senate Bill S4916

2013-2014 Legislative Session

Relates to the state procurement council and special provisions regarding joint ventures

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to finance
returned to senate
died in assembly
Jun 05, 2013 referred to governmental operations
Jun 04, 2013 delivered to assembly
passed senate
Jun 03, 2013 advanced to third reading
May 30, 2013 2nd report cal.
May 29, 2013 1st report cal.802
May 01, 2013 referred to finance

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Co-Sponsors

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S4916 - Bill Details

See Assembly Version of this Bill:
A7146
Current Committee:
Senate Finance
Law Section:
State Finance Law
Laws Affected:
Amd ยงยง161 & 165, St Fin L

S4916 - Bill Texts

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Relates to the state procurement council and special provisions regarding joint ventures.

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BILL NUMBER:S4916

TITLE OF BILL: An act to amend the state finance law, in relation to
the state procurement council and special provisions regarding joint
ventures; and providing for the expiration and repeal of such
provisions upon expiration thereof

PURPOSE: To give MWBEs and service-disabled veteran owned companies
opportunities for joint ventures and teaming in a pilot project under
the state procurement law.

SUMMARY OF PROVISIONS:

Section 1. Amends State Finance Law, paragraph n of subdivision 2 of
section 161, to add making recommendations for teaming and joint
ventures to the responsibilities of the state procurement council.

Section 2. Amends section 165 of the State Finance Law by adding a new
subdivision 9:

A. Definitions:

o Disabled Veteran Business Enterprise is a business enterprise in
which a disabled veteran has a 51% or greater ownership with
independent control, which has been certified as a disadvantaged
business enterprise (DBE) by the federal DOT or other federal agency,
or by a national certification organization satisfactory to the
commissioner. "Disabled Veteran" has the same meaning as in civil
service law.

* New York Business Enterprise is a business formed and located in New
York, which has more than 50% of its employees in this state and
realizes more than 50% of its gross revenues from this state.

* Diversity Business Enterprise means an MWBE or Disabled Veteran
Business Enterprise.

* Joint venture is a business entity that includes one or more
Diversity Business Enterprises and one or more New York Business
Enterprises for a specific project in which the parties contribute
equity, assets, and expertise.

* Teaming is a cooperative written agreement between one or more
Diversity Business Enterprises and one or more New York Business
Enterprises that defines the common purpose, performance goals,
approach, financing, liability, and accountability for a project,
satisfactory to the commissioner.

B. Requires the OGS commissioner to establish a pilot program, subject
to the following:

* Work and Ownership: The Diversity Business Enterprise shall perform
a share of the work equal to its ownership or potential profit from
the venture. The agreement brings resources, financing, and expertise
that would not otherwise be available to the Diversity Business
Enterprise, and


* Price: The contract price equals or is less than would otherwise be
charged by an entity which is not a JV or which is not involved in
such teaming agreement, and

* Engagement: The JV or teaming arrangement demonstrates significant
engagement by the Diversity Business Enterprise.

C. in addition

* Article 15-A contracts: If an MWBE has an ownership of 50% or
greater, then the JV is eligible for opportunities for participation
on contracts for minority and women owned business enterprises
pursuant to Article 15-A of the Executive Law.

* Localizing Factors: OGS may additionally set other factors in
contracts under the pilot, such as distance from the job or project,
green technology, financial or expert resources of the contractor or
joint venture or teaming arrangement, the freshness or newness of the
product, the impact of extended transportation, etc.

* Weighting: OGS must weight any consideration in awarding a contract
by the percentage of the JV or teaming arrangement allocated to the
Diversity Business Enterprise.

D. Report: The commissioner shall report annually on January 1 of each
year, beginning in the second calendar year after enactment of this
program, on contracts let to joint ventures, and the development of
Diversity Business Enterprises as a result of such joint ventures.

EXISTING LAW: New bill.

JUSTIFICATION: The major barrier in development of new Minority or
Women Business Enterprises, and businesses of disabled veterans, is
access to capital, expertise, and resources. Absent these, the
business entities cannot obtain larger contracts. The problem is
classic: the MWBE or disabled veteran enterprise cannot grow because
it is too small to get access to the capital and resources it needs to
meet performance bonds, cash flow and other requirements; but it
cannot grow without access to these things.

Teaming and joint ventures provide a way for these business entities
to gain access to the cash, resources, expertise and other attributes
needed for growth by providing mutually beneficial access to the
expertise and resources or a larger company. Procurement makes up as
much as a quarter or a third of New York's annual budget - tens of
billions of dollars each year for everything from construction to food
to toilet paper to everything else. These contracts and purchases
could be used to spur rapid growth for these entities. The state does
not now provide opportunities for JVs or teaming. This measure opens
the door to opportunity by allowing for teaming and JVs in a
controlled pilot program. Inherent in the program are means to assure
that the MWBEs and the disabled veteran enterprises are full partners
in any business venture.

