Relates to purchasing services and commodities

§ 2 amends paragraph h of subdivision 1 of section 163 of the state finance law to remove the term "non-technical" for the purposes of a definition of the term "single source".

§ 3 amends subdivision 6-a of section 163 of the state finance law to increase the threshold established in article 4-c of the economic development law for purchases made by the commissioner of general services from $30,000 to $50,000.

§ 4 amends subdivision 6-b of section 163 of the state finance law to allow a change to a renewal of a discretionary purchase where the change or renewal could not have been reasonably expected prior to the first purchase.

§ 5 amends paragraph c of subdivision 9 of section 163 of the state finance law to set a time frame of ten business days following a request for a state agency to provide a debriefing to any unsuccessful offeror that responded to a request for proposal or an invitation for bids.

§ 6 amends paragraph e of subdivision 10 of the state finance law to clarify that the requirement that agencies include in a procurement record the rationale for piggybacking on a federal government contract or any other state or states also applies to piggybacking on contracts let by New York state agencies and New York state political subdivisions.

§ 7 amends subdivision 3 of section 141 of the economic development law to add construction to the definition of "procurement contract" and to raise the threshold for such types of contracts from $15,000 to $50,000.

§ 8 amends section 146 of the economic development law to conform the Comptroller's authority to approve contracts which have not been advertised to the new notice threshold ($15,000 to $50,000) established by this bill.

§ 9 amends paragraph m of subdivision 2 of section 161 of the state finance law to require quarterly listing of projected procurements valued between $15,000 and $50,000 in the procurement opportunities newsletter.

§ 10 amends subdivision 8 of section 163 of the state finance law to increase the threshold from $15,000 to $50,000 for publishing procurement opportunities in the procurement opportunities newsletter.

§ 11 adds a new article 11-C to the state finance law to provide for Program Procurements in order to establish a statutory framework for the award of State contracts traditionally called "grants," that are awarded without the formal competitive process required by state finance law Article 11.

Section 179-ff of Article 11-C adapts the current Article 11 definitions of "costs," "emergency," "price," "procurement record," "responsible or responsibility," "responsive," "single source," "sole source," "specification or requirement," and "state agency or state agencies," adopts the current General Construction Law definition of "public corporation," and adds a new "program procurement" definition, which covers:

A procurement which is undertaken by a state agency for a broad public purpose authorized by law, rather than a narrowly defined activity, that is intended to benefit a community or a portion of a community and is to be accomplished in whole or in part through a contract or contracts with an association, partnership, joint venture, firm, company, corporation, public corporation, not-for-profit organization or a combination of such entities. A program procurement provides the proposer or applicant with wide discretion and latitude in the manner in which the purpose is to be accomplished with few specific limitations on the scope of the proposal or application. A program procurement is not undertaken by a state agency primarily to obtain commodities, services or technology.

Section 179-gg provides that Program Procurements are exempt from the formal competitive requirements of State Finance Law Article 11 if (i) they are open only to not-for-profit corporations, municipal corporations, district corporations, or public benefit corporations; or (ii) they are open to profit-seeking corporations and granted an exemption by the Comptroller from the requirements of Article 11.

Section 179-hh prescribes a procedure for a State agency to submit a written request for an exemption from the requirements of Article 11 and for the Comptroller to make a written determination granting or denying an exemption on the basis of the proposed procurement's conformance with the definition of a Program Procurement.

Section 179-ii specifies the procedures to be used in a Program Procurement, including the following: (i) documentation of the method of award prior to the receipt of proposals or applications, (ii) advance public notice in the State Contract Reporter, (iii) a Request for Proposals or other solicitation document specifying the requirements for a responsive proposal or application and the manner in which evaluations and selections will be made, (iv) selection and awards must be on the basis of reasonable costs and the highest-ranked technical merits, consistent with the solicitation document and the award methodology documented in the procurement record, and following a determination by the procuring agency that the selected proposer or applicant is a responsible party, (v) the amount of an award may be reduced in accordance with a methodology defined in the procurement record prior to the receipt of proposals, (vi) discretionary awards in amounts less than $50,000 may be made, (vii) contract awards shall be on the basis of the highest ranking in accordance with the predetermined evaluation methodology, or on an emergency, sole source, or single source basis documented in the procurement record, and (viii) review and approval of Program Procurement contracts will be conducted by the Comptroller in accordance with state finance law section 112.

§ 12 adds a new subdivision 13-a to section 163 of the state finance law to provide for pilot procurement projects if (i) the procuring agency demonstrates that a pilot procurement method would better serve the interest of the State than other methods currently available under state finance law article 11 and that the pilot procurement method can be applied on a fair and equitable basis, and (ii) the Comptroller concurs. For each pilot procurement project contract, the procuring agency shall submit to the Comptroller, not later than the mid-point of the term of the resultant contract, a report assessing the success or failure of the pilot procurement method. The Comptroller will then review the report and make written recommendations to the Governor and the Legislature regarding the possible continued use of such method.

