NY State Senate Bill 2021-S6270B

Archive: Last Bill Status - In Senate Committee Insurance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to insurance
Jun 04, 2021	print number 6270b
Jun 04, 2021	amend (t) and recommit to insurance
May 11, 2021	print number 6270a
May 11, 2021	amend and recommit to insurance
Apr 20, 2021	referred to insurance

Bill Amendments

Original

B (Active)

co-Sponsors

2021-S6270 - Details

See Assembly Version of this Bill:: A7266
Current Committee:: Senate Insurance
Law Section:: New York City Charter
Laws Affected:: Amd §311, NYC Chart

2021-S6270 - Summary

Expands contracting opportunities for businesses owned by women and minorities; provides for the consideration of contractor diversity practices when making award determinations.

2021-S6270 - Sponsor Memo

                                 
BILL NUMBER: S6270

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the insurance law, the New York city charter and the New
York city public works investment act, in relation to insurance in
certain public construction contracts, opportunities for businesses
owned by women and minorities and considering contractor diversity prac-
tices in making award determinations

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would authorize the City of New York and its agencies to
establish a pilot OCIP and CCIP insurance program to help offset insur-
ance cost for contractors on city projects; would increase the amount of
the City's discretionary award amount of non-competitive contracts from
$500,000.00 to one million dollars; and establish a system of business
earning credits to use when submitting a bid based on that business
community hiring practice.

 
SUMMARY OF PROVISIONS:

This legislation seeks to enhance New York City's Minority and Women
Business Enterprises (MWBE) program to help those businesses recover
from the negative impact of the pandemic to help stimulate the economy
in the following ways:

Paragraph one of subdivision (a) of section 2504 of the Insurance Law
currently prohibits an officer or employee of the State of New York, a
"public corporation" or a "public authority(,)" or any person acting on
their behalf, from requiring bidders for a public building or
construction contract to make an application to a particular insurance
company, agent or broker for or to purchase from the insurance company,
agent or broker a surety bond or contract of insurance, as required by
law or a contract term.

Subdivision (b) of this section prohibits such officer, employee or
persons acting on their behalf from negotiating, applying for, obtaining
or procuring such surety bonds or contracts of insurance, with limited
exceptions, where such surety bond or insurance could be obtained by the
bidder, contractor or subcontractor.

Section one of this act would amend paragraph two of subdivision (a) of
this section of the Insurance Law by creating an exception to the defi-
nition of the terms "public corporation" and "public authority(.)" This
exception would exclude the City of New York, or a public corporation or
public authority operating primarily within the City of New York, from
those definitions in connection with contracts that: (1) include partic-
ipation requirements for businesses certified as minority or women-owned
business enterprises (MWBEs) or emerging business enterprises (EBE)
pursuant to article 15-A of the Executive Law or section 1304 of the New
York City Charter, or include participation requirements for disadvan-
taged business enterprises pursuant to 49 C.F.R. part 26 or any succes-
sor provisions; or (2) are awarded to any such MWBEs or EBEs.

Section two of this act would amend subdivision (i) of section 311 of
the New York City Charter, which currently allows the New York City
Procurement Policy Board (PPB) to adopt rules for City agencies to award
contracts for goods and services to the vendor who would provide best
value to the City and to adopt rules for City agencies to make procure-
ments of goods, services and construction not exceeding $500,000 from
MWBEs without a formal competitive process.  The amendments in this
section of the act would raise the MWBE procurement threshold to one
million dollars. The amendments in this section of the act would also
allow for the PPB to establish rules to authorize agencies to consider a
vendor's record of implementing sound diversity practices as a factor in
determining best value.  Lastly, the amendments in this section would
authorize the PPB to adopt rules allowing agencies awarding contracts
for construction on the basis of competitive sealed bidding to identify
quantitative factors in the evaluation of bids based on the bidder's
record of implementing sound diversity practices or based on a bidder's
status as a business certified as an MWBE pursuant to section 1304 of
the Charter or Article 15-A of the Executive Law.

Sections three and four of this act would modify the definition of the
term "best value" in the New York City Public Works Investment Act,
codified in section two of chapter 749 of the laws of 2019, to include
the proposer's record of implementing sound diversity practices, thereby
allowing authorized entities under the law to consider such practices
when selecting vendors to perform work using the design-build project
delivery method.

Section five provides that this act would take effect immediately,
except that the amendments to the New York City Public Works Investment
Act, made by sections three and four of this act, would not affect the
expiration of such act and would be repealed pursuant to section 14 of
such act.

 
JUSTIFICATION:

The most recent disparity studies conducted by both the State of New
York and the City of New York demonstrate that discrimination continues
to affect MWBEs seeking to do business in the market where the City
conducts its procurements.

The City has undertaken many efforts to address such discrimination,
including setting of subcontractor participation goals for MWBEs and
EBEs pursuant to the program established pursuant to New York City
Administrative Code section 6-129, the use of a procurement method to
award contracts to MWBEs without a formal competitive process, and the
use of the best value vendor selection technique authorized by the
General Municipal Law and the City Charter. In recent years, the State
Legislature has provided the City with legislative tools to implement
these programs. See chapter 504 of 2017, chapter 19 of 2018 and chapter
98 of 2019. The City has also launched a contract financing loan fund to
improve access to capital for MWBEs seeking to enter into and perform on
City contracts.

These steps, among others, have helped to triple the City's MWBE utili-
zation rate and more than double the contract value awarded to MWBE
firms since Fiscal Year 2015. But disparities due to discrimination
persist, and have been exacerbated by the economic effects of the
COVID-19 pandemic. A recent national analysis of MWBEs by the National
Bureau of Economic Research estimates that between February and April
2020, 41% of Black-owned businesses, 32% of Latino-owned businesses, and

26% of Asian American-owned businesses closed either temporarily or
permanently, while only 17% of white-owned businesses closed.

