|SAME AS||No Same As|
|Add S139-l, amd S163, St Fin L; amd S142, Ec Dev L; amd S100-a, Gen Muni L; amd S2879, Pub Auth L|
|Includes net economic impact as a factor to consider in awarding state procurement contracts.|
|01/08/2015||referred to governmental operations|
|01/06/2016||referred to governmental operations|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1123 SPONSOR: Cahill (MS)
TITLE OF BILL: An act to amend the state finance law, the economic development law, the general municipal law and the public authorities law, in relation to considering net economic impact in procurement contracts   PURPOSE OR GENERAL IDEA OF BILL: To assure state procurement contracts to any contractor are awarded on the basis of the economic benefits such contract has on the New York economy. This bill would authorize the Office of the State Comptroller to establish rules and regulations in reference to the evaluation and awarding of state contracts to include the proposal's quantifiable long-term fiscal benefits to the State.   SUMMARY OF SPECIFIC PROVISIONS: State Finance Law is amended to include Section 139-j, which defines "Net Economic Impact," and author- izes the Office of the State Comptroller to promulgate rules and regu- lations to create the evaluation process. Section 142 of the Economic Development Law is amended to authorize the Commissioner of Economic Development to make notice of any changes to any procurement contract opportunity to be communicated in its Procure- ment Opportunities Newsletter. Section 100-a of the General Municipal Law is amended to include the economic impact be considered as the priority when negotiating contracts for public works and public purchases. Subdivision 1 of Section 2879 of the Public Authorities Law is amended to authorize any public authority and public benefit corporation to adopt comprehensive guidelines regarding purchases to include the economic impact of such contract as defined in Section 139-j of the State Finance Law.   JUSTIFICATION: This legislation would create a statewide procurement policy for state agencies, public authorities and public works purchases that would assure those public funds are spent in the most efficient and economically beneficial manner. Currently, state contracts are awarded based on the lowest bid submitted. The lowest bid does not equate to the best bid or most economically beneficial purchase. Although the lowest bid remains part of the purchasing criteria, this bill would take into consideration the entire economic impact a state contract would on New York's economy. By evaluating the perspective proposal on the basis of its net economic impact, the state can create a level playing field for all businesses competing for state contracts.   PRIOR LEGISLATIVE HISTORY: 2013-2014: A.1243 - Referred to Govern- mental Operations 2011-2012: A.59 - Referred to Governmental Operations 2009-2010 : A.572 - Referred to Governmental Operations 2007-2008 : A.3928 - Referred to Governmental Operations 2005-2006 : A.7882 - Referred to Governmental Operations 2004: A.11689 - Referred to Govern- mental Operations   FISCAL IMPLICATIONS: None   EFFECTIVE DATE: This act shall take effect on the one hundred eight- ieth day after it shall become law.
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STATE OF NEW YORK ________________________________________________________________________ 1123 2015-2016 Regular Sessions IN ASSEMBLY January 8, 2015 ___________ Introduced by M. of A. CAHILL -- Multi-Sponsored by -- M. of A. BRINDISI -- read once and referred to the Committee on Governmental Operations AN ACT to amend the state finance law, the economic development law, the general municipal law and the public authorities law, in relation to considering net economic impact in procurement contracts The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "competitive procurement act". 3 § 2. Legislative findings. The legislature hereby finds that in order 4 to assure the economically sound use of public funds for the benefit of 5 the entire state and to facilitate the acquisition of facilities and 6 commodities of maximum quality, this act shall require the negotiation 7 of such procurement contracts for public works and public purchases to 8 make the net economic impact of such contract a priority in awarding 9 such procurement contracts. Although the economic impact traditionally 10 includes evaluation of the direct, indirect, and induced impacts of a 11 contract on the economy of this state, the legislature further finds 12 that the "net economic impact" must include consideration of the lowest 13 responsible bid and best value as additional component criteria in 14 determining the overall economic impact of a contract on the state's 15 economy. Therefore, it is in the public's best interest to incorporate 16 the lowest responsible bid and best value criteria into the net economic 17 impact criterion in order to award the most economically viable procure- 18 ment contracts in New York state. 