Government Procurement Law

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Government Procurement Law
Presenter Anne Phillips, OGS Associate
Counsel State Purchasing Forum June 16 and 17,
2004
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Executive Law
State Finance Law
Case Law
UniformCommercial Code
CONTRACT
FederalLaws (e.g. Intellectual Property, Telecom)
Procurement Council Guidelines
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Pre-1995Public Contracting

• Historical Context
• Purchase of Traditional Commodities
• Capable of standardization
• Articles of commerce (food, salt, linens)
• Public entities were predominantly large
  institutions
• Services were bought individually by government
  agencies

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Pre-1995Public Contracting

• Prior governing statute (174 State Finance Law)
  provided minimal guidance for procurement and
  competitive bidding. Agencies were essentially
  relegated to contract awards for commodities to
  the lowest price bidder. Contracts for services
  or services procurements were not governed
  directly by statute.

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Post-1995Procurement Stewardship Act

• Major Change in the Framework for Public
  Procurements
• State Finance Law, Article 11
• Effective Date 4-1-95
• Sunset Date 6-30-05

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Procurement Stewardship Act

• Underlying Principles and Legislative Findings
• Responsibility of OGS and State Agencies in
  cooperation with OSC and DOB to
• Provide for the wise and prudent use of public
  money in the best interests of the taxpayers of
  the state
• Guard against favoritism, improvidence,
  extravagance, fraud corruption, and
• Facilitate the efficient and timely acquisition
  of commodities and services of the highest
  quality at the lowest practicable cost within
  available resources.

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Procurement Stewardship Act

• State agencies shall provide the states primary
  line of defense for protecting the integrity of
  the states procurement process and shall be
  responsible for ensuring that the decisions made
  in executing that process are made in accordance
  with the highest standards of professional
  practice.

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Procurement Stewardship Act

• Provide a level playing field among competitive
  bidders to enhance competition.
• Requires a procurement record a documented
  process which provides a balanced and fair
  method, established prior to receipt of offers,
  for evaluation of bids.

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Procurement Stewardship Act

• Procurement Council established to
• review, examine and develop
• improvements to procurement process
• and competitive solicitation of bidding for
• commodities, services and technology

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Procurement CouncilState Finance Law 161

• Nineteen Members
• Chair Commissioner of OGS
• OSC
• DOB
• State Agency Representatives
• Designated members
• Procurement Guidelines
• Procurement Policy
• Quarterly Meetings
• Strategic Plan

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Cooperative Efforts to Improve Pubic Procurement
Process

• Multi-agency Cooperative efforts (OSC, OFT, OGS,
  municipalities)
• Effort to coordinate information and expertise on
  statewide level
• Support necessary legislative and regulatory
  changes for best practice government procurement
  and competitive bidding
• Forum for exchange of views by participants with
  opposing or different interests in procurement

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Government Procurement Competitive Bidding

• Comprehensive Statutory Scheme
• Procurement Stewardship Act
• Article 11
• State Purchasing
• Section 160. Definitions
• 161 State Procurement Council
• 162 Preferred Sources

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Government Procurement Competitive Bidding

• Section 163 Purchasing services and
• commodities (Sunset
  
• 6/30/05)
• 163-a Vendor preparation of
• specifications for
  technology
• procurements prohibitions
• 164 Exemptions
• 165 Purchasing restrictions

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Government Procurement Competitive Bidding

• Section 166 Requirements for financed
• equipment acquisition
• 167 Transfer and disposal of
  
• personal property
• 168 The management of surplus
  
• computer equipment

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Government Procurement Competitive Bidding

• Procurement Guidelines
• Detailed Guidance to State agencies on how to
• conduct procurements
• Summarizes in one place the multiple approaches
  to procurement
• Identifies essential elements of successful
  procurements
• Provides valuable technical guidance on different
  approaches for structuring a procurement and
• Provides examples of good procurement practices

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Government Procurement Competitive Bidding

• Definitions
• Commodities Material goods, supplies,
  products, construction items or other standard
  articles of commerce (other than printing or
  technology) which are the subject of any purchase
  or exchange.