Allowing the City to award contracts to MWBEs without a formal compet-
itive process would allow the City to procure a broader range of
contracts from MWBEs, and build on the City's previous successes using
these methods. A formal competitive procurement process can be time
consuming. The time required to complete such a competition can be espe-
cially burdensome for MWBEs, which, because of historic racial wealth
gaps, typically do not have the cash cushions of wealthier, larger non-
MWBEs that have historically played a disproportionate role in City
contracting. The most recent increase in the MWBE procurement threshold
to $500,000, authorized by chapter 98 of 2019, led to a 20% increase in
the average size of contract awards to MWBEs in the first year following
the implementation of this amendment.

The authority to promulgate rules allowing agencies to consider MWBE
status in awarding design bid-build construction contracts would create
consistency across the City's procurement selection methods.  The City
already possesses such an authority for design-build construction
projects and for procurements for goods or services.

Access to insurance is a barrier for MWBEs. MWBEs typically pay higher
premiums than nonMWBEs on similar projects. In a bidding environment,
every cost is a factor, and if one vendor has a lower cost basis, than
that vendor will win competitions more often than a similarly situated
contractor burdened by higher costs. By allowing the City to provide for
an owner controlled insurance program (OCIP), or to require in its
solicitations that a contractor or construction manager create a
contractor controlled insurance program (CCIP), the City can create a
contracting environment where vendors compete on a more level playing
field. In addition to reducing disproportionate costs for MWBE firms and
thereby broadening access to opportunities, OCIPs and CCIPs would save
the City money and improve worker safety.

Authorizing the City to consider vendors' implementation of diversity
practices in contract awards will create a powerful incentive for such
vendors to set elective MWBE utilization goals, increase MWBE partner-
ships, create MWBE mentorship and contract pipelines, and promote
recruitment of job applicants from traditionally disadvantaged groups.
The State Government has the authority to consider diversity practices
as a factor in its process for selecting vendors pursuant to New York
State Executive Law section 313-a.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S6270 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6270
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              April 20, 2021
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Insurance
 
 AN ACT to amend the insurance law, the New York city charter and the New
   York city public works investment act, in  relation  to  insurance  in
   certain  public  construction  contracts, opportunities for businesses
   owned by women and minorities  and  considering  contractor  diversity
   practices in making award determinations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subparagraphs (A) and (B) of paragraph 2 of subsection  (a)
 of section 2504 of the insurance law, are amended and a new subparagraph
 (C)  to  subsection  (a)  and  a new subsection (d) are added to read as
 follows:
   (A) a public corporation  or  public  authority  created  pursuant  to
 agreement or compact with another state[, or];
   (B) the city of New York, a public corporation or public authority, in
 connection  with  the  construction  of electrical generating and trans-
 mission facilities or construction, extensions and  additions  of  light
 rail or heavy rail rapid transit and commuter railroads[.]; OR
   (C)  THE  CITY  OF NEW YORK, A PUBLIC CORPORATION OR PUBLIC AUTHORITY,
 OPERATING PRIMARILY WITHIN THE CITY  OF  NEW  YORK  IN  CONNECTION  WITH
 CONTRACTS  THAT:  (I)  INCLUDE PARTICIPATION REQUIREMENTS FOR BUSINESSES
 CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS  ENTERPRISES  PURSUANT  TO
 ARTICLE  FIFTEEN-A  OF THE EXECUTIVE LAW, THOSE CERTIFIED AS MINORITY OR
 WOMEN-OWNED BUSINESS ENTERPRISES OR EMERGING BUSINESS ENTERPRISES PURSU-
 ANT TO SECTION THIRTEEN HUNDRED FOUR OF THE NEW YORK  CITY  CHARTER,  OR
 THOSE  CERTIFIED  AS DISADVANTAGED BUSINESS ENTERPRISES PURSUANT TO PART
 26 OF  TITLE 49 OF THE CODE OF FEDERAL  REGULATIONS,  OR  ANY  SUCCESSOR
 PROVISIONS;  OR  (II) ARE AWARDED TO BUSINESSES CERTIFIED AS MINORITY OR
 WOMEN-OWNED BUSINESS ENTERPRISES PURSUANT TO ARTICLE  FIFTEEN-A  OF  THE
 EXECUTIVE  LAW  OR  THOSE  CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10927-01-1

