S T A T E O F N E W Y O R K
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4716--B
Cal. No. 342
2009-2010 Regular Sessions
I N A S S E M B L Y
February 5, 2009
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Introduced by M. of A. JOHN, ABBATE, CUSICK, SCHROEDER -- Multi-Spon-
sored by -- M. of A. HEASTIE, PHEFFER -- read once and referred to the
Committee on Ways and Means -- reported from committee, advanced to a
third reading, amended and ordered reprinted, retaining its place on
the order of third reading -- reported from committee, advanced to a
third reading, amended and ordered reprinted, retaining its place on
the order of third reading
AN ACT to amend the state finance law, in relation to awarding of
contracts
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The legislature finds that it is the
public policy of the state to provide a wide variety of services to the
people in a cost efficient manner while assuring the quality of life for
the people of this state. The legislature finds that these objectives
can be maximized by establishing an orderly procedure for cost effec-
tiveness review prior to a contract being authorized. It is necessary,
therefore, to establish minimum standards of cost effectiveness and
accountability for all such contracts.
S 2. The state finance law is amended by adding a new section 148 to
read as follows:
S 148. AWARDING OF CONTRACTS. 1. DEFINITIONS. AS USED IN THIS SECTION,
THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS UNLESS OTHERWISE
SPECIFIED:
(A) "AGENCY" SHALL MEAN ANY STATE DEPARTMENT, STATE UNIVERSITY OF NEW
YORK, BOARD, BUREAU, DIVISION, COMMISSION, COMMITTEE, COUNCIL, OFFICE OR
OTHER GOVERNMENTAL ENTITY PERFORMING A GOVERNMENTAL OR PROPRIETARY FUNC-
TION FOR THE STATE, INCLUDING ANY PUBLIC AUTHORITY OR PUBLIC BENEFIT
CORPORATION; THE CITY OF NEW YORK OR A PUBLIC EMPLOYER WITHIN THE CITY
OF NEW YORK, THE MAJORITY OF WHOSE BOARD ARE CITY OFFICIALS OR AN AGENCY
WHOSE CHIEF EXECUTIVE OFFICER IS APPOINTED DIRECTLY OR INDIRECTLY BY
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07421-03-0
A. 4716--B 2
OFFICIALS OF THE CITY OF NEW YORK; PROVIDED, HOWEVER, THAT THE NEW YORK
CITY SCHOOL CONSTRUCTION AUTHORITY IS EXEMPTED FROM THE PROVISIONS OF
THIS SECTION AND SHALL CONTINUE TO AWARD CONTRACTS PURSUANT TO SECTIONS
SEVENTEEN HUNDRED THIRTY-FOUR AND SEVENTEEN HUNDRED THIRTY-FIVE OF THE
PUBLIC AUTHORITIES LAW.
(B) "CONTRACT" SHALL MEAN AN ENFORCEABLE AGREEMENT FOR PERSONAL
SERVICES ENTERED INTO BY A CONTRACTOR AND AN AGENCY FOR AN AMOUNT WHICH
EXCEEDS FIVE THOUSAND DOLLARS.
(C) "CONTRACTOR" SHALL MEAN ANY PERSON, PARTNERSHIP, FIRM, CORPO-
RATION, OR ASSOCIATION RENDERING OR PROVIDING SERVICES PURSUANT TO A
CONTRACT WITH AN AGENCY.
(D) "CHANGE ORDER" SHALL MEAN A CONTRACT MODIFICATION OR ANY WRITTEN
ALTERATION TO SPECIFICATIONS, DELIVERY POINT, RATE OF DELIVERY, PERIOD
OF PERFORMANCE, PRICE, QUALITY, OR OTHER PROVISIONS OF ANY CONTRACT
AUTHORIZED BY THE AGENCY OR MUTUAL ACTION OF THE PARTIES TO THE
CONTRACT.
