Bill Text: NY A06832 | 2017-2018 | General Assembly | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Defines the term "prevailing market price".
Spectrum: Moderate Partisan Bill (Democrat 10-3)
Status: (Introduced - Dead) 2018-06-06 - reported referred to ways and means [A06832 Detail]
Download: New_York-2017-A06832-Amended.html
Bill Title: Defines the term "prevailing market price".
Spectrum: Moderate Partisan Bill (Democrat 10-3)
Status: (Introduced - Dead) 2018-06-06 - reported referred to ways and means [A06832 Detail]
Download: New_York-2017-A06832-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 6832--B 2017-2018 Regular Sessions IN ASSEMBLY March 21, 2017 ___________ Introduced by M. of A. GUNTHER, SANTABARBARA, BRINDISI, McDONOUGH, RICH- ARDSON, RA, THIELE, WALSH, SEPULVEDA -- Multi-Sponsored by -- M. of A. ENGLEBRIGHT -- read once and referred to the Committee on Governmental Operations -- recommitted to the Committee on Governmental Operations in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- again reported from said committee with amendments, ordered reprinted as amended and recommitted to said committee AN ACT to amend the state finance law, in relation to preferred sources for state contracts for goods and services The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph m of subdivision 2 of section 161 of the state 2 finance law, as amended by section 13 of part L of chapter 55 of the 3 laws of 2012, is amended to read as follows: 4 m. Establish and, from time to time, amend guidelines with respect to 5 publishing by state agencies of quarterly listings of projected procure- 6 ments having a value greater than five thousand dollars but less than 7 [fifty] two hundred thousand dollars in the procurement opportunities 8 newsletter established by article four-C of the economic development 9 law. 10 § 2. Section 162 of the state finance law, as added by chapter 83 of 11 the laws of 1995, subdivision 2 as amended by chapter 501 of the laws of 12 2002, paragraph a of subdivision 2, paragraphs a and b of subdivision 3, 13 subparagraph (i) of paragraph a of subdivision 4, subdivision 5, and 14 paragraphs a and d of subdivision 6 as amended by section 164 of subpart 15 B of part C of chapter 62 of the laws of 2011, paragraph b of subdivi- 16 sion 2 as amended by chapter 519 of the laws of 2003, subparagraph (iii) 17 of paragraph b of subdivision 4 as amended by chapter 430 of the laws of 18 1997, paragraph e of subdivision 6 as amended by chapter 265 of the laws 19 of 2013, subdivision 7 as amended by chapter 426 of the laws of 2002 and EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD10450-06-8A. 6832--B 2 1 paragraph a of subdivision 8 as amended by chapter 95 of the laws of 2 2000, is amended to read as follows: 3 § 162. Preferred sources. 1. Definitions. As used in this section: 4 (a) "Preferred source" shall mean: 5 (i) commodities produced by the correctional industries program of the 6 department of corrections and community supervision; 7 (ii) commodities and services produced by any qualified charitable 8 non-profit-making agency for the blind approved for such purposes by the 9 commissioner of children and family services; 10 (iii) commodities and services produced by any special employment 11 program serving mentally ill persons, which shall not be required to be 12 incorporated and which is operated by facilities within the office of 13 mental health and is approved for such purposes by the commissioner of 14 mental health; 15 (iv) commodities and services produced by any qualified charitable 16 non-profit-making agency for other significantly disabled persons 17 approved for such purposes by the commissioner of education, or incorpo- 18 rated under the laws of this state and approved for such purposes by the 19 commissioner of education; 20 (v) commodities and services produced a qualified veterans' workshop 21 providing job and employment-skills training to veterans where such a 22 workshop is operated by the United States department of veterans affairs 23 and is manufacturing products or performing services within this state 24 and where such workshop is approved for such purposes by the commission- 25 er of education; 26 (vi) commodities and services produced by any qualified charitable 27 non-profit-making workshop for veterans approved for such purposes by 28 the commissioner of education, or incorporated under the laws of this 29 state and approved for such purposes by the commissioner of education; 30 or 31 (vii) commodities and services produced by a private vendor accorded 32 preferred source status pursuant to subdivision seven of this section. 33 b. "Facilitating entity" shall refer to those non-profit-making enti- 34 ties identified pursuant to paragraph e of subdivision six of this 35 section by the commissioner of children and family services or the 36 commissioner of education; and the commissioner of mental health. 37 c. "Prevailing market price" shall mean the predominate price at which 38 vendors of the same or similar product or service regularly engaged in 39 the business of selling such product or service offers to sell such 40 product or service under similar terms in the same market. "Under simi- 41 lar terms" shall mean, without limitation, procurements conducted with- 42 out competitive bidding. 