FISCAL IMPLICATIONS: None to the state.


EFFECTIVE DATE: immediately, with a sunset at midnight on December 31
of the fifth full year following enactment.

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

                                  4916

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               May 1, 2013
                               ___________

Introduced by Sens. GOLDEN, GRISANTI, LANZA, LARKIN, MAZIARZ, VALESKY --
  read  twice  and  ordered printed, and when printed to be committed to
  the Committee on Finance

AN ACT to amend the state finance law, in relation to the state procure-
  ment council and special  provisions  regarding  joint  ventures;  and
  providing  for the expiration and repeal of such provisions upon expi-
  ration thereof

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

  Section  1.  Paragraph  n of subdivision 2 of section 161 of the state
finance law, as added by chapter 173 of the laws of 2010, is amended  to
read as follows:
  n.  Recommend  to  the  commissioner  necessary legislative changes or
modifications to existing or proposed rules, regulations and  procedures
that would increase access to the state's procurement process by minori-
ty-owned  business  enterprises and women-owned business enterprises and
create model language to be used by agencies when issuing  requests  for
bids  or  proposals to other solicitations or offers that would increase
the ability of small businesses to participate  in  state  procurements,
INCLUDING  THROUGH  TEAMING AND JOINT VENTURES AS DEFINED IN SUBDIVISION
NINE OF SECTION ONE HUNDRED SIXTY-FIVE OF THIS ARTICLE.
  S 2. Section 165 of the state finance law is amended by adding  a  new
subdivision 9 to read as follows:
  9. SPECIAL PROVISIONS REGARDING JOINT VENTURES.
  A. DEFINITIONS. AS USED IN THIS SUBDIVISION:
  (I)  "DISABLED  VETERAN BUSINESS ENTERPRISE" IS AN INDEPENDENTLY OWNED
AND OPERATED BUSINESS ENTERPRISE IN WHICH A DISABLED VETERAN HAS A REAL,
SUBSTANTIAL, AND CONTINUING OWNERSHIP OF FIFTY-ONE PER CENT  OR  GREATER
AND HAS AND EXERCISES INDEPENDENT CONTROL OF THE DAY TO DAY DECISIONS OF
THE ENTERPRISE, AND WHICH HAS BEEN CERTIFIED AS A DISADVANTAGED BUSINESS
ENTERPRISE PURSUANT TO THE FEDERAL DEPARTMENT OF TRANSPORTATION OR OTHER