2. COST EFFECTIVENESS AND ACCOUNTABILITY REVIEW. NO CONTRACT WITH A
CONTRACTOR FOR SERVICES SHALL BE ENTERED INTO BY AN AGENCY UNLESS
CONTRACTING FOR SUCH SERVICES IS:
(A) COST EFFECTIVE WHEN COMPARED TO THE COST OF HAVING AN AGENCY
PERFORM THE WORK;
(I) THE CONTRACTING AGENCY MUST CLEARLY DEMONSTRATE THAT THE PROPOSED
CONTRACT WILL RESULT IN ACTUAL COST SAVINGS TO THE AGENCY. IN COMPARING
COSTS, THERE SHALL BE INCLUDED THE AGENCY'S COST OF PROVIDING THE SAME
SERVICE AS THE PROPOSED CONTRACTOR.
(II) IN COMPUTING COSTS, THERE SHALL NOT BE INCLUDED THE AGENCY'S
INDIRECT OVERHEAD COSTS UNLESS THESE COSTS CAN BE ATTRIBUTED SOLELY TO
THE FUNCTIONS IN QUESTION AND WOULD NOT EXIST IF THAT FUNCTION WERE NOT
PERFORMED. INDIRECT OVERHEAD COSTS SHALL INCLUDE THE PRO RATA SHARE OF
EXISTING ADMINISTRATIVE SALARIES AND BENEFITS, RENT, EQUIPMENT COSTS,
UTILITIES AND MATERIALS.
(III) IN COMPUTING COSTS, THERE SHALL BE INCLUDED AN ESTIMATE OF ANY
COSTS THAT WILL BE INCURRED BY THE AGENCY AS A RESULT OF ENTERING INTO
THE CONTRACT, INCLUDING THE COST OF CONTRACT ADMINISTRATION, THE COSTS
OF ANY REGULATORY OR INSPECTION FUNCTION WHICH THE AGENCY MAY BE
REQUIRED TO PERFORM IN CONNECTION WITH THE SERVICES PROVIDED PURSUANT TO
THE CONTRACT, THE COST OF PERSONNEL CHANGES AS A RESULT OF THE CONTRACT,
AND ANY SIMILAR COSTS WHICH THE AGENCY CAN BE REASONABLY EXPECTED TO
INCUR AS A RESULT OF THE CONTRACT.
(IV) A PROPOSED CONTRACT SHALL NOT BE APPROVED SOLELY ON THE BASIS
THAT SAVINGS WILL RESULT FROM LOWER CONTRACTOR PAY RATES OR BENEFITS.
PROPOSALS TO CONTRACT WORK SHALL BE ELIGIBLE FOR APPROVAL PROVIDED THE
CONTRACTOR'S WAGES AND BENEFITS ARE AT THE SAME RATE AS EMPLOYEES
CURRENTLY PROVIDING THE SERVICE OR PERFORMING COMPARABLE WORK.
(V) A PROPOSED CONTRACT SHALL NOT BE APPROVED UNLESS IT CONTAINS A
DESCRIPTION OF THE SERVICE QUALITY EXPECTATIONS PURSUANT TO THE CONTRACT
AND A DESCRIPTION OF THE METHOD BY WHICH THE QUALITY OF SERVICES SHALL
BE MONITORED AND EVALUATED. THE CONTRACT MUST INCLUDE SPECIFIC
PROVISIONS PERTAINING TO THE QUALIFICATIONS OF THE STAFF THAT WILL
PERFORM THE WORK UNDER THE CONTRACT.
(B) REQUIRED DUE TO AN EMERGENCY; "EMERGENCY" SHALL MEAN A SITUATION
INVOLVING DANGER TO LIFE, SAFETY, OR PROPERTY WHICH REQUIRES IMMEDIATE
ACTION, IS ESSENTIAL TO EFFICIENT OPERATION OR THE ADEQUATE PROVISION OF
SERVICE BY THE AGENCY, AND IS A DIRECT CONSEQUENCE OF AN ACCIDENT OR
OTHER UNFORESEEN CIRCUMSTANCE.