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Government Procurement Competitive Bidding

• Definitions
• Services Except for state printing, the
  performance of a task or tasks that may include
  provision of a material good or a quantity of
  material goods, and which is the subject of any
  purchase or exchange. Technology is deemed a
  service.

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Government Procurement Competitive Bidding

• Definitions
• Technology Either a good or a service or a
  combination thereof, that results in a technical
  method of achieving a practical purpose or in
  improvements in productivity. Goods may be
  either new or used.

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Government Procurement Competitive Bidding

Definitions Costs As used in this article
shall be quantifiable and may include, without
limitation, the price of the given good or
service being purchased the administrative,
training, storage, maintenance or other overhead
associated with a given good or service the
value of warranties, delivery schedule, financing
costs and foregone
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Government Procurement Competitive Bidding

• opportunity costs associated with a given
• good or service and the life span and
• associated life cycle costs of the given good
• or service being purchased. Life cycle costs
• may include, but shall not be limited to,
• costs or savings associated with construction,
• energy use, maintenance, operation, and
• salvage or disposal.

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Government Procurement Competitive Bidding

• Definitions
• Price Unless otherwise specified means the
  amount of money set as consideration for the sale
  of a commodity or service and may include, but is
  not limited to, when applicable and when
  specified in the solicitation, delivery charges,
  installation charges and other costs.

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Government Procurement Competitive Bidding

• Definitions
• Invitations for Bids (IFBs)
• Competitive Bidding Methodology
• Primarily used for procurement of commodities
• Basis for Contract Award
• Meet specifications
• Lowest price

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Government Procurement Competitive Bidding

• Lowest Price for Commodities Statutorily
• defined to include costs such as
• Administrative, training, storage, maintenance or
  other overhead associated with a given good or
  service
• Value of warranties
• Delivery schedules
• Financing and foregone opportunity costs
• Life span and associated life cycle costs
  (savings associated with construction, energy
  use, maintenance, operation, salvage or disposal)

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Government Procurement Competitive Bidding

• Best Value
• Bid Evaluation Criteria Technical and Financial
• Qualifying Criteria
• Documented in advance of the receipt of offers
• Quantifiable wherever possible
• Relative weight technical vs. financial criteria

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Government Procurement Competitive Bidding

• Request for Proposals (RFPs)
• Competitive Solicitation Methodology
• Primarily used for procurement of services and
  technology
• Basis for Award
• Pre-established evaluation criteria where cost is
  not necessarily the determining factor
• Best Value to the purchaser is the
  determinative criteria

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Government Procurement Competitive Bidding

• Best Value
• Documentation Other Requirements
• Best Practices Before You Solicit
• Document the intended basis for award. (such as
  meeting mandatory requirements, best value or
  lowest price)
• Determine the technical and financial evaluation
  criteria and relative weight.
• Quantify criteria whenever possible, to optimize
  quality, cost and efficiency.
• Determine and document the evaluation and
  selection process
• Advertise the procurement

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Government Procurement Competitive Bidding

• Distinction Lowest Price vs. Best Value
  State Finance Law, 163
• Lowest Price means the basis for awarding
  contracts for commodities among responsive and
  responsible offerors.

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Government Procurement Competitive Bidding

• Best Value means the basis for awarding
  contracts for services to the offeror which
  optimizes quality, cost and efficiency, among
  responsive and responsible offerors. Such basis
  shall reflect, wherever possible, objective and
  quantifiable analysis. Services includes
  technology.

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• Centralized Contracts
• Centralized Contract means any contract for
  the purchase of commodities or services,
  established or approved by the Commissioner of
  General Services as meeting the State's
  requirements including, but not limited to, any
  contract let by the federal government, other
  state or local governments or purchasing
  consortia.

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Government Procurement Competitive Bidding

• Examples
• Vehicles heavy equipment
• Pharmaceuticals medical equipment
• Electronic Value Transfer (credit
  cards)/procurement card
• Fuel Oil, Gasoline, Road Salt
• PCs
• Rubbish Removal
• Telecommunications Systems Services

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• Agency Specific Contracts
• Specialized Requirements Needed to Meet Agency
  Mission
• Consultant Services
• Do Not Call Registry
• Digital Fingerprinting Identification
• Specialized Software
• Entertainment Services

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• Preferred Sources State Finance Law 162
• To advance special social and economic goals,
  selected providers shall have preferred source
  status Procurement from these providers shall be
  exempted from competitive procurement provisions.

