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

                                  7893

                            I N  S E N A T E

                              May 23, 2016
                               ___________

Introduced  by Sen. DeFRANCISCO -- (at request of the State Comptroller)
  -- 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  participation  by
  state  agencies  in a system used by the comptroller to compile vendor
  responsibility  information;  defining  information   technology   for
  procurement  purposes; clarifying the use of best and final offers for
  invitations for bids and requests for proposals  for  goods,  services
  and technology; clarifying the use of contracts let by another govern-
  mental  agency;  and clarifying the valuation of non-cash contracts by
  the state comptroller

  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 section
163-c to read as follows:
  S 163-C. VENDOR RESPONSIBILITY; ONLINE SYSTEM PARTICIPATION. 1.  DEFI-
NITIONS. AS USED IN THIS SECTION, THE FOLLOWING  TERMS  SHALL  HAVE  THE
FOLLOWING MEANINGS:
  A.  "ENROLLMENT" MEANS THE ESTABLISHMENT OF AN ONLINE SERVICES ACCOUNT
WITH THE STATE COMPTROLLER, INCLUDING, BUT NOT LIMITED TO, THE  CREATION
OF A UNIQUE USER IDENTIFICATION AND PASSWORD. ENROLLMENT PROVIDES A USER
ACCESS TO THE SYSTEM.
  B.  "ONLINE  SERVICES"  MEANS THE SERVICES PROVIDED ELECTRONICALLY AND
SECURELY BY THE STATE COMPTROLLER FOR THE BENEFIT OF NEW YORK'S  CUSTOM-
ERS, CLIENTS AND BUSINESS PARTNERS. SUCH ONLINE SERVICES MAY BE EXPANDED
AND ENHANCED AS TECHNOLOGY ALLOWS.
  C.  "STATE  CONTRACT"  OR  "CONTRACT"  MEANS  AND INCLUDES ANY WRITTEN
AGREEMENT FOR THE ACQUISITION OF GOODS, SERVICES OR CONSTRUCTION OF  ANY
KIND  BETWEEN  A  VENDOR  AND  A STATE AGENCY, OR A WRITTEN AGREEMENT OR
OTHER INSTRUMENT WHEREIN A STATE AGENCY  AGREES  TO  GIVE  CONSIDERATION
OTHER  THAN THE PAYMENT OF MONEY AS CONTEMPLATED IN SUBDIVISION THREE OF
SECTION ONE HUNDRED TWELVE OF THIS CHAPTER.
  D. "SUBCONTRACTOR" MEANS AN INDIVIDUAL, SOLE PROPRIETORSHIP,  PARTNER-
SHIP, JOINT VENTURE OR CORPORATION, WHICH IS ENGAGED IN A SUBCONTRACT BY

