Authorizes political subdivisions to award public contracts to participants of a MWBE program at a cost premium not to exceed ten percent of the lowest bid

1 Co-sponsor

• Tony Avella

BILL NUMBER:S416

Title of bill

An act to amend the general municipal law, in relation to authorizing political subdivisions to award public contracts to participants of a minority and women owned business enterprise program at a cost premium not to exceed ten percent of the lowest bid as an available remedy to a demonstrated disparity

Purpose

To ensure MWBE certified businesses can compete for local procurement opportunities.

Summary of provisions

Amends Section 104-a of the general municipal law to provide that when purchasing goods, services or construction for public use on contracts less than one million a municipality may award the contract as reasonably competitive when (1) a study has found that there is or has been a disparity between the availability and the utilization of MWBEs in the award of contracts by such political subdivision or district therein; and (2) the bid does not exceed the lowest bid by more than ten percent.

Justification

Many MWBEs are losing contracts by very small margins (a few percentage points). Though localities like the City of New York, which have increased its certified MWBE firms by over 40% from December 2006 to December 2007, the number of firms who win contracts remain very low, despite the goals set forth in NYC Local law 129 and the goals and utilization plans set forth by the individual agencies. Due to General Municipal Law § 103, localities cannot require agencies to award contracts to anyone but a lowest responsible bidder. This constrains localities from developing a stronger program that might result in more contract awards to certified MWBEs.

As many MWBEs are losing bids by very narrow margins, legislation that would allow the localities to give certified firms a small price preference could help address this problem. State Finance law 165(3) (b) (i) already allows for such a price preference for the state purchase of recycled goods (state agencies may purchase recycled commodities at a cost premium not to exceed ten percent of what a non-recycled commodity would cost or not to exceed 15% for commodities with over 50% secondary materials generated from NY waste stream). Legislation that mirrors STF §165, would allow municipalities to give certified MWBEs a small price preference when awarding qualifying contracts.

Legislative history

2011/12 - S.1330/A.1906 Reported to Ways and Means in Assembly 2009/10 - S.8575/A.6807 Passed Senate

Fiscal implications

None to the State; local impact would depend on how the law is implemented by a municipality.

Effective date

This act shall take effect on the 30th day after becoming law.