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09996-03-3

S. 4916                             2

FEDERAL  AGENCY  PROCEDURES, OR CERTIFIED AS A DISABILITY-OWNED BUSINESS
ENTERPRISE BY A NATIONAL CERTIFICATION ORGANIZATION SATISFACTORY TO  THE
COMMISSIONER.  THE  TERM  "DISABLED  VETERAN" HAS THE SAME MEANING AS IN
PARAGRAPH  (B)  OF  SUBDIVISION  ONE OF SECTION EIGHTY-FIVE OF THE CIVIL
SERVICE LAW AND ADDITIONALLY MEANS A MEMBER OF THE ARMED FORCES  OF  THE
UNITED  STATES WHO SERVED IN TIME OF WAR OR WHO SERVED IN AN AREA DESIG-
NATED BY THE PRESIDENT OF THE UNITED STATES  BY  EXECUTIVE  ORDER  AS  A
"COMBAT  ZONE" AT ANY TIME DURING THE PERIOD DESIGNATED BY THE PRESIDENT
BY EXECUTIVE ORDER AS THE PERIOD OF COMBATANT ACTIVITIES IN  SUCH  ZONE,
AND  WHO  WAS  HONORABLY  DISCHARGED OR RELEASED UNDER HONORABLE CIRCUM-
STANCES FROM SUCH SERVICE, AND WHO IS A CITIZEN OF THE UNITED STATES AND
A RESIDENT OF THE STATE OF NEW YORK.
  (II) "DIVERSITY BUSINESS ENTERPRISE"  OR  "DIVERSITY  BUSINESS  ENTER-
PRISES"  REFERS INDIVIDUALLY OR COLLECTIVELY, ACCORDING TO CONTEXT, TO A
MINORITY BUSINESS ENTERPRISE, A WOMEN'S BUSINESS  ENTERPRISE,  AND/OR  A
DISABLED VETERAN BUSINESS ENTERPRISE.
  (III)  "JOINT  VENTURE" MEANS A BUSINESS, A PARTNERSHIP, SOLE PROPRIE-
TORSHIP, OR A CORPORATION FORMED UNDER THE LIMITED LIABILITY CORPORATION
LAW OR THE BUSINESS CORPORATION LAW BY A DIVERSITY  BUSINESS  ENTERPRISE
AND  ONE OR MORE NEW YORK BUSINESS ENTERPRISES FOR A SPECIFIC PROJECT IN
WHICH THE PARTIES CONTRIBUTE EQUITY, ASSETS, AND EXPERTISE.
  (IV) "NEW YORK BUSINESS ENTERPRISE" MEANS A BUSINESS ENTITY FORMED  IN
THIS  STATE,  WHOSE  PRIMARY  RESIDENCE  IS LOCATED IN THIS STATE, WHICH
REALIZES MORE THAN HALF ITS GROSS REVENUES FROM ACTIVITIES CONDUCTED  IN
THIS  STATE AND WHICH HAS MORE THAN HALF ITS FULL TIME EMPLOYEES LOCATED
IN THIS STATE. A NEW YORK BUSINESS ENTERPRISE MAY BE A PARTNERSHIP, SOLE
PROPRIETORSHIP, OR A CORPORATION  FORMED  UNDER  THE  LIMITED  LIABILITY
CORPORATION  LAW,  OR A CORPORATION FOR PROFIT FORMED UNDER THE BUSINESS
CORPORATION LAW, OR EXISTING  ON  ITS  EFFECTIVE  DATE  AND  THERETOFORE
FORMED  UNDER  ANY  OTHER  GENERAL STATUTE OR BY ANY SPECIAL ACT OF THIS
STATE FOR A PURPOSE OR PURPOSES FOR WHICH A CORPORATION  MAY  BE  FORMED
UNDER  SUCH BUSINESS CORPORATION LAW, OTHER THAN A CORPORATION WHICH MAY
BE FORMED UNDER THE COOPERATIVE CORPORATIONS LAW.
  (V) "TEAMING" MEANS A COOPERATIVE AGREEMENT BETWEEN ONE OR MORE DIVER-
SITY BUSINESS ENTERPRISES AND ONE OR MORE NEW YORK BUSINESS  ENTERPRISES
EXECUTED  BY  A  WRITTEN  INSTRUMENT  THAT  DEFINES  THE COMMON PURPOSE,
PERFORMANCE GOALS, APPROACH, FINANCING,  LIABILITY,  AND  ACCOUNTABILITY
FOR A PROJECT, THAT IS SATISFACTORY TO THE COMMISSIONER FOR THE PURPOSES
OF CONTRACTING PURSUANT TO THIS SUBDIVISION.
  B.  THE  COMMISSIONER  SHALL  TAKE  SUCH  STEPS AS MAY BE NECESSARY TO
DEVELOP AND  IMPLEMENT  A  PILOT  PROGRAM  TO  INSURE  THAT  CENTRALIZED
CONTRACTS  PROVIDED  PURSUANT TO THIS ARTICLE ALSO INCLUDE PROVISION FOR
JOINT VENTURES AND TEAMING ARRANGEMENTS AS DEFINED HEREIN, PROVIDED THAT
IN ANY SUCH JOINT VENTURE OR TEAMING ARRANGEMENT:
  (I) THE DIVERSITY BUSINESS ENTERPRISE SHALL PERFORM  A  SHARE  OF  THE
WORK  NECESSARY  TO SUCH CONTRACT EQUAL TO ITS OWNERSHIP OF STOCK, DIVI-
DENDS, PROFIT, OR CONTROL OF A JOINT VENTURE, WHICHEVER IS  GREATER,  OR
TO ITS POTENTIAL PROFITABILITY RETURN IN THE CASE OF TEAMING, AND
  (II)  THE AGREEMENT IS DEMONSTRATED TO THE SATISFACTION OF THE COMMIS-
SIONER TO BRING RESOURCES AND EXPERTISE TO THE PROJECT  THAT  WOULD  NOT
OTHERWISE  BE AVAILABLE WITHIN THE SCOPE OF EXPERTISE, ABILITIES, ACTIV-
ITIES OF THE DIVERSITY BUSINESS ENTERPRISE, OR WHICH WOULD BE  OTHERWISE
LIMITED  BY  RESOURCES AVAILABLE TO THE DIVERSITY BUSINESS ENTERPRISE IF
SUCH ENTERPRISE SOUGHT TO PERFORM THE WORK ITSELF, AND
  (III) THE PROPOSAL OFFERS, IN THE JUDGEMENT OF THE  COMMISSIONER,  THE
SERVICES OR COMMODITIES AT A PRICE EQUAL TO OR LESS THAN WOULD OTHERWISE

