Bill Text: NY A00566 | 2019-2020 | General Assembly | Introduced
Bill Title: Includes net economic impact as a factor to consider in awarding state procurement contracts.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2020-01-08 - referred to governmental operations [A00566 Detail]
Download: New_York-2019-A00566-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 566 2019-2020 Regular Sessions IN ASSEMBLY (Prefiled) January 9, 2019 ___________ Introduced by M. of A. CAHILL, ABINANTI -- 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-m to 20 read as follows: 21 § 139-m. 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- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03111-01-9A. 566 2 1 ant to a competitive bidding process or a request for proposal process, 2 such state agency, public authority or municipality shall require that 3 any proposal submitted by a prospective contractor in response thereto 4 include an economic impact statement detailing how an award of the 5 contract to the particular contractor would benefit the economy of New 6 York state and shall provide that net economic impact will be considered 7 in making the award. The weight to be given to such net economic impact 8 criterion relative to other criteria used to evaluate the proposals, 9 including lowest responsible bidder and best value, shall be determined 10 by the contracting agency, authority or municipality on a case by case 11 basis. The state agency, public authority, or municipality shall give 12 priority to the net economic impact criterion wherever practicable and 13 set forth the basis for its award in writing. 14 2. For the purposes of this section, the following terms shall have 15 the following definitions: 16 (a) "Net economic impact" means the measure of economic stimulation 17 that occurs from purchasing transactions that have occurred within the 18 local economy of New York state and the lowest responsible bid. Net 19 economic impact shall be measured by direct impact, indirect impact and 20 induced impact, as well as lowest responsible bid and best value, which 21 are defined as: 22 (1) "Direct impact" means the amount of direct economic activity 23 generated by the purchasing transaction, or business transactions, in 24 question. The sets of numbers used to determine direct impact are a 25 result of developing per capita numbers based on actual economic data 26 supplied by transaction management, attendance figures, and other finan- 27 cial information for all transaction-related activities, as well as 28 using available transaction industry average per capita expenditure 29 levels for various items. 30 (2) "Indirect impact" includes economic activity felt by businesses as 31 an indirect result of the purchasing or business transaction. 32 (3) "Induced impact" is the impact generated when those surrounding 33 businesses purchase additional products and services, and hire more 34 employees to meet the demand brought on by direct and indirect impacts. 35 (4) "Lowest responsible bidder" means any person, firm, corporation, 36 successor corporation, contractor or subcontractor who (i) submits the 37 lowest responsible bid and (ii) is not disqualified on any of the 38 grounds provided by law, rule or regulation. 39 (5) "Best value" means the same as in subdivision one of section one 40 hundred sixty-three of this chapter. 41 (b) "Municipality" shall mean any city, town, village, county, munici- 42 pal corporation, district corporation, district or any office, depart- 43 ment or agency, thereof. 44 (c) "State agency" shall, notwithstanding any other provision of law, 45 mean any state department, board, bureau, division, office, council, 46 committee or officer of the state, or the state university of New York, 47 or the senior colleges of the city university of New York, or any public 48 benefit corporation or commission at least one of whose members are 49 appointed by the governor. 50 3. The comptroller and the commissioner of the department of economic 51 development shall establish, through the promulgation of rules and regu- 52 lations, and in consultation with the heads of state agencies, a method 53 for structuring requests for proposals to require inclusion of an 54 economic impact statement and in evaluating responses to such requests 55 for proposals. The comptroller shall also establish through the promul- 56 gation of rules and regulations guidelines for agencies, authorities andA. 566 3 1 municipalities to incorporate consideration of the lowest responsible 2 bidder criteria into the net economic impact formula. Such net economic 3 impact shall include, but not be limited to, consideration of where 4 subcontractors used by contractors to fulfill a contract are located, 5 how many jobs in the state, if any, will be created by the awarding of 6 such a contract, and the estimated tax revenue and ancillary economic 7 activity that would be generated in the state through the awarding of 8 such contracts and subsequent subcontracts, lowest responsible bid, and 9 best value. Such rules and regulations shall include a procedure whereby 10 a state agency, public authority or municipality may request a waiver 11 from the requirements of this section. 