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

                                  7506

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                              May 13, 2015
                               ___________

Introduced by M. of A. TITUS -- (at request of the State Comptroller) --
  read once and referred to the Committee on Labor

AN  ACT  to amend the state finance law, in relation to establishing the
  ethical standards for state agency contractors act

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

  Section 1. Legislative findings and intent. The legislature finds that
to  a  great  extent,  state  agencies  and  public  authorities rely on
contractors to help accomplish a  broad  array  of  complex,  inherently
governmental  and mission-critical functions.  State agencies and public
authorities contract for services that involve the contractors' exercise
of judgment, providing operational and policy advice to  state  officers
and  employees,  overseeing  other  contractors  and,  at times, working
alongside state officers and employees on the same projects. This inter-
mingling of public and private workforce reveals a need to address  what
processes  are in place to ensure the integrity of government operations
and maintain public confidence.
  While a majority of contractors deliver services with integrity,  some
contractors  could,  nonetheless, engage in misconduct during the course
of the contract term - for example, engaging in acts for personal finan-
cial gain, accepting inappropriate gifts, or inappropriately negotiating
for certain jobs.
  Furthermore, in carrying out the day-to-day tasks for  state  agencies
and  public  authorities,  contractors often require extensive access to
and use of nonpublic government  information.  Protection  of  nonpublic
information  is  critical, because unauthorized disclosure can erode the
integrity of government operations and lead to situations in which  such
information  is  misused for private gain, potentially harming important
interests such  as  the  privacy  of  individuals,  commercial  business
proprietary rights, security, and law enforcement.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03004-02-5

              

A. 7506                             2

  The  legislature  further  finds that opportunities for organizational
and personal conflicts of interest by contractors,  and  the  misuse  of
nonpublic  information  by contractors through negligence or misconduct,
can have a significant effect on the government's ability to perform its
primary functions, potentially resulting in inappropriate use of taxpay-
er dollars, damaged reputation, and loss of public trust.
  The legislature further finds that while few cases of improper conduct
by  contractors have been publicly identified, safeguards are lacking to
identify whether organizational or personal conflicts of interest  exist