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

                                                           LBD15317-02-6

S. 7893                             2

A  VENDOR PURSUANT TO A STATE CONTRACT AND SUCH SUBCONTRACT IS VALUED AT
ONE HUNDRED THOUSAND DOLLARS OR MORE AND IS KNOWN AT  THE  TIME  OF  THE
AWARD OF THE STATE CONTRACT TO THE VENDOR.
  E.  "SYSTEM"  MEANS  THE  ONLINE  SOFTWARE, DATA AND RELATED RESOURCES
MAINTAINED BY THE COMPTROLLER TO COMPILE VENDOR RESPONSIBILITY  INFORMA-
TION.
  F.  "TERM  OF SERVICE" MEANS THE TERMS AND CONDITIONS DEVELOPED BY THE
STATE COMPTROLLER AND AGREED TO BY EACH AUTHORIZED USER PRIOR TO GAINING
ACCESS TO ONLINE SERVICES. TERMS OF SERVICE SHALL INCLUDE A  DESCRIPTION
OF THE SERVICES, OBLIGATIONS OF THE STATE COMPTROLLER AND THE AUTHORIZED
USER,  A  DESCRIPTION OF THE STATE COMPTROLLER'S PRIVACY POLICY, AUTHOR-
IZED USER CODE OF CONDUCT, AND INDEMNITY FOR THE STATE  COMPTROLLER  AND
THE  STATE  OF  NEW  YORK.  TERMS  OF  SERVICE  ARE SUBJECT TO CHANGE AS
PRESCRIBED BY THE STATE COMPTROLLER. AUTHORIZED USERS MAY  VIEW  CHANGES
VIA THE STATE COMPTROLLER'S INTERNET SITE.
  G.  "VENDOR"  MEANS  ANY  PERSON,  PARTNERSHIP, CORPORATION OR LIMITED
LIABILITY COMPANY OR ANY BUSINESS ENTITY BIDDING ON A STATE  PROCUREMENT
OR OTHERWISE AWARDED A STATE CONTRACT.
  H.  "VENDOR  RESPONSIBILITY"  MEANS  THAT A VENDOR HAS THE CAPACITY TO
FULLY PERFORM THE TERMS OF A CONTRACT AND  THE  INTEGRITY  AND  BUSINESS
ETHICS  TO JUSTIFY AN AWARD OF PUBLIC DOLLARS. A DETERMINATION OF VENDOR
RESPONSIBILITY SHALL INCLUDE CONSIDERATION OF FACTORS INCLUDING, BUT NOT
LIMITED TO, FINANCIAL  AND  ORGANIZATIONAL  CAPACITY,  LEGAL  AUTHORITY,
INTEGRITY AND PAST PERFORMANCE ON GOVERNMENTAL CONTRACTS.
  2. A. STATE AGENCIES SHALL ENROLL WITH THE STATE COMPTROLLER TO ACCESS
THE  SYSTEM MAINTAINED BY THE COMPTROLLER TO COMPILE VENDOR RESPONSIBIL-
ITY INFORMATION. STATE AGENCIES SHALL AGREE TO AND ABIDE BY THE TERMS OF
SERVICE FOR SUCH SYSTEM AS THE STATE COMPTROLLER DEEMS NECESSARY.
  B. FOR EACH CONTRACT OR SUBCONTRACT BETWEEN A VENDOR AND A SUBCONTRAC-
TOR WHERE, PURSUANT TO LAW OR BY DIRECTION OF THE STATE AGENCY,  DISCLO-
SURE FOR VENDOR RESPONSIBILITY IS REQUIRED, THE STATE AGENCY SHALL:
  (I) PROVIDE NOTICE TO VENDORS BIDDING FOR PROCUREMENTS ADMINISTERED BY
THE  STATE AGENCY THAT ANY VENDOR AND SUBCONTRACTOR, SUBMITTING A VENDOR
RESPONSIBILITY QUESTIONNAIRE SHALL DO SO VIA THE  SYSTEM  MAINTAINED  TO
COMPILE VENDOR RESPONSIBILITY INFORMATION;
  (II) PROVIDE VENDORS WITH INSTRUCTIONS ON HOW TO ELECTRONICALLY ACCESS
THE  SYSTEM  AND PROVIDE CONTACT INFORMATION FOR ASSISTANCE WITH ENROLL-
MENT. THIS INFORMATION SHALL BE MADE AVAILABLE PRIOR TO  THE  TIME  WHEN
VENDORS ARE REQUIRED TO SUBMIT DISCLOSURE FOR VENDOR RESPONSIBILITY; AND
  (III) ACCESS THE SYSTEM TO OBTAIN AND EVALUATE ANY DATA SUBMITTED BY A
VENDOR  PROPOSED  FOR  CONTRACT  AWARD.  STATE AGENCIES SHALL ENSURE THE
SUBMISSION FILED BY THE VENDOR MEETS SUCH SYSTEM'S TIMELINESS STANDARDS.
SUCH PROVISIONS APPLY REGARDLESS OF WHETHER THE CONTRACT IS  SUBJECT  TO
PRE-REVIEW AND APPROVAL BY THE STATE COMPTROLLER.
  C.  FOR  CONTRACTS  WHERE VENDOR DISCLOSURE IS NOT OTHERWISE REQUIRED,
THE STATE AGENCY AT ITS  DISCRETION,  MAY  REQUIRE  VENDORS  BIDDING  ON
PROCUREMENTS,  AND/OR  SUBCONTRACTORS, TO SUBMIT A VENDOR RESPONSIBILITY
QUESTIONNAIRE VIA THE SYSTEM. NOTHING CONTAINED IN THIS PARAGRAPH  SHALL
BE CONSTRUED TO ALTER THE EXISTING AUTHORITY OF THE STATE COMPTROLLER TO
REQUIRE  THE  SUBMISSION  OF  A  VENDOR  RESPONSIBILITY QUESTIONNAIRE IN
CONJUNCTION WITH HIS OR HER DUTY TO REVIEW AND APPROVE  STATE  CONTRACTS
PRIOR TO SUCH CONTRACTS BECOMING EFFECTIVE.
  D.  STATE  AGENCIES SHALL PROVIDE ACCESS TO THE SYSTEM TO USERS WITHIN
THEIR ORGANIZATION, AS DEEMED APPROPRIATE BY THE HEAD OF THE STATE AGEN-
CY OR HIS OR HER DESIGNEE. STATE AGENCY USERS PROVIDED WITH SUCH  ACCESS
SHALL  BE  THOSE INDIVIDUALS, WHO, AS PART OF THEIR OFFICIAL JOB DUTIES,