12 4. (a) The provisions of this section shall not apply to contracts for 13 which a state agency, public authority, or municipality receives funds 14 administered by the federal government, except to the extent that the 15 federal government would not withhold such funds owing to the state 16 agency's, public authority's, or municipality's compliance with this 17 section. 18 (b) The provisions of this section shall not apply to contracts 19 between a state agency, public authority, or municipality in negotiated 20 reciprocity for goods or services, except to the extent that such net 21 economic impact shall not undermine such reciprocal contract agreement. 22 5. Any person, firm, corporation, successor corporation, labor organ- 23 ization, contractor or subcontractor may, within ten days after a bid is 24 accepted, file an application to challenge the determination. Upon 25 receipt of such application, the comptroller, or his or her designee, 26 shall conduct a hearing to determine the validity of the application. 27 Notice shall be given to the applicant and to the proposed contract bid 28 awardee of the date, time and place of the hearing. The applicant and 29 the proposed contract bid awardee shall be given the opportunity to 30 present evidence and witnesses on their behalf. The comptroller, or his 31 or her designee, presiding over such hearing shall issue a written deci- 32 sion with findings of fact whether the proposed contract bid awardee is 33 valid. Such contract shall not be awarded prior to such decision. The 34 awarding agency, authority, or municipality shall notify all bidders 35 regarding the selection of its proposed contract bid awardee. 36 § 4. The opening paragraph and paragraph c of subdivision 2, the open- 37 ing paragraph and subparagraphs (ii), (v) and (vi) of paragraph a and 38 subparagraph (i) of paragraph b of subdivision 3 of section 163 of the 39 state finance law, as added by chapter 83 of the laws of 1995, are 40 amended to read as follows: 41 The objective of state procurement is to facilitate each state agen- 42 cy's mission while protecting the interests of the state and its taxpay- 43 ers and promoting fairness in contracting with the business community. 44 The state's procurement process shall be guided by the net economic 45 impact, pursuant to section one hundred thirty-nine-m of this chapter, 46 of a contract on the state and the following principles: 47 c. To encourage the investment of the private and not-for-profit 48 sectors in New York state by making reasonable efforts to ensure that 49 offerers are apprised of procurement opportunities; by specifying the 50 elements of a responsive bid and disclosing the process for awarding 51 contracts including, if applicable, the relative importance and/or 52 weight of [cost] net economic impact and the overall technical criterion 53 for evaluating offers; and by ensuring the procurement is conducted 54 accordingly.A. 566 4 1 State agency procurement practices for commodities shall incorporate 2 net economic impact, pursuant to section one hundred thirty-nine-m of 3 this chapter, and then the following: 4 (ii) Commodities contracts shall be awarded on the basis of [lowest5price to] net economic impact of a responsive and responsible offerer; 6 or, in the case of multiple awards, in accordance with paragraph c of 7 subdivision ten of this section. 8 (v) Consistent with guidelines issued by the state procurement coun- 9 cil, state agencies may competitively purchase commodities procured in 10 accordance with this article in lieu of using centralized contracts when 11 the resultant [price is less] net economic impact is greater than the 12 centralized contract [price]. 13 (vi) When justified by [price] net economic impact, state agencies, 14 and hospitals and facilities managed and controlled by state agencies 15 eligible pursuant to section twenty-eight hundred three-a of the public 16 health law, shall be eligible to make purchases pursuant to guidelines 17 issued by the state procurement council from a consortium or comparable 18 entity in lieu of using centralized contracts for commodities. 19 (i) determine, in cooperation with the state procurement council and 20 state agencies, the identity, form, function and utility of those 21 commodities which shall be made available on or through centralized 22 contracts. Criteria shall include the net economic impact, as defined in 23 section one hundred thirty-nine-m of this chapter, on New York state's 24 economy. Criteria may include, but need not be limited to, the avail- 25 ability of a volume discount, prior use of the commodity among state 26 agencies and the relative cost of establishing the contract, its antic- 27 ipated use and expected actual savings for the state. The commissioner 28 may also act as a broker for state agencies to procure commodities. 