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Government Procurement Competitive Bidding

• Preferred Status
• Correctional Services Commodities
• Agencies for the Blind Commodities Services
• Agencies for the Severely Disabled Commodities
  and Services
• Special Employment for Mentally Ill Commodities
  and Services
• Disabled Veterans Commodities sand Services
• Veterans Commodities and Services
• Qualified Apparel Manufacturer September 11th
  Registry

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Government Procurement Competitive Bidding

• Public List of Commodities Services
• Approval by Procurement Council
• Price Approval Not greater than 15 above
  Prevailing Market Price
• Alternate Process for Procurements of Apparel
  Textiles

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• Emergency Contracts State Finance Law
  163(10(b)
• Procurements may be made to meet emergencies
  arising from unforeseen causes without using a
  formal competitive process. Such procurements
  shall be made only under unusual circumstances
  and shall include a determination in the
  procurement record of the nature of the emergency
  and that the procurement was conducted in a fair
  and equitable manner.

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• Single Source
• Single Source means a procurement in which
  although two or more offerors can supply the
  required commodities or services, the
  Commissioner or State agency, upon written
  findings setting forth the material and
  substantial reasons therefore, may award the
  contract to one offeror over all others. The
  Commissioner or State agency shall document in
  the procurement record the circumstances leading
  to the selection of the vendor, including the
  alternatives considered, the rationale for
  selecting the specific vendor and the basis upon
  which it determined the cost was reasonable.

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• Sole Source
• Sole Source means a procurement in which only
  one offeror is capable of supplying the required
  commodities or services

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• Multiple Awards State Finance Law 163(10)(c)
• The Commissioner or State agency may elect to
• award a contract to one or more responsive
  and responsible offerors provided, however, that
  the basis for the selection among multiple
  contracts at the time of purchase shall be the
  most practical and economical alternative and
  shall be in the best interests of the State, and
  further provided that the requirements set forth
  herein shall not preclude the Commissioner from
  establishing multiple award contracts for reasons
  including increased opportunities for small
  businesses to participate in State contracts.

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Government Procurement Competitive Bidding

• Types of Contracts State Finance Law 163
• Centralized Contract
• Agency Specific Contract
• Preferred Sources
• Emergency Contract
• Single Source Contract
• Sole Source Contract
• Multiple Awards
• Piggybacking (Adoption of Another Government
  Entity Contract)

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Government Procurement Competitive Bidding

• The Commissioner of General Services may
  authorize purchases required by state agencies or
  authorized purchasers by letting a contract or by
  approving the use of a contract let by any
  department, agency or instrumentality of the
  United States government and/or any department,
  agency, office, political subdivision or
  instrumentality of any state or states.

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Government Procurement Competitive Bidding

• The Commissioner of General Services is
  authorized to let centralized contracts for joint
  purchasing by New York State and any department,
  agency or instrumentality of the United States
  government and/or any state including the
  political subdivisions thereof provided however
  that any entity incurring a liability under such
  contract shall be responsible for discharging
  said liability.

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Government Procurement Competitive Bidding

• Under this authority, the State can recognize
  and use or be a part of contracts of other public
  purchasers. In most instances, these other
  government entities establish their agreements
  using competitive solicitations. This
  procurement methodology has proven to be a tool
  that provides a means to meet special
  requirements or to efficiently and economically
  meet the needs of State agencies and Authorized
  Users.

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Government Procurement Competitive Bidding

• Note These contracts and purchases
• also need to be supported by a
• procurement record and are
• subject to OSC approval.

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Government Procurement Competitive Bidding

• Piggybacking Agreements have provided for imaging
  systems, landscape furniture, cellular telephone
  service and mission specific consultant services
  such as Year 2000 programming.
• Joint Agreements have provided for
  pharmaceuticals (Minnesota multi-state) and
  traffic cones (New England States and New York.

