Bill Text: NY S05624 | 2019-2020 | General Assembly | Amended


Bill Title: Enacts various provisions relating to procurement procedures.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-02-07 - PRINT NUMBER 5624A [S05624 Detail]

Download: New_York-2019-S05624-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5624--A

                               2019-2020 Regular Sessions

                    IN SENATE

                                       May 9, 2019
                                       ___________

        Introduced  by  Sen. KRUEGER -- (at request of the State Comptroller) --
          read twice and ordered printed, and when printed to  be  committed  to
          the Committee on Finance -- recommitted to the Committee on Finance in
          accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
          amended, ordered reprinted as amended and recommitted to said  commit-
          tee

        AN  ACT  to  amend  the  state  finance  law and the legislative law, 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  clarifying  the  use  of
          contracts let by another governmental agency; in relation to  clarify-
          ing  the valuation of non-cash contracts by the state comptroller; and
          in relation to conforming the definition of restricted period

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  The  state finance law is amended by adding a new section
     2  163-c to read as follows:
     3    § 163-c. Vendor responsibility; online system participation. 1.  Defi-
     4  nitions. As used in this section the  following  terms  shall  have  the
     5  following meanings:
     6    a.  "Enrollment"  shall  mean  the establishment of an online services
     7  account with the state comptroller, including, but not limited  to,  the
     8  creation  of  a  unique  user  identification  and  password. Enrollment
     9  provides a user access to the system.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08975-03-9

        S. 5624--A                          2

     1    b. "Online services" shall mean the services  provided  electronically
     2  and  securely  by  the  state  comptroller for the benefit of New York's
     3  customers, clients and business partners. Such online  services  may  be
     4  expanded and enhanced as technology allows.
     5    c.  "State  agency"  or  "state agencies" shall mean all state depart-
     6  ments, boards, commissions, offices or institutions. Such term shall not
     7  include the legislature or the judiciary.
     8    d. "State contract" or "contract" shall mean and include  any  written
     9  agreement  for the acquisition of goods, services or construction of any
    10  kind between a vendor and a state agency,  or  a  written  agreement  or
    11  other  instrument  wherein  a  state agency agrees to give consideration
    12  other than the payment of money as contemplated in subdivision three  of
    13  section one hundred twelve of this chapter.
    14    e.  "Subcontractor"  shall  mean  an  individual, sole proprietorship,
    15  partnership, joint venture or corporation, which is engaged in a subcon-
    16  tract by a vendor pursuant to a state contract and such  subcontract  is
    17  valued  at one hundred thousand dollars or more and is known at the time
    18  of the award of the state contract to the vendor.
    19    f.  "System"  shall  mean  the  on-line  software,  data  and  related
    20  resources maintained by the comptroller to compile vendor responsibility
    21  information.
    22    g. "Terms of service" shall mean the terms and conditions developed by
    23  the  state  comptroller  and  agreed to by each authorized user prior to
    24  gaining access to online services.   Terms of service  shall  include  a
    25  description  of  the  services, obligations of the state comptroller and
    26  the authorized user, a description of the  state  comptroller's  privacy
    27  policy,  authorized  user  code  of conduct, and indemnity for the state
    28  comptroller and the state of New York. Terms of service are  subject  to
    29  change  as  prescribed  by the state comptroller.   Authorized users may
    30  view changes via the state comptroller's internet site.
    31    h. "Vendor" shall include  any  person,  partnership,  corporation  or
    32  limited  liability  company  or  any  business entity bidding on a state
    33  procurement or otherwise awarded a state contract.
    34    i. "Vendor responsibility" shall mean that a vendor has  the  capacity
    35  to  fully perform the terms of a contract and the integrity and business
    36  ethics to justify an award of public dollars. A determination of  vendor
    37  responsibility shall include consideration of factors including, but not
    38  limited  to,  financial  and  organizational  capacity, legal authority,
    39  integrity and past performance on governmental contracts.
    40    2. a. State agencies shall enroll with the state comptroller to access
    41  the system maintained by the comptroller to compile vendor  responsibil-
    42  ity information. State agencies shall agree to and abide by the terms of
    43  service for such system as the state comptroller deems necessary.
    44    b. For each contract or subcontract between a vendor and a subcontrac-
    45  tor  where, pursuant to law or by direction of the state agency, disclo-
    46  sure for vendor responsibility is required, the state agency shall:
    47    (i) provide notice to vendors bidding for procurements administered by
    48  the state agency that any vendor and subcontractor, submitting a  vendor
    49  responsibility  questionnaire  shall  do so via the system maintained to
    50  compile vendor responsibility information;
    51    (ii) provide vendors with instructions on how to electronically access
    52  the system and provide contact information for assistance  with  enroll-
    53  ment.  This  information  shall be made available prior to the time when
    54  vendors are required to submit disclosure for vendor responsibility; and
    55    (iii) access the system to obtain and evaluate any data submitted by a
    56  vendor proposed for contract award.  State  agencies  shall  ensure  the

