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A07793 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
TITLE OF BILL: An act to amend the state finance law and the legisla- tive 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 anoth- er governmental agency; in relation to clarifying the valuation of non- cash contracts by the state comptroller; and in relation to conforming the definition of restricted period PURPOSE: The purpose of this proposed legislation is to increase the transparen- cy and flexibility of the procurement process. SUMMARY OF PROVISIONS: Section 1 of this proposal amends the State Finance Law by adding a new Section 163-c requiring use by state agencies of a system maintained by the State Comptroller to compile vendor responsibility information. Section 2 of this proposal amends Subdivisions 7 and 10 of Section 160 of the State Finance Law in relation to defining information technology for procurement purposes. Section 3 of this proposal makes conforming changes to Paragraphs g and i of Subdivision 2 of Section 161 of the State Finance Law with respect to the definition of information technology. Section 4 of this proposal makes conforming changes to Paragraph k of Subdivision 1 and subdivision 6 of Section 163 of the State Finance Law with respect to the definition of information technology. Section 5 of this proposal adds a new Subdivisions 16 to Section 163 of the State Finance Law. The new Subdivision 16 authorizes alternative procurement methods for the acquisition of non-construction related commodities and services, or information technology. Section 6 of this proposal adds a new Subdivision 17 authorizing compet- itive negotiation concluding with best and final offer. Section 7 of this proposal amends Subdivision 9 of Section 163 of the State Finance Law by adding a new Paragraph c-1 relating to best and final offer. Section 8 amends Paragraph e of Subdivision 10 of Section 163 of the State Finance Law relating to the use of piggybacking of contracts. Section 9 of this proposal amends Subdivision 3 of Section 112 of the State Finance Law provide that for contracts where consideration cannot be determined in terms of monetary value, it shall be valued in terms of intrinsic value. Section 10 amends Subdivision m of Section 1-c of the Legislative Law to conform to the definition of restricted period set forth in the State Finance Law. Section 11 provides for an immediate effective date and provides further that section 1 of the proposal shall take effect on the 180th day after it shall have become a law and finally, provides that the amendments to section 163 of the State Finance Law shall'not affect the repeal of Section 163 and shall be deemed repealed therewith. PRIOR LEGISLATIVE HISTORY: 2017-2018: S .6452(DeFreanci sco)/A. 8156(P eoples-Stokes) - Veto Memo 336 2016: S. 7893(DeFrancisco)/A.10688 (Peoples-Stokes) - Veto Memo 295 2015: S. 5713-B (DeFrancisco)/A.7513-C (Peoples-Stokes) - Veto Memo 303 JUSTIFICATION: Vendor Responsibility: To fully standardize the vendor responsibility review and streamline the contract process, and enable a 24-7, online access for vendors to update information easily as information changes. Pursuant to the State Comptroller's responsibility under Section 112 of the State Finance Law to review and approve State contracts, which may include a vendor responsibility review performed by the state agency and the State Comptroller, the State Comptroller finds that mandatory use of the on-line system for filing necessary vendor responsibility informa- tion will facilitate an efficient review of a vendor's responsibility thereby streamlining the procurement process for vendors and contracting agencies. Agencies not on the system require vendors to update in paper with every procurement. 59 agencies use the system now, with more than 11,600 vendors already in the system. Change references to "technology" in article 11 to "information technol- ogy": To clarify the definition of technology, to ensure the definition meets current practice, and ensure future developments in information technology are anticipated. This amendment would also clarify that inci- dental technology content is not intended to drive a major procurement that is not directly information technology related. Alternative Procurements: When a state agency develops a procurement method that does not fit within the requirements of the Procurement Stewardship Act (the Act), the agency should be able to use such an alternative method for a specific contract award if certain conditions are met. The bill authorizes the State Comptroller to approve a contract awarded on the basis of an alternative procurement method as long as (i) the contracting agency makes a determination, documented in the procure- ment record, that such alternative procurement method better serves the interest of the State than other procurement methods available under the Act and can be applied on a fair and equitable basis; and (ii) the State Comptroller approves the alternative procurement method prior to the procurement. In order to effectively monitor the success or failure of the alternative procurement method the procuring state agency must file a report with the Governor, State Comptroller and heads of the Legisla- tive Fiscal Committees by the mid-term of the resulting contract concerning the benefits of the alternative method and comparing results to other procurement methods Competitive Negotiation with Best and Final Offer: This amendment expands available procurement options to include competitive negotiation with multiple vendors to obtain the best result for taxpayers. The State Comptroller anticipates this change would be useful in highly complex procurements where approaches to meeting the requirements are not pre- defined, to encourage innovative solutions amidst changing industry capabilities, or where there may be opportunities for the State to miti- gate risk or expense through non-material tradeoffs. Where the basis of award is best value and after completing an initial evaluation and scoring, a state agency may choose to make an award at that time based on best value. Or, if the agency believes a better price or outcome can be achieved, competitive negotiations can be conducted with vendors that fall in a competitive range and could potentially be selected based on the final outcome. Clarifying use of Best and Final Offer: There is a lack of clarity among agencies as to when Best and Final Offers can be utilized to achieve best value for the State; this is intended to help clarify the require- ments for use of best and final offers. Clarifying Use of "Piggyback" Contracts: This amendment is intended to ensure that agencies using the contracts of other entities (local, state, or federal) comply with the intent of the original contract as well as the mechanism for vendor selection in the case of contracts with multiple award options. Clarify Valuation of Non-Cash Contracts: This amendment clarifies that for contracts with little or no cash actual cash consideration, the intrinsic value of the contract will be used to determine the threshold. Conform the Definition of Restricted Period: This technical amendment conforms the definition of restricted period in the Legislative Law to the definition of restricted period set forth in Section 139-j of the State Finance Law as recently amended by Part F of Chapter 57 of the laws of 2016. The State Comptroller urges the passage of this proposed legislation. FISCAL IMPLICATIONS FOR STATE: None. However, these proposals will help streamline procurements result- ing in more effective and efficient procurements at reduced costs and will facilitate the use of new methods that will result in more effec- tive and efficient procurements at reduced costs and provides additional transparency to the procurement process. EFFECTIVE DATE: Provides for an immediate effective date, provides that certain provisions take effect on the 180th day and states that certain provisions shall only apply to any procurement initiated on or after such date; and further provides that the amendments to Section 163 of the state finance law shall not affect the repeal of such Section and shall be deemed repealed therewith. The State Comptroller urges the passage of this proposed legislation.