S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3884--A

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            January 29, 2013
                               ___________

Introduced  by  M.  of  A.  ENGLEBRIGHT,  GLICK,  COOK, LAVINE, SWEENEY,
  JAFFEE, TITONE, ROBERTS, HOOPER -- Multi-Sponsored  by  --  M.  of  A.
  BRENNAN,  BRINDISI,  BRONSON, GOTTFRIED, RUSSELL -- (at request of the
  State Comptroller) -- read once  and  referred  to  the  Committee  on
  Governmental  Operations  -- reported and referred to the Committee on
  Ways  and  Means  --  committee  discharged,  bill  amended,   ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to amend the state finance law, in relation to program procure-
  ments, clarifying the definition of services and  allowing  the  state
  comptroller  to  excuse  non-material deviations in procurement proce-
  dures

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.   The state finance law is amended by adding a new article
11-C to read as follows:
                              ARTICLE XI-C
                          PROGRAM PROCUREMENTS
SECTION 179-FF. DEFINITIONS.
        179-GG. PROGRAM PROCUREMENTS.
        179-HH. REQUEST FOR EXEMPTION.
        179-II. PROGRAM PROCUREMENT PROCESS.
  S 179-FF. DEFINITIONS. AS USED IN THIS  ARTICLE  THE  FOLLOWING  TERMS
SHALL HAVE THE FOLLOWING MEANINGS UNLESS OTHERWISE SPECIFIED:
  1.  "COSTS" SHALL BE QUANTIFIABLE AND MAY INCLUDE, WITHOUT LIMITATION,
THE PRICE OF PROVIDING THE GIVEN GOOD OR SERVICE AND THE ADMINISTRATIVE,
TRAINING, STORAGE, MAINTENANCE OR OTHER OVERHEAD EXPENSE ASSOCIATED WITH
A GIVEN GOOD OR SERVICE.
  2. "EMERGENCY" MEANS AN URGENT AND UNEXPECTED REQUIREMENT WHERE PUBLIC
HEALTH, SAFETY, OR WELFARE OR THE CONSERVATION OF PUBLIC RESOURCES IS AT
RISK.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04653-02-3

              