        S. 5624--A                          3

     1  submission filed by the vendor meets such system's timeliness standards.
     2  Such  provisions  apply regardless of whether the contract is subject to
     3  pre-review and approval by the state comptroller.
     4    c.  For  contracts  where vendor disclosure is not otherwise required,
     5  the state agency at its  discretion,  may  require  vendors  bidding  on
     6  procurements,  and/or  subcontractors, to submit a vendor responsibility
     7  questionnaire via the system. Nothing contained in this paragraph  shall
     8  be construed to alter the existing authority of the state comptroller to
     9  require  the  submission  of  a  vendor  responsibility questionnaire in
    10  conjunction with his or her duty to review and approve  state  contracts
    11  prior to such contracts becoming effective.
    12    d.  State  agencies shall provide access to the system to users within
    13  their organization, as deemed appropriate by the head of the state agen-
    14  cy or his or her designee. State agency users provided with such  access
    15  shall  be  those individuals, who, as part of their official job duties,
    16  are required to assess and/or review vendor responsibility for the agen-
    17  cy's contracts.
    18    § 2. Subdivisions 7 and 10 of section 160 of the  state  finance  law,
    19  subdivision  7  as  amended by section 30 of part L of chapter 55 of the
    20  laws of 2012 and subdivision 10 as added by chapter 83 of  the  laws  of
    21  1995, are amended to read as follows:
    22    7.  "Service"  or  "services" means the performance of a task or tasks
    23  and may include a material good or a quantity  of  material  goods,  and
    24  which is the subject of any purchase or other exchange. For the purposes
    25  of  this  article,  information  technology  shall  be deemed a service.
    26  Services, as defined in this article, shall not apply to those contracts
    27  for architectural, engineering or surveying services, or those contracts
    28  approved in accordance with article eleven-B of this chapter.
    29    10. "[Technology] Information technology" means either  a  good  or  a
    30  service or a combination thereof, [that results in a technical method of
    31  achieving  a  practical purpose or in improvements in productivity] used
    32  in the application of any computer or electronic  information  equipment
    33  or  interconnected  system  that  is  used  in the acquisition, storage,
    34  manipulation, management, movement, control, display, switching,  inter-
    35  change,  transmission,  or  reception of data including, but not limited
    36  to, hardware, software, firmware, programs, systems,  networks,  infras-
    37  tructure,  media,  and  related material used to automatically and elec-
    38  tronically collect, receive, access, transmit, display,  store,  record,
    39  retrieve,  analyze,  evaluate,  process,  classify,  manipulate, manage,
    40  assimilate, control, communicate, exchange,  convert,  converge,  inter-
    41  face,  switch,  or  disseminate  data  of any kind or form. Goods may be
    42  either new or used.
    43    § 3. Paragraphs g and i of subdivision 2 of section 161 of  the  state
    44  finance  law, as added by chapter 83 of the laws of 1995, are amended to
    45  read as follows:
    46    g. Consult with and advise the commissioner on  strategic  information
    47  technology  investments  that  will  facilitate electronic access to the
    48  terms and conditions of existing procurement  contracts,  promote  elec-
    49  tronic  commerce  including,  but  not  limited  to, payment to vendors,
    50  promote and enhance the efficiency of the procurement  of  products  and
    51  services  by  or  for state agencies and produce useful information that
    52  supports state procurement operations, management, analysis and decision
    53  making including, but not limited to, data concerning the status and use
    54  of procurement contracts and the number and type of contracts and  award
    55  recipients;

