Relates to obtaining best value for contracts for purchase contracts

BILL NUMBER:S4753A

Title of bill

An act to amend the general municipal law, in relation to obtaining best value for purchase contracts

Summary of provisions

Sections one and two of this bill amend subdivision 1 of General Municipal Law § 103 to provide that purchase contracts (including contracts for service work, but excluding any purchase contracts necessary for the completion of a public works contract pursuant to Article eight of the Labor Law) shall be awarded on the basis of best value rather than to the lowest responsible bidder Sections three through eleven amend other subdivisions of § 103 and § 103-e of the General Municipal Law to conform these subdivisions to allow for the awarding of purchase contracts (including contracts for service work) on the basis of best value.

Reasons for support

Enactment of this legislation would provide additional procurement options to localities in ways that may expedite the procurement process and result in cost savings. The "best value" standard for selecting goods and services vendors, including janitorial and security contracts, is critical to the City's efforts to use strategic sourcing principles to modernize its supply chain and ensure that taxpayers obtain the highest quality goods and services at the lowest potential cost, while also ensuring fairness to all competitors. Today, the federal government, approximately half of the states and many localities have added best value selection processes to their procurement options, in recognition of these advantages.

With the increased complexity of the goods and services that municipalities must obtain in order to serve taxpayers, it is critical to consider selection and evaluation criteria that measure factors other than cost in the strictest sense. Taxpayers are not well served when a public procurement results in low unit costs at the outset, but ultimately engenders cost escalations due to factors such as inferior quality, poor reliability and difficulty of maintenance. Best value procurement links the procurement process directly to the municipality's performance requirements, incorporating selection factors such as useful lifespan, quality and options and incentives for more timely performance and/or additional services. Even if the initial expenditure is higher, considering the total value over the life of the procurement may result in a better value and long-term investment of public funds. Best value procurement also encourages competition and, in turn, often results in better pricing, quality and customer service.

Fostering healthy competition ensures that bidders will continue to strive for excellence in identifying and meeting municipalities' needs, including such important goals as the participation of small, minority and women-owned businesses, and the development of environmentally-preferable goods and service delivery methods.

Best value procurement will provide the City much-needed flexibility in obtaining important goods and services at favorable prices, and will reduce the time to procure such goods and services.

Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.