among contractors. The cost to the state of contractors or their employ-
ees  engaging  in  actions  reaping organizational or personal gain - an
outcome increasingly likely based on sheer numbers - would likely  never
be known, let alone calculable, as long as there is no transparency.
  S  2.  Short  title.  This  act shall be known and may be cited as the
"ethical standards for state agency contractors act".
  S 3. The state finance law is amended by adding a new section  148  to
read as follows:
  S 148. ETHICAL STANDARDS FOR CONTRACTORS PERFORMING INHERENTLY GOVERN-
MENTAL  AND MISSION-CRITICAL FUNCTIONS OR RENDERING SERVICES PURSUANT TO
AN INFORMATION-RISK CONTRACT. 1. FOR THE PURPOSES OF THIS  SECTION,  THE
FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A)  "STATE  AGENCY CONTRACTOR" OR "CONTRACTOR" SHALL MEAN AN INDIVID-
UAL, SUBCONTRACTOR, OR OTHER AGENT OF THE CONTRACTOR WHO, OR  AN  ENTITY
WHICH, PURSUANT TO CONTRACT OR OTHER ARRANGEMENT WITH A STATE AGENCY AND
UNDER  THE  SUPERVISION OR OVERSIGHT OF A STATE OFFICER OR EMPLOYEE, (I)
PERFORMS OR ASSISTS A STATE AGENCY  IN  THE  PERFORMANCE  OF  INHERENTLY
GOVERNMENTAL  ACTIVITIES AND MISSION-CRITICAL FUNCTIONS, OR (II) RENDERS
SERVICES PURSUANT TO AN INFORMATION-RISK CONTRACT.
  (B) "STATE AGENCY" SHALL  MEAN  ANY  STATE  DEPARTMENT,  OR  DIVISION,
BOARD,  COMMISSION, OR BUREAU OF ANY STATE DEPARTMENT; THE STATE UNIVER-
SITY OF NEW YORK OR THE CITY UNIVERSITY OF NEW YORK AND THE  INDEPENDENT
INSTITUTIONS  OPERATING  STATUTORY OR CONTRACT COLLEGES ON BEHALF OF THE
STATE; ANY PUBLIC BENEFIT CORPORATION, PUBLIC AUTHORITY OR COMMISSION AT
LEAST ONE OF WHOSE MEMBERS ARE APPOINTED BY THE GOVERNOR  OTHER  THAN  A
LOCAL AUTHORITY AS DEFINED IN SECTION TWO OF THE PUBLIC AUTHORITIES LAW;
AND  ANY  GOVERNMENTAL  ENTITY  PERFORMING A GOVERNMENTAL OR PROPRIETARY
FUNCTION FOR THE STATE, OTHER THAN THE LEGISLATURE OR THE JUDICIARY.
  (B-1) "EMPLOYEE" SHALL MEAN ANY OFFICER, EMPLOYEE, AGENT OR  REPRESEN-
TATIVE OF A STATE AGENCY CONTRACTOR.
  (C) "INHERENTLY GOVERNMENTAL AND MISSION-CRITICAL FUNCTION" SHALL MEAN
A  FUNCTION THAT INVOLVES THE DISCRETIONARY EXERCISE OF STATE GOVERNMENT
AUTHORITY, OR INVOLVES MONETARY TRANSACTIONS AND ENTITLEMENTS INCLUDING,
BUT NOT LIMITED TO, PROGRAM  MANAGEMENT  SUPPORT,  SYSTEMS  ENGINEERING,
TECHNICAL  ASSISTANCE,  OR  CONTRACT AND ACQUISITION SUPPORT. INHERENTLY
GOVERNMENTAL AND MISSION-CRITICAL FUNCTIONS SHALL INCLUDE, BUT  ARE  NOT
LIMITED TO:
  (I)  THE DETERMINATION OF STATE BUDGET PRIORITIES, POLICY, GUIDANCE OR
STRATEGY;
  (II) THE DETERMINATION OF STATE AGENCY POLICY, SUCH AS DETERMINING THE
CONTENT AND APPLICATION OF REGULATIONS;
  (III) THE DIRECTION AND CONTROL OF STATE EMPLOYEES;
  (IV) THE SELECTION OR NON-SELECTION OF INDIVIDUALS FOR  STATE  GOVERN-
MENT  EMPLOYMENT,  INCLUDING THE INTERVIEWING OF INDIVIDUALS FOR EMPLOY-
MENT;
  (V) THE APPROVAL OF POSITION DESCRIPTIONS  AND  PERFORMANCE  STANDARDS
FOR STATE EMPLOYEES;