        S. 5624--A                          4

     1    i. Establish and, from time to time, amend guidelines for the procure-
     2  ment  of  services  and  information  technology  in accordance with the
     3  provisions of this article. Such guidelines shall ensure  the  wise  and
     4  prudent use of public money in the best interest of the taxpayers of the
     5  state;  guard  against favoritism, improvidence, extravagance, fraud and
     6  corruption; and ensure that service contracts are awarded on  the  basis
     7  of  best  value,  including, but not limited to, the following criteria:
     8  quality, cost, and efficiency;
     9    § 4. Paragraph k of subdivision 1 and subdivision 6 of section 163  of
    10  the  state finance law, paragraph k of subdivision 1 as added by section
    11  36 of part L of chapter 55 of the laws of 2012, subdivision 6 as amended
    12  by chapter 96 of the laws of 2019, are amended to read as follows:
    13    k. "Authorized user" or "non-state agency  purchaser"  means  (i)  any
    14  officer,  body or agency of the state or of a political subdivision or a
    15  district therein, or fire company or volunteer ambulance service as such
    16  are defined in section one hundred of the general municipal law, to make
    17  purchases of commodities, services and  information  technology  through
    18  the  office  of general services' centralized contracts, pursuant to the
    19  provisions of section one hundred four of  the  general  municipal  law;
    20  (ii) any county extension service association as authorized under subdi-
    21  vision eight of section two hundred twenty-four of the county law; (iii)
    22  any  association  or other entity as specified in and in accordance with
    23  section one hundred nine-a of the general municipal law; (iv) any  asso-
    24  ciation, consortium or group of privately owned or municipal, federal or
    25  state owned or operated hospitals, medical schools, other health related
    26  facilities  or  voluntary  ambulance services, which have entered into a
    27  contract and made mutual arrangements for the joint purchase of  commod-
    28  ities,  services  and information technology pursuant to section twenty-
    29  eight hundred three-a of the public health law; (v) any institution  for
    30  the  instruction of the deaf or of the blind listed in section forty-two
    31  hundred one of the education law; (vi) any  qualified  non-profit-making
    32  agency for the blind approved by the commissioner of the office of chil-
    33  dren  and  family  services  or  the  office of temporary and disability
    34  assistance; (vii) any qualified charitable non-profit-making agency  for
    35  the  severely disabled approved by the commissioner of education; (viii)
    36  any hospital or residential health care facility as defined  in  section
    37  twenty-eight  hundred  one  of  the  public health law; (ix) any private
    38  not-for-profit mental hygiene facility as defined in section 1.03 of the
    39  mental hygiene law; (x) any public authority or  public  benefit  corpo-
    40  ration  of  the  state, including the port authority of New York and New
    41  Jersey and the interstate  environmental  commission;  (xi)  any  public
    42  library,   association  library,  library  system,  cooperative  library
    43  system, the New York Library Association, and the New York State Associ-
    44  ation of Library Boards or any other  library  except  those  which  are
    45  operated  by  for profit entities; (xii) any other association or entity
    46  as specified in state law, to make purchases  of  commodities,  services
    47  and  information  technology  through  the  office  of general services'
    48  centralized contracts. Such qualified non-profit-making agencies for the
    49  blind and severely disabled may make  purchases  from  the  correctional
    50  industries program of the department of corrections and community super-
    51  vision subject to rules pursuant to the correction law.
    52    6. Discretionary buying thresholds. Pursuant to guidelines established
    53  by the state procurement council: the commissioner may purchase services
    54  and  commodities in an amount not exceeding eighty-five thousand dollars
    55  without a  formal  competitive  process;  state  agencies  may  purchase
    56  services  and  commodities  in  an  amount  not exceeding fifty thousand

