NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7513C REVISED MEMO 07/24/2015
SPONSOR: Peoples-Stokes TITLE OF BILL: An act to amend the state finance law, in relation to
allowing the state comptroller to excuse non-material deviations in a
procurement; in relation to participation by state agencies in a system
used by the comptroller to compile vendor responsibility information; in
relation to defining information technology for procurement purposes; in
relation to authorizing the commissioner of the office of general
services and state agencies to develop alternative procurement methods
not otherwise authorized by law under certain circumstances; in relation
to authorizing competitive negotiation concluding with a best and final
offer; in relation to clarifying the use of best and final offers for
invitations for bids and requests for proposals for goods, services and
technology; in relation to providing unsuccessful offerors a reasonable
opportunity for debriefing; in relation to increasing the threshold for
construction bonds; in relation to clarifying the use of contracts let
by another governmental agency; in relation to reports on centralized
contracts; and in relation to increasing the threshold for the state
comptroller's approval of certain contracts and clarifying the valuation
of non-cash contracts by the state comptroller
PURPOSE:
The purpose of this proposed legislation is to increase the transparen-
cy, accountability, efficiency and flexibility of the procurement proc-
ess and to make technical corrections and clarifications relating to
certain procurements.
SUMMARY OF PROVISIONS:
Section 1 of this proposal amends Subdivision 12 of Section 163 of the
State Finance Law authorizing the State Comptroller to excuse nonmateri-
al deviations in a procurement.
Section 2 of this proposal amends the State Finance Law by adding a new
Section 163-c requiring use by state agencies of a system maintained by
the State Comptroller to compile vendor responsibility information.
Section 3 of this proposal amends Subdivisions 7 and 10 of Section 160
of the State Finance Law in relation to defining information technology
for procurement purposes.
Sections 4 and 5 of this proposal make conforming changes to Paragraphs
g and i of Subdivision 2 of Section 161 of the State Finance Law, and
Paragraph k of Subdivision 1 as well as Subdivisions 6 and 7 of Section
163 of the State Finance Law, with respect to the definition of informa-
tion technology.
Section 6 of this proposal amends Paragraph (a) of Subdivision 2 of
Section 112 of the State Finance Law relating to centralized contracts
not awarded under an alternative procurement method.
Section 7 of this proposal adds a new Subdivision 16 to Section 163 of
the State Finance Law authorizing alternative procurement methods for
the acquisition of non-construction related commodities and services, or
information technology.
Section 8 of this proposal amends Section 163 of the State Finance Law
by adding a new Subdivision 17 relating to competitive negotiation.
Section 9 of this proposal amends Subdivision 9 of Section 163 of the
State Finance Law by adding a new Paragraph c-1 relating to best and
final offer.
Section 9-a amends Paragraph c of Subdivision 9 of Section 163 of the
State Finance Law to delete current debriefing language.
Section 9-b add a new Paragraph h to Subdivision 9 of Section 163 of the
State Finance Law to set forth new debriefing requirements.
Section 10 of this proposal is Intentionally Omitted.
Section 11 of this proposal is Intentionally Omitted.
Section 12 of this proposal amends Subdivisions 1 and 2 of Section 137
of the State Finance Law increasing the threshold for the requirement
for construction bonds.
Section 13 of this proposal amends Paragraph e of Subdivision 10 of
Section 163 of the State Finance Law clarifying the use of a contract
let by another governmental entity.
Section 14 of this proposal amends Subdivision 15 of Section 163 of the
State Finance Law by adding a new Paragraph d requiring a report on the
savings achieved from all contracts established as a centralized
contract through the office of general services.
Section 15 of this proposal amends Subdivision 3 of Section 112 of the
State Finance Law to increase the threshold from $10,000 to $25,000 for
revenue contracts requiring pre-review by the State Comptroller and
provide that for contracts where consideration cannot be determined in
terms of monetary value, it shall be valued in terms of intrinsic value.
Section 16 provides for an immediate effective date and provides that
the provisions of sections 1, 5, 7, 8, 9, 9-a, 9-b, 13 and 14 of the
proposal shall apply to any procurement initiated on or after such date.
Additionally, this Section provides that section two of the proposal
shall take effect on the 180th day after it shall have become a law and
finally, provides that the amendments to section 163 of the State
Finance Law shall not affect the repeal of Section 163 and shall be
deemed repealed therewith.