S. 7893                             3

ARE REQUIRED TO ASSESS AND/OR REVIEW VENDOR RESPONSIBILITY FOR THE AGEN-
CY'S CONTRACTS.
  S  2.  Subdivisions  7 and 10 of section 160 of the state finance law,
subdivision 7 as amended by section 30 of part L of chapter  55  of  the
laws  of  2012  and subdivision 10 as added by chapter 83 of the laws of
1995, are 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, INFORMATION  technology  shall  be  deemed  a  service.
Services, as defined in this article, shall not apply to those contracts
for architectural, engineering or surveying services, or those contracts
approved in accordance with article eleven-B of this chapter.
  10.   ["Technology"] "INFORMATION TECHNOLOGY" means either a good or a
service or a combination thereof, [that results in a technical method of
achieving a practical purpose or in improvements in  productivity]  USED
IN  THE  APPLICATION OF ANY COMPUTER OR ELECTRONIC INFORMATION EQUIPMENT
OR INTERCONNECTED SYSTEM THAT  IS  USED  IN  THE  ACQUISITION,  STORAGE,
MANIPULATION,  MANAGEMENT, MOVEMENT, CONTROL, DISPLAY, SWITCHING, INTER-
CHANGE, TRANSMISSION, OR RECEPTION OF DATA INCLUDING,  BUT  NOT  LIMITED
TO,  HARDWARE,  SOFTWARE, FIRMWARE, PROGRAMS, SYSTEMS, NETWORKS, INFRAS-
TRUCTURE, MEDIA, AND RELATED MATERIAL USED TO  AUTOMATICALLY  AND  ELEC-
TRONICALLY  COLLECT,  RECEIVE, ACCESS, TRANSMIT, DISPLAY, STORE, RECORD,
RETRIEVE, ANALYZE,  EVALUATE,  PROCESS,  CLASSIFY,  MANIPULATE,  MANAGE,
ASSIMILATE,  CONTROL,  COMMUNICATE,  EXCHANGE, CONVERT, CONVERGE, INTER-
FACE, SWITCH, OR DISSEMINATE DATA OF ANY KIND  OR  FORM.  Goods  may  be
either new or used.
  S  3.  Paragraphs g and i of subdivision 2 of section 161 of the state
finance law, as added by chapter 83 of the laws of 1995, are amended  to
read as follows:
  g.  Consult  with and advise the commissioner on strategic INFORMATION
technology investments that will facilitate  electronic  access  to  the
terms  and  conditions  of existing procurement contracts, promote elec-
tronic commerce including, but  not  limited  to,  payment  to  vendors,
promote  and  enhance  the efficiency of the procurement of products and
services by or for state agencies and produce  useful  information  that
supports state procurement operations, management, analysis and decision
making including, but not limited to, data concerning the status and use
of  procurement contracts and the number and type of contracts and award
recipients;
  i. Establish and, from time to time, amend guidelines for the procure-
ment of services and  INFORMATION  technology  in  accordance  with  the
provisions  of  this  article. Such guidelines shall ensure the wise and
prudent use of public money in the best interest of the taxpayers of the
state; guard against favoritism, improvidence, extravagance,  fraud  and
corruption;  and  ensure that service contracts are awarded on the basis
of best value, including, but not limited to,  the  following  criteria:
quality, cost, and efficiency;
  S  4. Paragraph k of subdivision 1 and subdivisions 6 and 7 of section
163 of the state finance law, paragraph k of subdivision 1 as  added  by
section 36 of part L of chapter 55 of the laws of 2012, subdivision 6 as
amended  by chapter 569 of the laws of 2015 and subdivision 7 as amended
by section 10 of part L of chapter 55 of the laws of 2012,  are  amended
to read as follows:
  k.  "Authorized  user"  or  "non-state agency purchaser" means (i) any
officer, body or agency of the state or of a political subdivision or  a