        S. 5624--A                          5

     1  dollars without a formal competitive process;  and  state  agencies  may
     2  purchase  commodities  or services from small business concerns or those
     3  certified pursuant to articles fifteen-A and seventeen-B of  the  execu-
     4  tive  law, or commodities or information technology that are recycled or
     5  remanufactured in an amount not exceeding five hundred thousand  dollars
     6  without  a formal competitive process and for commodities that are food,
     7  including milk and milk products, grown, produced or  harvested  in  New
     8  York  state  in  an  amount  not to exceed two hundred thousand dollars,
     9  without a formal competitive process.
    10    § 5. Section 163 of the state finance law is amended by adding  a  new
    11  subdivision 16 to read as follows:
    12    16.  Alternative  procurement  methods for the acquisition of non-con-
    13  struction related commodities, services and information  technology.  a.
    14  When  the  commissioner  or  a state agency determines that it is in the
    15  best interest of the state to develop a procurement method  not  author-
    16  ized  by this section for non-construction related commodities, services
    17  and information technology, the commissioner or state agency  is  hereby
    18  authorized to develop and use such method for a specific contract award.
    19  Such determination shall be made in writing and shall include documenta-
    20  tion  for the procurement record that such alternative procurement meth-
    21  od: (i) would serve the interest of the state better than other  methods
    22  currently available under this section; (ii) can be applied on a compet-
    23  itive, fair and equitable basis; and (iii) contains an appropriate eval-
    24  uation  methodology  that considers both cost and qualitative evaluation
    25  factors.  Such alternative procurement method shall be  subject  to  all
    26  other applicable provisions of this section. The commissioner or a state
    27  agency  may  not  undertake  an alternative procurement method until the
    28  comptroller has determined that  the  proposed  alternative  procurement
    29  method is in the best interest of the state; can be applied on a compet-
    30  itive,  fair and equitable basis; and utilizes an appropriate evaluation
    31  methodology that considers both cost and qualitative evaluation factors.
    32    b. When using an alternative procurement  method  authorized  by  this
    33  subdivision,  the  commissioner or agency shall include in its solicita-
    34  tion a detailed description of the proposed method of award. In  advance
    35  of  the  initial  receipt  of  offers or bids, the commissioner or state
    36  agency shall determine and document in the procurement record the evalu-
    37  ation criteria and process to  be  used  in  the  determination  of  the
    38  specific  contract  award  and  the  process by which the evaluation and
    39  selection shall be conducted. In addition to the requirements set  forth
    40  in  paragraph  g  of  subdivision  nine of this section, the procurement
    41  record shall document the basis upon which  the  agency  has  determined
    42  that  potential vendors will be able to respond with viable bids to such
    43  alternative procurement.
    44    c. Notwithstanding the provisions of subdivision five of section three
    45  hundred fifty-five of the education  law  to  the  contrary  or  section
    46  sixty-two  hundred  eighteen  of  the education law, before any contract
    47  awarded under this section  which  exceeds  fifty  thousand  dollars  in
    48  amount  becomes  effective  it  must  be approved by the comptroller and
    49  filed in his or her office.
    50    d. For each procurement awarded pursuant to this section, the  commis-
    51  sioner or state agency shall submit to the governor, the comptroller and
    52  the  heads  of the fiscal committees of each house of the state legisla-
    53  ture no later than the mid-point of the initial term  of  the  resultant
    54  contract  a  report assessing the validity of the procurement method and
    55  comparing  its  results  to  procurement  methods  for  commodities  and
    56  services or information technology.