 S. 6270                             2
 
 ENTERPRISES OR EMERGING BUSINESS ENTERPRISES PURSUANT TO  SECTION  THIR-
 TEEN  HUNDRED  FOUR  OF  THE  NEW  YORK  CITY  CHARTER; OR (III) INCLUDE
 PROJECTS   RANGING FROM STREETS, HIGHWAYS, SEWERS  AND  WATER  MAINS  TO
 PUBLIC  SAFETY, HEALTH AND HUMAN SERVICE FACILITIES, AS WELL AS CULTURAL
 INSTITUTIONS AND LIBRARIES.
   (D) THE CITY OF NEW YORK SHALL UTILIZE VARIOUS FORMS OF AN ALTERNATIVE
 RISK TRANSFER, INCLUDING, BUT NOT LIMITED TO, THE POTENTIAL  UTILIZATION
 OF A CAPTIVE INSURANCE COMPANY.
   §  2.  Paragraphs  1  and 2 of subdivision i of section 311 of the New
 York city charter, paragraph 1 as amended by chapter 98 of the  laws  of
 2019,  paragraph  2  as  amended  by chapter 19 of the laws of 2018, are
 amended to read as follows:
   1. agencies may make procurements of goods, services and  construction
 for  amounts  not  exceeding [five hundred thousand] ONE MILLION dollars
 from businesses certified as minority  or  women-owned  business  enter-
 prises  pursuant to section thirteen hundred four of the charter without
 a formal competitive process.
   2. agencies may award contracts for goods and services on the basis of
 best value to the bidder [or offerer] which optimizes quality, cost  and
 efficiency, among responsive and responsible bidders [or offerers]. Such
 basis shall reflect, wherever possible, objective and quantifiable anal-
 ysis and may include the [prospective] bidder's record of complying with
 existing labor standards, maintaining harmonious labor relations, IMPLE-
 MENTING  SOUND  DIVERSITY PRACTICES and protecting the health and safety
 of workers. Such basis may  also  identify  a  quantitative  factor  for
 awarding  of  contracts  for  bidders  [or offerers] that are businesses
 certified as minority or women-owned business  enterprises  pursuant  to
 article  [fifteen-a] FIFTEEN-A of the executive law and section thirteen
 hundred four of the charter. Where an agency identifies  a  quantitative
 factor  pursuant  to  this paragraph, the agency must specify that busi-
 nesses certified as minority or women-owned business enterprises  pursu-
 ant  to  article  [fifteen-a]  FIFTEEN-A of the executive law as well as
 those certified as minority or women-owned business enterprises pursuant
 to section thirteen hundred four of the charter are eligible to  qualify
 for  such  factor.  Nothing  in  this  paragraph shall be construed as a
 requirement that such businesses be concurrently certified  as  minority
 or  women-owned  business  enterprises  under  both  article [fifteen-a]
 FIFTEEN-A of the executive law and section thirteen hundred four of  the
 charter to qualify for such quantitative factor.
   §  3. Paragraph 3 of subdivision i of section 311 of the New York city
 charter, as amended by chapter 19 of the laws of  2018,  is  amended  to
 read as follows:
   3.  AGENCIES  AWARDING  CONSTRUCTION CONTRACTS ON THE BASIS OF COMPET-
 ITIVE SEALED BIDDING PURSUANT TO SECTION THREE HUNDRED THIRTEEN  OF  THE
 CHARTER  MAY  IDENTIFY  A QUANTITATIVE FACTOR FOR BIDDERS THAT ARE BUSI-
 NESSES CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES  PURSU-
 ANT  TO  ARTICLE  FIFTEEN-A  OF  THE  EXECUTIVE LAW AND SECTION THIRTEEN
 HUNDRED FOUR OF THE CHARTER. WHERE AN AGENCY IDENTIFIES  A  QUANTITATIVE
 FACTOR  PURSUANT  TO  THIS PARAGRAPH, THE AGENCY MUST SPECIFY THAT BUSI-
 NESSES CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES  PURSU-
 ANT TO ARTICLE FIFTEEN-A OF THE EXECUTIVE LAW AS WELL AS THOSE CERTIFIED
 AS  MINORITY  OR  WOMEN-OWNED  BUSINESS  ENTERPRISES PURSUANT TO SECTION
 THIRTEEN HUNDRED FOUR OF THE CHARTER ARE ELIGIBLE TO  QUALIFY  FOR  SUCH
 FACTOR.  NOTHING  IN  THIS PARAGRAPH SHALL BE CONSTRUED AS A REQUIREMENT
 THAT SUCH BUSINESSES BE CONCURRENTLY CERTIFIED  AS  MINORITY  OR  WOMEN-
 OWNED BUSINESS ENTERPRISES UNDER BOTH ARTICLE FIFTEEN-A OF THE EXECUTIVE

 S. 6270                             3
 
 LAW AND SECTION THIRTEEN HUNDRED FOUR OF THE CHARTER TO QUALIFY FOR SUCH
 QUANTITATIVE  FACTOR.  AGENCIES  MAY ALSO IDENTIFY A QUANTITATIVE FACTOR
 FOR AWARDING OF SUCH  CONSTRUCTION  CONTRACTS  BASED  ON  EACH  BIDDER'S
 RECORD  OF  IMPLEMENTING  SOUND  DIVERSITY  PRACTICES.  SUCH BASIS SHALL
 REFLECT, WHEREVER POSSIBLE, OBJECTIVE AND QUANTIFIABLE ANALYSIS.
   4. the rule or rules promulgated to implement paragraph  one  of  this
 subdivision  shall  provide that the city shall, commencing on the first
 of October of the first full calendar year  following  the  adoption  of
 such  rule  or  rules,  submit  an annual report to the governor and the
 state legislature of the total number and total dollar value of procure-
 ments of goods and services for amounts not exceeding [one hundred fifty
 thousand dollars] THE DOLLAR THRESHOLD FOR MAKING PROCUREMENTS WITHOUT A
 FORMAL COMPETITIVE PROCESS, AS ESTABLISHED BY RULE PURSUANT TO PARAGRAPH
 ONE OF THIS SUBDIVISION, from:
   (i) businesses certified as minority or  women-owned  business  enter-
 prises pursuant to section thirteen hundred four of the charter;
   (ii) all other businesses; and
   (iii) information about the number of businesses certified as minority
 or women-owned business enterprises pursuant to section thirteen hundred
 four of this charter able to perform the specific type and scale of work
 involved in each procurement.
   §  4. Paragraph 13 of subdivision b of section 2 of chapter 749 of the
 laws of 2019, constituting the New York  city  public  works  investment
 act, is amended to read as follows:
   (13) The proposer's record of complying with existing labor standards,
 maintaining  harmonious  labor  relations, and protecting the health and
 safety of workers and payment of wages above any locally-defined  living
 wage; [and]
   §  5. Paragraph 14 of subdivision b of section 2 of chapter 749 of the
 laws of 2019, constituting the New York  city  public  works  investment
 act,  is renumbered paragraph 15 and a new paragraph 14 is added to read
 as follows:
   (14) THE PROPOSER'S RECORD OF IMPLEMENTING SOUND DIVERSITY  PRACTICES;
 AND
   §  6.  This act shall take effect immediately, provided, however, that
 the amendments to paragraphs 13 and 14 of subdivision b of section 2  of
 chapter  749  of the laws of 2019, constituting the New York city public
 works investment act, made by sections four and five of this  act  shall
 not affect the repeal of such paragraphs pursuant to section 14 of chap-
 ter  749  of  the laws of 2019, as amended, and shall be deemed repealed
 therewith.