A. 3884--A                          2

  3. "PRICE" MEANS THE AMOUNT OF MONEY SET AS CONSIDERATION FOR  A  GOOD
OR  SERVICE  AND  MAY  INCLUDE WHEN APPLICABLE AND WHEN SPECIFIED IN THE
PROPOSAL/APPLICATION, DELIVERY CHARGES, INSTALLATION CHARGES  AND  OTHER
COSTS.
  4.  "PROCUREMENT RECORD" MEANS DOCUMENTATION OF THE DECISIONS MADE AND
THE APPROACH TAKEN IN THE PROCUREMENT PROCESS.
  5. "PROGRAM" MEANS A PROVISION OF LAW AUTHORIZING A  STATE  AGENCY  TO
UNDERTAKE  ACTIVITIES  THAT  ARE  TO BE ACCOMPLISHED IN WHOLE OR IN PART
THROUGH CONTRACTS WITH CERTAIN ENTITIES INCLUDING, BUT NOT  LIMITED  TO,
NOT-FOR-PROFIT  ORGANIZATIONS,  FOR-PROFIT ORGANIZATIONS, MUNICIPALITIES
OR ANY COMBINATION THEREOF.
  6. "PROGRAM PROCUREMENT" MEANS A PROCUREMENT WHICH:
  A.  SEEKS A COMPETITIVE CONTRACT PURSUANT TO WHICH  THE  VENDOR  WOULD
PROVIDE  SERVICES  OR COMMODITIES DIRECTLY TO THE PUBLIC OR A SEGMENT OF
THE PUBLIC AND NOT DIRECTLY  TO  A  STATE  AGENCY,  PROVIDED  THAT  SUCH
SERVICE  SHALL  NOT INCLUDE THE CONSTRUCTION OR RECONSTRUCTION OF BUILD-
INGS, BRIDGES, ROADS, AND APPURTENANCES FOR USE BY THE STATE;
  B. PROVIDES THE APPLICANT WITH DISCRETION IN THE MANNER IN  WHICH  THE
PURPOSE  IS  TO  BE  ACCOMPLISHED  WITH  FEW SPECIFIC LIMITATIONS ON THE
MANNER OF DELIVERY; AND
  C. HAS BEEN GRANTED AN EXEMPTION PURSUANT TO THE PROVISIONS OF SECTION
ONE HUNDRED SEVENTY-NINE-HH OF THIS  ARTICLE  WHERE  SUCH  EXEMPTION  IS
REQUIRED BY SECTION ONE HUNDRED SEVENTY-NINE-GG OF THIS ARTICLE.
  A  PROGRAM  PROCUREMENT  PROVIDES  THE PROPOSER OR APPLICANT WITH WIDE
DISCRETION AND LATITUDE IN THE MANNER IN WHICH  THE  PURPOSE  IS  TO  BE
ACCOMPLISHED  WITH FEW SPECIFIC LIMITATIONS ON THE SCOPE OF THE PROPOSAL
OR APPLICATION. A PROGRAM PROCUREMENT SHALL NOT INCLUDE ANY NON-COMPETI-
TIVE, SINGLE SOURCE OR SOLE SOURCE CONTRACT.
  7. "PUBLIC CORPORATION" MEANS A CITY, TOWN, VILLAGE, SCHOOL  DISTRICT,
A  DISTRICT  CORPORATION  OR A PUBLIC BENEFIT CORPORATION AS THOSE TERMS
ARE DEFINED IN SECTION SIXTY-SIX OF THE GENERAL CONSTRUCTION LAW.
  8. "RESPONSIBLE" OR  "RESPONSIBILITY"  MEANS  THE  FINANCIAL  ABILITY,
LEGAL CAPACITY, INTEGRITY, AND PAST PERFORMANCE OF A BUSINESS ENTITY AND
AS SUCH TERMS HAVE BEEN INTERPRETED RELATIVE TO PUBLIC PROCUREMENTS.
  9.  "RESPONSIVE"  MEANS  A  PROPOSER  OR APPLICANT MEETING THE MINIMUM
SPECIFICATIONS OR REQUIREMENTS AS PRESCRIBED IN A SOLICITATION ISSUED BY
A STATE AGENCY.
  10. "SINGLE SOURCE" MEANS A PROGRAM PROCUREMENT IN WHICH ALTHOUGH  TWO
OR  MORE  PROPOSERS  OR  APPLICANTS  CAN  SUPPLY  THE  REQUIRED GOODS OR
SERVICES, THE STATE AGENCY, UPON  WRITTEN  FINDINGS  SETTING  FORTH  THE
MATERIAL AND SUBSTANTIAL REASONS THEREFOR, MAY AWARD THE CONTRACT TO ONE
PROPOSER  OR  APPLICANT OVER ANOTHER. THE STATE AGENCY SHALL DOCUMENT IN
THE PROCUREMENT RECORD THE CIRCUMSTANCES LEADING TO THE SELECTION OF THE
PROPOSER  OR  APPLICANT,  INCLUDING  THE  ALTERNATIVES  CONSIDERED,  THE
RATIONALE FOR SELECTING THE SPECIFIC PROPOSER OR APPLICANT AND THE BASIS
UPON WHICH THE STATE AGENCY DETERMINED THAT THE COST WAS REASONABLE.
  11. "SOLICITATION DOCUMENT" MEANS THE DOCUMENT ISSUED BY A STATE AGEN-
CY  NOTIFYING  PROSPECTIVE PROPOSERS OR APPLICANTS THAT THE STATE AGENCY
WISHES TO RECEIVE PROPOSALS  OR  APPLICATIONS  FOR  PROVIDING  GOODS  OR
SERVICES.
  12. "SOLE SOURCE" MEANS A PROGRAM PROCUREMENT IN WHICH ONLY ONE PROPO-
SER OR APPLICANT IS CAPABLE OF SUPPLYING THE REQUIRED GOODS OR SERVICES.
  13.  "SPECIFICATION"  OR  "REQUIREMENT"  MEANS  ANY DESCRIPTION OF THE
PHYSICAL OR FUNCTIONAL CHARACTERISTICS  OR  THE  NATURE  OF  A  GOOD  OR
SERVICE,  ANY  DESCRIPTION OF THE SERVICES TO BE PERFORMED, THE GOODS OR
SERVICES TO BE PROVIDED, THE NECESSARY QUALIFICATIONS OF THE PROPOSER OR