A. 7506                             3

  (VI)  THE  APPROVAL  OF  STATE  GOVERNMENT  PROPERTY TO BE ACQUIRED OR
DISPOSED OF AND ON WHAT TERMS; PROVIDED, HOWEVER,  A  STATE  AGENCY  MAY
GIVE CONTRACTORS AUTHORITY TO DISPOSE OF PROPERTY AT PRICES WITHIN SPEC-
IFIED RANGES AND SUBJECT TO OTHER REASONABLE CONDITIONS DEEMED APPROPRI-
ATE BY SUCH STATE AGENCY;
  (VII)  APPROVING  ANY STATE CONTRACTUAL DOCUMENTS, INCLUDING DOCUMENTS
DEFINING REQUIREMENTS, INCENTIVE PLANS AND EVALUATION CRITERIA;
  (VIII) AWARDING, ADMINISTERING OR TERMINATING CONTRACTS;
  (IX) DETERMINING WHETHER CONTRACT COSTS ARE REASONABLE, ALLOCABLE  AND
ALLOWABLE;
  (X) THE APPROVAL OF STATE LICENSING ACTIONS AND INSPECTIONS;
  (XI) THE CONDUCT OF CRIMINAL INVESTIGATIONS; OR
  (XII)  THE  CONTROL  OF  PROSECUTIONS  AND PERFORMANCE OF ADJUDICATORY
FUNCTIONS.
  (D) "NONPUBLIC INFORMATION" SHALL MEAN INFORMATION UNDER A STATE AGEN-
CY'S AUTHORITY OR CONTROL, THE UNAUTHORIZED ACCESS TO, OR LOSS,  MISUSE,
OR  MODIFICATION  OF,  WHICH MAY COMPROMISE IMPORTANT INTERESTS, SUCH AS
PERSONAL OR  MEDICAL  PRIVACY,  GOVERNMENT  SECURITY,  LAW  ENFORCEMENT,
PROPRIETARY  RIGHTS, OR THE CONDUCT OF STATE AGENCY PROGRAMS.  NONPUBLIC
INFORMATION INCLUDES, BUT IS NOT LIMITED TO, INFORMATION THAT:
  (I) IS EXEMPT FROM DISCLOSURE UNDER ARTICLE SIX OF THE PUBLIC OFFICERS
LAW OR OTHERWISE PROTECTED FROM DISCLOSURE BY LAW, RULE  OR  REGULATION;
IS PRIVATE INFORMATION, THE RELEASE OF WHICH WOULD CONSTITUTE A SECURITY
BREACH  UNDER SECTION TWO HUNDRED EIGHT OF THE STATE TECHNOLOGY LAW; HAS
BEEN DESIGNATED AS CONFIDENTIAL BY A STATE AGENCY; HAS NOT BEEN  DISSEM-
INATED  TO  THE PUBLIC AND IS NOT AUTHORIZED TO BE MADE AVAILABLE TO THE
PUBLIC ON REQUEST; IS PERSONAL IDENTIFYING  INFORMATION  INCLUDING,  BUT
NOT  LIMITED  TO,  A  PERSON'S NAME, SOCIAL SECURITY NUMBER, BIRTH DATE,
HEALTH/MEDICAL INFORMATION, FINANCIAL INFORMATION, OR TAXPAYER DATA;  OR
IS  SOURCE  SELECTION  INFORMATION INCLUDING, BUT NOT LIMITED TO, SOURCE
SELECTION PLANS, TECHNICAL EVALUATION PLANS, COST EVALUATIONS  OR  RANK-
INGS;
  (II)  IS  BUSINESS  PROPRIETARY INFORMATION RELATING TO TRADE SECRETS,
OPERATIONS, APPARATUS, OR PROCESSES; OR
  (III) IS STATE AGENCY INFORMATION RELATED TO CONTINUITY OF  OPERATIONS
INFORMATION;  SECURITY  MANAGEMENT  INFORMATION,  PLANNING  INFORMATION,
BUDGETING INFORMATION, PROTECTION SERVICES/ BUILDING  SECURITY  INFORMA-
TION, OR PERSONNEL RECORDS.
  (E)  "PROPRIETARY  INFORMATION"  SHALL MEAN INFORMATION INCLUDING, BUT
NOT LIMITED TO, SOURCE SELECTION, BUSINESS  PROPRIETARY  INFORMATION  OR
PERSONAL  INFORMATION  AS  SUCH TERM IS DEFINED IN SECTION NINETY-TWO OF
THE PUBLIC OFFICERS LAW.
  (F) "INFORMATION-RISK CONTRACT" SHALL MEAN ANY  CONTRACT  PURSUANT  TO
WHICH CERTAIN STATE AGENCY CONTRACTORS MAY:
  (I)  RECEIVE  ACCESS TO INFORMATION RELATING TO A STATE AGENCY'S DELI-
BERATIVE PROCESSES, MANAGEMENT OPERATIONS, OR STAFF, WHICH IS NOT GENER-
ALLY RELEASED OR AVAILABLE TO THE PUBLIC;
  (II) HAVE ACCESS TO PROPRIETARY INFORMATION THAT  COULD  BE  EXPLOITED
FOR FINANCIAL GAIN; OR
  (III) HAVE ACCESS TO NONPUBLIC INFORMATION.
  (G) AN "ORGANIZATIONAL CONFLICT OF INTEREST" SHALL MEAN A STATE AGENCY
CONTRACTOR'S  PRESENT OR CURRENTLY PLANNED INTERESTS, INCLUDING BUSINESS
OR RELATIONSHIPS  WITH  OTHER  PRIVATE  SECTOR  ENTITIES,  WHICH  EITHER
DIRECTLY  OR INDIRECTLY RELATE TO THE WORK TO BE PERFORMED UNDER A STATE
AGENCY CONTRACT AND (I) WHICH MAY DIMINISH ITS CAPACITY TO  GIVE  IMPAR-