19 § 3. The state finance law is amended by adding a new section 139-l to 20 read as follows: 21 § 139-l. Net economic impact in procurement contracts. 1. Notwith- 22 standing any other provision of law to the contrary, where a contract is 23 to be awarded by a state agency, public authority or municipality pursu- 24 ant to a competitive bidding process or a request for proposal process, EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD06228-01-5A. 1123 2 1 such state agency, public authority or municipality shall require that 2 any proposal submitted by a prospective contractor in response thereto 3 include an economic impact statement detailing how an award of the 4 contract to the particular contractor would benefit the economy of New 5 York state and shall provide that net economic impact will be considered 6 in making the award. The weight to be given to such net economic impact 7 criterion relative to other criteria used to evaluate the proposals, 8 including lowest responsible bidder and best value, shall be determined 9 by the contracting agency, authority or municipality on a case by case 10 basis. The state agency, public authority, or municipality shall give 11 priority to the net economic impact criterion wherever practicable and 12 set forth the basis for its award in writing. 13 2. For the purposes of this section, the following terms shall have 14 the following definitions: 15 (a) "Net economic impact" means the measure of economic stimulation 16 that occurs from purchasing transactions that have occurred within the 17 local economy of New York state and the lowest responsible bid. Net 18 economic impact shall be measured by direct impact, indirect impact and 19 induced impact, as well as lowest responsible bid and best value, which 20 are defined as: 21 (1) "Direct impact" means the amount of direct economic activity 22 generated by the purchasing transaction, or business transactions, in 23 question. The sets of numbers used to determine direct impact are a 24 result of developing per capita numbers based on actual economic data 25 supplied by transaction management, attendance figures, and other finan- 26 cial information for all transaction-related activities, as well as 27 using available transaction industry average per capita expenditure 28 levels for various items. 29 (2) "Indirect impact" includes economic activity felt by businesses as 30 an indirect result of the purchasing or business transaction. 31 (3) "Induced impact" is the impact generated when those surrounding 32 businesses purchase additional products and services, and hire more 33 employees to meet the demand brought on by direct and indirect impacts. 34 (4) "Lowest responsible bidder" means any person, firm, corporation, 35 successor corporation, contractor or subcontractor who (i) submits the 36 lowest responsible bid and (ii) is not disqualified on any of the 37 grounds provided by law, rule or regulation. 38 (5) "Best value" means the same as in subdivision one of section one 39 hundred sixty-three of this chapter. 40 (b) "Municipality" shall mean any city, town, village, county, munici- 41 pal corporation, district corporation, district or any office, depart- 42 ment or agency, thereof. 43 (c) "State agency" shall, notwithstanding any other provision of law, 44 mean any state department, board, bureau, division, office, council, 45 committee or officer of the state, or the state university of New York, 46 or the senior colleges of the city university of New York, or any public 47 benefit corporation or commission at least one of whose members are 48 appointed by the governor. 49 3. The comptroller and the commissioner of the department of economic 50 development shall establish, through the promulgation of rules and regu- 51 lations, and in consultation with the heads of state agencies, a method 52 for structuring requests for proposals to require inclusion of an 53 economic impact statement and in evaluating responses to such requests 54 for proposals. The comptroller shall also establish through the promul- 55 gation of rules and regulations guidelines for agencies, authorities and 56 municipalities to incorporate consideration of the lowest responsibleA. 1123 3 1 bidder criteria into the net economic impact formula. Such net economic 2 impact shall include, but not be limited to, consideration of where 3 subcontractors used by contractors to fulfill a contract are located, 4 how many jobs in the state, if any, will be created by the awarding of 5 such a contract, and the estimated tax revenue and ancillary economic 6 activity that would be generated in the state through the awarding of 7 such contracts and subsequent subcontracts, lowest responsible bid, and 8 best value. Such rules and regulations shall include a procedure whereby 9 a state agency, public authority or municipality may request a waiver 10 from the requirements of this section. 