co-Sponsors

2021-S6270A - Details

See Assembly Version of this Bill:: A7266
Current Committee:: Senate Insurance
Law Section:: New York City Charter
Laws Affected:: Amd §311, NYC Chart

2021-S6270A - Summary

Expands contracting opportunities for businesses owned by women and minorities; provides for the consideration of contractor diversity practices when making award determinations.

2021-S6270A - Sponsor Memo

                                 
BILL NUMBER: S6270A

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the insurance law, the New York city charter and the New
York city public works investment act, in relation to insurance in
certain public construction contracts, opportunities for businesses
owned by women and minorities and considering contractor diversity prac-
tices in making award determinations

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would authorize the City of New York and its agencies to
establish a pilot OCIP and CCIP insurance program to help offset insur-
ance cost for contractors on city projects; would increase the amount of
the City's discretionary award amount of non-competitive contracts from
$500,000.00 to one million dollars; and establish a system of business
earning credits to use when sub mitting a bid based on that business
community hiring practice.

 
SUMMARY OF PROVISIONS:

This legislation seeks to enhance New York City's Minority and Women
Business Enterprises (MWBE) program to help those businesses recover
from the negative impact of the pandemic to help stimulate the economy
in the following ways:

Paragraph one of subdivision (a) of section 2504 of the Insurance Law
currently prohibits an officer or employee of the State of New York, a
"public corporation" or a "public authority(,)" or any person acting on
their behalf, from requiring bidders for a public building or
construction contract to make an application to a particular insurance
company, agent or broker for or to purchase from the insurance company,
agent or broker a surety bond or contract of insurance, as required by
law or a contract term.

Subdivision (b) of this section prohibits such officer, employee or
persons acting on their behalf from negotiating, applying for, obtaining
or procuring such surety bonds or contracts of insurance, with limited
exceptions, where such surety bond or insurance could be obtained by the
bidder, contractor or subcontractor.

Section one of this act would amend paragraph two of subdivision (a) of
this section of the Insurance Law by creating an exception to the defi-
nition of the terms "public corporation" and "public authority(.)" This
exception would exclude the City of New York, or a public corporation or
public authority operating primarily within the City of New York, from
those definitions in connection with contracts that: (1) include partic-
ipation requirements for businesses certified as minority or women-owned
business enterprises (MWBEs) or emerging business enterprises (EBE)
pursuant to article 15-A of the Executive Law or section 1304 of the New
York City Charter, or include participation requirements for disadvan-
taged business enterprises pursuant to 49 C.F.R. part 26 or any succes-
sor provisions; or (2) are awarded to any such MWBEs or EBEs.

Section two of this act would amend subdivision (i) of section 311 of
the New York City Charter, which currently allows the New York City
Procurement Policy Board (PPB) to adopt rules for City agencies to award
contracts for goods and services to the vendor who would provide best
value to the City and to adopt rules for City agencies to make procure-
ments of goods, services and construction not exceeding $500,000 from
MWBEs without a formal competitive process.  The amendments in this
section of the act would raise the MWBE procurement threshold to one
million dollars. The amendments in this section of the act would also
allow for the PPB to establish rules to authorize agencies to consider a
vendor's record of implementing sound diversity practices as a factor in
determining best value.  Lastly, the amendments in this section would
authorize the PPB to adopt rules allowing agencies awarding contracts
for construction on the basis of competitive sealed bidding to identify
quantitative factors in the evaluation of bids based on the bidder's
record of implementing sound diversity practices or based on a bidder's
status as a business certified as an MWBE pursuant to section 1304 of
the Charter or Article 15-A of the Executive Law.

Sections three and four of this act would modify the definition of the
term "best value" in the New York City Public Works Investment Act,
codified in section two of chapter 749 of the laws of 2019, to include
the proposer's record of implementing sound diversity practices, thereby
allowing authorized entities under the law to consider such practices
when selecting vendors to perform work using the design-build project
delivery method.

Section five provides that this act would take effect immediately,
except that the amendments to the New York City Public Works Investment
Act, made by sections three and four of this act, would not affect the
expiration of such act and would be repealed pursuant to section 14 of
such act.

 
JUSTIFICATION:

The most recent disparity studies conducted by both the State of New
York and the City of New York demonstrate that discrimination continues
to affect MWBEs seeking to do business in the market where the City
conducts its procurements.

The City has undertaken many efforts to address such discrimination,
including setting of subcontractor participation goals for MWBEs and
EBEs pursuant to the program established pursuant to New York City
Administrative Code section 6-129, the use of a procurement method to
award contracts to MWBEs without a formal competitive process, and the
use of the best value vendor selection technique authorized by the
General Municipal Law and the City Charter. In recent years, the State
Legislature has provided the City with legislative tools to implement
these programs. See chapter 504 of 2017, chapter 19 of 2018 and chapter
98 of 2019. The City has also launched a contract financing loan fund to
improve access to capital for MWBEs seeking to enter into and perform on
City contracts.