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Process for Conducting Procurements

• Developing the Procurement
• Determination of Need
• Form, Function Utility Decisions for
  Centralized Contracts
• Discretion of OGS Commissioner in cooperation
  with State Procurement Council and state
  agencies,

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Process for Conducting Procurements

• Criteria which OGS uses includes, but is not
  limited to
• Availability of a volume discount
• Prior use of the commodity among state agencies
• Relative cost of establishing the contract
• Anticipated use and
• Expected actual savings for the State

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Process for Conducting Procurements

• Drafting Issuing Agency Contracts
• IFB vs. RFP
• NYS Contract Reporter Advertisement
• Required if Contract Value Over 15,000
• Article 4C Economic Development Law
• Receipt of offers minimum of fifteen business
  days after notice published
• Appendix A (Standard Clauses for State Contracts

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Process for Conducting Procurements

• Drafting Issuing the Document
• Appendix B (OGS General Specifications for
  Procurement Contracts)
• Non-Collusive Bidding Certificate
• MacBride Certification
• Executive Order No. 127 Providing for
  Additional State Procurement Disclosure

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Government Procurement Competitive Bidding

• Discretionary Thresholds for Purchasing
• State Agencies up to 15,000
• State Agencies up to 50,000
• For recycled commodities or technology
• For remanufactured commodities or technology
• From small businesses
• From certified minority/women-owned business
  enterprises

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Government Procurement Competitive Bidding

• Use of Mini Bids
• Another competitive solicitation technique
  employs multiple contract awards where vendors
  present their qualifications and agree to
  standard terms and conditions for a multiple year
  contract term with not to exceed prices
  backdrop contracts. State agencies and
  Authorized Users present their technical needs to
  a pool of qualified contractors (Project
  Definition or Mini Bid) choosing the best
  value solution.

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Government Procurement Competitive Bidding

• This allows the purchaser to focus on meeting
  their operational or functional requirements and
  cut down on the contract cycle time often
  reducing the procurement time to weeks rather
  than months.

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Government Procurement Competitive Bidding

• Use of Mini Bids
• Computer Consulting, Systems Integration and
  Training Agreements with categories of services
• Telephone Systems and Maintenance
• Third Party Financing Services
• Microcomputer Systems

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Government Procurement Competitive Bidding

• Bid Evaluation Approvals
• Responsive Offeror
• Material vs. Non-Material Deviations
• Clarifications, revisions, discussions, where
  provided in the solicitation
• Responsible Offeror
• Due Diligence
• Due Process
• Prior Contract History
• No debarment in NYS, other than for prevailing
  wage rate or labor law violations

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Government Procurement Competitive Bidding
Vendor Responsibility Due Process and the
Opportunity to be Heard

• Procurement determinations arising from the need
  to ascertain the responsibility of a
  vendor/bidder impose a duty on the State agency
  to provide an opportunity to be heard

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Government Procurement Competitive Bidding

• It is the policy of the Office of General
  Services (OGS) Procurement Services Group (PSG)
  to provide vendors with an opportunity to
  administratively resolve complaints or inquiries
  related to PSG bid solicitations or contract
  awards. Bidders are encouraged to seek
  resolution of complaints through consultation
  with PSG staff. All such matters will be
  accorded impartial and timely consideration.

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Government Procurement Competitive Bidding

• Bid Evaluation Approvals
• Bid Disputes
• No statutory right
• Commissioner's responsibility to make an award
  consistent with procurement laws
• Elements of defensible decisions

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Government Procurement Competitive Bidding

• Bid Evaluation Approvals
• Required Approvals
• Department of Law
• Specialty Contracts
• Civil Service
• Office for Technology
• Division of the Budget
• Office of the State Comptroller

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Government Procurement Competitive Bidding

• Selection and Contract Award
• Using Bid Documents for Contract Award
• Negotiate Contract

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Government Procurement Competitive Bidding

• Other Relevant Laws
• Section 112 State Finance Law
• OSC Approval
• Section 97-g State Finance Law Centralized
  Services
• Section 138 State Finance Law Non-Assignment of
  State Contracts
• Section 139-d State Finance Law Non Collusion by
  Bidders
• Section 144-a State Finance Law Rock Salt
  Preference
• Section 220 and 240 Labor Law
• Prevailing Wage Rate
• Article 2 Uniform Commercial Code Sales

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Questions