        S. 5624--A                          6

     1    §  6.  Section 163 of the state finance law is amended by adding a new
     2  subdivision 17 to read as follows:
     3    17. Competitive negotiation. a. Where the basis of award is best value
     4  and  after  completing an initial evaluation and scoring, a state agency
     5  may choose to either make an award to the best value offerer pursuant to
     6  subdivision four of this section or undertake  competitive  negotiations
     7  with  all  offerers  of  proposals  susceptible  of  being  selected for
     8  contract award, so long as the agency reserves the right to conduct such
     9  competitive negotiations in the solicitation.  The negotiations shall be
    10  conducted as provided in paragraph d of this subdivision.
    11    b. Competitive negotiation may only be used where:
    12    (i) at least two offerers are deemed susceptible of being selected for
    13  contract award;
    14    (ii) in the event that the solicitation includes optional  components,
    15  the  solicitation  shall  require all offerers to provide a proposal for
    16  all options or otherwise be deemed nonresponsive; and
    17    (iii) the agency has determined that use  of  competitive  negotiation
    18  will  maximize  the  agency's ability to obtain best value, based on the
    19  agency's need and the specifications set forth in the solicitation.
    20    c. The agency must document in the procurement record and  in  advance
    21  of the initial receipt of offers:
    22    (i)  the  methodology,  which  shall  be  quantifiable  and based on a
    23  comparison of the proposals' price and technical  merit,  that  will  be
    24  employed  to  arrive  at  a  competitive range that will determine which
    25  proposals are to be considered susceptible to award; and
    26    (ii) a fair and impartial negotiation procedure, formulated  with  the
    27  goal  of  ensuring  sustained competition until an award is rendered and
    28  obtaining the best value for the state.
    29    d. The agency shall conduct written  or  oral  negotiations  with  all
    30  responsible  offerers  who submit proposals in the competitive range. In
    31  the course of such negotiations, the agency shall:
    32    (i) advise the offerer of ways in which its proposal may  be  improved
    33  so  that the offerer is given an opportunity to better meet the agency's
    34  needs;
    35    (ii) clarify any uncertainties, ambiguities or non-material deviations
    36  in the proposal;
    37    (iii) advise the offerer of any technical components in  its  proposal
    38  that  may  not  be  necessary  to  satisfy the agency's requirements and
    39  request modifications as appropriate;
    40    (iv) provide the offerer a reasonable opportunity to submit any  cost,
    41  technical or other revisions to its proposal in response to issues iden-
    42  tified during negotiations; and
    43    (v) document any oral negotiations for the procurement record.
    44    e.  Negotiations  may be tailored to each offerer's proposal provided,
    45  however, such negotiations shall be conducted with each  offerer  within
    46  the  competitive  range  without  disclosing  information concerning any
    47  other offerers' proposals or the evaluation process. Negotiations  shall
    48  culminate in a technical solution from each offerer remaining within the
    49  competitive range that is deemed acceptable to meet the agency's need as
    50  set  forth  in  the  solicitation.  After  discussion of these technical
    51  solutions is completed, the agency shall solicit a best and final  price
    52  proposal  from  all  offerers within the competitive range. The best and
    53  final price solicitation shall ensure that all offerers are afforded  an
    54  equal opportunity to respond within a specified period of time.
    55    f.  Where  an  agency  chooses  to  undertake competitive negotiations
    56  instead of making a best value award after  an  initial  evaluation  and