These steps, among others, have helped to triple the City's MWBE utili-
zation rate and more than double the contract value awarded to MWBE
firms since Fiscal Year 2015. But disparities due to discrimination
persist, and have been exacerbated by the economic effects of the
COVID-19 pandemic. A recent national analysis of MWBEs by the National
Bureau of Economic Research estimates that between February and April
2020, 41% of Black-owned businesses, 32% of Latino-owned businesses, and

26% of Asian American-owned businesses closed either temporarily or
permanently, while only 17% of white-owned businesses closed.

Allowing the City to award contracts to MWBEs without a formal compet-
itive process would allow the City to procure a broader range of
contracts from MWBEs, and build on the City's previous successes using
these methods. A formal competitive procurement process can be time
consuming. The time required to complete such a competition can be espe-
cially burdensome for MWBEs, which, because of historic racial wealth
gaps, typically do not have the cash cushions of wealthier, larger non-
MWBEs that have historically played a disproportionate role in City
contracting. The most recent increase in the MWBE procurement threshold
to $500,000, authorized by chapter 98 of 2019, led to a 20% increase in
the average size of contract awards to MWBEs in the first year following
the implementation of this amendment.

The authority to promulgate rules allowing agencies to consider MWBE
status in awarding designbid-build construction contracts would create
consistency across the City's procurement selection methods.  The City
already possesses such an authority for design-build construction
projects and for procurements for goods or services.

Access to insurance is a barrier for MWBEs. MWBEs typically pay higher
premiums than nonMWBEs on similar projects. In a bidding environment,
every cost is a factor, and if one vendor has a lower cost basis, than
that vendor will win competitions more often than a similarly situated
contractor burdened by higher costs. By allowing the City to provide for
an owner controlled insurance program (OCIP), or to require in its
solicitations that a contractor or construction manager create a
contractor controlled insurance program (CCIP), the City can create a
contracting environment where vendors compete on a more level playing
field. In addition to reducing disproportionate costs for MWBE firms and
thereby broadening access to opportunities, OCIPs and CCIPs would save
the City money and improve worker safety.

Authorizing the City to consider vendors' implementation of diversity
practices in contract awards will create a powerful incentive for such
vendors to set elective MWBE utilization goals, increase MWBE partner-
ships, create MWBE mentorship and contract pipelines, and promote
recruitment of job applicants from traditionally disadvantaged groups.
The State Government has the authority to consider diversity practices
as a factor in its process for selecting vendors pursuant to New York
State Executive Law section 313-a.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S6270A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6270--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              April 20, 2021
                                ___________
 
 Introduced  by  Sens.  SANDERS, COMRIE, RAMOS, SALAZAR -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Insurance  -- committee discharged, bill amended, ordered reprinted as
   amended and recommitted to said committee
 
 AN ACT to amend the insurance law, the New York city charter and the New
   York city public works investment act, in  relation  to  insurance  in
   certain  public  construction  contracts, opportunities for businesses
   owned by women and minorities  and  considering  contractor  diversity
   practices in making award determinations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 2 of subsection (a) of section 2504 of the insur-
 ance law is amended to read as follows:
   (2) In paragraph one hereof, "public corporation" and "public authori-
 ty" shall not include:
   (A) a public corporation  or  public  authority  created  pursuant  to
 agreement or compact with another state[, or];
   (B) the city of New York, a public corporation or public authority, in
 connection  with  the  construction  of electrical generating and trans-
 mission facilities or construction, extensions and  additions  of  light
 rail or heavy rail rapid transit and commuter railroads[.]; OR
   (C)  THE  CITY  OF NEW YORK, A PUBLIC CORPORATION OR PUBLIC AUTHORITY,
 OPERATING PRIMARILY WITHIN THE CITY  OF  NEW  YORK  IN  CONNECTION  WITH
 CONTRACTS  THAT:  (I)  INCLUDE PARTICIPATION REQUIREMENTS FOR BUSINESSES
 CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS  ENTERPRISES  PURSUANT  TO
 ARTICLE  FIFTEEN-A  OF THE EXECUTIVE LAW, THOSE CERTIFIED AS MINORITY OR
 WOMEN-OWNED BUSINESS ENTERPRISES OR EMERGING BUSINESS ENTERPRISES PURSU-
 ANT TO SECTION THIRTEEN HUNDRED FOUR OF THE NEW YORK  CITY  CHARTER,  OR
 THOSE  CERTIFIED  AS DISADVANTAGED BUSINESS ENTERPRISES PURSUANT TO PART
 26 OF  TITLE 49 OF THE CODE OF FEDERAL  REGULATIONS,  OR  ANY  SUCCESSOR
 PROVISIONS;  OR  (II) ARE AWARDED TO BUSINESSES CERTIFIED AS MINORITY OR
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10927-02-1

