Currently, the only factor taken into consideration when negotiating state contracts is price. This way of doing business is costing our state jobs and money. Unfortunately, within their own state New York companies need help when competing for state contracts. The current system is making it impossible for a New York state company to place the lowest bid and make a reasonable profit.
There are instances of New York companies losing state contracts by as little as 2 percent, but the economic benefits lost greatly outweigh that margin. However, if a New York based company is awarded a state contract the benefits the state reaps are endless. Economic activity would be encouraged and job growth would be spurred and tax revenue would be increased. Because of this reason and this reason alone the state should take other factors into consideration when awarding state contracts.
To combat this problem, I have joined my Assembly Minority colleagues to unveil the Invest in New York Act, an innovative method for negotiating state contracts. The plan would require state agencies to consider any fiscal benefits to New York state, such as increased tax revenues, job creation, and other criteria, when determining the lowest bids for public works projects. This new approach would allow us to quantify economic benefits to the state beyond determining the lowest price.
Under the measure (A.9786), the state comptroller would be required to devise a method for determining the lowest bid for public works projects by taking into account any quantifiable long-term fiscal benefits to the state. Those factors would be assigned a monetary value, which then would be subtracted from the bid amount to determine the actual lowest bidder. The same rules would apply to both in-state and out-of-state contractors that use the services of New York companies, purchase New York materials or services or create jobs in New York. Under current state contract rules, lowest price alone determines the winning bid.
Patrick Hooker, director, Division of Public Policy for the New York Farm Bureau, said, "New York Farm Bureau has long supported the expansion of the ability of state agencies to purchase products grown or manufactured in New York. It is crucial, in order to spur the state’s economy, to award state contracts based on the consideration of all the economic and social benefits afforded to New York state when determining a lowest responsible bid. By creating a ‘lowest responsible bidder’ requirement, this bill would better promote New York farms and other businesses – leading to increased employment and more economic opportunity for all New Yorkers."