdf (last accessed Feb. 24, 2017). 659 Id. at 6 (emphasis in original). 660 N.C. gen. stat. § 143-129.8(a) (2016). 661 N.C. gen. stat. § 143-129.8(b)(2) (2016). 662 N.C. gen. stat. § 143-129.8(c) (2016). The statute states that “[n]egotiations allowed under this section shall not alter the contract beyond the scope of the original request for proposals in a manner that: (i) deprives the pro 663 or. rev. stat. § 279B.060(1) (2016). 664 or. rev. stat. §§ 279B.060(2)(c) and (h) (2016). 665 or. rev. stat. § 279B.060(7) (2016). 666 or. rev. stat. § 279A.065 and §§ 279B.060(8)(a)–(h) (2016).