Create Contract Oversight Committee

Section 1. Section 2824 of the public authorities law is amended by adding a new subdivision 9 to read as follows:

9. The governing body of every state authority shall establish a procurement policy committee that shall consist of at least three independent members, unless there are insufficient seats on the governing body itself to allow for the appointment of at least three independent members, in which case the procurement policy committee shall consist of all the independent members of the governing body, and such committee shall be responsible for issuing appropriate rules or guidelines for oversight of all contracting matters in accordance with rules or guidelines adopted by the governing body pursuant to section twenty-eight hundred seventy-nine of this article.

§ 2. Section 2879 of the public authorities law, as amended by chapter 564 of the laws of 1988, paragraph (b) of subdivision 3 as amended by chapter 45 of the laws of 1994, subparagraph (i) of paragraph (b) of subdivision 3 and subdivision 6 as amended, paragraphs (f), (g), (h), (i) and (j) of subdivision 3 as added and paragraphs (k), (l), (m), (n), (o) and (p) of subdivision 3 as relettered by chapter 174 of the laws of 2010, subparagraph (iv) of paragraph (b) of subdivision 3 as amended by chapter 383 of the laws of 1994, paragraph (m) of subdivision 3 as added by chapter 862 of the laws of 1990, paragraph (n) of subdivision 3 and paragraph (a) of subdivision 5 as amended by chapter 531 of the laws of 1993, paragraphs (o) and (p) of subdivision 3 and subdivision 5 as added and paragraph (a) of subdivision 8 as amended, subdivisions 7, 8 and 9 as renumbered by chapter 844 of the laws of 1992, paragraph (b) of

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD07495-01-7

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subdivision 5 as amended by chapter 684 of the laws of 1994, subparagraph (iii) of paragraph (b) and paragraphs (c) and (d) of subdivision 5 as amended by chapter 383 of the laws of 2000, is amended to read as follows:

§ 2879. Procurement, public work, construction and revenue contracts. 1. (a) Every [public] state authority [and public benefit corporation, a majority of the members of which consist of persons either appointed by the governor or who serve as members by virtue of holding a civil office of the state, or a combination thereof, (such entities to be hereinafter in this section referred to as "corporation")] shall adopt by resolution comprehensive rules or guidelines which (i) detail the [corporation's] state authority's operative policy and instructions regarding the use, awarding, monitoring and reporting of procurement, public work, construction and revenue contracts[. Guidelines], and (ii) designate a contracting officer who shall be responsible for the public authority's compliance with, and enforcement of, such rules or guidelines. Such rules or guidelines shall be consistent with, and shall require a state authority's contracting activities to comply with the provisions of the state finance law or any other law applicable to contracts of the state, except that such rules or guidelines may be stricter than the provisions of the state finance law or other law applicable to state contracts if a state authority determines that additional safeguards are necessary to assure the integrity of its operations. Rules or guidelines approved by the [corporation] state authority shall be annually reviewed and approved by the [corporation.] governing body of the state authority. Not more than ninety days after the close of the state authority's fiscal year, the state authority shall file with the comptroller a copy of the rules or guidelines most recently reviewed and approved by the state authority, including the name of the state authority's designated contracting officer. At the time of filing such rules or guidelines with the comptroller, every state authority shall also post such rules or guidelines on the state authority's internet website. Procurement rules or guidelines posted on the state authority's internet website shall be maintained on such website at least until the procurement rules or guidelines for the following year are posted on such website.

(b) The procurement, public work, construction, and revenue contracts of a state authority shall be subject to prior review and approval by the comptroller, if the comptroller, in his or her discretion, determines that such review and approval shall be required. If the comptroller determines that any contract or category of contracts of a state authority or category of state authorities requires direct supervision in the form of pre-approval of contracts and the comptroller so notifies any state authority of such determination, then no such contract or agreement by such state authority shall be a valid enforceable contract unless such contract shall first be approved by the comptroller. In the event that the comptroller notifies any state authority that approval shall be required then the state authority shall (i) include in all such contracts a provision informing the other parties to such contracts that the same are not valid and enforceable without the comptroller's approval, and (ii) publish a notice on such state authority's internet website disclosing that such contracts shall not be valid and enforceable without the comptroller's approval. Nothing in this paragraph shall be deemed to limit the comptroller's existing authority to supervise the accounts of public authorities.

2. For purposes of this section, procurement, public work, construction or revenue contracts shall mean any written agreement of a

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state authority for the acquisition of goods or services of any kind or the construction of a project of any kind, in the actual or estimated [amount of five thousand dollars or more] amounts provided for contracts of the state in section one hundred twelve of the state finance law.