43 2. Purpose. To advance special social and economic goals, selected 44 providers shall have preferred source status for the purposes of 45 procurement in accordance with the provisions of this section. Procure- 46 ment from these providers shall be exempted from the competitive 47 procurement provisions of section one hundred sixty-three of this arti- 48 cle and other competitive procurement statutes. Such exemption shall 49 apply to commodities produced, manufactured or assembled, including 50 those repackaged to meet the form, function and utility required by 51 state agencies, in New York state and, where so designated, services 52 provided by those sources in accordance with this section. 53 [2. Preferred status. Preferred status as prescribed in this section54shall be accorded to:55a. Commodities produced by the correctional industries program of the56department of corrections and community supervision and provided to theA. 6832--B 3 1state pursuant to subdivision two of section one hundred eighty-four of2the correction law;3b. Commodities and services produced by any qualified charitable non-4profit-making agency for the blind approved for such purposes by the5commissioner of the office of children and family services;6c. Commodities and services produced by any special employment program7serving mentally ill persons, which shall not be required to be incorpo-8rated and which is operated by facilities within the office of mental9health and is approved for such purposes by the commissioner of mental10health;11d. Commodities and services produced by any qualified charitable non-12profit-making agency for other severely disabled persons approved for13such purposes by the commissioner of education, or incorporated under14the laws of this state and approved for such purposes by the commission-15er of education;16e. Commodities and services produced by a qualified veterans' workshop17providing job and employment-skills training to veterans where such a18workshop is operated by the United States department of veterans affairs19and is manufacturing products or performing services within this state20and where such workshop is approved for such purposes by the commission-21er of education; or22f. Commodities and services produced by any qualified charitable non-23profit-making workshop for veterans approved for such purposes by the24commissioner of education, or incorporated under the laws of this state25and approved for such purposes by the commissioner of education.] 26 3. Public list of services and commodities provided by preferred 27 sources. 28 a. By December thirty-first, nineteen hundred ninety-five, the commis- 29 sioner, in consultation with the commissioners of corrections and commu- 30 nity supervision, [the office of] children and family services, [the31office of] temporary and disability assistance, mental health and educa- 32 tion, shall prepare a list (the "preferred source list of offerings") of 33 all commodities and services that are available and are being provided 34 as of said date, for purchase by state agencies, public benefit corpo- 35 rations or political subdivisions from those entities accorded prefer- 36 ence or priority status under this section. Such list may include refer- 37 ences to catalogs and other descriptive literature which are available 38 directly from any provider accorded preferred status or the designated 39 facilitating entity under this section. The commissioner shall make this 40 list available to prospective vendors, state agencies, public benefit 41 corporations, political subdivisions and other interested parties. Ther- 42 eafter, new or substantially different commodities or services may only 43 be made available [by preferred sources for purchase by more than one44state agency, public benefit corporation or political subdivision] for 45 purchases pursuant to the exemption established pursuant to this section 46 after addition to said list. 47 b. After January first, nineteen hundred ninety-six, upon the applica- 48 tion of the commissioner of corrections and community supervision, the 49 commissioner of [the office of] children and family services, the 50 [office] commissioner of temporary and disability assistance, the 51 commissioner of mental health or the commissioner of education, or a 52 non-profit-making facilitating [agency] entity designated by one of the 53 said commissioners pursuant to paragraph e of subdivision six of this 54 section, the state procurement council may recommend that the commis- 55 sioner: (i) add commodities or services to, or (ii) in order to insure 56 that such list reflects current production and/or availability ofA. 6832--B 4 1 commodities and services, delete at the request of a preferred source, 2 commodities or services from, the list established by paragraph a of 3 this subdivision. The council may make a non-binding recommendation to 4 the relevant preferred source to delete a commodity or service from such 5 list. Additions may be made only for new services or commodities, or for 6 services or commodities that are substantially different from those 7 reflected on said list for that provider. The decision to recommend the 8 addition of services or commodities shall be based upon a review of 9 relevant factors as determined by the council including the purpose of 10 the preferred source program identified in subdivision two of this 11 section, costs and benefits to be derived from such addition, and [shall12include] an analysis by the office of general services conducted pursu- 13 ant to subdivision six of this section. Unless the state procurement 14 council shall make a recommendation to the commissioner on any such 15 application within one hundred twenty days of receipt thereof, such 16 application shall be deemed recommended. In the event that the state 17 procurement council shall deny any such application, the commissioner, 18 or non-profit-making agency or designated facilitating entity which 19 submitted such