S. 7893                             4

district therein, or fire company or volunteer ambulance service as such
are defined in section one hundred of the general municipal law, to make
purchases  of  commodities,  services and INFORMATION technology through
the  office  of general services' centralized contracts, pursuant to the
provisions of section one hundred four of  the  general  municipal  law;
(ii) any county extension service association as authorized under subdi-
vision eight of section two hundred twenty-four of the county law; (iii)
any  association  or other entity as specified in and in accordance with
section one hundred nine-a of the general municipal law; (iv) any  asso-
ciation, consortium or group of privately owned or municipal, federal or
state owned or operated hospitals, medical schools, other health related
facilities  or  voluntary  ambulance services, which have entered into a
contract and made mutual arrangements for the joint purchase of  commod-
ities,  services  and INFORMATION technology pursuant to section twenty-
eight hundred three-a of the public health law; (v) any institution  for
the  instruction of the deaf or of the blind listed in section forty-two
hundred one of the education law; (vi) any  qualified  non-profit-making
agency for the blind approved by the commissioner of the office of chil-
dren  and  family  services  or  the  office of temporary and disability
assistance; (vii) any qualified charitable non-profit-making agency  for
the  severely disabled approved by the commissioner of education; (viii)
any hospital or residential health care facility as defined  in  section
twenty-eight  hundred  one  of  the  public health law; (ix) any private
not-for-profit mental hygiene facility as defined in section 1.03 of the
mental hygiene law; (x) any public authority or  public  benefit  corpo-
ration  of  the  state, including the port authority of New York and New
Jersey and the interstate  environmental  commission;  (xi)  any  public
library,   association  library,  library  system,  cooperative  library
system, the New York Library Association, and the New York State Associ-
ation of Library Boards or any other  library  except  those  which  are
operated  by  for profit entities; (xii) any other association or entity
as specified in state law, to make purchases  of  commodities,  services
and  INFORMATION  technology  through  the  office  of general services'
centralized contracts. Such qualified non-profit-making agencies for the
blind and severely disabled may make  purchases  from  the  correctional
industries program of the department of corrections and community super-
vision subject to rules pursuant to the correction law.
  6. Discretionary buying thresholds. Pursuant to guidelines established
by the state procurement council: the commissioner may purchase services
and  commodities in an amount not exceeding eighty-five thousand dollars
without a  formal  competitive  process;  state  agencies  may  purchase
services  and  commodities  in  an  amount  not exceeding fifty thousand
dollars without a formal competitive process;  and  state  agencies  may
purchase  commodities  or services from small business concerns or those
certified pursuant to articles fifteen-A and seventeen-B of  the  execu-
tive  law, or commodities or INFORMATION technology that are recycled or
remanufactured, or commodities that are food, including  milk  and  milk
products,  grown,  produced  or harvested in New York state in an amount
not exceeding two hundred thousand dollars without a formal  competitive
process.
  7. Method of procurement. Consistent with the requirements of subdivi-
sions  three and four of this section, state agencies shall select among
permissible methods of procurement including, but  not  limited  to,  an
invitation for bid, request for proposals or other means of solicitation
pursuant  to  guidelines  issued by the state procurement council. State
agencies may accept bids  electronically  including  submission  of  the