29 § 5. The opening paragraph and paragraph d of subdivision 4 of section 30 163 of the state finance law, as added by chapter 83 of the laws of 31 1995, are amended to read as follows: 32 State agency procurement practices for services shall incorporate the 33 net economic impact, as defined in section one hundred thirty-nine-m of 34 this chapter, and then the following: 35 d. Service contracts shall be awarded on the basis of [best value to] 36 net economic impact of a responsive and responsible offerer; or, in the 37 case of multiple awards, in accordance with paragraph c of subdivision 38 ten of this section. 39 § 6. Subdivision 7, paragraphs a and b of subdivision 9, the opening 40 paragraph and paragraph a of subdivision 10, and the opening paragraph 41 of subdivision 11 of section 163 of the state finance law, subdivision 7 42 as amended by section 2 of subpart A of part KK of chapter 57 of the 43 laws of 2018, paragraphs a and b of subdivision 9, the opening paragraph 44 and paragraph a of subdivision 10, and the opening paragraph of subdivi- 45 sion 11 as added by chapter 83 of the laws of 1995, and are amended to 46 read as follows: 47 7. Method of procurement. Consistent with the requirements of subdivi- 48 sions three and four of this section, state agencies shall select among 49 permissible methods of procurement including, but not limited to, an 50 invitation for bid, request for proposals or other means of solicitation 51 pursuant to guidelines issued by the state procurement council. State 52 agencies may accept bids electronically including submission of the 53 statement of non-collusion required by section one hundred thirty-nine-d 54 of this chapter, and the statement of certification required by section 55 one hundred thirty-nine-l of this chapter, and, starting April first, 56 two thousand twelve, and ending March thirty-first, two thousandA. 566 5 1 fifteen, may, for commodity, service and technology contracts require 2 electronic submission as the sole method for the submission of bids for 3 the solicitation. State agencies shall undertake no more than eighty- 4 five such electronic bid solicitations, none of which shall be reverse 5 auctions, prior to April first, two thousand fifteen. In addition, state 6 agencies may conduct up to twenty reverse auctions through electronic 7 means, prior to April first, two thousand fifteen. Prior to requiring 8 the electronic submission of bids, the agency shall make a determi- 9 nation, which shall be documented in the procurement record, that elec- 10 tronic submission affords a fair and equal opportunity for offerers to 11 submit responsive offers. Within thirty days of the completion of the 12 eighty-fifth electronic bid solicitation, or by April first, two thou- 13 sand fifteen, whichever is earlier, the commissioner shall prepare a 14 report assessing the use of electronic submissions and make recommenda- 15 tions regarding future use of this procurement method. In addition, 16 within thirty days of the completion of the twentieth reverse auction 17 through electronic means, or by April first, two thousand fifteen, 18 whichever is earlier, the commissioner shall prepare a report assessing 19 the use of reverse auctions through electronic means and make recommen- 20 dations regarding future use of this procurement method. Such reports 21 shall be published on the website of the office of general services. 22 Except where otherwise provided by law, procurements shall be compet- 23 itive, and state agencies shall conduct formal competitive procurements 24 to the maximum extent practicable. State agencies shall document the 25 determination of the method of procurement and the basis of award in the 26 procurement record. Where the basis for award is the best [value] net 27 economic impact offer, the state agency shall document, in the procure- 28 ment record and in advance of the initial receipt of offers, the deter- 29 mination of the evaluation criteria, which whenever possible, shall be 30 quantifiable, and the process to be used in the determination of best 31 [value] net economic impact and the manner in which the evaluation proc- 32 ess and selection shall be conducted. 33 a. The commissioner or a state agency shall select a formal compet- 34 itive procurement process in accordance with guidelines established by 35 the state procurement council and document its determination in the 36 procurement record. The process shall include, but is not limited to, a 37 clear statement of need; a description of the required specifications 38 governing performance and related factors; a reasonable process for 39 ensuring a competitive field; a fair and equal opportunity for offerers 40 to submit responsive offers; and a balanced and fair method of award. 41 Where the basis for the award is best [value] net economic impact, 42 documentation in the procurement record shall, where practicable, 43 include a quantification of the application of the criteria to the 44 rating of proposals and the evaluation results, or, where not practica- 45 ble, such other justification which demonstrates that best [value] net 46 economic impact will be achieved. 47 b. The solicitation shall prescribe the minimum specifications or 48 requirements that must be met in order to be considered responsive and 49 shall describe and disclose the general manner in which the evaluation 50 and selection shall be conducted. Where appropriate, the solicitation 51 shall identify the relative importance and/or weight of [cost] net 52 economic impact and the overall technical criterion to be considered by 53 a state agency in its determination of best [value] net economic impact. 