WSR 97-20-099

PROPOSED RULES

EXECUTIVE ETHICS BOARD

[Filed September 29, 1997, 4:13 p.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-15-041.

Title of Rule: Compensation for outside activities and contracting with state agencies.

Purpose: To explain procedures used by state officers and state employees, when contracting with state agencies.

Statutory Authority for Adoption: RCW 42.52.360 (2)(b).

Statute Being Implemented: Chapter 42.52 RCW.

Summary: To provide guidance to state employees on procedures relating to review and approval of contracts between state employees and state agencies.

Reasons Supporting Proposal: Intended to prevent violations of chapter 42.52 RCW.

Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Margaret A. Grimaldi, P.O. Box 40100, Olympia, WA, (360) 664-0871.

Name of Proponent: Executive Ethics Board, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: To briefly explain evaluation criteria and procedures to be used by the Executive Ethics Board in reviewing contracts between state employees and state agencies. Provides specific exemptions from procedures for state employees who receive assistance through state programs when entitled to receive such assistance by law and on the same basis as similarly situated citizens; and exempts state employees who contract for teaching duties at bona fide community colleges, vocational-technical institutions, or institutions of higher learning.

Proposal does not change existing rules.

No small business economic impact statement has been prepared under chapter 19.85 RCW. No small business impact statement was prepared because this issue is limited to the conduct of state officers and employees.

Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. Pursuant to RCW 34.05.328(5) the Executive Ethics Board is not an agency subject to the provisions of RCW 34.05.328 (1)-(4). In addition, under RCW 34.05.328 (5)(b)(ii), these rules relate to internal governmental operations that are not subject to violation by a nongovernmental party.

Hearing Location: Office of the Attorney General, 1125 Washington Street S.E., 7th Floor, Room HLB 742, Olympia, WA, on November 14, 1997, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Patti Hurn, Board Clerk by October 31, 1997, (360) 586-3265.

Submit Written Comments to: Margaret A. Grimaldi, Board Secretary, FAX (360) 664-0229, by October 31, 1997.

Date of Intended Adoption: At the meeting following hearing November 14, 1997.

September 29, 1997

Margaret A. Grimaldi

Board Secretary

NEW SECTION

WAC 292-110-060 Compensation for outside activities and contracting with state agencies. The primary purpose of the Ethics in Public Service Act is to prevent conflicts of interest that impair the impartial and independent judgment of state officers and employees. A conflict of interest may occur when a state officer or state employee accepts compensation for outside activities, and acceptance conflicts with the performance of official duties on behalf of the state and the citizens of Washington. Conflicts of interest occur whenever a state officer or state employee has a beneficial interest in a transaction with the state; accepts outside compensation for the performance or non-performance of an official duty; or, accepts or seeks outside compensation relating to a matter in which the officer or employee participated in an official capacity. A conflict of interest extends to those matters in which a state officer or employee exercises responsibility. Potential conflicts of interest relating to the receipt of compensation for outside activities may be resolved by seeking the review and prior approval of the Executive Ethics Board.

(1) A state officer or employee may not receive anything of economic value under a contract or grant outside his or her official duties unless each of the following conditions is met:

(a) the contract or grant is legitimate and actually performed;

(b) the contract or grant is not within the state officer's or employee's official duties, under his or her supervision, created or authorized by the state officer or employee in an official capacity, or is within an area of his or her responsibility;

(c) The contract or grant is not performed for nor compensated by a person from whom the state officer or employee would not be able to accept a gift; and,

(d) the contract or grant would not require the disclosure of confidential or non-public information.

(2) A state officer or employee may not enter into a contract or receive a grant with his or her state agency unless all conditions in section one are met, and one of the following conditions are satisfied:

(a) the contract bid or grant application is awarded through an open and competitive bidding process and more than one bid or grant application is received; or

(b) if only one bid or application is received, or the process for awarding the contract or grant was not open and competitive, the approval of the board is obtained.

(3) A state officer or employee may not engage in a business or transaction or professional activity, or incur an obligation of any nature if such activities may conflict with the proper discharge of official duties.

(4) The conditions in sections one and two do not apply to state employees who receive assistance through state programs or federal programs administered by the state, when they are entitled to receive such assistance by law and on the same basis as similarly situated citizens. Section three applies only in circumstances wherein a state officer or employee exercises discretionary judgment and decision-making with regard to an assistance program under which he or she is otherwise eligible.

(5) A contract does not include a contract of employment for teaching duties at a bona fide community college, vocational-technical school, or institution of higher learning, provided:

(a) there is no conflict with the performance of official duties;

(b) the state officer or employee did not use his or her official position to influence the contract of employment;

(c) no state resources are used to fulfill the contract; and,

(d) the position would not require the disclosure of confidential information.

(6) State officers and employees seeking the approval of the board for a contract, grant application, or outside employment shall provide the following information to the board secretary no later than thirty days prior to the commencement of the contract:

(a) a description of current official duties and responsibilities;

(b) a statement of the work to be performed or, a copy of the contract;

(c) the duration and dollar value of the contract, if applicable;

(d) a statement that no state resources will be used to perform the outside employment or to fulfill the contract or grant; and,

(e) a description of how the work will be performed without the use of state resources.

(7) If a state officer or employee bids on a contract valued at more than $2500.00, if only one contract bid is received, or the contract is to be awarded under a process that is not open and competitive, and the basis for the award of contract is sole source or some other exemption, the agency must provide the following additional information to the board no later than thirty days prior to the commencement of the contract::

(a) a statement of the scope of work to be performed with special attention paid to the uniqueness of the work;

(b) an explanation of why only one contractor or consultant is able to perform the work, including specific qualifications and experience that make the contractor or consultant the only available person;

(c) a description of the steps taken to identify other qualified contractors or consultants to perform the work;

(d) a description of why other contractors or consultants who might appear to be viable were not considered for the contract.

(8) The board secretary shall review the contract or grant application terms and related documents and may determine whether there could be a potential conflict. If the board secretary determines:

(a) there would be no potential conflict under sections one and two of this rule, the board secretary shall approve the contract or grant application.

(b) there could be a potential conflict under sections one and two of this rule, the board secretary shall refer the contract or grant application to the board for approval or disapproval.

(9) If an agency is unable to submit the required information at least thirty days prior to the commencement of work, the agency shall provide a brief explanation of the reasons for the delay.

(10) If a contract has been amended or the scope of work altered, and the effect of the amendment or alteration is to create a potential conflict of interest under section one of this rule, the agency must resubmit the contract to the board at least fifteen days prior to commencement of work under the amended or altered contract.

(11) If a series of substantially identical contracts or grants with a state agency is anticipated, the state officer or employee may request that the board pre-approve such contracts or grants. Pre-approval shall be effective for the period of one calendar year, after which the state officer or employee shall resubmit the request.

(12) The board secretary shall provide written notice of any action on a contract bid, grant application or request for outside employment within fifteen (15) working days of the board's action.

(13) Final contracts reviewed under this rule shall be filed with the board secretary within thirty (30) days of execution.

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