S. 4916                             3

BE  CHARGED  BY  AN  ENTITY WHICH IS NOT A JOINT VENTURE OR WHICH IS NOT
INVOLVED IN SUCH TEAMING AGREEMENT, AND
  (IV) THE JOINT VENTURE OR TEAMING ENTITY MEETS REQUIREMENTS AND CRITE-
RIA  OF THE COMMISSIONER IN SUCH AREAS AS FINANCING, LIABILITY, ACCOUNT-
ABILITY, USE OF RESOURCES  AND  OTHER  CRITERIA  AND  REQUIREMENTS  THAT
DEMONSTRATE SIGNIFICANT ENGAGEMENT BY THE DIVERSITY BUSINESS ENTERPRISE,
PROVIDED  THAT  AN  ENTITY WHICH QUALIFIES AS A NEW YORK BUSINESS ENTER-
PRISE AT THE TIME OF THE EXECUTION OF A CONTRACT SHALL NOT BE  DISQUALI-
FIED  FOR  FAILING  TO MEET EMPLOYMENT AND GROSS REVENUE CRITERIA DURING
THE COURSE OF THE CONTRACT IF THE VARIATION IN REVENUES  AND/OR  EMPLOY-
MENT  IS  NO  MORE  THAN  TWENTY  PER CENT MORE THAN SUCH CRITERIA WOULD
OTHERWISE ALLOW.
  C. A JOINT VENTURE IN  WHICH  A  MINORITY  BUSINESS  ENTERPRISE  OR  A
WOMEN-OWNED  BUSINESS  ENTERPRISE HAS AN OWNERSHIP OF GREATER THAN FIFTY
PERCENT  SHALL  BE  ELIGIBLE  FOR  OPPORTUNITIES  FOR  PARTICIPATION  ON
CONTRACTS  FOR MINORITY AND WOMEN OWNED BUSINESS ENTERPRISES PURSUANT TO
ARTICLE FIFTEEN-A OF THE EXECUTIVE LAW.
  D. IN IMPLEMENTING THE PILOT PROGRAM THE COMMISSIONER MAY, IN ADDITION
TO OTHER CONTRACT REQUIREMENTS IMPOSED ON CONTRACTS AND  CONTRACTORS  OR
VENDORS  PURSUANT  TO  SECTION  ONE HUNDRED SIXTY-THREE OF THIS ARTICLE,
REQUIRE CONSIDERATION OF ADDITIONAL FACTORS INCLUDING DISTANCE FROM  THE
JOB  OR  PROJECT,  THE AMOUNT OR LEVEL OF GREEN TECHNOLOGY, FINANCIAL OR
EXPERT RESOURCES OF THE CONTRACTOR OR JOINT VENTURE OR TEAMING  ARRANGE-
MENTS,  ANCILLARY  COSTS  SUCH  AS  REQUIREMENTS  TO  BRING OR HIRE ON A
CONSULTANT BASIS EXPERTISE FROM OTHER AREAS OR STATES, THE FRESHNESS  OR
NEWNESS OF THE PRODUCT BEING PURCHASED AND THE IMPACT OF EXTENDED TRANS-
PORTATION  ON  IT,  AND  OTHER SIMILAR FACTORS.   THE COMMISSIONER SHALL
ADDITIONALLY WEIGH ANY CONSIDERATION IN THE AWARDING OF  A  CONTRACT  BY
THE  PERCENTAGE OF THE JOINT VENTURE OR TEAMING ARRANGEMENT ALLOCATED OF
THE DIVERSITY BUSINESS ENTERPRISE.
  E. THE COMMISSIONER SHALL REPORT ANNUALLY ON THE FIRST OF  JANUARY  OF
EACH YEAR, BEGINNING IN THE SECOND YEAR AFTER ENACTMENT OF THIS PROGRAM,
CONCERNING  THE  PILOT  PROGRAM  AUTHORIZED  BY THIS SECTION. THE REPORT
SHALL NOTE CONTRACTS LET TO  JOINT  VENTURES,  AND  THE  DEVELOPMENT  OF
DIVERSITY  BUSINESS  ENTERPRISES AS A RESULT OF SUCH JOINT VENTURES. THE
COMMISSIONER SHALL USE METRICS WHICH SHOW THE EFFECT OF THE  PROGRAM  ON
THE DEVELOPMENT AND STRENGTHENING OF DIVERSITY BUSINESS ENTERPRISES, AND
SHALL INCLUDE RECOMMENDATIONS FOR THE EXPANSION, ALTERATION, AND PERMAN-
ENTIZATION OF THE PROGRAM.
  S  3.  This  act shall take effect immediately and shall expire and be
deemed repealed on the thirty-first of December of the fifth  full  year
following the effective date of this act.

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