Ask the Expert – Sales and Lobbying Registration

Question: Do my salespeople need to be registered as lobbyists if they sell to the government?

Answer: More than half of the states consider at least some forms of selling to the government to be lobbying, so caution is definitely warranted. The states that require registration for procurement lobbying all have different approaches, so there is no one-size-fits-all response to this question.

The most important question is what engagements are considered to be procurement lobbying. Some states broadly consider any attempt to influence a contracting decision to be lobbying, and other states use an “outside of the normal procurement process” standard, meaning that registration is required for attempts to change the rules applicable to procurements, to change the substance of the RFP’s requirements, to go outside of established procedures, or to sell to high-ranking officials rather than the end users. Other states, such as Texas, require registration for procurement lobbying, but only when the contract reaches a certain value.

Once you determine your sales activities fall under the definition of lobbying, all the other concerns applicable to lobbyists apply, so your analysis is not complete. Registration thresholds and exceptions for expert testimony, for example, still need to be considered, so, if desired, you may be able to avoid registration through careful consideration of the type and extent your staff’s interactions with government.

One last key factor to consider before registering your staff is contingency fee bans, also known as success fee bans, and how they affect sales staff compensation. While many states acknowledge salespersons frequently receive sales commissions and carve out an exception for commissions paid to “bona fide” salespeople, many others view their contingency bans as applying to all lobbyists, which would prevent your staff from receiving such payments. It is always advisable to determine how you will handle staff compensation before making contacts with the government, as there will be times when it is best to avoid having your staff engage at all.

Further information about the lobbying laws in hundreds of cities, counties, and local agencies can be found in the Procurement Lobbying Compliance Laws section of the State and Federal Communications online guidebooks. Schedule your demo today – https://stateandfed.com/demo/