Relates to obtaining best value for purchase contracts

Summary of specific provisions

Sections one and two of this bill amend a chapter of the laws of 2011, amending the general municipal law relating to obtaining best value for purchase contracts, as proposed in legislative bills numbers S.4753-A and A.7357-A, 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) may be awarded on the basis of best value, except that in a political subdivision other than a city with a population of one million inhabitants or more or any district, board or agency therein the use of best value must be authorized by a local law or, in the case of a district corporation, school district or board of cooperative educational services, by rule, regulation adopted at a public meeting.

Effects of present law which this bill would alter

Current law requires political subdivisions to award all contracts for public work involving an expenditure of more than thirty-five thousand dollars and all purchase contracts involving an expenditure of more than twenty thousand dollars to the lowest responsible bidder.

Justification

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 efforts to use strategic sourcing principles to modernize the 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 life span, 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 a much-needed flexibility in obtaining important goods and services at favorable prices, and will reduce the time to procure such goods and services.

Prior legislative history

This is a new bill that would amend a chapter of the laws of 2011, amending the general municipal law relating to obtaining best value for purchase contracts, as proposed in legislative bills numbers S.4753-A and A.7357-A.

Fiscal implications for state and local government

None to the State and the potential for undetermined savings to local governments.

Effective date

This act shall take effect on the same date and in the same manner as a chapter of the laws of 2011, amending the general municipal law relating to obtaining best value for purchase contracts, as proposed in legislative bills numbers S.4753-A and A.7357-A, takes effect.