Establishes detailed procedure for public bidding for purchases and contracts for all public benefit corporations and public authorities not otherwise exempted

BILL NUMBER:S2226

Title of bill

An act to amend the public authorities law, in relation to public bidding for purchases and contracts

Summary

This bill describes the manner of awarding all contracts by public authorities and public benefit corporations, not otherwise required to advertise and obtain sealed bids before letting public works contracts or contracts for the purchase of supplies, materials, or equipment. The legislation requires that all purchase contracts in excess of $25,000 be awarded to the lowest responsible bidder furnishing the mandates security after advertisement for sealed bids.

In certain instances the bill provides for an authority to use the 5% rule: the public authority or public benefit corporation could award the contract to a N.Y. firm if it comes within 5% of the lowest responsible bid. A "NY bidder" is a person or entity who or which has its principle place of business in this state, or who or which conducts a substantial portion of its economic activity within this state, or who or which manufacturers a product within NYS and such product is the subject of the bid to be awarded.

Firms which list a NYS address but whose principle place of business is in another location will be excluded from definition of a NYS firm.

Types of contracts for which a 5% rule would not apply, include: Consultant contracts, projects receiving federal funding under restrictions that require competitive bidding without exception, and as determined by the authority based upon its evaluation of the public interest, certain large capital projects for which major construction activities employ workers who reside in NYS within the general area to be served by the completed project.

This bill does not prohibit the evaluation of bids on the basis of the life cycle cost of the supplies, materials and equipment to be purchased so long as the invitation to bid clearly sets forth objectively measurable criteria to be used in evaluating the life cycle cost of the item to be purchased. Such criteria may include but shall not be limited to costs or savings associated with discounts, transportation, installation, energy use, maintenance, operation and salvage or disposal.

This bill makes provisions as to identical bids, advertisements, and suspension thereof in cases of public emergency or the purchase of special, unique or sophisticated equipment or professional services which are peculiar to the business of the public entity.

Justification

This legislation would assure the prudent and economical use of public moneys for the benefit of all inhabitants of this State and would facilitate the acquisition of facilities and commodities of maximum quality at the lowest possible cost by requiring competitive bidding. In the instances where the 5% preference rule will be enforced, it would promote economic growth, create jobs and generate income and tax benefits in NYS. A public entity's primary responsibility must always be to provide NYS residents with the quickest, safest and most cost-efficient service possible. However, the entity also has the means as well as a duty to promote economic growth and development in the state. This legislation has been supported by the New York State Association of Architects, and the General Building Contractors.

The life cycle provision is important because while one company may outbid another on initial cost for purchases of supplies, materials, or equipment, other long term costs including discounts, transportation, installation, energy use maintenance, operation salvage or disposal, may prove the low bid contract more expensive.

Fiscal implication

To be determined.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become a law.