S. 7893                             5

statement of non-collusion required by section one hundred thirty-nine-d
of  this  chapter  and,  starting  April first, two thousand twelve, and
ending March thirty-first, two thousand  fifteen,  may,  for  commodity,
service   and   INFORMATION   technology  contracts  require  electronic
submission as the sole method for the submission of bids for the  solic-
itation.  State  agencies  shall undertake no more than eighty-five such
electronic bid solicitations, none of which shall be  reverse  auctions,
prior  to April first, two thousand fifteen. In addition, state agencies
may conduct up to twenty  reverse  auctions  through  electronic  means,
prior to April first, two thousand fifteen. Prior to requiring the elec-
tronic  submission of bids, the agency shall make a determination, which
shall  be  documented  in  the  procurement  record,   that   electronic
submission  affords  a fair and equal opportunity for offerers to submit
responsive offers. Within thirty days of the completion of  the  eighty-
fifth  electronic  bid  solicitation,  or  by  April first, two thousand
fifteen, whichever is earlier, the commissioner shall prepare  a  report
assessing  the  use  of  electronic submissions and make recommendations
regarding future use of this procurement  method.  In  addition,  within
thirty  days  of the completion of the twentieth reverse auction through
electronic means, or by April first, two thousand fifteen, whichever  is
earlier,  the  commissioner  shall prepare a report assessing the use of
reverse auctions  through  electronic  means  and  make  recommendations
regarding  future  use of this procurement method. Such reports shall be
published on the website of the office of general services. Except where
otherwise provided by law, procurements shall be competitive, and  state
agencies  shall  conduct  formal competitive procurements to the maximum
extent practicable. State agencies shall document the  determination  of
the  method  of  procurement  and  the basis of award in the procurement
record. Where the basis for award is the best  value  offer,  the  state
agency  shall  document, in the procurement record and in advance of the
initial receipt of offers, the determination of the evaluation criteria,
which whenever possible, shall be quantifiable, and the  process  to  be
used  in  the  determination  of  best value and the manner in which the
evaluation process and selection shall be conducted.
  S 5. Subdivision 9 of section 163 of the state finance law is  amended
by adding a new paragraph c-1 to read as follows:
  C-1.  WHERE A STATE AGENCY DETERMINES THAT NON-MATERIAL CHANGES TO THE
SPECIFICATIONS AS SET FORTH IN THE SOLICITATION WOULD  BE  IN  THE  BEST
INTEREST  OF THE STATE AND, WHEN PROVIDED FOR IN THE SOLICITATION, STATE
AGENCIES MAY REQUEST BEST AND FINAL OFFERS, WHICH SHALL  BE  IN  WRITING
AND  SOLICITED  IN  THE  SAME  MANNER FROM ALL OFFERERS DETERMINED TO BE
SUSCEPTIBLE OF BEING SELECTED FOR CONTRACT AWARD,  WITH  THE  INTENT  OF
ALLOWING  AN OFFERER TO REVISE ITS COST; PROVIDED, HOWEVER, THAT A STATE
AGENCY MAY NOT MAKE A MODIFICATION TO THE SOLICITATION IF SUCH MODIFICA-
TION WOULD PREJUDICE  ANY  BIDDER  OR  POTENTIAL  BIDDER  AND,  PROVIDED
FURTHER, THAT NO BEST AND FINAL OFFER MAY BE ACCEPTED OR CONSIDERED BY A
STATE  AGENCY  UNLESS SUCH BEST AND FINAL OFFER IS SUBMITTED IN RESPONSE
TO A REQUEST BY THE STATE AGENCY.
  S 6. Paragraph e of subdivision 10 of section 163 of the state finance
law, as amended by chapter 137 of the laws of 2008, is amended  to  read
as follows:
  e. The commissioner may authorize purchases required by state agencies
or other authorized purchasers by letting a contract pursuant to a writ-
ten  agreement, or by approving the use of a contract let by any depart-
ment, agency or instrumentality of the United States  government  and/or
any department, agency, office, political subdivision or instrumentality