A. 3884--A                          3

APPLICANT, THE CAPACITY AND CAPABILITY OF THE PROPOSER OR  APPLICANT  TO
COMPLETE  THE PROPOSED CONTRACT SUCCESSFULLY, OR THE PROCESS FOR ACHIEV-
ING SPECIFIC RESULTS OR ANTICIPATED OUTCOMES,  OR  BOTH,  OR  ANY  OTHER
REQUIREMENT  NECESSARY TO PERFORM THE WORK. IT MAY INCLUDE A DESCRIPTION
OF ANY OBLIGATORY TESTING, INSPECTION OR PREPARATION  FOR  DELIVERY  AND
USE,  AND MAY INCLUDE FEDERALLY REQUIRED PROVISIONS AND CONDITIONS WHERE
THE ELIGIBILITY FOR FEDERAL FUNDS IS CONDITIONED UPON THE  INCLUSION  OF
SUCH FEDERALLY REQUIRED PROVISIONS AND CONDITIONS.  SPECIFICATIONS SHALL
BE DESIGNED TO ENHANCE COMPETITION AND, WHERE APPROPRIATE, SET FORTH THE
RELATIVE  IMPORTANCE OR WEIGHT OF GEOGRAPHIC DISTRIBUTION AND ASSESSMENT
OF NEED.
  14. "STATE AGENCY" OR "STATE AGENCIES" MEANS  ALL  STATE  DEPARTMENTS,
BOARDS,  COMMISSIONS, OFFICES OR INSTITUTIONS BUT EXCLUDES, HOWEVER, FOR
THE PURPOSES OF SUBDIVISION FIVE OF SECTION THREE HUNDRED FIFTY-FIVE  OF
THE  EDUCATION  LAW, THE STATE UNIVERSITY OF NEW YORK, AND EXCLUDES, FOR
THE PURPOSES OF SUBDIVISION A OF SECTION SIXTY-TWO HUNDRED  EIGHTEEN  OF
THE  EDUCATION  LAW, THE CITY UNIVERSITY OF NEW YORK.  FURTHERMORE, SUCH
TERM SHALL NOT INCLUDE THE LEGISLATURE OR THE JUDICIARY.
  S 179-GG. PROGRAM PROCUREMENTS. THE PROGRAM  PROCUREMENT  PROCESS  SET
FORTH IN THIS ARTICLE, RATHER THAN THE REQUIREMENTS OF ARTICLE ELEVEN OF
THIS CHAPTER, SHALL APPLY TO:
  1.  PROGRAM  PROCUREMENTS OPEN ONLY TO NOT-FOR-PROFIT ORGANIZATIONS OR
PUBLIC CORPORATIONS OR BOTH, AND
  2. THOSE PROGRAM PROCUREMENTS OPEN TO  PROFIT-SEEKING  ENTITIES  WHERE
THE  STATE AGENCY HAS OBTAINED FROM THE STATE COMPTROLLER, IN ACCORDANCE
WITH SECTION ONE HUNDRED SEVENTY-NINE-HH OF THIS ARTICLE,  AN  EXEMPTION
FROM THE REQUIREMENTS OF ARTICLE ELEVEN OF THIS CHAPTER.
  S 179-HH. REQUEST FOR EXEMPTION. BEFORE THE ISSUANCE OF A SOLICITATION
