Authorizes political subdivisions to award public competitively bid contracts to businesses that participate in certain programs

BILL NUMBER:S1020

Title of bill

An act to amend the general municipal law, in relation to authorizing political subdivisions to award public competitively bid contracts to businesses that participate in a program designed to foster participation by local businesses in public procurement at a cost premium not to exceed ten percent of the lowest bid

Purpose

To ensure local 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 by competitive sealed bids on contracts less than one million a municipality that employs a program to foster the participation of local businesses in public procurement, may award such contracts to a participant of such a program even if their bid is not the lowest bid received, provided that the bid does not exceed the lowest bid by more than ten percent.

Justification

According to the NYC Economic Development Corporation, there are over 220,000 small businesses in New York City. Businesses with fewer than 100 employees comprise 98% of all businesses in the City. Moreover, these businesses employ nearly 50% of all New Yorkers in the private sector.

The current economic climate is having a devastating effect on small businesses all over the City. According to the NYC Comptroller, the economic downturn could cause up to 165,000 New Yorkers to be laid off over the next two years. Furthermore, nearly 80% of the people who may lose their jobs are likely to be employees of small businesses.

Due to General Municipal Law § 103, localities cannot require agencies to award contracts to anyone but the lowest responsible bidder and prohibits the City from any flexibility in the award of such contracts. As a result, the City's current program that is designed to assist local businesses in obtaining contracts with the City, primarily assist businesses in accessing contracting opportunities, informing them how to navigate the procurement system and providing them with technical training to improve their chances of being the lowest responsible bidder. GML § 103 constrains localities from developing a stronger program that might result in more contract awards to local businesses.

In order to strengthen the program aimed to assist local businesses in obtaining contracts with the City, legislation that would allow the localities to give certified firms a small price preference could help address this problem. General Municipal Law § 104-a already allows for such a price preference for the purchase of recycled products by political subdivisions (political subdivisions may purchase recycled products at a cost premium not to exceed ten percent of what a non-recycled product would cost or not to exceed 15% for products manufactured with at least 50% secondary materials generated from NY waste stream). Legislation that mirrors GML § 104-a, would allow municipalities to give local businesses a small price preference when awarding qualifying contracts.

Legislative history

2013-14: S.415/A.719

Fiscal implications

None to the State.

Effective date

This act shall take effect on the thirtieth day after it shall have become a law.