11 4. (a) The provisions of this section shall not apply to contracts for 12 which a state agency, public authority, or municipality receives funds 13 administered by the federal government, except to the extent that the 14 federal government would not withhold such funds owing to the state 15 agency's, public authority's, or municipality's compliance with this 16 section. 17 (b) The provisions of this section shall not apply to contracts 18 between a state agency, public authority, or municipality in negotiated 19 reciprocity for goods or services, except to the extent that such net 20 economic impact shall not undermine such reciprocal contract agreement. 21 5. Any person, firm, corporation, successor corporation, labor organ- 22 ization, contractor or subcontractor may, within ten days after a bid is 23 accepted, file an application to challenge the determination. Upon 24 receipt of such application, the comptroller, or his or her designee, 25 shall conduct a hearing to determine the validity of the application. 26 Notice shall be given to the applicant and to the proposed contract bid 27 awardee of the date, time and place of the hearing. The applicant and 28 the proposed contract bid awardee shall be given the opportunity to 29 present evidence and witnesses on their behalf. The comptroller, or his 30 or her designee, presiding over such hearing shall issue a written deci- 31 sion with findings of fact whether the proposed contract bid awardee is 32 valid. Such contract shall not be awarded prior to such decision. The 33 awarding agency, authority, or municipality shall notify all bidders 34 regarding the selection of its proposed contract bid awardee. 35 § 4. The opening paragraph and paragraph c of subdivision 2, the open- 36 ing paragraph and subparagraphs (ii), (v) and (vi) of paragraph a and 37 subparagraph (i) of paragraph b of subdivision 3 of section 163 of the 38 state finance law, as added by chapter 83 of the laws of 1995, are 39 amended to read as follows: 40 The objective of state procurement is to facilitate each state agen- 41 cy's mission while protecting the interests of the state and its taxpay- 42 ers and promoting fairness in contracting with the business community. 43 The state's procurement process shall be guided by the net economic 44 impact, pursuant to section one hundred thirty-nine-l of this chapter, 45 of a contract on the state and the following principles: 46 c. To encourage the investment of the private and not-for-profit 47 sectors in New York state by making reasonable efforts to ensure that 48 offerers are apprised of procurement opportunities; by specifying the 49 elements of a responsive bid and disclosing the process for awarding 50 contracts including, if applicable, the relative importance and/or 51 weight of [ cost] net economic impact and the overall technical criterion 52 for evaluating offers; and by ensuring the procurement is conducted 53 accordingly. 54 State agency procurement practices for commodities shall incorporate 55 net economic impact, pursuant to section one hundred thirty-nine-l of 56 this chapter, and then the following:A. 1123 4 1 (ii) Commodities contracts shall be awarded on the basis of [ lowest2 price to] net economic impact of a responsive and responsible offerer; 3 or, in the case of multiple awards, in accordance with paragraph c of 4 subdivision ten of this section. 5 (v) Consistent with guidelines issued by the state procurement coun- 6 cil, state agencies may competitively purchase commodities procured in 7 accordance with this article in lieu of using centralized contracts when 8 the resultant [ price is less] net economic impact is greater than the 9 centralized contract [ price]. 10 (vi) When justified by [ price] net economic impact, state agencies, 11 and hospitals and facilities managed and controlled by state agencies 12 eligible pursuant to section twenty-eight hundred three-a of the public 13 health law, shall be eligible to make purchases pursuant to guidelines 14 issued by the state procurement council from a consortium or comparable 15 entity in lieu of using centralized contracts for commodities. 16 (i) determine, in cooperation with the state procurement council and 17 state agencies, the identity, form, function and utility of those 18 commodities which shall be made available on or through centralized 19 contracts. Criteria shall include the net economic impact, as defined in 20 section one hundred thirty-nine-l of this chapter, on New York state's 21 economy. Criteria may include, but need not be limited to, the avail- 22 ability of a volume discount, prior use of the commodity among state 23 agencies and the relative cost of establishing the contract, its antic- 24 ipated use and expected actual savings for the state. The commissioner 25 may also act as a broker for state agencies to procure commodities. 