54 Contracts for commodities shall be awarded on the basis of [lowest55price to] net economic impact of a responsive and responsible offerer, 56 pursuant to section one hundred thirty-nine-m of this chapter.A. 566 6 1 Contracts for services shall be awarded on the basis of best [value] net 2 economic impact from a responsive and responsible offerer, pursuant to 3 section one hundred thirty-nine-m of this chapter. Multiple awards for 4 services and commodities shall be conducted in accordance with paragraph 5 c of this subdivision. 6 a. Selection and award shall be a written determination in the 7 procurement record made by the commissioner or a state agency in a 8 manner consistent with the provisions of the solicitation. In the event 9 two offers are found to be substantially equivalent, [price] net econom- 10 ic impact shall be the basis for determining the award recipient or, 11 when [price] net economic impact and other factors are found to be 12 substantially equivalent, the determination of the commissioner or agen- 13 cy head to award a contract to one or more of such bidders shall be 14 final. The basis for determining the award shall be documented in the 15 procurement record. 16 It shall be the responsibility of the head of each state agency to 17 periodically sample the results of the procurement process to test for 18 reasonableness; to ensure that the results withstand public scrutiny and 19 that the quality and the price of the purchase makes sense; and to 20 ensure that purchasing is conducted in a manner consistent with the best 21 net economic impact interests of the state. 22 § 7. Subdivision 1 of section 142 of the economic development law, as 23 amended by chapter 137 of the laws of 2008, is amended to read as 24 follows: 25 1. The commissioner shall publish on a daily basis a procurement 26 opportunities newsletter, which shall contain notices of procurement 27 contract opportunities and any other information the commissioner deems 28 necessary to effectuate the purposes of this article including, but not 29 limited to, any changes in the law, rules and regulations regarding 30 procurement contracts. Notices of procurement contract opportunities 31 shall be available on the internet for at least fifteen days. 32 § 8. Section 100-a of the general municipal law, as added by chapter 33 363 of the laws of 1964, is amended to read as follows: 34 § 100-a. Declaration of policy. [It] Notwithstanding any provision of 35 this article to the contrary, it is hereby declared to be the policy of 36 this state that this article shall [be construed] consider the net 37 economic impact, as defined in section one hundred thirty-nine-m of the 38 state finance law, as the priority in the negotiation of contracts for 39 public works and public purchases to which political subdivisions [or40and district] and/or districts therein [is] are a party so as to assure 41 the prudent and economical use of public moneys for the benefit of all 42 the inhabitants of the state and to facilitate the acquisition of facil- 43 ities and commodities of maximum quality [at the lowest possible cost]. 44 § 9. Subdivision 1 of section 2879 of the public authorities law, as 45 amended by chapter 564 of the laws of 1988, is amended to read as 46 follows: 47 1. Every public authority and public benefit corporation, a majority 48 of the members of which consist of persons either appointed by the 49 governor or who serve as members by virtue of holding a civil office of 50 the state, or a combination thereof, (such entities to be hereinafter in 51 this section referred to as "corporation") shall adopt by resolution 52 comprehensive guidelines which detail the corporation's operative policy 53 and instructions regarding the use, awarding, monitoring and reporting 54 of procurement contracts. Notwithstanding any other provision of law, 55 rule or regulation, such guidelines shall include, but not be limited 56 to, making consideration of the net economic impact, as defined inA. 566 7 1 section one hundred thirty-nine-m of the state finance law, the priority 2 in awarding procurement contracts. Guidelines approved by the corpo- 3 ration shall be annually reviewed and approved by the corporation. 4 § 10. This act shall take effect on the one hundred eightieth day 5 after it shall have become a law; provided, however, the provisions of 6 this act shall be applied to all contracts entered into on or after 7 April 1, 2019; and provided, further, however, that the amendments to 8 the provisions of section 163 of the state finance law made by sections 9 four, five and six of this act shall not affect the repeal of such 10 section and shall be deemed repealed therewith. Effective immediately, 11 the addition, amendment and/or repeal of any rule or regulation neces- 12 sary for the implementation of this act on its effective date are 13 authorized and directed to be made and completed on or before such date.