3. The rules or guidelines approved by [the corporation] each state authority shall include, but not be limited to the following:

(a) A description of the types of goods purchased or the types of projects constructed, [and] for procurement contracts for services, a description of those areas of responsibility and oversight requiring the use of personal services and the reasons for the use of personal services in such areas, and for revenue contracts, a description of the types of considerations given by the public authority, and the revenues expected to be generated.

(b) Requirements regarding the [selection of contractors] award of contracts, which shall include provisions:

(i) for the [selection of such contractors] award of contracts on a competitive basis, and provisions relating to the circumstances under which the [board] governing body may by resolution waive competition, including, notwithstanding any other provision of law requiring competition, the purchase of goods or services from small business concerns or those certified as minority or women-owned business enterprises, or goods or technology that are recycled or remanufactured, in an amount not to exceed two hundred thousand dollars without a formal competitive process, but only if such waiver would be permissible under the limited circumstances permitted by the state finance law, and only if such a waiver is approved by a two-thirds majority of the entire governing body of the state authority;

(ii) describing when the award of procurement, public work, construction or revenue contracts shall require approval of the [board] governing body by resolution, provided that any contract involving services to be rendered, a project to be constructed, or considerations to be given over a period in excess of one year shall require the approval of the [board] governing body by resolution and an annual review of the contract by the [board] governing body;

(iii) setting forth responsibilities of contractors;

(iv) as used in this subparagraph, the term "professional firm" shall be defined as any individual or sole proprietorship, partnership, corporation, association, or other legal entity permitted by law to practice the professions of architecture, engineering or surveying.

[The corporation] A state authority shall not refuse to negotiate with a professional firm solely because the ratio of the "allowable indirect costs" to direct labor costs of the professional firm or the hourly labor rate in any labor category of the professional firm exceeds a limitation generally set by the [corporation] state authority in the determination of the reasonableness of the estimated cost of services to be rendered by the professional firm, but rather the [corporation] state authority should also consider the reasonableness of cost based on the total estimated cost of the service of the professional firm which should include, among other things, all the direct labor costs of the professional firm for such services plus all "allowable indirect costs," other direct costs, and negotiated profit of the professional firm. "Allowable indirect costs" of a professional firm are defined as those costs generally associated with overhead which cannot be specifically identified with a single project or contract and are considered reasonable and allowable under specific state contract or allowability limits.

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(c) An identification of those areas or types of contracts for which minority or women-owned business enterprises may best bid so as to promote and assist participation by such enterprises and facilitate a fair share of the awarding of contracts to such enterprises. For the purposes of this section, a minority business enterprise means any business enterprise, including a sole proprietorship, partnership or corporation that is:

(i) at least fifty-one percent owned by one or more minority group members or in the case of a publicly-owned business at least fifty-one percent of the common stock or other voting interests of which is owned by one or more minority group members;

(ii) an enterprise in which the minority ownership is real, substantial and continuing;

(iii) an enterprise in which the minority ownership has and exercises the authority to control independently the day-to-day business decisions of the enterprise; and

(iv) an enterprise authorized to do business in New York state, independently owned and operated, and not dominant in its field.

(d) For the purposes of this section, a minority group member means a United States citizen or permanent resident alien who is and can demonstrate membership in one of the following groups:

(i) Black persons having origins in any of the Black African racial groups not of Hispanic origin;

(ii) Hispanic persons of Mexican, Puerto Rican, Dominican, Cuban, Central or South American of either Indian or Hispanic origin, regardless of race;

(iii) Asian and Pacific Islander persons having origins in any of the Far East, Southeast Asia, the Indian sub-continent or the Pacific Islands; or

(iv) Native American persons having origins in any of the original peoples of North America.

(e) For the purposes of this section, a women-owned business enterprise means a business enterprise, including a sole proprietorship, partnership or corporation which is:

(i) at least fifty-one percent owned by one or more United States citizens or permanent resident aliens who are women or in the case of a publicly-owned business at least fifty-one percent of the common stock or other voting interests of which is owned by United States citizens or permanent resident aliens who are women;

(ii) an enterprise in which the ownership interest of women is real, substantial and continuing;

(iii) an enterprise in which the women ownership has and exercises the authority to control independently the day-to-day business decisions of the enterprise; and

(iv) an enterprise authorized to do business in New York state, independently owned and operated, and not dominant in its field.

(f) Requirements for the designation of one or more senior staff of the [corporation] state authority to oversee the [corporation's] state authority's programs established to promote and assist: (i) participation by certified minority or women-owned business enterprises in the [corporation's] state authority's procurement opportunities and facilitation of the award of procurement contracts to such enterprises; (ii) the utilization of certified minority and women-owned business enterprises as subcontractors and suppliers by entities having procurement contracts with the [corporation] state authority; and (iii) the utilization of partnerships, joint ventures or other similar arrangements

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