26 § 5. The opening paragraph and paragraph d of subdivision 4 of section 27 163 of the state finance law, as added by chapter 83 of the laws of 28 1995, are amended to read as follows: 29 State agency procurement practices for services shall incorporate the 30 net economic impact, as defined in section one hundred thirty-nine-l of 31 this chapter, and then the following: 32 d. Service contracts shall be awarded on the basis of [ best value to] 33 net economic impact of a responsive and responsible offerer; or, in the 34 case of multiple awards, in accordance with paragraph c of subdivision 35 ten of this section. 36 § 6. Subdivision 7, paragraphs a and b of subdivision 9, the opening 37 paragraph and paragraph a of subdivision 10, and the opening paragraph 38 of subdivision 11 of section 163 of the state finance law, as added by 39 chapter 83 of the laws of 1995, and subdivision 7 as amended by section 40 10 of part L of chapter 55 of the laws of 2012, are amended to read as 41 follows: 42 7. Method of procurement. Consistent with the requirements of subdivi- 43 sions three and four of this section, state agencies shall select among 44 permissible methods of procurement including, but not limited to, an 45 invitation for bid, request for proposals or other means of solicitation 46 pursuant to guidelines issued by the state procurement council. State 47 agencies may accept bids electronically including submission of the 48 statement of non-collusion required by section one hundred thirty-nine-d 49 of this chapter and, starting April first, two thousand twelve, and 50 ending March thirty-first, two thousand fifteen, may, for commodity, 51 service and technology contracts require electronic submission as the 52 sole method for the submission of bids for the solicitation. State agen- 53 cies shall undertake no more than eighty-five such electronic bid solic- 54 itations, none of which shall be reverse auctions, prior to April first, 55 two thousand fifteen. In addition, state agencies may conduct up to 56 twenty reverse auctions through electronic means, prior to April first,A. 1123 5 1 two thousand fifteen. Prior to requiring the electronic submission of 2 bids, the agency shall make a determination, which shall be documented 3 in the procurement record, that electronic submission affords a fair and 4 equal opportunity for offerers to submit responsive offers. Within thir- 5 ty days of the completion of the eighty-fifth electronic bid solicita- 6 tion, or by April first, two thousand fifteen, whichever is earlier, the 7 commissioner shall prepare a report assessing the use of electronic 8 submissions and make recommendations regarding future use of this 9 procurement method. In addition, within thirty days of the completion of 10 the twentieth reverse auction through electronic means, or by April 11 first, two thousand fifteen, whichever is earlier, the commissioner 12 shall prepare a report assessing the use of reverse auctions through 13 electronic means and make recommendations regarding future use of this 14 procurement method. Such reports shall be published on the website of 15 the office of general services. Except where otherwise provided by law, 16 procurements shall be competitive, and state agencies shall conduct 17 formal competitive procurements to the maximum extent practicable. State 18 agencies shall document the determination of the method of procurement 19 and the basis of award in the procurement record. Where the basis for 20 award is the best [ value] net economic impact offer, the state agency 21 shall document, in the procurement record and in advance of the initial 22 receipt of offers, the determination of the evaluation criteria, which 23 whenever possible, shall be quantifiable, and the process to be used in 24 the determination of best [ value] net economic impact and the manner in 25 which the evaluation process and selection shall be conducted. 26 a. The commissioner or a state agency shall select a formal compet- 27 itive procurement process in accordance with guidelines established by 28 the state procurement council and document its determination in the 29 procurement record. The process shall include, but is not limited to, a 30 clear statement of need; a description of the required specifications 31 governing performance and related factors; a reasonable process for 32 ensuring a competitive field; a fair and equal opportunity for offerers 33 to submit responsive offers; and a balanced and fair method of award. 34 Where the basis for the award is best [ value] net economic impact, 35 documentation in the procurement record shall, where practicable, 36 include a quantification of the application of the criteria to the 37 rating of proposals and the evaluation results, or, where not practica- 38 ble, such other justification which demonstrates that best [ value] net 39 economic impact will be achieved. 40 b. The solicitation shall prescribe the minimum specifications or 41 requirements that must be met in order to be considered responsive and 42 shall describe and disclose the general manner in which the evaluation 43 and selection shall be conducted. Where appropriate, the solicitation 44 shall identify the relative importance and/or weight of [ cost] net 45 economic impact and the overall technical criterion to be considered by 46 a state agency in its determination of best [ value] net economic impact. 