application may, within thirty days of such denial, 20 appeal such denial to the commissioner of general services who shall 21 review all materials submitted to the state procurement council with 22 respect to such application and who may request such further information 23 or material as is deemed necessary. Within sixty days of receipt of all 24 information or materials deemed necessary, the commissioner shall render 25 a written final decision on the application which shall be binding upon 26 the applicant and upon the state procurement council. For those commod- 27 ities and services identified in sections C and E of the "preferred 28 source list of offerings" as of January first, two thousand eighteen, 29 any state agencies, political subdivisions, public benefit corporations 30 and other interested parties choosing to purchase from a preferred 31 source shall obtain price approved pursuant to subdivision six of this 32 section. 33 c. The list maintained by the office of general services pursuant to 34 paragraph a of this subdivision shall be revised as necessary to reflect 35 the additions and deletions of commodities and services approved by the 36 state procurement council. 37 4. Priority accorded preferred sources. Except as provided in the New 38 York state printing and public documents law, priority among preferred 39 sources shall be accorded as follows: 40 a. (i) When commodities are available, in the form, function and util- 41 ity required by a state agency, public authority, commission, public 42 benefit corporation or political subdivision, said commodities must be 43 purchased first from the correctional industries program of the depart- 44 ment of corrections and community supervision; 45 (ii) When commodities are available, in the form, function and utility 46 required by, a state agency or political subdivision or public benefit 47 corporation having their own purchasing agency, and such commodities are 48 not available pursuant to subparagraph (i) of this paragraph, said 49 commodities shall then be purchased from approved charitable non-pro- 50 fit-making agencies for the blind; 51 (iii) When commodities are available, in the form, function and utili- 52 ty required by, a state agency or political subdivision or public bene- 53 fit corporation having their own purchasing agency, and such commodities 54 are not available pursuant to subparagraphs (i) and (ii) of this para- 55 graph, said commodities shall then be purchased from a qualified non- 56 profit-making agency for other severely disabled persons, a qualifiedA. 6832--B 5 1 special employment program for mentally ill persons, or a qualified 2 veterans' workshop; 3 b. When services are available, in the form, function and utility 4 required by, a state agency or political subdivision or public benefit 5 corporation having their own purchasing agency, equal priority shall be 6 accorded the services rendered and offered for sale by qualified non- 7 profit-making agencies for the blind and those for the other severely 8 disabled, by qualified special employment programs for mentally ill 9 persons and by qualified veterans' workshops. In the case of services: 10 (i) state agencies or political subdivisions or public benefit corpo- 11 rations having their own purchasing agency shall make reasonable efforts 12 to provide a written notification describing their requirements to those 13 preferred sources, or to the facilitating entity identified in paragraph 14 e of subdivision six of this section, which provide the required 15 services as indicated on the official public list maintained by the 16 office of general services pursuant to subdivision three of this 17 section; 18 (ii) if, within ten days of the notification required by subparagraph 19 (i) of this paragraph, one or more preferred sources or facilitating 20 entities identified in paragraph e of subdivision six of this section 21 submit a notice of intent to provide the service in the form, function 22 and utility required, said service shall be purchased in accordance with 23 this section. If more than one preferred source or facilitating entity 24 identified in paragraph e of subdivision six of this section submits 25 notification of intent and meets the requirements, [costs] price shall 26 be the determining factor for purchase among the preferred sources; 27 (iii) if, within ten days of the notification required by subparagraph 28 (i) of this paragraph, no preferred source or facilitating entity iden- 29 tified in paragraph e of subdivision six of this section indicates 30 intent to provide the service, then the service shall be procured in 31 accordance with section one hundred sixty-three of this article. If, 32 after such period, a preferred source elects to bid on the service, 33 award shall be made in accordance with section one hundred sixty-three 34 of this article or as otherwise provided by law. 35 c. For the purposes of commodities and services produced by special 36 employment programs operated by facilities approved or operated by the 37 office of mental health, facilities within the office of mental health 38 shall be exempt from the requirements of subparagraph (i) of paragraph a 39 of this subdivision. When such requirements of the office of mental 40 health cannot be met pursuant to subparagraph (ii) or (iii) of paragraph 41 a of this subdivision, or paragraph b of this subdivision, the office of 42 mental health may purchase commodities and services which are compet- 43 itive in price and comparable in quality to those which could otherwise 44 be obtained in accordance with this article, from special employment 45 programs operated by facilities within the office of mental health or 46 other programs approved by the office of mental health. 