A. 7506                             4

TIAL,  TECHNICALLY  SOUND,  OBJECTIVE  ASSISTANCE OR ADVICE, OR (II) MAY
RESULT IN IT HAVING AN UNFAIR COMPETITIVE ADVANTAGE.
  (H)  A  "PERSONAL  CONFLICT  OF  INTEREST"  SHALL  MEAN A STATE AGENCY
CONTRACTOR'S  EMPLOYEE'S  PERFORMANCE  OF  SERVICES   OR   EXERCISE   OF
DISCRETION  UNDER  A  STATE  AGENCY  CONTRACT,  IN A WAY TO BENEFIT SUCH
CONTRACTOR'S EMPLOYEE OR HIS OR HER RELATIVE INCLUDING, BUT NOT  LIMITED
TO,  FINANCIAL  CONFLICTS OF INTEREST WHERE THE CONTRACTOR'S EMPLOYEE OR
RELATIVE STANDS TO GAIN OR LOSE FINANCIALLY FROM THE CONTRACTOR'S  WORK;
LACK  OF  IMPARTIALITY;  ACCEPTANCE  OF GIFTS VALUED AT FIFTY DOLLARS OR
MORE ALONE OR IN THE AGGREGATE WITHIN A GIVEN TWELVE-MONTH  PERIOD  FROM
AN  INDIVIDUAL  OR  ENTITY  REVIEWED, AUDITED, OR INVESTIGATED UNDER THE
STATE AGENCY CONTRACT, OR FROM ANYONE  WHO  COULD  BE  AFFECTED  BY  THE
PERFORMANCE OF THE CONTRACTOR'S DUTIES.
  (I)  "RELATIVE"  SHALL MEAN ANY PERSON LIVING IN THE SAME HOUSEHOLD AS
THE INDIVIDUAL AND ANY PERSON WHO IS A DIRECT DESCENDANT OF  THAT  INDI-
VIDUAL'S GRANDPARENTS OR THE SPOUSE OF SUCH DESCENDANT.
  (J)  "STATE AGENCY CONTRACT" SHALL MEAN A CONTRACT WITH A STATE AGENCY
TO PERFORM AN INHERENTLY GOVERNMENTAL AND MISSION-CRITICAL FUNCTION,  OR
AN INFORMATION-RISK CONTRACT.
  2.  ANY CONTRACT EXECUTED BY A STATE AGENCY WITH A CONTRACTOR PERFORM-
ING OR ASSISTING OR PROVIDING ADVICE TO A STATE AGENCY IN  THE  PERFORM-
ANCE  OF  AN  INHERENTLY GOVERNMENTAL AND MISSION-CRITICAL FUNCTION, AND
ANY INFORMATION-RISK CONTRACT SHALL:
  (A) PROHIBIT A CONTRACTOR FROM ORGANIZATIONAL  CONFLICTS  OF  INTEREST
WITH  RESPECT  TO  SUCH  STATE AGENCY CONTRACT EXCEPT TO THE EXTENT THAT
SUCH CONTRACTOR HAS DISCLOSED SUCH CONFLICT  TO  THE  STATE  AGENCY  AND
PROPOSED  A  METHOD  OF  MITIGATION  OR ELIMINATION SATISFACTORY TO SUCH
AGENCY;
  (B) PROHIBIT CONTRACTORS' EMPLOYEES FROM TAKING ANY ACTION THAT  WOULD
CONSTITUTE  A  PERSONAL CONFLICT OF INTEREST AS DEFINED IN PARAGRAPH (H)
OF SUBDIVISION ONE OF THIS SECTION AND PROVIDE  THAT  SUCH  AGENCY  MAY,
WHEN  A  CONTRACTOR  DISCLOSES  THAT A PERSONAL CONFLICT OF INTEREST HAS
OCCURRED, TAKE APPROPRIATE ACTION;
  (C) INCLUDE A NONDISCLOSURE AGREEMENT OR CLAUSE REQUIRING THE CONTRAC-
TOR TO CERTIFY THAT THEY HAVE AN EXECUTED  NONDISCLOSURE  AGREEMENT  FOR
EACH  INDIVIDUAL  EMPLOYED BY SUCH CONTRACTOR PURSUANT TO A STATE AGENCY
CONTRACT AS A CONDITION OF ACCESS TO NONPUBLIC INFORMATION AND REQUIRING
THAT AGREEMENTS BETWEEN SUCH CONTRACTORS AND THIRD PARTIES MUST  PROTECT
THE STATE AGENCY'S NONPUBLIC INFORMATION;
  (D) REQUIRE CONTRACTORS TO OBTAIN WRITTEN CONSENT FROM THE STATE AGEN-
CY  PRIOR  TO  DISCLOSING  NONPUBLIC  INFORMATION  TO  SUBCONTRACTORS OR
OTHERS;
  (E) REQUIRE CONTRACTORS TO TRAIN AT LEAST BIANNUALLY ITS EMPLOYEES AND
SUBCONTRACTORS, IF ANY, RENDERING SERVICES  ON  STATE  AGENCY  CONTRACTS
REGARDING  ORGANIZATIONAL  CONFLICTS  OF INTEREST, PERSONAL CONFLICTS OF
INTEREST AND PROTECTION OF NONPUBLIC INFORMATION  AND  THE  CONSEQUENCES
FOR UNAUTHORIZED DISCLOSURE OR MISUSE OF SUCH INFORMATION;
  (F) REQUIRE CONTRACTORS TO IMMEDIATELY NOTIFY THE STATE AGENCY REGARD-
ING  ANY  SUCH  ORGANIZATIONAL OR PERSONAL CONFLICTS OF INTEREST, OR THE
MISUSE OR UNAUTHORIZED DISCLOSURE OF NONPUBLIC INFORMATION; AND
  (G) IMPOSE CONSEQUENCES FOR VIOLATIONS.
  3. CONTRACTORS SHALL BE RESPONSIBLE FOR THE  SECURITY  OF  ANY  SYSTEM
RELATING  TO  NONPUBLIC  INFORMATION  WHETHER  SUCH SYSTEM IS MAINTAINED
ELECTRONICALLY OR OTHERWISE.