 S. 6270--A                          2
 
 WOMEN-OWNED BUSINESS ENTERPRISES PURSUANT TO ARTICLE  FIFTEEN-A  OF  THE
 EXECUTIVE  LAW  OR  THOSE  CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS
 ENTERPRISES OR EMERGING BUSINESS ENTERPRISES PURSUANT TO  SECTION  THIR-
 TEEN  HUNDRED  FOUR  OF  THE  NEW  YORK  CITY  CHARTER; OR (III) INCLUDE
 PROJECTS   RANGING FROM STREETS, HIGHWAYS, SEWERS  AND  WATER  MAINS  TO
 PUBLIC  SAFETY, HEALTH AND HUMAN SERVICE FACILITIES, AS WELL AS CULTURAL
 INSTITUTIONS AND LIBRARIES.
   § 2. Subdivision i of section 311 of the New  York  city  charter,  as
 amended  by  chapter  19  of the laws of 2018, paragraph 1 as amended by
 chapter 98 of the laws of 2019, is amended to read as follows:
   i. In addition to other rules authorized by this  section,  the  board
 may provide by rule that:
   1.  agencies may make procurements of goods, services and construction
 for amounts not exceeding [five hundred thousand]  ONE  MILLION  dollars
 from  businesses  certified  as  minority or women-owned business enter-
 prises pursuant to section thirteen hundred four of the charter  without
 a formal competitive process.
   2. agencies may award contracts for goods and services on the basis of
 best  value to the bidder [or offerer] which optimizes quality, cost and
 efficiency, among responsive and responsible bidders [or offerers]. Such
 basis shall reflect, wherever possible, objective and quantifiable anal-
 ysis and may include the [prospective] bidder's record of complying with
 existing labor standards, maintaining harmonious labor relations, IMPLE-
 MENTING SOUND DIVERSITY PRACTICES and protecting the health  and  safety
 of  workers.  Such  basis  may  also  identify a quantitative factor for
 awarding of contracts for bidders  [or  offerers]  that  are  businesses
 certified  as  minority  or women-owned business enterprises pursuant to
 article [fifteen-a] FIFTEEN-A of the executive law and section  thirteen
 hundred  four  of the charter. Where an agency identifies a quantitative
 factor pursuant to this paragraph, the agency must  specify  that  busi-
 nesses  certified as minority or women-owned business enterprises pursu-
 ant to article [fifteen-a] FIFTEEN-A of the executive  law  as  well  as
 those certified as minority or women-owned business enterprises pursuant
 to  section thirteen hundred four of the charter are eligible to qualify
 for such factor. Nothing in this  paragraph  shall  be  construed  as  a
 requirement  that  such businesses be concurrently certified as minority
 or women-owned  business  enterprises  under  both  article  [fifteen-a]
 FIFTEEN-A  of the executive law and section thirteen hundred four of the
 charter to qualify for such quantitative factor.
   3. AGENCIES AWARDING CONSTRUCTION CONTRACTS ON THE  BASIS  OF  COMPET-
 ITIVE  SEALED  BIDDING PURSUANT TO SECTION THREE HUNDRED THIRTEEN OF THE
 CHARTER MAY IDENTIFY A QUANTITATIVE FACTOR FOR BIDDERS  THAT  ARE  BUSI-
 NESSES  CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES PURSU-
 ANT TO ARTICLE FIFTEEN-A OF  THE  EXECUTIVE  LAW  AND  SECTION  THIRTEEN
 HUNDRED  FOUR  OF THE CHARTER. WHERE AN AGENCY IDENTIFIES A QUANTITATIVE
 FACTOR PURSUANT TO THIS PARAGRAPH, THE AGENCY MUST  SPECIFY  THAT  BUSI-
 NESSES  CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES PURSU-
 ANT TO ARTICLE FIFTEEN-A OF THE EXECUTIVE LAW AS WELL AS THOSE CERTIFIED
 AS MINORITY OR WOMEN-OWNED  BUSINESS  ENTERPRISES  PURSUANT  TO  SECTION
 THIRTEEN  HUNDRED  FOUR  OF THE CHARTER ARE ELIGIBLE TO QUALIFY FOR SUCH
 FACTOR. NOTHING IN THIS PARAGRAPH SHALL BE CONSTRUED  AS  A  REQUIREMENT
 THAT  SUCH  BUSINESSES  BE  CONCURRENTLY CERTIFIED AS MINORITY OR WOMEN-
 OWNED BUSINESS ENTERPRISES UNDER BOTH ARTICLE FIFTEEN-A OF THE EXECUTIVE
 LAW AND SECTION THIRTEEN HUNDRED FOUR OF THE CHARTER TO QUALIFY FOR SUCH
 QUANTITATIVE FACTOR. AGENCIES MAY ALSO IDENTIFY  A  QUANTITATIVE  FACTOR
 FOR  AWARDING  OF  SUCH  CONSTRUCTION  CONTRACTS  BASED ON EACH BIDDER'S

 S. 6270--A                          3

 RECORD OF IMPLEMENTING  SOUND  DIVERSITY  PRACTICES.  SUCH  BASIS  SHALL
 REFLECT, WHEREVER POSSIBLE, OBJECTIVE AND QUANTIFIABLE ANALYSIS.
   4.  the  rule  or rules promulgated to implement paragraph one of this
 subdivision shall provide that the city shall, commencing on  the  first
 of  October  of  the  first full calendar year following the adoption of
 such rule or rules, submit an annual report  to  the  governor  and  the
 state legislature of the total number and total dollar value of procure-
 ments of goods and services for amounts not exceeding [one hundred fifty
 thousand dollars] THE DOLLAR THRESHOLD FOR MAKING PROCUREMENTS WITHOUT A
 FORMAL COMPETITIVE PROCESS, AS ESTABLISHED BY RULE PURSUANT TO PARAGRAPH
 ONE OF THIS SUBDIVISION, from:
   (i)  businesses  certified  as minority or women-owned business enter-
 prises pursuant to section thirteen hundred four of the charter;
   (ii) all other businesses; and
   (iii) information about the number of businesses certified as minority
 or women-owned business enterprises pursuant to section thirteen hundred
 four of this charter able to perform the specific type and scale of work
 involved in each procurement.
   § 3. Paragraph 13 of subdivision b of section 2 of chapter 749 of  the
 laws  of  2019,  constituting  the New York city public works investment
 act, is amended to read as follows:
   (13) The proposer's record of complying with existing labor standards,
 maintaining harmonious labor relations, and protecting  the  health  and
 safety  of workers and payment of wages above any locally-defined living
 wage; [and]
   § 4. Paragraph 14 of subdivision b of section 2 of chapter 749 of  the
 laws  of  2019,  constituting  the New York city public works investment
 act, is renumbered paragraph 15 and a new paragraph 14 is added to  read
 as follows:
   (14)  THE PROPOSER'S RECORD OF IMPLEMENTING SOUND DIVERSITY PRACTICES;
 AND
   § 5. This act shall take effect immediately, provided,  however,  that
 the  amendments to paragraphs 13 and 14 of subdivision b of section 2 of
 chapter 749 of the laws of 2019, constituting the New York  city  public
 works  investment act, made by sections three and four of this act shall
 not affect the repeal of such chapter pursuant to section 14 of  chapter
 749 of the laws of 2019, as amended, and shall be deemed repealed there-
 with.