47 5. Prices charged by the department of corrections and community 48 supervision. The prices to be charged for commodities produced by the 49 correctional industries program of the department of corrections and 50 community supervision shall be established by the commissioner of 51 corrections and community supervision in accordance with section one 52 hundred eighty-six of the correction law. 53 a. The prices established by the commissioner of corrections and 54 community supervision shall be based upon costs as determined pursuant 55 to this subdivision, but shall not exceed a reasonable fair market price 56 determined at or within ninety days before the time of sale. Fair marketA. 6832--B 6 1 price as used herein means the price at which a vendor of the same or 2 similar product or service who is regularly engaged in the business of 3 selling such product or service offers to sell such product or service 4 under similar terms in the same market. Costs shall be determined in 5 accordance with an agreement between the commissioner of corrections and 6 community supervision and the director of the budget. 7 b. A purchaser of any such product or service may, at any time prior 8 to or within thirty days of the time of sale, appeal the purchase price 9 in accordance with section one hundred eighty-six of the correction law, 10 on the basis that it unreasonably exceeds fair market price. Such an 11 appeal shall be decided by a majority vote of a three-member price 12 review board consisting of the director of the budget, the commissioner 13 of corrections and community supervision and the commissioner or their 14 representatives. The decision of the review board shall be final. 15 6. Prices charged by agencies for the blind, other severely disabled 16 and veterans' workshops. 17 a. (i) Except with respect to the correctional industries program of 18 the department of corrections and community supervision, it shall be the 19 duty of the commissioner to determine, and from time to time review, the 20 prices of all commodities [and to approve the price of all services] 21 provided by preferred sources as specified in this section offered to 22 state agencies, political subdivisions or public benefit corporations 23 having their own purchasing office. 24 (ii) With respect to the purchase of services, it shall be the duty of 25 the commissioner to review and to approve the price of all services 26 offered that have a value over two hundred thousand dollars annually, to 27 be provided by the facilitating entity in response to the written scope 28 of services issued by the state agency, political subdivision or public 29 benefit corporation. The facilitating entities identified in paragraph e 30 of this subdivision shall provide to the commissioner, within a reason- 31 able time following the request, information to determine prevailing 32 market price. Such information shall include a price application and 33 either comparable pricing from private contracts, benchmarking provided 34 by an independent third party supplied by the facilitating entity, or 35 attestation by the state agency, political subdivision or public benefit 36 corporation of price reasonableness. Where appropriate, the provider of 37 such information may request that such information be exempted from 38 disclosure in accordance with the provisions of paragraph (a) of subdi- 39 vision five of section eighty-nine of the public officers law. State 40 agencies, political subdivisions, or public benefit corporations may 41 issue a request for the information to assist the commissioner in estab- 42 lishing prevailing market prices. Subcontracting a portion of the work 43 under the preferred source program shall be authorized provided that: 44 the annual value of the subcontract does not exceed authorized thresh- 45 olds for discretionary purchase levels; and the service provided through 46 a subcontract is integral to the service being delivered by the provid- 47 ing preferred source agency or partnership. When the subcontracted work 48 is not a preferred source service, it must be sourced from a centralized 49 contract when available, unless a better value can be achieved from 50 another source. If the subcontract is sourced outside a centralized 51 contract the subcontracting shall be sourced competitively by the facil- 52 itating agency or the performing preferred source provider or partner. 53 All direct labor hours performed by a subcontractor shall be included in 54 the required value added labor ratio requirements. This price review 55 process shall be concluded within ninety days of receipt thereof by theA. 6832--B 7 1 commissioner of a price application. Otherwise, such application shall 2 be deemed approved. 3 b. In determining and revising the prices of such commodities or 4 services, in instances where the prevailing market price cannot be 5 reasonably determined by comparable price information from private 6 contracts, third party benchmarking or attestation by the customer, 7 consideration shall be given to the reasonable costs of labor, materials 8 and overhead necessarily incurred by such preferred sources under effi- 9 cient methods of procurement, production, performance and adminis- 10 tration; however, the prices of such products and services shall be as 11 close to prevailing market price as practicable, but in no event greater 12 than fifteen percent above, the prevailing market prices among respon- 13 sive offerors for the same or equivalent commodities or services. 