§ 13 amends subdivision 7 of section 160 of the state finance law amending the definition of services to exclude those services provided by a not- for-profit organizations in accordance with the provisions of article IX-B, services provided by a public corporation defined in subdivision one of section sixty-six of the general construction law and services obtained through a program procurement process.

§ 14 adds a new section 169 to the state finance law providing for the purchase of renewable energy resources and recycled products when available and when reasonably priced.

§ 15 amends paragraph b of subdivision 10 of section 163 of the state finance law to establish when a state agency shall not make available for public inspection the procurement record of a single source procurement contract.

§ 16 amends subdivision 12 of section 163 of the state finance law to allow the Comptroller to excuse minor deviations in procurement procedures if (i) the contracting agency determines and certifies, based upon clear and convincing evidence documented in the procurement record, that the noncompliance did not prejudice or favor any vendor or potential vendor and that a new procurement would not be in the best interest of the state; and (ii) the Comptroller concurs in such determination.

§ 17 provides for an immediate effective date.

Justification

The Procurement Stewardship Act was enacted fourteen years ago (Chapter 83, Laws of 1995. The Act codified many procurement standards the Comptroller was already using in the review and approval of State contracts. The Act also established a State Procurement Council and added new provisions relating to the procurement of commodities, services and technology. The Legislature should consider the amendments set forth in this bill that are necessary to address issues that have become apparent during the time the Act has been in effect.

RAISING THRESHOLD LEVEL FOR PUBLIC NOTICE - DISCRETIONARY PURCHASES : The discretionary buying thresholds provide state agencies and public authorities with flexibility and support more timely procurements for low dollar transactions. Thresholds requiring formal competition and prior approval by the Office of the State Comptroller were last increased in 2005(7). Advertising thresholds for State agencies to announce procurement opportunities remain at $15,000 and for OGS at $30,000. The proposed amendment would increase and align the various dollar levels to improve the administration of discretionary purchasing by making the threshold for advertising procurement opportunities $50,000 consistent with the threshold for formal competition and State Comptroller approval.

This threshold increase would provide a positive impact by providing increased contracting opportunities for MWBE's and small businesses and promote purchasing of recycled or remanufactured goods. In conjunction with the proposal to raise the threshold for advertisement the bill requires advertisement on a quarterly basis of projected discretionary procurements so as to provide notice to interested parties and to increase the availability and functionality of the procurement opportunities newsletter by making it free to users of the electronic publication, by allowing publication of notices from government or potential government contractors seeking subcontractors and suppliers and requiring inclusion in the newsletter of contract award information.

Program procurements

Currently there is no statutory authority governing the award of program procurements, commonly known as grants. The Procurement Stewardship Act should be modernized to establish a statutory framework for the award of "grants" and to recognize that for-profit entities, as well as not-for-profit organizations, often compete for grant-type awards for services that have traditionally been confined to the not-for-profit arena. Currently, the award of grants to fund specific programs run by not-for-profits is not subject to the same competitive standards as the law prescribes for other types of procurements. Once the competition involves for-profit entities, however, the rules of the Procurement Stewardship Act apply even though they may not make sense for this type of procurement. This bill defines such procurements as "Program procurements" provides for consistent treatment whether or not profit-seeking firms are being enlisted to participate in public programs. Since, under the bill, a State agency will be able to conduct a program Procurement open to profit-seeking entities only if the Comptroller grants an exemption from the requirements of Article 11, any concerns about the possibility that State agencies might abuse the Program Procurement process should be alleviated.

Pilot procurement methods

When a State agency develops a procurement method that does not fit within the requirements of the Procurement Stewardship Act, the agency should be able to use such a method on a pilot basis for a specific contract award. The bill authorizes the Comptroller to approve a contract awarded on the basis of a pilot procurement method as long as (i) the contracting agency makes a determination, documented in the procurement record, that such a pilot procurement method better serves the interest of the State than other procurement methods available under the Act and can be applied on a fair and equitable basis; and (ii) the Comptroller approves the pilot procurement method prior to the procurement. In order to effectively monitor the success or failure of the pilot procurement method the procuring State agency must file a report with the Comptroller by the mid-term of the resulting contract. The Comptroller will then review the report and make recommendations to the Governor and the Legislature concerning the possible continued use of the pilot procurement method.

Comptroller's authority to waive deviations

The Office of the State Comptroller regularly encounters circumstances where the contracting agency has unwittingly deviated from formal competitive bidding requirements. Where the agency has otherwise conducted a fair competition, and the deviation does not favor the winning proposer or prejudice the losing proposers or potential proposers, the Comptroller's staff often attempts to salvage the procurement by approving the resulting contract on a single source basis. The rationale for this approach is that approving such contracts is in the best interests of the State, since, in these instances, it is generally predictable that the same proposer would win a new procurement competition and that, therefore, State resources would be wasted by conducting a new procurement. The bill authorizes the Comptroller to approve such contracts if (i) the procuring agency certifies, on the basis of clear and convincing evidence documented in the procurement record, that the noncompliance did not prejudice or favor any vendor or potential vendor and that a new solicitation would not be in the best interests of the State; and (ii) the Comptroller concurs in such determination.

The Comptroller recommends enactment of this bill to improve contracting practices in the State.