co-Sponsors

2021-S6270B (ACTIVE) - Details

See Assembly Version of this Bill:: A7266
Current Committee:: Senate Insurance
Law Section:: New York City Charter
Laws Affected:: Amd §311, NYC Chart

2021-S6270B (ACTIVE) - Summary

Expands contracting opportunities for businesses owned by women and minorities; provides for the consideration of contractor diversity practices when making award determinations.

2021-S6270B (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6270b

SPONSOR: SANDERS
 
TITLE OF BILL:

An act to amend the New York city charter in relation to opportunities
for businesses owned by women and minorities

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would authorize the City of New York and its agencies to
increase the amount of the City's discretionary award amount of non-com-
petitive contracts from $500,000.00 to one million dollars.

 
SUMMARY OF PROVISIONS:

This legislation seeks to enhance New York City's Minority and Women
Business Enterprises (MWBE) program to help those businesses recover
from the negative impact of the pandemic to help stimulate the economy
in the following ways:

Section one of this act would amend subdivision (i) of section 311 of
the New York City Charter, which currently allows the New York City
Procurement Policy Board (PPB) to adopt rules for City agencies to award
contracts for goods and services to the vendor who would provide best
value to the City and to adopt rules for City agencies to make procure-
ments of goods, services and construction not exceeding $500,000 from
MWBEs without a formal competitive process.  The amendments in this
section of the act would raise the MWBE procurement threshold to one
million dollars. The amendments in this section of the act would also
allow for the PPB to establish rules to authorize agencies to consider a
vendor's record of implementing sound diversity practices as a factor in
determining best value.  Lastly, the amendments in this section would
authorize the PPB to adopt rules allowing agencies awarding contracts
for construction on the basis of competitive sealed bidding to identify
quantitative factors in the evaluation of bids based on the bidder's
record of implementing sound diversity practices or based on a bidder's
status as a business certified as an MWBE pursuant to section 1304 of
the Charter or Article 15-A of the Executive Law.

 
JUSTIFICATION:

The most recent disparity studies conducted by both the State of New
York and the City of New York demonstrate that discrimination continues
to affect MWBEs seeking to do business in the market where the City
conducts its procurements.

The City has undertaken many efforts to address such discrimination,
including setting of subcontractor participation goals for MWBEs and
EBEs pursuant to the program established pursuant to New York City
Administrative Code section 6-129, the use of a procurement method to
award contracts to MWBEs without a formal competitive process, and the
use of the best value vendor selection technique authorized by the
General Municipal Law and the City Charter. In recent years, the State
Legislature has provided the City with legislative tools to implement
these programs. See chapter 504 of 2017, chapter 19 of 2018 and chapter
98 of 2019. The City has also launched a contract financing loan fund to
improve access to capital for MWBEs seeking to enter into and perform on
City contracts.
These steps, among others, have helped to triple the City's MWBE utili-
zation rate and more than double the contract value awarded to MWBE
firms since Fiscal Year 2015. But disparities due to discrimination
persist, and have been exacerbated by the economic effects of the
COVID-19 pandemic. A recent national analysis of MWBEs by the National
Bureau of Economic Research estimates that between February and April
2020, 41% of Black-owned businesses, 32% of Latino-owned businesses, and
26% of Asian American-owned businesses closed either temporarily or
permanently, while only 17% of white-owned businesses closed.

Allowing the City to award contracts to MWBEs without a formal compet-
itive process would allow the City to procure a broader range of
contracts from MWBEs, and build on the City's previous successes using
these methods. A formal competitive procurement process can be time
consuming. The time required to complete such a competition can be espe-
cially burdensome for MWBEs, which, because of historic racial wealth
gaps, typically do not have the cash cushions of wealthier, larger non-
MWBEs that have historically played a disproportionate role in City
contracting. The most recent increase in the MWBE procurement threshold
to $500,000, authorized by chapter 98 of 2019, led to a 20% increase in
the average size of contract awards to MWBEs in the first year following
the implementation of this amendment.

The authority to promulgate rules allowing agencies to consider MWBE
status in awarding design-bid-build construction contracts would create
consistency across the City's procurement selection methods.  The City
already possesses such an authority for design-build construction
projects and for procurements for goods or services.