S. 7893                             6

of  any  state or states. A state agency purchaser shall document in the
procurement record its rationale for the use of a contract  let  by  any
department, agency or instrumentality of the United States government or
any department, agency, office, political subdivision or instrumentality
of any other state or states. Such rationale shall include, but need not
be  limited to, a determination of need, a consideration of the procure-
ment method by which the contract was awarded, an analysis  of  alterna-
tive  procurement  sources  including  an  explanation why a competitive
procurement or the use of a centralized contract let by the commissioner
is not in the best interest of the  state,  and  the  reasonableness  of
cost.  THE AUTHORITY TO USE A CONTRACT LET BY ANOTHER GOVERNMENTAL ENTI-
TY  PURSUANT TO THIS PARAGRAPH IS INTENDED TO BENEFIT THE STATE BY USING
CONTRACTS IN PLACE THAT PROVIDE FOR THE SAME SERVICE OR COMMODITY SOUGHT
BY A STATE AGENCY AT A PRICE DETERMINED TO BE REASONABLE  BY  THE  STATE
AGENCY.  SUCH  CONTRACTS  ARE NOT INTENDED TO BE USED PRIMARILY TO AVOID
COMPETITIVE BIDDING. USE OF MULTIPLE AWARD CONTRACTS  PURSUANT  TO  THIS
PARAGRAPH  SHALL  FOLLOW  THE SAME BASIS OF SELECTION AMONG THE MULTIPLE
AWARDEES AS WAS PRESCRIBED  BY  THE  ORIGINAL  CONTRACTING  GOVERNMENTAL
ENTITY.
  S  7.    Subdivision  3  of  section  112 of the state finance law, as
amended by section 2-c of part F of chapter 57 of the laws of  2016,  is
amended to read as follows:
  3.  A  contract  or  other  instrument wherein the state or any of its
officers, agencies, boards or commissions agrees to give a consideration
other than the payment of money, when the value or reasonably  estimated
value  of such consideration exceeds twenty-five thousand dollars, shall
not become a valid enforceable contract unless such  contract  or  other
instrument  shall  first be approved by the comptroller and filed in his
office.  FOR PURPOSES OF THIS SUBDIVISION, WHERE CONSIDERATION CANNOT BE
DETERMINED IN TERMS OF MONETARY VALUE, IT SHALL BE VALUED  IN  TERMS  OF
INTRINSIC VALUE.
  S  8.  This  act  shall  take  effect  immediately; provided, however,
section one of this act shall take effect on the one  hundred  eightieth
day  after  it  shall have become a law; provided, further however, that
the provisions of sections four, five and six of this act shall apply to
any procurement initiated on or after such sections shall have become  a
law;  provided,  further, however, that the amendments to section 163 of
the state finance law made by sections four, five, and six 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.