A. 4716--B 3
(C) REQUIRED FOR A SHORT DURATION WHERE CURRENT EMPLOYEES OF THE AGEN-
CY ARE OTHERWISE ENGAGED AND CANNOT BE REASSIGNED TO PERFORM THE
SERVICES AND NEW EMPLOYEES CANNOT BE HIRED WITHIN A REASONABLE TIME TO
PERFORM SUCH SERVICES AND SUCH SERVICES ARE NEEDED IN CONNECTION WITH
WORK UNDERTAKEN IN RESPONSE TO AN EMERGENCY.
(D) REQUIRED FOR SPECIAL EXPERTISE OF A SHORT DURATION.
(E) REQUIRED TO AVOID A CONFLICT OF INTEREST.
(F) OTHERWISE EXPRESSLY REQUIRED BY LAW TO BE SO CONTRACTED.
3. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION TWO OF THIS SECTION,
NO CONTRACT SHALL BE LET WHICH IS NOT IN COMPLIANCE WITH THE REQUIRE-
MENTS OF ARTICLE FIFTEEN-A OF THE EXECUTIVE LAW, IN COMPLIANCE WITH THE
AGENCY'S AFFIRMATIVE ACTION EFFORTS AND WILL NOT CAUSE THE AGENCY TO
FAIL TO MEET ITS AFFIRMATIVE ACTION GOALS OR CAUSES THE DISPLACEMENT OF
WORKERS. FOR THE PURPOSES OF THIS SUBDIVISION, THE TERM "DISPLACEMENT"
SHALL INCLUDE LAYOFFS, DEMOTION, INVOLUNTARY TRANSFER TO A NEW CLASS OR
TITLE, INVOLUNTARY TRANSFER OR REASSIGNMENT TO A NEW LOCATION REQUIRING
A CHANGE OF RESIDENCE, AND PARTIAL DISPLACEMENT SUCH AS REDUCTION IN THE
CUSTOMARY HOURS TO WORK, WAGES, OR BENEFITS.
4. DISCLOSURE. (A) PRIOR TO EXECUTING A CONTRACT FOR SERVICES, AN
AGENCY SHALL PREPARE A SPECIFIC STATEMENT WHICH SETS FORTH THE OBJECTIVE
DATA SUPPORTING THE REASONS WHY THE PROPOSED CONTRACT MEETS THE REQUIRE-
MENTS SET FORTH IN SUBDIVISIONS TWO AND THREE OF THIS SECTION. THE
CONTRACTOR SHALL DISCLOSE, IN WRITING, THE NAMES OF CORPORATE OFFICERS,
PARTNERS OR ASSOCIATES, AND THE NAMES OF ANY STATE OR MUNICIPAL PUBLIC
OFFICER OR POLITICAL PARTIES TO WHOM THE CONTRACTOR OR ITS OFFICERS,
PARTNERS AND ASSOCIATES HAS MADE ONE OR MORE COMPANY CONTRIBUTIONS
TOTALLING TWO HUNDRED FIFTY DOLLARS OR MORE WITHIN ANY TWELVE MONTH
PERIOD DURING THE PREVIOUS THIRTY-SIX MONTH PERIOD. IN ADDITION, THE
CONTRACTOR SHALL DISCLOSE ANY LABOR LAW VIOLATIONS OR CITATIONS INCLUD-
ING BUT NOT LIMITED TO OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION
VIOLATIONS, WAGE, HOUR OR BENEFITS VIOLATIONS INCURRED WITHIN THE PAST
THIRTY-SIX MONTHS. THE CONTRACTOR SHALL ALSO DISCLOSE, IN WRITING,
WHETHER EACH EMPLOYEE WHO SHALL BE ENGAGED IN THE SERVICES TO BE
PROVIDED PURSUANT TO A CONTRACT WITH AN AGENCY OR MUNICIPALITY IS A
RESIDENT OF THE STATE OR, IN THE CASE OF A CONTRACT WITH THE CITY OF NEW
YORK OR A PUBLIC EMPLOYER WITHIN THE CITY OF NEW YORK, WHETHER EACH SUCH
EMPLOYEE SHALL BE A RESIDENT OF SUCH CITY.