        S. 5624--A                          7

     1  scoring, the final award shall be made to the lowest responsible offerer
     2  after receiving a best and final price on a revised acceptable proposal.
     3    §  7. Subdivision 9 of section 163 of the state finance law is amended
     4  by adding a new paragraph c-1 to read as follows:
     5    c-1. Where a state agency determines that non-material changes to  the
     6  specifications  as  set  forth  in the solicitation would be in the best
     7  interest of the state and, when provided for in the solicitation,  state
     8  agencies  may  request  best and final offers, which shall be in writing
     9  and solicited in the same manner from  all  offerers  determined  to  be
    10  susceptible  of  being  selected  for contract award, with the intent of
    11  allowing an offerer to revise its cost; provided, however, that a  state
    12  agency may not make a modification to the solicitation if such modifica-
    13  tion  would  prejudice  any  bidder  or  potential  bidder and, provided
    14  further, that no best and final offer may be accepted or considered by a
    15  state agency unless such best and final offer is submitted  in  response
    16  to a request by the state agency.
    17    § 8. Paragraph e of subdivision 10 of section 163 of the state finance
    18  law,  as  amended by chapter 137 of the laws of 2008, is amended to read
    19  as follows:
    20    e. The commissioner may authorize purchases required by state agencies
    21  or other authorized purchasers by letting a contract pursuant to a writ-
    22  ten agreement, or by approving the use of a contract let by any  depart-
    23  ment,  agency  or instrumentality of the United States government and/or
    24  any department, agency, office, political subdivision or instrumentality
    25  of any state or states. A state agency purchaser shall document  in  the
    26  procurement  record  its  rationale for the use of a contract let by any
    27  department, agency or instrumentality of the United States government or
    28  any department, agency, office, political subdivision or instrumentality
    29  of any other state or states. Such rationale shall include, but need not
    30  be limited to, a determination of need, a consideration of the  procure-
    31  ment  method  by which the contract was awarded, an analysis of alterna-
    32  tive procurement sources including  an  explanation  why  a  competitive
    33  procurement or the use of a centralized contract let by the commissioner
    34  is  not  in  the  best  interest of the state, and the reasonableness of
    35  cost. The authority to use a contract let by another governmental entity
    36  pursuant to this paragraph is intended to benefit  the  state  by  using
    37  contracts in place that provide for the same service or commodity sought
    38  by  a  state  agency at a price determined to be reasonable by the state
    39  agency. Such contracts are not intended to be used  primarily  to  avoid
    40  competitive  bidding.  Use  of multiple award contracts pursuant to this
    41  paragraph shall follow the same basis of selection  among  the  multiple
    42  awardees  as  was  prescribed  by  the original contracting governmental
    43  entity.
    44    § 9. Subdivision 3 of section 112 of the state finance law, as amended
    45  by section 2-c of part F of chapter 57 of the laws of 2016,  is  amended
    46  to read as follows:
    47    3.  A  contract  or  other  instrument wherein the state or any of its
    48  officers, agencies, boards or commissions agrees to give a consideration
    49  other than the payment of money, when the value or reasonably  estimated
    50  value  of such consideration exceeds twenty-five thousand dollars, shall
    51  not become a valid enforceable contract unless such  contract  or  other
    52  instrument  shall  first be approved by the comptroller and filed in his
    53  office. For purposes of this subdivision, where consideration cannot  be
    54  determined  in  terms  of monetary value, it shall be valued in terms of
    55  intrinsic value.

        S. 5624--A                          8

     1    § 10. Subdivision (m) of section 1-c of the legislative law, as  added
     2  by chapter 1 of the laws of 2005, is amended to read as follows:
     3    (m)  The  term  "restricted  period"  shall  mean  the  period of time
     4  commencing  with  the  earliest  posting,  on  a  governmental  entity's
     5  website,  in  a  newspaper of general circulation, or in the procurement
     6  opportunities newsletter  in  accordance  with  article  four-C  of  the
     7  economic  development  law of written notice, advertisement or solicita-
     8  tion of a request for proposal, invitation for bids, or solicitation  of
     9  proposals,  or  any  other  method provided for by law or regulation for
    10  soliciting a response from offerers intending to result in a procurement
    11  contract with a [state agency, either house of  the  state  legislature,
    12  the unified court system, or a municipal agency, as that term is defined
    13  by  paragraph  (ii)  of subdivision (s) of this section, and ending with
    14  the final contract award and approval by the state agency, either  house
    15  of the state legislature, the unified court system, or a municipal agen-
    16  cy, as that term is defined by paragraph (ii) of subdivision (s) of this
    17  section,]  governmental  entity and ending with the final contract award
    18  and approval by the governmental entity and, where applicable, the state
    19  comptroller. For the purposes of this subdivision, "governmental entity"
    20  shall have the same meaning as paragraph a of subdivision one of section
    21  one hundred thirty-nine-j of the state finance law.
    22    § 11. This act  shall  take  effect  immediately;  provided,  however,
    23  section  one  of this act shall take effect on the one hundred eightieth
    24  day after it shall have become a law; provided, further,  however,  that
    25  the  provisions  of  sections  four, five, six, seven, eight and nine of
    26  this act shall apply to any procurement initiated on or after such date;
    27  provided, further however, that the amendments to  section  163  of  the
    28  state  finance  law made by sections four, five, six, seven and eight of
    29  this act shall not affect the repeal of  such  section  as  provided  in
    30  subdivision  5  of  section  362  of  chapter 83 of the laws of 1995, as
    31  amended, and shall be deemed repealed therewith.
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