47 Contracts for commodities shall be awarded on the basis of [ lowest48 price to] net economic impact of a responsive and responsible offerer, 49 pursuant to section one hundred thirty-nine-l of this chapter. 50 Contracts for services shall be awarded on the basis of best [ value] net 51 economic impact from a responsive and responsible offerer, pursuant to 52 section one hundred thirty-nine-l of this chapter. Multiple awards for 53 services and commodities shall be conducted in accordance with paragraph 54 c of this subdivision. 55 a. Selection and award shall be a written determination in the 56 procurement record made by the commissioner or a state agency in aA. 1123 6 1 manner consistent with the provisions of the solicitation. In the event 2 two offers are found to be substantially equivalent, [ price] net econom- 3 ic impact shall be the basis for determining the award recipient or, 4 when [ price] net economic impact and other factors are found to be 5 substantially equivalent, the determination of the commissioner or agen- 6 cy head to award a contract to one or more of such bidders shall be 7 final. The basis for determining the award shall be documented in the 8 procurement record. 9 It shall be the responsibility of the head of each state agency to 10 periodically sample the results of the procurement process to test for 11 reasonableness; to ensure that the results withstand public scrutiny and 12 that the quality and the price of the purchase makes sense; and to 13 ensure that purchasing is conducted in a manner consistent with the best 14 net economic impact interests of the state. 15 § 7. Subdivision 1 of section 142 of the economic development law, as 16 amended by chapter 137 of the laws of 2008, is amended to read as 17 follows: 18 1. The commissioner shall publish on a daily basis a procurement 19 opportunities newsletter, which shall contain notices of procurement 20 contract opportunities and any other information the commissioner deems 21 necessary to effectuate the purposes of this article including, but not 22 limited to, any changes in the law, rules and regulations regarding 23 procurement contracts. Notices of procurement contract opportunities 24 shall be available on the internet for at least fifteen days. 25 § 8. Section 100-a of the general municipal law, as added by chapter 26 363 of the laws of 1964, is amended to read as follows: 27 § 100-a. Declaration of policy. [ It] Notwithstanding any provision of 28 this article to the contrary, it is hereby declared to be the policy of 29 this state that this article shall [ be construed] consider the net 30 economic impact, as defined in section one hundred thirty-nine-l of the 31 state finance law, as the priority in the negotiation of contracts for 32 public works and public purchases to which political subdivisions [ or33 and district] and/or districts therein [ is] are a party so as to assure 34 the prudent and economical use of public moneys for the benefit of all 35 the inhabitants of the state and to facilitate the acquisition of facil- 36 ities and commodities of maximum quality [ at the lowest possible cost]. 37 § 9. Subdivision 1 of section 2879 of the public authorities law, as 38 amended by chapter 564 of the laws of 1988, is amended to read as 39 follows: 40 1. Every public authority and public benefit corporation, a majority 41 of the members of which consist of persons either appointed by the 42 governor or who serve as members by virtue of holding a civil office of 43 the state, or a combination thereof, (such entities to be hereinafter in 44 this section referred to as "corporation") shall adopt by resolution 45 comprehensive guidelines which detail the corporation's operative policy 46 and instructions regarding the use, awarding, monitoring and reporting 47 of procurement contracts. Notwithstanding any other provision of law, 48 rule or regulation, such guidelines shall include, but not be limited 49 to, making consideration of the net economic impact, as defined in 50 section one hundred thirty-nine-l of the state finance law, the priority 51 in awarding procurement contracts. Guidelines approved by the corpo- 52 ration shall be annually reviewed and approved by the corporation. 53 § 10. This act shall take effect on the one hundred eightieth day 54 after it shall have become a law; provided, however, the provisions of 55 this act shall be applied to all contracts entered into on or after 56 April 1, 2015; and provided, further, however, that the amendments toA. 1123 7 1 the provisions of section 163 of the state finance law made by sections 2 four, five and six of this act shall not affect the repeal of such 3 section and shall be deemed repealed therewith. Effective immediately, 4 the addition, amendment and/or repeal of any rule or regulation neces- 5 sary for the implementation of this act on its effective date is author- 6 ized and directed to be made and completed on or before such date.