BILL NUMBER: S5326

SPONSOR: SERINO
 
TITLE OF BILL:

An act to amend the state finance law, in relation to approval of
contracts during a declared state disaster emergency

 
PURPOSE:

This bill would ensure appropriate oversight of state contracts are in
place during state disaster emergencies

 
SUMMARY OF PROVISIONS:

Section 1: Amends the State Finance Law to add a new Section 112-A to
require that, in the event of a declared state disaster emergency where
the governor suspends, alters, or modifies subdivision 2 of

Section 112 of the State Finance Law requiring the comptroller to
approve certain state contracts, such contracts shall immediately be
              

filed with the comptroller's office. Further requires the comptroller to
review such contracts and submit a report with any concerns and recom-
mendations on such contracts to the State Senate and Assembly within 14
days, and to post such report publicly on the Comptroller's website.
Provides that the comptroller may notify the Senate and Assembly in
writing if there is a need of an extension for such report if there is
good cause.

Also provides that the comptroller may place a hold on emergency
contracts where he or she deems it in the public interest upon review of
such contracts, and requires the comptroller to notify the originating
state agency, department, board, officer, commission or institution of
such contracts, as well as the State Senate and Assembly, of any hold,
along with an explanation for such hold.

Allows the comptroller to establish a system for accounting and a form
of accounts to be installed and observed in every state department and
state institution as may be necessary to ensure appropriate review emer-
gency contracts pursuant to this section.

Prohibits the governor from suspending, altering, or modifying any
provision of this section.

Section 2: Provides the effective date.

 
JUSTIFICATION:

Upon the Governor's declaration of a state disaster emergency on March
7, 2020, the Governor suspended or modified several provisions of law
pursuant to Section 29-a of the Executive Law, including Section 112 of
the State Finance Law, which relates to accounting systems and approval
of certain state contracts by the Comptroller. Section 112 of the State
Finance Law provides that before a contract exceeding $85,000 by the
Office of General Services, or $50,000 by any other state agency,
department, boar, officer or institution is executed or becomes effec-
tive, the Comptroller must first approve such contract within 90 days.
While times of emergency may require contracts be expedited to address
rapidly developing needs, reports of several of the State's emergency
contracts during the COVID-19 pandemic highlight the need for appropri-
ate oversight of such contracts on an on-going basis.

According to The New York Times, New York State entered into contracts
for more than $1 billion for supplies and equipment during the pandemic,
but is now seeking at least partial refunds on approximately one-third
of that spending. In one case, the State made an upfront deposit of
$12.5 million for 1,000 ventilators with a company that produced small
medical devices, children's books, masks, and adult toys but never
ventilators. It has been reported that, to date, this company has not
delivered any of the agreed upon units.  Similarly, the New York Post
reported that the State is trying to recover payment to a Silicon Valley
engineer that totaled nearly $70 million offering three times the going
rate per unit-for ventilators that the State never received.

This legislation would allow the State to move expeditiously on securing
emergency contracts in times of crisis, while ensuring appropriate over-
sight and transparency is in place and on-going to safeguard taxpayer
dollars. Specifically, this legislation would require that in times of
emergency, contracts that would otherwise require pre-approval from the
Comptroller would still need to be immediately filed with the Comp-
troller so that he or she may review such contracts. Further, the Comp-
troller would be required to report on such contracts within 14 days to
the State Senate and Assembly on any concerns and recommendations, and
publicly post such report on the Comptroller's website. This on-going
and timely reporting of emergency contracts would empower the Comp-
troller and the State Legislature to provide appropriate oversight of
emergency contracts to help ensure the responsible use of taxpayer
dollars.

Further, this legislation would allow the Comptroller to establish a
system of accounting during state disaster emergencies as needed, and
prohibit the governor from suspending this new section of law, as there
would be no public interest in suspending appropriate oversight that
does not interfere with the State's ability to enter into expedited
emergency contracts when needed.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

No cost to the state and shall ensure appropriate oversight of state
contracts.

 
EFFECTIVE DATE:
This act shall take effect immediately.