 
PRIOR LEGISLATIVE HISTORY:

None.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S6270B (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6270--B
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                              April 20, 2021
                                ___________
 
 Introduced  by  Sens.  SANDERS, COMRIE, RAMOS, SALAZAR -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Insurance  -- committee discharged, bill amended, ordered reprinted as
   amended and recommitted to said  committee  --  committee  discharged,
   bill  amended,  ordered  reprinted  as amended and recommitted to said
   committee
 
 AN ACT to amend the New York city charter in relation  to  opportunities
   for businesses owned by women and minorities
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision i of section 311 of the New York city  charter,
 as  amended by chapter 19 of the laws of 2018, paragraph 1 as amended by
 chapter 98 of the laws of 2019, is amended to read as follows:
   i. In addition to other rules authorized by this  section,  the  board
 may provide by rule that:
   1.  agencies may make procurements of goods, services and construction
 for amounts not exceeding [five hundred thousand]  ONE  MILLION  dollars
 from  businesses  certified  as  minority or women-owned business enter-
 prises pursuant to section thirteen hundred four of the charter  without
 a formal competitive process.
   2. agencies may award contracts for goods and services on the basis of
 best  value to the bidder [or offerer] which optimizes quality, cost and
 efficiency, among responsive and responsible bidders [or offerers]. Such
 basis shall reflect, wherever possible, objective and quantifiable anal-
 ysis and may include the [prospective] bidder's record of complying with
 existing labor standards, maintaining harmonious labor relations, IMPLE-
 MENTING SOUND DIVERSITY PRACTICES and protecting the health  and  safety
 of  workers.  Such  basis  may  also  identify a quantitative factor for
 awarding of contracts for bidders  [or  offerers]  that  are  businesses
 certified  as  minority  or women-owned business enterprises pursuant to
 article [fifteen-a] FIFTEEN-A of the executive law and section  thirteen
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10927-04-1

 S. 6270--B                          2
 
 hundred  four  of the charter. Where an agency identifies a quantitative
 factor pursuant to this paragraph, the agency must  specify  that  busi-
 nesses  certified as minority or women-owned business enterprises pursu-
 ant  to  article  [fifteen-a]  FIFTEEN-A of the executive law as well as
 those certified as minority or women-owned business enterprises pursuant
 to section thirteen hundred four of the charter are eligible to  qualify
 for  such  factor.  Nothing  in  this  paragraph shall be construed as a
 requirement that such businesses be concurrently certified  as  minority
 or  women-owned  business  enterprises  under  both  article [fifteen-a]
 FIFTEEN-A of the executive law and section thirteen hundred four of  the
 charter to qualify for such quantitative factor.
   3.  AGENCIES  AWARDING  CONSTRUCTION CONTRACTS ON THE BASIS OF COMPET-
 ITIVE SEALED BIDDING PURSUANT TO SECTION THREE HUNDRED THIRTEEN  OF  THE
 CHARTER  MAY  IDENTIFY  A QUANTITATIVE FACTOR FOR BIDDERS THAT ARE BUSI-
 NESSES CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES  PURSU-
 ANT  TO  ARTICLE  FIFTEEN-A  OF  THE  EXECUTIVE LAW AND SECTION THIRTEEN
 HUNDRED FOUR OF THE CHARTER. WHERE AN AGENCY IDENTIFIES  A  QUANTITATIVE
 FACTOR  PURSUANT  TO  THIS PARAGRAPH, THE AGENCY MUST SPECIFY THAT BUSI-
 NESSES CERTIFIED AS MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISES  PURSU-
 ANT TO ARTICLE FIFTEEN-A OF THE EXECUTIVE LAW AS WELL AS THOSE CERTIFIED
 AS  MINORITY  OR  WOMEN-OWNED  BUSINESS  ENTERPRISES PURSUANT TO SECTION
 THIRTEEN HUNDRED FOUR OF THE CHARTER ARE ELIGIBLE TO  QUALIFY  FOR  SUCH
 FACTOR.  NOTHING  IN  THIS PARAGRAPH SHALL BE CONSTRUED AS A REQUIREMENT
 THAT SUCH BUSINESSES BE CONCURRENTLY CERTIFIED  AS  MINORITY  OR  WOMEN-
 OWNED BUSINESS ENTERPRISES UNDER BOTH ARTICLE FIFTEEN-A OF THE EXECUTIVE
 LAW AND SECTION THIRTEEN HUNDRED FOUR OF THE CHARTER TO QUALIFY FOR SUCH
 QUANTITATIVE  FACTOR.  AGENCIES  MAY ALSO IDENTIFY A QUANTITATIVE FACTOR
 FOR AWARDING OF SUCH  CONSTRUCTION  CONTRACTS  BASED  ON  EACH  BIDDER'S
 RECORD  OF  IMPLEMENTING  SOUND  DIVERSITY  PRACTICES.  SUCH BASIS SHALL
 REFLECT, WHEREVER POSSIBLE, OBJECTIVE AND QUANTIFIABLE ANALYSIS.
   4. the rule or rules promulgated to implement paragraph  one  of  this
 subdivision  shall  provide that the city shall, commencing on the first
 of October of the first full calendar year  following  the  adoption  of
 such  rule  or  rules,  submit  an annual report to the governor and the
 state legislature of the total number and total dollar value of procure-
 ments of goods and services for amounts not exceeding [one hundred fifty
 thousand dollars] THE DOLLAR THRESHOLD FOR MAKING PROCUREMENTS WITHOUT A
 FORMAL COMPETITIVE PROCESS, AS ESTABLISHED BY RULE PURSUANT TO PARAGRAPH
 ONE OF THIS SUBDIVISION, from:
   (i) businesses certified as minority or  women-owned  business  enter-
 prises pursuant to section thirteen hundred four of the charter;
   (ii) all other businesses; and
   (iii) information about the number of businesses certified as minority
 or women-owned business enterprises pursuant to section thirteen hundred
 four of this charter able to perform the specific type and scale of work
 involved in each procurement.
   § 2. This act shall take effect immediately.

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Senate Bill S6270B

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Archive: Last Bill Status - In Senate Committee Insurance Committee

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2021-S6270B (ACTIVE) - Bill Text download pdf

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Archive: Last Bill Status - In Senate Committee Insurance Committee

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co-Sponsors

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co-Sponsors

2021-S6270A - Details

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co-Sponsors

2021-S6270B (ACTIVE) - Details

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2021-S6270B (ACTIVE) - Sponsor Memo

2021-S6270B (ACTIVE) - Bill Text download pdf

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