DOCUMENT, A STATE AGENCY CONDUCTING A PROCUREMENT OPEN TO PROFIT-SEEKING
ENTITIES  WHICH  THE STATE AGENCY BELIEVES FALLS WITHIN THE MEANING OF A
PROGRAM PROCUREMENT, AS DEFINED IN THIS ARTICLE, SHALL  MAKE  A  WRITTEN
REQUEST  TO THE STATE COMPTROLLER FOR AN EXEMPTION FROM THE REQUIREMENTS
OF ARTICLE ELEVEN OF THIS CHAPTER. THE STATE COMPTROLLER  SHALL  MAKE  A
WRITTEN DETERMINATION AS TO WHETHER THE PROPOSED PROCUREMENT FALLS WITH-
IN  THE  DEFINITION OF A PROGRAM PROCUREMENT AS SET FORTH IN SECTION ONE
HUNDRED SEVENTY-NINE-FF OF THIS ARTICLE AND IS IN THE BEST  INTEREST  OF
THE  STATE, AND SHALL EITHER GRANT OR DENY THE EXEMPTION ON THE BASIS OF
SUCH DETERMINATION. IF THE STATE COMPTROLLER GRANTS A  STATE  AGENCY  AN
EXEMPTION  FROM  THE REQUIREMENTS OF ARTICLE ELEVEN OF THIS CHAPTER, THE
PROGRAM PROCUREMENT SHALL BE CONDUCTED IN ACCORDANCE WITH  THE  REQUIRE-
MENTS OF THIS ARTICLE.
  S  179-II.  PROGRAM PROCUREMENT PROCESS. 1. METHOD OF PROCUREMENT. THE
STATE AGENCY SHALL DOCUMENT IN THE PROCUREMENT RECORD AND IN ADVANCE  OF
THE  INITIAL  RECEIPT OF PROPOSALS/APPLICATIONS THE DETERMINATION OF THE
EVALUATION CRITERIA, AND THE WEIGHT ASSIGNED TO EACH, AND THE PROCESS TO
BE USED IN THE DETERMINATION OF AWARD OR  FUNDING,  AND  THE  MANNER  IN
WHICH THE EVALUATION AND SELECTION SHALL BE CONDUCTED.
  2.  PUBLIC  NOTICE.  ALL  PROGRAM PROCUREMENTS BY STATE AGENCIES OR AN
AWARD OR FUNDING IN EXCESS OF FIFTEEN THOUSAND DOLLARS SHALL  BE  ADVER-
TISED  IN THE STATE'S PROCUREMENT OPPORTUNITIES NEWSLETTER IN ACCORDANCE
WITH ARTICLE FOUR-C OF THE ECONOMIC DEVELOPMENT LAW.
  3. SOLICITING AND ACCEPTING PROPOSALS OR APPLICATIONS. A  SOLICITATION
DOCUMENT ISSUED BY A STATE AGENCY SHALL PRESCRIBE THE MINIMUM SPECIFICA-
TIONS  OR  REQUIREMENTS THAT MUST BE MET TO BE CONSIDERED RESPONSIVE AND
SHALL DESCRIBE AND DISCLOSE THE GENERAL MANNER IN WHICH  THE  EVALUATION
AND  SELECTION  SHALL  BE CONDUCTED. WHERE APPROPRIATE, THE SOLICITATION

