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A09689 Memo:

BILL NUMBER:A9689

TITLE OF BILL:  An act to amend the state finance law, in relation to
reports on centralized contracts and authorizing alternative
procurement methods

PURPOSE:  To improve contracting practices in the State of New York by
authorizing alternative procurement methods

SUMMARY OF PROVISIONS: Section 1 of this bill amends Paragraph a of
Subdivision 2 of Section 112 of the State Finance Law to require State
Comptroller approval of OGS centralized contracts when such contracts
are awarded using an alternative method of procurement pursuant to
subdivision 15 of section 163 as added by section 2 of this bill

Section 2 of this bill adds a new Subdivision 15 to Section 163 of the
State Finance Law to provide for alternative procurement methods if
the Commissioner of General Services (Commissioner) or a state agency
determines that it is in the best interest of the state to develop an
alternative procurement method not authorized by Article 11 of the
State Finance Law for goods, services or technology. The bill also
authorizes the Commissioner or state agency to develop and use such
method for a specific contract award. Additionally, the bill requires
that such determination be made in writing and include documentation
for the procurement record that such alternative procurement method
would serve the interest of the state better than other methods
currently available under section 163 of the State Finance Law, can be
applied on a competitive, fair and equitable basis, and contains an
appropriate evaluation methodology that considers both cost and
qualitative evaluation factors.

The bill provides that the Commissioner or a state agency may not
undertake an alternative procurement method until the State
Comptroller has determined that the proposed alternative procurement
method is in the best interest of the state, can be applied on a
competitive, fair and equitable basis, and utilizes an appropriate
evaluation methodology that considers both cost and qualitative
evaluation factors.

The bill requires the Commissioner or agency to include in its
solicitation document a detailed description of the proposed method of
award. In advance of the initial receipt of offers, the Commissioner
or state agency shall determine and document in the procurement record
the evaluation criteria and process to be used in the determination of
the specific contract award and the process by which the evaluation
and selection shall be conducted.

This bill provides that before any contract awarded under an
alternative procurement which exceeds fifty thousand dollars in amount
becomes effective it must be approved by the Stag Comptroller and
filed in his or her office.

This bill requires that for each alternative procurement awarded, the
Commissioner or state agency shall submit to the Governor, the State
Comptroller and the heads of the fiscal committees of each house of
the State Legislature no later than the mid- point of the initial term
of the resultant contract a report assessing the validity of the


alternative procurement method and comparing its results to standard
procurement methods for goods, services or technology.

This bill requires the Commissioner to prepare a report on the savings
achieved from all contracts established as a centralized contract
through the Office of General Services pursuant to section 163 of the
State Finance Law, the impact of such contracts on small, minority and
women-owned business enterprises, and the effectiveness of such
contracts in fulfilling the purchasing needs of all authorized users
of such contracts. Such report shall be submitted by such Commissioner
to the Governor, the State Comptroller, and the heads of the fiscal
committees of each house of the state legislature no later than
January 15, 2015, and thereafter annually on or before such date.

Section 2 of this bill provides for an immediate effective date.

PRIOR LEGISLATIVE HISTORY: New Bill.

JUSTIFICATION: When a State agency develops a procurement method that
does not fit within the requirements of the Procurement Stewardship
Act (the Act), the agency should be able to use such an alternative
method for a specific contract award. The bill authorizes the State
Comptroller to approve a contract awarded on the basis of an
alternative procurement method as long as (i) the contracting agency
makes a determination, documented in the procurement record, that such
alternative procurement method better serves the interest of the State
than other procurement methods available under the Act and can be
applied on a fair and equitable basis; and (ii) the State Comptroller
approves the alternative procurement method prior to the procurement.
In order to effectively monitor the success or failure of the
alternative procurement method the procuring State agency must file a
report with the State Comptroller by the mid-term, of the resulting
contract. The State Comptroller will then review the report and make
recommendations to the Governor and the Legislature concerning the
possible continued use of the alternative procurement method.

The State Comptroller recommends enactment of this bill to improve
contracting practices in the State.

BUDGET IMPLICATIONS: This bill has no significant fiscal impact.

EFFECTIVE DATE: This bill would take effect immediately.
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