14 c. Such qualified charitable non-profit-making agencies for the blind 15 and other severely disabled may make purchases of materials, equipment 16 or supplies, except printed material, from centralized contracts for 17 commodities in accordance with the conditions set by the office of 18 general services; provided that the qualified charitable non-profit-mak- 19 ing agency for the blind or other severely disabled shall accept sole 20 responsibility for any payment due the vendor. 21 d. Such qualified charitable non-profit-making agencies for the blind 22 and other severely disabled may make purchases of materials, equipment 23 and supplies directly from the correctional industries program adminis- 24 tered by the commissioner of corrections and community supervision, 25 subject to such rules as may be established from time to time pursuant 26 to the correction law; provided that the qualified charitable non-pro- 27 fit-making agency for the blind or other severely disabled shall accept 28 sole responsibility for any payment due the department of corrections 29 and community supervision. 30 e. The commissioner of the office of children and family services 31 shall appoint the New York state commission for the blind, or other 32 non-profit-making agency, other than the agency representing the other 33 severely disabled, to facilitate the distribution of orders among quali- 34 fied non-profit-making charitable agencies for the blind. The state 35 commissioner of education shall appoint a non-profit-making agency, 36 other than the agency representing the blind, to facilitate the distrib- 37 ution of orders among qualified non-profit-making charitable agencies 38 for the other severely disabled and the veterans' workshops. The 39 [state] commissioner of mental health shall facilitate the distribution 40 of orders among qualified special employment programs operated or 41 approved by the office of mental health serving mentally ill persons. 42 f. The commissioner may request the state comptroller to conduct 43 audits and examinations to be made of all records, books and data of any 44 agency for the blind or the other severely disabled, any special employ- 45 ment program for mentally ill persons or any veterans' workshops quali- 46 fied under this section to determine the costs of manufacture or the 47 rendering of services and the manner and efficiency of production and 48 administration of such agency or special employment program or veterans' 49 workshop with relation to any product or services purchased by a state 50 agency or political subdivision or public benefit corporation and to 51 furnish the results of such audit and examination to the commissioner 52 for such action as he or she may deem appropriate under this section. 53 7. Partnering with preferred sources. The commissioner of the appro- 54 priate appointing agency as identified in paragraph e of subdivision six 55 of this section, shall [conduct one or more pilot studies] review and 56 approve applications provided by the facilitating entity whereby aA. 6832--B 8 1 private vendor may be accorded preferred source status for purposes of 2 this section. [The pilot studies shall seek to ascertain the benefits of3partnerships between private industry and those entities accorded4preferred source status as specified in this section.] Preferred source 5 status under a partnering arrangement may only be accorded when a 6 proposal to a soliciting agency for commodities or services includes a 7 binding agreement with one or more of the non-profit-making entities 8 accorded preferred source status [under] identified in paragraph e of 9 subdivision six of this section. The binding agreement shall provide 10 that: 11 (i) The preferred source shall perform the majority of the work neces- 12 sary to such offering, and 13 (ii) The partnering proposal includes bona fide long term employment 14 opportunities for [persons who could otherwise be new] clients of an 15 entity previously accorded preferred source status [herein] pursuant to 16 this section, and 17 (iii) The partnering proposal offers the solicited services or commod- 18 ities at a price less than the price that otherwise would be charged by 19 [a] the preferred source that is a party to the partnership application, 20 or 21 (iv) The partnering proposal allows the preferred source to engage in 22 an approved offering that would allow for employment opportunities that 23 would not otherwise be able to provide on its own. 24 8. [a. The commissioner of the appropriate appointing agency shall25report by December thirty-first, two thousand four, to the governor, the26chairperson of the senate finance committee, the chairperson of the27assembly ways and means committee and the director of the budget, the28results and findings of each pilot study conducted, pursuant to subdivi-29sion seven of this section, and include recommendations for improving30partnering with preferred sources.31b.] The council shall report to the governor, legislative fiscal 32 committees and the director of the budget by December thirty-first, 33 [nineteen hundred ninety-five and thereafter] annually, a separate list 34 concerning the denial of any application made pursuant to paragraph 35 [(b)] b of subdivision three of this section, the reasons for such 36 denial, whether such denial was appealed to the commissioner, and the 37 final decision by the commissioner on such application. 38 9. The provisions of this section shall supersede inconsistent 39 provisions of any general, special or local law, or the provisions of 40 any charter. 41 § 3. This act shall take effect on the first of January next succeed- 42 ing the date on which it shall have become a law.