RoAnn Destito Chair, Governmental Operations LOB 621 Albany, NY 12248 518-455-5454

Recently, several small businesses that expressed concerns to the committee about not being able to participate in the state’s centralized contracting process. The Office of General Services (OGS) administers a large centralized contracts program for acquisitions of commodities, services and technology by state agencies, local governments, the educational community, and certain not-for-profit organizations. The state looks at the combined and common needs of state agencies and authorized users and then leverages its buying power to achieve cost savings and efficiencies. If excluded as a vendor, a small business could be shut out of the state marketplace.

The Committee on Governmental Operation investigated the concerns and sponsored a joint public hearing. The hearing was held on February 26, 2008, with the Committees on Small Business, Local Governments, Education, Higher Education, and Cities to examine state and local procurement practices regarding centralized contracts and the impact they have on state agencies, political subdivisions, and small businesses.

As a result of the investigation, the Committee found that small businesses were being excluded as participants in the state’s centralized contracts in three profound ways: artificial sales thresholds were arbitrarily set to determine a vendor’s ability to service a contract; centralized contracts were let for extraordinarily long periods of time reducing, a small business’s ability to compete in the market; and centralized contracts required vendors to service the entire state, also reducing a small business’s ability to compete.

To eliminate these practices, I introduced legislation A.10315, which was negotiated in the Procurement Stewardship Reform Act of 2008 (see A.11738). The new law will require the creation of regional contracts, enable the continuous recruitment of vendors for centralized contracts, and require the state to review the potential vendor’s entire public sales volume and not just sales to the state.

These reforms will open the state’s centralized contracts to small businesses across the state. The state will gain superior local commodities and services, while small businesses will be able to participate and grow by doing business with the state.

The Procurement Stewardship Act was scheduled to sunset on June 30, 2008. The Committee on Governmental Operations participated in numerous hearings and roundtables addressing a variety of procurement reforms. Through negotiations with the Executive and Senate, Ch. 137 of the Laws of 2008 (A.11738) was enacted to extend the provisions of the Act until June 30, 2012, and:

The proposal will assist small businesses and increase their participation in contracting with the State by reforming centralized contracts. It will:

• create regional centralized contracts;

• allow continuous recruitment into centralized contracts; and

• require OGS to consider all public sales of a vendor and not just sales to the State when determining if a vendor could satisfy a contract.

Businesses will be assisted by modernizing the method of contract notification. Each contract will be noticed daily, on the Internet, for at least fifteen days; the contract reporter will be free of charge, with fees for advanced services; and a printed copy will be available on request at a weekly basis for a subscription rate. The State Procurement Council will be required to study and report on the procurement opportunity notification system by September 1, 2009.

The law will:

• minimize the use of the single source procurements; and

• define aggregate purchasing to be for a period of one year; an agency shall not split purchase orders within a one-year period to avoid competition or comptroller review.

The law will:

• provide municipalities an opportunity to purchase surplus personal property prior to OGS auction to all interested parties;

• authorize OGS to solicit contracts and accept electronic bids as sole submission for technology contracts; and

• require agencies to provide bidders with a debriefing.

The law will also:

• remove an obsolete provision relating to vehicle leasing from the State Finance Law;

• update the food product provisions of State Finance Law;

• permit waiver of prior consent for assignments of contract but require Office of the State Comptroller concurrence on contracts that required initial OSC approval;

• repeal strategic partnerships – a program used one time;

• update the definition of “responsibility;” and

• require documentation in the procurement record when agencies buy off of federal government contracts or other states’ centralized contracts.

A roundtable was held in Albany on May 28, 2008 to discuss veteran procurement legislation pending in the Committee on Governmental Operations and the Committee on Veterans Affairs in order to assist veterans returning from active duty and who want to participate in state contracting.

The roundtable discussion identified the need to establish a working group on veteran procurement issues. The working group met several times and consisted of representatives from: the Office of the State Comptroller, the Office of General Services, the Department of Labor, the Department of Veterans Affairs, the Division of Minority and Women-owned Business Development, the Small Business Development Corporation, the Industries of the Disabled, the Industries for the Blind, the Vietnam Veterans of America, the New York State Council of Veterans Organizations, and the National Disabled Veterans Business Council.

The Sub-Committee on the Oversight of MWBE made the following finding and recommendation: Article 15-A of the Executive Law (the MWBE program) should not be expanded to include any additional groups until the current program is properly implemented. The current administration has taken steps to improve the program but until the program demonstrates positive results, it would not help to add disabled veterans to a broken program.

In addition, the Sub-Committee assisted the Committee on Governmental Operations and the Committee on Veterans Affairs to develop the following legislative package:

• A.11648 (Destito, Ch.387 of the Laws of 2008) to require DVA, in consultation with the Office of General Services, to establish a series of four regional workshops to assist veteran-owned businesses to obtain New York State procurement contracts;

• A.11650 (Espaillat, Passed both houses) to establish the Veteran Program Consolidation Council, which would be required to make recommendations regarding the manner by which New York State sponsored veteran programs shall be consolidated in order to promote efficiency, cost effectiveness, oversight, and outreach for veterans residing in NYS. Recommendations in a report to be issued by September 9, 2009;

• A.11651 (Espaillat, Passed both houses) to require the Division of Veterans Affairs (DVA) to conduct a study to determine the number of veterans (disabled and non-disabled) who are anticipated to return to NYS and to identify all existing state programs that have been mandated to provide veteran-related services. DVA would establish a data bank of all existing state programs and their sponsors that have been mandated to provide veteran-related services; and

• A.11652 (Peoples, Passed both houses) to require a mentor-protégé veteran program to foster long-term relationships between approved mentor firms and veterans in order to enhance capabilities of eligible veterans, improve their success in obtaining commercial contracts, and create sources of reliable contractors and subcontractors ready to perform larger jobs and responsibilities.

The Minority and Women Business Enterprise (MWBE) program, as set forth in Article 15-A of the Executive Law, was enacted in 1988 to increase participation in state contracts by minority and women group members. Over the last six years, the Assembly has held a series of hearings across the state on the effectiveness of the MWBE program. As a result of the hearings, three laws were enacted in 2006: the streamlining of the certification process, the authorization for a disparity study, and the creation on statewide MWBE advocates.

The disparity RFP process was completed in 2007 and National Economics Research Associates (NERA) was selected to conduct the study. The New York Disparity Study will be one of the largest such studies ever conducted in the United States, and should take approximately one year to complete.

The Assembly is proud to have a partner in the Executive that recognizes the importance of our MWBE firms. In fact, the New York State Office for Technology recently hosted the 1st annual “Technology Sector Jumpstart Event for MWBE Firms.” More than forty leading information technology companies, and ten of the state’s largest agencies that purchase approximately 65% of the state’s IT services, met with representatives from 140 MWBE firms that provide IT products and services. More than 400 people attended this event to introduce and connect state-certified MWBE firms with the largest IT companies doing business with the state to form long-term relationships.