A. 3884--A                          4

DOCUMENT SHALL IDENTIFY THE RELATIVE IMPORTANCE OR WEIGHT  OF  COST  AND
THE  OVERALL  TECHNICAL  CRITERIA  TO BE CONSIDERED BY A STATE AGENCY IN
MAKING A PROGRAM PROCUREMENT DETERMINATION.  CONSIDERATION, WHERE APPRO-
PRIATE,  SHOULD  INCLUDE  GEOGRAPHIC  DISTRIBUTION  OF  FUNDING BASED ON
ASSESSED NEEDS OF THE COMMUNITY.
  4. SELECTION AND CONTRACT AWARD. A. SELECTION AND CONTRACT AWARD SHALL
BE CONSISTENT WITH: (I) THE TERMS OF THE SOLICITATION DOCUMENT ISSUED BY
THE STATE AGENCY; AND (II) THE CONTRACT AWARD METHODOLOGY SET  FORTH  IN
THE PROCUREMENT RECORD BEFORE THE INITIAL RECEIPT OF PROPOSALS OR APPLI-
CATIONS.
  B. PROGRAM PROCUREMENT AWARDS SHALL BE MADE TO A PROPOSER OR APPLICANT
ON  THE  BASIS  OF  TECHNICAL  MERIT WITH THE CONSIDERATION GIVEN TO THE
REASONABLENESS OF COSTS. THE CONTRACT AWARD OR AWARDS OR  FUNDING  SHALL
BE  ALLOCATED  TO  THE  HIGHEST RANKED PROPOSAL OR PROPOSALS. NOTHING IN
THIS SECTION, HOWEVER, SHALL BE DEEMED TO PROHIBIT A STATE  AGENCY  FROM
EVALUATING COST SEPARATELY IN ITS SELECTION AND CONTRACT AWARD.
  C.  A PROCUREMENT RECORD SHALL BE MAINTAINED FOR EACH PROGRAM PROCURE-
MENT IDENTIFYING, WITH SUPPORTING DOCUMENTATION, DECISIONS MADE  BY  THE
STATE AGENCY DURING THE PROCUREMENT PROCESS.
  D.  SELECTION  AND  CONTRACT AWARD SHALL BE A WRITTEN DETERMINATION IN
THE PROCUREMENT RECORD MADE BY THE STATE AGENCY.
  E. PRIOR TO MAKING A PROGRAM PROCUREMENT AWARD, THE STATE AGENCY SHALL
MAKE A DETERMINATION OF THE RESPONSIBILITY OF THE PROPOSER OR APPLICANT.
  5. REDUCTION OF AWARD. A STATE AGENCY MAY REDUCE THE  MONETARY  AMOUNT
OF  THE  AWARDS  MADE  UNDER  A  PROGRAM PROCUREMENT IF THE STATE AGENCY
RESERVES THE RIGHT TO MAKE SUCH A REDUCTION IN THE SOLICITATION DOCUMENT
AND SUCH REDUCTION IS CONSISTENT WITH A PREDEFINED METHODOLOGY SET FORTH
IN THE PROCUREMENT RECORD PRIOR TO THE RECEIPT OF INITIAL  PROPOSALS  OR
APPLICATIONS.
  6. DISCRETIONARY PROGRAM PROCUREMENT AWARDS. A STATE AGENCY MAY MAKE A
PROGRAM  PROCUREMENT  AWARD  IN  AN  AMOUNT NOT EXCEEDING FIFTY THOUSAND
DOLLARS WITHOUT A FORMAL COMPETITIVE PROCESS. THE  STATE  AGENCY  SHALL,
HOWEVER, DOCUMENT THAT THE AMOUNT OF THE AWARD OR FUNDING IS REASONABLE.
  7.  CONTRACT AWARDS.  A. CONTRACT AWARDS SHALL BE MADE ON THE BASIS OF
HIGHEST RANK IN ACCORDANCE WITH  THE  SELECTION  AND  AWARD  METHODOLOGY
ESTABLISHED  IN  ACCORDANCE  WITH  THE PROGRAM REQUIREMENTS SET FORTH BY
EACH AGENCY FOR SUCH PROGRAM.
  B. SINGLE OR SOLE SOURCE CONTRACT AWARDS, OR CONTRACT AWARDS  MADE  TO
MEET  EMERGENCIES  ARISING FROM UNFORESEEN CAUSES, MAY BE MADE WITHOUT A
FORMAL COMPETITIVE PROCESS AND SHALL ONLY BE MADE UNDER UNUSUAL  CIRCUM-
STANCES AND SHALL BE BASED UPON A DETERMINATION BY THE STATE AGENCY THAT
THE  SPECIFICATIONS OR REQUIREMENTS FOR SUCH AWARD HAVE BEEN DESIGNED IN
A FAIR AND EQUITABLE MANNER.   THE STATE AGENCY SHALL  DOCUMENT  IN  THE
PROCUREMENT  RECORD,  SUBJECT  TO  REVIEW  BY THE STATE COMPTROLLER, THE
BASIS FOR A DETERMINATION TO MAKE AN AWARD TO A SINGLE  SOURCE  OR  SOLE
SOURCE, OR THE NATURE OF THE EMERGENCY GIVING RISE TO THE AWARD.
  8.  CONTRACTS.  ANY  CONTRACT  RESULTING  FROM  A  PROGRAM PROCUREMENT
AWARDED PURSUANT TO THE PROVISIONS OF THIS ARTICLE THAT INCLUDES FUNDING
FOR COMMODITIES OR CONSTRUCTION SERVICES IN  EXCESS  OF  FIFTY  THOUSAND
DOLLARS  SHALL  INCLUDE  CONTRACT  LANGUAGE  REQUIRING THE CONTRACTOR TO
ACQUIRE SUCH COMMODITIES AND/OR  CONSTRUCTION  SERVICES  PURSUANT  TO  A
COMPETITIVE BIDDING PROCESS.
  9. REVIEW BY THE OFFICE OF THE STATE COMPTROLLER. REVIEW BY THE OFFICE
OF THE STATE COMPTROLLER SHALL BE IN ACCORDANCE WITH SECTION ONE HUNDRED
TWELVE OF THIS CHAPTER.