A. 7506                             5

  4. CONTRACTORS INVOLVED IN SOURCE  SELECTION  AND  RELATED  ACTIVITIES
SUPPORTING  AWARD OF STATE AGENCY CONTRACTS SHALL BE SUBJECT TO LAWS AND
REGULATIONS TO PREVENT RELEASE OF NONPUBLIC INFORMATION.
  5. IN ADDITION TO THE REQUIREMENTS OF SUBDIVISIONS TWO, THREE AND FOUR
OF  THIS  SECTION,  CONTRACTORS  PERFORMING  INHERENTLY GOVERNMENTAL AND
MISSION-CRITICAL SERVICES  OR  INFORMATION-RISK  CONTRACT  SERVICES  FOR
WHICH MORE THAN FIVE MILLION DOLLARS IS TO BE PAID AND INVOLVING WORK IN
EXCESS  OF  ONE  HUNDRED TWENTY DAYS SHALL BE REQUIRED TO HAVE A WRITTEN
CODE OF BUSINESS ETHICS AND CONDUCT. THE PROVISIONS OF THIS  SUBDIVISION
SHALL NOT APPLY TO CONTRACTS FOR THE PURCHASE OF COMMODITIES.
  6. THE COMPTROLLER, IN HIS OR HER DISCRETION, MAY PROMULGATE RULES AND
REGULATIONS  ADDRESSING THE APPROPRIATE CONTENT FOR A MODEL WRITTEN CODE
OF BUSINESS ETHICS TO BE UTILIZED BY CONTRACTORS AND EMPLOYEES  OF  SUCH
CONTRACTORS  PERFORMING  INHERENTLY  GOVERNMENTAL  AND  MISSION-CRITICAL
FUNCTIONS, OR RENDERING INFORMATION  RISK  CONTRACT  SERVICES,  FOR  THE
PURPOSE  OF PREVENTING ORGANIZATIONAL AND PERSONAL CONFLICTS OF INTEREST
AND PROTECTING NONPUBLIC INFORMATION.
  (A) THE COMPTROLLER'S REGULATIONS MAY INCLUDE SAFEGUARDS  TO  IDENTIFY
AND PREVENT ORGANIZATIONAL AND PERSONAL CONFLICTS OF INTEREST INCLUDING,
BUT NOT LIMITED TO:
  (I)  PROHIBITING  THE  CONTRACTOR'S  EMPLOYEES FROM PARTICIPATING IN A
STATE AGENCY CONTRACT IN WHICH THEY HAVE A PERSONAL CONFLICT  OF  INTER-
EST,  ABSENT  NOTIFICATION  TO THE CONTRACTING STATE AGENCY AND SPECIFIC
APPROVAL TO PROCEED FOLLOWING MITIGATION;
  (II) REQUIRING THE CONTRACTOR'S EMPLOYEES AVOID THE APPEARANCE OF LOSS
OF IMPARTIALITY IN PERFORMING CONTRACTED DUTIES;
  (III) REQUIRING THE CONTRACTOR  TO  REVIEW  AND  ADDRESS  ANY  OF  ITS
EMPLOYEES'  PERSONAL  CONFLICTS  OF  INTEREST  BEFORE  ASSIGNING THEM TO
DELIVER SERVICES;
  (IV) PROHIBITING  THE  CONTRACTOR'S  EMPLOYEES  FROM  USING  NONPUBLIC
INFORMATION  OBTAINED  WHILE PERFORMING WORK UNDER CONTRACT FOR PERSONAL
GAIN;
  (V) PROHIBITING THE CONTRACTOR'S  EMPLOYEES  WHO  PROVIDE  PROCUREMENT
SUPPORT  SERVICES  FROM INITIATING A FUTURE EMPLOYMENT CONTACT OR FUTURE
EMPLOYMENT CONTACTS INVOLVING A BIDDING STATE AGENCY DURING  AN  ONGOING
PROCUREMENT;
  (VI)  IMPOSING LIMITS ON THE ABILITY OF THE CONTRACTOR AND ITS EMPLOY-
EES TO ACCEPT GIFTS IN CONNECTION WITH CONTRACTED DUTIES;
  (VII) PROHIBITING MISUSE OF CONTRACT DUTIES  TO  PROVIDE  PREFERENTIAL
TREATMENT TO A PRIVATE INTEREST; AND
  (VIII)  ESTABLISHING  DISCIPLINARY  PROCESSES  FOR  VIOLATIONS OF SUCH
CODES.
  (B) SUCH REGULATIONS SHALL REQUIRE CONTRACTORS TO:
  (I)  REPORT  ANY  ORGANIZATIONAL  OR  PERSONAL  CONFLICT  OF  INTEREST
VIOLATIONS  BY  AN  EMPLOYEE  OF SUCH CONTRACTOR TO THE APPLICABLE STATE
AGENCY CONTRACTING OFFICER AS SOON AS IDENTIFIED;
  (II) MAINTAIN EFFECTIVE OVERSIGHT  TO  VERIFY  COMPLIANCE  WITH  SAFE-
GUARDS; AND
  (III)  ESTABLISH  AND  MAINTAIN  PROCEDURES  TO  SCREEN  FOR POTENTIAL
CONFLICT OF INTEREST FOR ALL EMPLOYEES EITHER ON A TASK BY TASK BASIS OR
ANNUALLY, THROUGH A FINANCIAL DISCLOSURE STATEMENT.
  7. WHEN REVIEW OF CONTRACTOR DISCLOSURE PURSUANT TO PARAGRAPH  (A)  OF
SUBDIVISION  SIX OF THIS SECTION REVEALS AN ACTUAL OR POTENTIAL CONFLICT
OF INTEREST, FINANCIAL CONFLICT OF INTEREST,  IMPAIRED  IMPARTIALITY  OR
MISUSE  OF INFORMATION AND AUTHORITY, CONTRACTORS SHALL ESTABLISH PROCE-
DURES TO MITIGATE SUCH CONFLICT, IMPAIRMENT OR MISUSE INCLUDING, BUT NOT

