You are the director of procurement for state agency ABC. In that capacity you are responsible for the process by which ABC seeks competitive bids for the sale of products to and makes selections of vendors. Under the "best bid" procedure, you select the lowest bidder meeting your contract specifications. The process is not automatic but involves your exercise of discretion to determine whether the lowest bidder actually meets the contract specifications.
XYZ, a non-profit corporation, is a national educational buying consortium. XYZ bids competitively to sell products to institutions, and currently has substantial contracts with ABC. ABC is an eligible institution for the receipt of XYZ bids and for annual patronage refunds from XYZ.
XYZ has recently invited you to serve as an unpaid member of the XYZ board of directors for a three-year term. As a director, you would oversee a general manager and full-time paid staff who carry out the day-to-day operation of XYZ.
Does G.L. c. 268A permit you to become a member of the XYZ board of directors while you also serve as ABC director of procurement?
Yes, although you will be subject to limitations on your activities both as director of procurement and as an XYZ director.
As ABC director of procurement, you are a state employee for the purposes of G.L. c. 268A.
1. Limitation on Official Actions
Under § 6 of G.L. c. 268A, you are prohibited from participating[1] in any particular matter[2] in which a business organization in which you serve as director has a financial interest. The purpose of this restriction is to remove state employees from situations in which their loyalty to the state may be clouded by competing private loyalties.
If you accept the XYZ directorship, limitations under § 6 will come into play whenever XYZ applies for or is awarded a contract by ABC. Because XYZ is a business organization which has an obvious financial interest in the awarding of contracts for which it has bid, you must refrain from participating in any XYZ bids or contracts. The prohibition applies not only to formal decision making, but also to your reviewing and recommending decisions to others. Further, the § 6 prohibition extends to any particular matter in which XYZ has a financial interest. For example, if XYZ is one of several organizations which has submitted a bid, you are disqualified from participating not only on the XYZ bid but also on the bids of organization which are competing with XYZ for the same contract. See EC-COI-81-118.
Should matters affecting the financial interest of XYZ come before you, you must not only refrain from participation, but also notify your appointing official in writing about the financial interest, Your appointing official thereafter may either:
- assign the particular matter to another employee;
- assume responsibility for the particular matter; or
- make a written determination that the interest is not so substantial as to be deemed likely to affect the integrity of the services which the commonwealth may expect from you, in which case it shall not be a violation for you to participate in the particular matter. Copies of such written determination shall be forwarded to you and filed with the Commission by the person who made the determination.
Unless you have received a written determination from your appointing official expressly permitting your participation in matters in which XYZ has a financial interest, you must continue to refrain from any participation in such matters.
You should also be aware that G.L. c. 268A, § 23 applies to your official actions. Under § 23(¶ 2), you may neither use your official ABC position to secure unwarranted privileges for XYZ, nor engage in conduct which gives reasonable basis for the impression that XYZ will unduly enjoy your favor in the performance of official duties. You should keep these principles in mind whenever you perform periodic job performance evaluations of ABC procurement department employees who participate in the award or monitoring of XYZ contracts.[3]
2. Limitation on XYZ activities
Section 4(c) of G.L. c. 268A governs your activities as a XYZ director while you also serve as ABC director of procurement. Under § 4(c) you may not act as the agent or spokesperson for XYZ in relation to any particular matter in which the commonwealth or a state agency is a party or has a direct and substantial interest. For example, you may not appear on behalf of XYZ before any state institution in connection with a contract bid which XYZ has made. On the other hand, your periodic participation in XYZ board of director meetings will not, by itself constitute acting as the agent of XYZ.
End Of Decision