(B) PRIOR TO THE SCHEDULED AWARD OF A CONTRACT FOR SERVICES, AN AGENCY
SHALL PROVIDE TO THE EMPLOYEE ORGANIZATION THAT REPRESENTS AGENCY
EMPLOYEES WHO WOULD OTHERWISE PERFORM SUCH SERVICES WITH COPIES OF THE
STATEMENTS RENDERED PURSUANT TO PARAGRAPH (A) OF THIS SUBDIVISION AND
THE PROPOSED CONTRACT SO THAT SUCH EMPLOYEE ORGANIZATION SHALL HAVE AT
LEAST NINETY DAYS TO OBJECT TO THE PROPOSED CONTRACT. AN EMPLOYEE ORGAN-
IZATION WHICH PROVIDES TIMELY WRITTEN NOTICE OF OBJECTION AND THE
REASONS THEREFORE SHALL, UNLESS THE AGENCY AGREES IN WRITING TO WITHDRAW
THE PROPOSED CONTRACT, BE PERMITTED TO BE HEARD BY THE AGENCY'S HEAD
PRIOR TO THE AWARD OF THE CONTRACT. WITHIN FIFTEEN DAYS OF RECEIPT OF
SUCH OBJECTION, THE AGENCY'S HEAD, AFTER CONSIDERING THE OBJECTIONS OF
THE EMPLOYEE ORGANIZATION, SHALL NOTIFY THE EMPLOYEE ORGANIZATION WHETH-
ER THE AGENCY WILL WITHDRAW THE PROPOSED CONTRACT OR ENTER INTO THE
CONTRACT. IF THE AGENCY'S HEAD DECIDES TO ENTER INTO THE CONTRACT, AND
THE EMPLOYEE ORGANIZATION STILL BELIEVES THAT THE CONTRACT IS IN
VIOLATION OF THE GUIDELINES IN SUBDIVISIONS TWO AND THREE OF THIS
SECTION, THE EMPLOYEE ORGANIZATION MAY FORWARD ITS COMPLAINT TO THE
COMPTROLLER WITHIN FIFTEEN DAYS OF RECEIPT OF THE AGENCY HEAD'S NOTIFI-
CATION. BEFORE APPROVING SUCH CONTRACT, THE COMPTROLLER SHALL CONSIDER
A. 4716--B 4
THE EMPLOYEE ORGANIZATION'S COMPLAINT, AND SHALL NOT APPROVE SUCH
CONTRACT IF THE COMPTROLLER BELIEVES SUCH COMPLAINT IS VALID. THE COMP-
TROLLER SHALL NOTIFY THE EMPLOYEE ORGANIZATION OF THE COMPTROLLER'S
DECISION TO EITHER APPROVE OR DISAPPROVE THE CONTRACT. IN CARRYING OUT
THE DUTIES OF THIS SECTION, THE COMPTROLLER MAY FORM AN ADVISORY BOARD
WHICH SHALL CONSIST OF REPRESENTATIVES OF THE GOVERNMENT, PUBLIC EMPLOY-
EE ORGANIZATIONS, AND THE PUBLIC.
5. PARAGRAPH (B) OF SUBDIVISION FOUR OF THIS SECTION SHALL NOT APPLY
TO THE CITY OF NEW YORK OR A PUBLIC EMPLOYER WITHIN THE CITY OF NEW YORK
(A) THE MAJORITY OF WHOSE BOARD ARE CITY OFFICIALS OR (B) AN AGENCY
WHOSE CHIEF EXECUTIVE OFFICER IS APPOINTED DIRECTLY OR INDIRECTLY BY
OFFICIALS OF THE CITY OF NEW YORK. THE PROCUREMENT POLICY BOARD ESTAB-
LISHED BY SECTION THREE HUNDRED ELEVEN OF THE NEW YORK CITY CHARTER
SHALL ADOPT THE STANDARDS AS DEFINED IN SUBDIVISIONS TWO AND THREE AND
PARAGRAPH (A) OF SUBDIVISION FOUR OF THIS SECTION AND IMPLEMENT RULES
CONSISTENT WITH THOSE STANDARDS FOR CONTRACTING FOR THE PROVISION OF
SERVICES AND APPLY THOSE STANDARDS AND RULES TO ALL PROCUREMENT
CONTRACTS AS DEFINED IN PARAGRAPH (B) OF SUBDIVISION ONE OF THIS
SECTION.