PRIOR LEGISLATIVE HISTORY:
New bill.
JUSTIFICATION:
Non-Material Deviations: To allow for award of contracts where noncom-
pliance with this article was not material and did not substantially
affect the fairness of the competitive procurement process.
Vendor Responsibility: To fully standardize the vendor responsibility
review and streamline the contract process, and enable a 24-7, online
access for vendors to update information easily as information changes.
Pursuant to the State Comptroller's responsibility under Section 112 of
the State Finance Law to review and approve State contracts, which may
include a vendor responsibility review performed by the state agency and
the State Comptroller, the State Comptroller finds that mandatory use of
the on-line system for filing necessary vendor responsibility informa-
tion will facilitate an efficient review of a vendor's responsibility
thereby streamlining the procurement process for vendors and contracting
agencies.
Agencies not on the system require vendors to update in paper with every
procurement.
59 agencies use the system now, with more than 11,600 vendors already in
the system.
Change references to "technology" in article 11 to "information technol-
ogy": To clarify the definition of technology, to ensure the definition
meets current practice, and ensure future developments in information
technology are anticipated. This amendment would also clarify that inci-
dental technology content is not intended to drive a major procurement
that is not directly information technology related.
Alternative Procurements: 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 if certain conditions
are met. 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 procure-
ment 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 Governor, State Comptroller and heads of the Legisla-
tive Fiscal Committees by the mid-term of the resulting contract
concerning the benefits of the alternative method and comparing results
to other procurement methods.
Competitive Negotiation with Best and Final Offer: This amendment
expands available procurement options to include competitive negotiation
with multiple vendors to obtain the best result for taxpayers. The State
Comptroller anticipates this change would be useful in highly complex
procurements where approaches to meeting the requirements are not pre-
defined, to encourage innovative solutions amidst changing industry
capabilities, or where there may be opportunities for the state to miti-
gate risk or expense through non-material tradeoffs.
Where the basis of award is best value and after completing an initial
evaluation and scoring, a state agency may choose to make an award at
that time based on best value. Or, if the agency believes a better price
or outcome can be achieved, competitive negotiations can be conducted
with vendors that fall in a competitive range and could potentially be
selected based on the final outcome.
Clarifying use of Best and Final Offer: There is a lack of clarity among
agencies as to when Best and Final Offers can be utilized to achieve
best value for the state; this is intended to help clarify the require-
ments for use of best and final offers.
Debriefing Requirements: Unsuccessful offerors often do not receive
sufficient information related to the reasons for the loss of a procure-
ment. This amendment requires a state agency to provide a reasonable
opportunity to discuss the procurement.
Raising threshold for construction bonding to $200,000: This amendment
is intended to help small businesses qualify for construction contracts
by not requiring contractors to post construction bonds for contracts
under $200,000 (the current threshold is $100,000).
Clarifying Use of "Piggyback" Contracts: This amendment is intended to
ensure that agencies using the contracts of other entities (local,
state, or federal) comply with the intent of the original contract as
well as the mechanism for vendor selection in the case of contracts with
multiple award options.
Office of General Services Reporting Requirement: This amendment
requires the Commissioner of General Services 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, minori-
ty and women-owned business enterprises, service-disabled veteran owned
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 Comp-
troller, and the heads of the fiscal committees of each house of the
state legislature no later than January 15, 2016, and thereafter annual-
ly on or before such date.
Change Revenue Threshold and Clarify Consideration Non-Cash Contracts:
This amendment increases from $10,000 to $25,000 the threshold for
revenue contracts needing State Comptroller approval. For contracts with
little or no cash actual cash consideration, the intrinsic value of the
contract will be used to determine the threshold.
The State Comptroller urges the passage of this proposed legislation.
FISCAL IMPLICATIONS FOR STATE:
None. However, these proposals will help streamline procurements and
facilitate the use of new methods that will result in more effective and
efficient procurements at reduced costs.
EFFECTIVE DATE:
Provides for an immediate effective date and states that certain
provisions shall only apply to any procurement initiated on or after
such date; and further provides that the amendments to Section 163 of
the state finance law shall not affect the repeal of such Section and
shall be deemed repealed therewith.