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LIMITED TO, DISQUALIFICATION FROM BEING ASSIGNED TO THE GOVERNMENT TASK,
REASSIGNMENT OR DIVESTITURE.
  8.  IN  ADDITION  TO THE VENDOR RESPONSIBILITY PROCESS, STATE AGENCIES
MAY CONDUCT REGULAR BACKGROUND CHECKS OF STATE  AGENCY  CONTRACTORS  AND
EMPLOYEES  OF  SUCH  CONTRACTORS  PERFORMING INHERENTLY GOVERNMENTAL AND
MISSION-CRITICAL  FUNCTIONS,  OR  RENDERING  INFORMATION  RISK  CONTRACT
SERVICES.    SUCH  BACKGROUND  CHECKS MAY INCLUDE, AT THE STATE AGENCY'S
DISCRETION, FINGERPRINTING OF THE STATE  AGENCY  CONTRACTOR'S  EMPLOYEES
PERFORMING  INHERENTLY  GOVERNMENTAL  AND MISSION-CRITICAL FUNCTIONS, OR
RENDERING INFORMATION RISK CONTRACT SERVICES OR ITS PERSONNEL.
  9. A CONTRACTOR'S FAILURE TO IMPLEMENT AN ADEQUATE SYSTEM FOR EMPLOYEE
CONFLICT CERTIFICATION, TO DISCLOSE OR CORRECT  INSTANCES  OF  PERSONNEL
MISCONDUCT,  OR  TO  TAKE  APPROPRIATE  DISCIPLINARY MEASURES AGAINST AN
EMPLOYEE WHO COMMITS MISCONDUCT MAY BE GROUNDS FOR CONTRACT  TERMINATION
BY THE STATE AGENCY.
  S 4. This act shall take effect on the one hundred eightieth day after
it  shall have become a law and apply to contracts executed on and after
such date; provided, however, that effective immediately,  any  rule  or
regulation  necessary  for  the timely implementation of this act on its
effective date is authorized and directed to be made and completed on or
before such effective date.