REQUESTED BY: Maxine B. Moul, Director, Nebraska Department of Economic Development
QUESTION: Does a procedure for the awarding of grants proposed by the Department of Economic Development constitute an open and public process?
Under a variety of programs which it administers pursuant to its statutory duties, the Nebraska Department of Economic Development (DED) makes grants to various entities in order to encourage economic development in the state. Many of these grants take the form of a contract. On occasion, questions arise when a public official or public employee of state or local government has an interest in the contract either personally, through an immediate family member, or through a business association. State law does not prohibit an official or employee of the State of Nebraska or one of its political subdivisions from having an interest in a contract with the state. It does, however, require that a contract in which a public official or public employee has an interest be entered into through an open and public process. To meet this requirement, DED has developed a procedure which it intends to use whenever a public official or employee has an interest in a proposed contractual grant with DED. The proposed procedure is as follows:
1) DED will publish in the Omaha World Herald a notice of the date, time and place of a public hearing. The notice will identify the public official or public employee, notify the public of the recommended contract award, identify the amount to be awarded, and identify the type and purpose of the award.
2) The public notice would invite oral or written public comment on the proposed contractual award. The application for the award, the proposed contractual award and other pertinent information would be available for review at the DED office during normal office hours.
3) The public hearing would be held in the City of Lincoln. The press and other interested parties in the community where the proposed contractual award would be made would be notified.
4) The hearing would be conducted by a hearing officer appointed by the Director of DED.
5) An official record of the hearing would be maintained. When the hearing was completed, the official record would be given to the Director of DED.
6) Based upon the record, factors contained in the application and staff recommendations, the Director would approve, disapprove, or recommend other action regarding the award of the contract.
7) All aspects of this process would conform to the applicable sections of the Public Meetings Act (§84-1408 et seq.) and the Nebraska Political Accountability and Disclosure Act (§49-1401 et seq.).
Section 49-14,102 of the Nebraska Political Accountability and Disclosure Act provides in part as follows:
[N]o public official or public employee, a member of that individual's immediate family, or a business with which the individual is associated shall enter into a contract valued at two thousand dollars or more, in any one year, with a governmental body unless the contract is awarded through an open and public process which includes prior public notice and subsequent availability for public inspection during regular office hours of the contracting governmental body of the proposals considered and the contract awarded... This section shall not apply to a contract when the public official or public employee does not in any way represent either party to the transaction.
Section 49-14,103 provides that a contract entered into contrary to the provisions of §4914,102 is voidable by a court of competent jurisdiction. Sections 49-1407, 49-1408 and 49-1425 define the terms business, business association, and immediate family, respectively.
In past advisory opinions, the Commission has taken the position that a bidding process is an open and public process. It has also stated that an open and public process includes one in which the matter of awarding a contract is an agenda item for a meeting of a governing body if the meeting is publicized in the normal manner of the governing body. See Advisory Opinions #87, 154, and 168. In Advisory Opinion #168 the Commission stated, "These are- not necessarily the only processes which can be considered open and public."
It is our opinion that the procedure proposed by DED is an open and public process. It provides public notice prior to the award of the contractual grant. It provides the opportunity for the public to comment prior to any award. It permits the public to review the application for the contractual grant, the recommendations of the DED staff and the terms of the proposed grant.