A. 3884--A                          5

  S 2. Subdivision 7 of section 160 of the state finance law, as amended
by section 30 of part L of chapter 55 of the laws of 2012, is amended to
read as follows:
  7.  "Service"  or  "services" means the performance of a task or tasks
and may include a material good or a quantity  of  material  goods,  and
which is the subject of any purchase or other exchange. For the purposes
of  this  article,  technology  shall  be deemed a service. Services, as
defined in this article, shall not apply  to  those  contracts  for  (I)
architectural,  engineering  or  surveying services, [or those contracts
approved] (II) SERVICES PROVIDED BY  A  NOT-FOR-PROFIT  ORGANIZATION  in
accordance  with  article  eleven-B  of  this chapter, OR (III) SERVICES
OBTAINED  THROUGH  PROGRAM  PROCUREMENTS  IN  ACCORDANCE  WITH   ARTICLE
ELEVEN-C OF THIS CHAPTER.
  S  3. Subdivision 12 of section 163 of the state finance law, as added
by chapter 83 of the laws of 1995, is amended to read as follows:
  12. Review by the office of  the  state  comptroller.  Review  by  the
office  of the state comptroller shall be in accordance with section one
hundred twelve of this chapter. WHERE THE  CONTRACTING  AGENCY  HAS  NOT
COMPLIED  WITH  ONE  OR MORE PROVISIONS OF THIS ARTICLE, THE COMPTROLLER
MAY APPROVE THE AWARDED CONTRACT IF:
  A. THE CONTRACTING AGENCY  DETERMINES  AND  CERTIFIES,  BASED  UPON  A
PREPONDERANCE OF THE EVIDENCE DOCUMENTED IN THE PROCUREMENT RECORD, THAT
THE  NONCOMPLIANCE  WAS  A  NON-MATERIAL  DEVIATION  FROM  ONE  OR  MORE
PROVISIONS OF  THIS  ARTICLE.  FOR  THE  PURPOSES  OF  THIS  SUBDIVISION
"NON-MATERIAL  DEVIATION"  SHALL  MEAN  THAT  SUCH NONCOMPLIANCE DID NOT
PREJUDICE OR FAVOR ANY VENDOR OR POTENTIAL  VENDOR,  SUCH  NONCOMPLIANCE
DID  NOT  SUBSTANTIALLY  AFFECT THE FAIRNESS OF THE COMPETITIVE PROCESS,
AND THAT A NEW PROCUREMENT WOULD NOT BE IN  THE  BEST  INTEREST  OF  THE
STATE.  SUCH DETERMINATION BY THE CONTRACTING AGENCY AND THE COMPTROLLER
SHALL BE DOCUMENTED IN THE PROCUREMENT RECORD; AND
  B. THE STATE COMPTROLLER CONCURS IN SUCH DETERMINATION.
  S 4. This act shall take effect immediately and  shall  apply  to  any
procurement initiated on or after such date; provided, however, that the
amendments to section 163 of the state finance law made by section three
of  this  act shall not affect the repeal of such section as provided in
subdivision 5 of section 362 of chapter 83  of  the  laws  of  1995,  as
amended, and shall be deemed repealed therewith.