Relates to contracts for joint or group purchasing of goods for state university health care facilities

1 Co-sponsor

• Michael H. Ranzenhofer

Title of bill

An act to amend the education law, in relation to contracts for joint or group purchasing of goods for state university health care facilities

Purpose

To provide that in the event State University health care facilities purchase goods through joint or group purchasing arrangements, such arrangements and purchases made through such arrangements shall not be subject to the pre-approvals of the State Comptroller and Attorney General, competitive procurement requirements, requirements to purchase from preferred sources and through centralized contracts of the Office of General Services and publication requirements.

Summary of provisions

Section 1 of the legislation amends Education Law section 355(16)(b) to authorize State University health care facilities to enter into joint or group purchasing arrangements for goods, which arrangements and purchases made through such arrangements shall not be subject to State Finance Law section 112 (State Comptroller pre-approval), Executive Law section 63 (Attorney General approval), State Finance Law section 163 (competitive procurement; preferred sources; OGS centralized contracts), Economic Development Law Art. 4-C (publication in Contract Reporter or Education Law section 355(5)(a), (a-1)(rules of the State Comptroller).

Section 2 provides that the legislation takes effect immediately.

Existing law

Education Law section 355(26)(b) authorizes the State University to purchase goods without prior approval of the State Comptroller and Attorney General and to purchase services without the approval of the State Comptroller and Attorney General at a cost under negotiated thresholds. Generally, the provisions of State Finance Law section 163 require competitive procurement of goods and services and require procurement first from preferred sources then through centralized contracts of the Office of General Services and then through procurement by a State entity directly.

Justification

SUNY's hospitals exist in increasingly competitive and rapidly changing health care markets, requiring that they be provided with additional flexibility to deploy limited resources more efficiently. All hospital - including other public hospital in New York - use Group Purchasing Organizations (GPOs) as a major purchasing tool to save money and maximize the efficiency of internal procurement resources. Current procurement requirements for SUNY's hospitals, which this legislation seeks to amend, preclude them from taking full advantage of leveraging the shared buying power of all three hospitals and the efficiency provided by using GPOs as a purchasing tool. Nothing in this legislation either amends the civil service law or impacts State employee contracts.

This legislation only provides flexibility for hospital joint or group purchasing, thereby providing an incentive for the hospitals to purchase together to maximize savings for all three of them and freeing them from duplicative and time consuming requirements associated with current law. This legislation is an important step in giving the SUNY Hospitals the flexibility from overly burdensome processes that impede their ability to survive and compete - so they

are able to continue to support the educational mission of SUNY's public academic medical centers at Downstate, Stony Brook and Upstate.

Legislative history

2013-14 S.1653; 2012 S.7065A.

Fiscal implications

Savings in expenditures for goods and services procured for State University health care facilities.

Effective date

Immediately.