6. CHANGE ORDERS. IF AN AGENCY INTENDS TO CHANGE, BY USE OF A CHANGE
ORDER, A CONTRACT FOR SERVICES AND SUCH CHANGE ORDER EITHER BY ITSELF OR
TOGETHER WITH PREVIOUSLY AUTHORIZED CHANGE ORDERS RESULTS IN CAUSING THE
AMOUNT OF THE CONTRACT TO EXCEED ONE HUNDRED FIVE PERCENT OF THE
ORIGINAL CONTRACT AMOUNT, THEN APPROVAL OF SUCH CHANGE SHALL BE SUBJECT
TO THE PROVISIONS OF SUBDIVISIONS TWO, THREE AND FOUR OF THIS SECTION.
7. FOR PURPOSES OF THIS SUBDIVISION THE TERM "MUNICIPALITY" SHALL MEAN
A COUNTY, CITY WITHIN A POPULATION OF UNDER ONE MILLION, TOWN, VILLAGE
OR SCHOOL DISTRICT AND SHALL INCLUDE ANY AND ALL AGENCIES THEREOF.
SUBDIVISIONS TWO AND THREE AND PARAGRAPH (A) OF SUBDIVISION FOUR OF THIS
SECTION SHALL APPLY TO A MUNICIPALITY. PRIOR TO THE SCHEDULED AWARD OF A
CONTRACT FOR SERVICES, A MUNICIPALITY SHALL PROVIDE THE EMPLOYEE ORGAN-
IZATION THAT REPRESENTS MUNICIPAL EMPLOYEES WHO WOULD OTHERWISE PERFORM
SUCH SERVICES WITH COPIES OF THE STATEMENT RENDERED PURSUANT TO PARA-
GRAPH (A) OF SUBDIVISION FOUR OF THIS SECTION AND THE PROPOSED CONTRACT
SO THAT SUCH EMPLOYEE ORGANIZATION SHALL HAVE AT LEAST NINETY DAYS TO
OBJECT TO THE PROPOSED CONTRACT. AN EMPLOYEE ORGANIZATION WHICH PROVIDES
TIMELY WRITTEN NOTICE OF OBJECTION AND THE REASONS THEREFOR SHALL,
UNLESS THE MUNICIPALITY AGREES IN WRITING TO WITHDRAW THE PROPOSED
CONTRACT, BE PERMITTED TO BE HEARD BY THE MUNICIPALITY HEAD PRIOR TO THE
AWARD OF THE CONTRACT. WITHIN FIFTEEN DAYS OF RECEIPT OF SUCH OBJECTION,
THE AGENCY'S HEAD, AFTER CONSIDERING THE OBJECTIONS OF THE EMPLOYEE
ORGANIZATION, SHALL NOTIFY THE EMPLOYEE ORGANIZATION WHETHER THE AGENCY
WILL WITHDRAW THE PROPOSED CONTRACT OR ENTER INTO THE CONTRACT.
S 3. Nothing contained in this act shall supersede or nullify any of
the terms of a collective bargaining agreement and shall not be deemed
to authorize any contract which is otherwise prohibited by law or regu-
lation.
S 4. Severability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction to
be invalid, such judgment shall not affect, impair, or invalidate the
remainder thereof.
S 5. This act shall take effect on the thirtieth day after it shall
have become a law.