BILL NUMBER: S4877

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the state finance law, in relation to the time frame for
the implementation of contracts with not-for-profit corporations

 
PURPOSE:

To ensure a timely procurement process for nonprofits contracting with
the state.

 
SUMMARY OF PROVISIONS:

Section one cf the bill amends section 179-q of the state finance law to
define "reaistered contract."

Section two of the bill amends section 179-q of the state finance law to
require state agencies reaister contracts with not-for-profit organiza-
tions within thirty days of the start Aatg, cf the contract.

              

Section three sets forth the effective date.

 
JUSTIFICATION:

New York State often outsources crucial programs to non-profits, inolu-
dina early childhood education programs, mental health counselina, and
shelter for the homeless. The state relies on non-profit organizations
to provide these vital social services.  However, non-profit organiza-
tions that contract with the state have expressed concerns for years
about the slow contract and procurement process. In an effort to addrea
these concerns, the state enacted.  the Prompt COntractina Law in 1991
to help expedite contracts and reduce the fiscal stress on not for
profits. Thirty years later, the problem persists and ncn-prcfits are
facing Lmmense financial hardships as a result.

In May of 2020, the Office of the NS Comptroller released their "Not-For
Profit Prompt Contracting Annual Report" that found 5Crt of contracts in
2019 had not been approved until after the start date of such contracts,
compared to 470i of contracts in 2013. A non-profit cannot receive
payment from the state until the contract is formally approved by the
state comptroller. Sc, while non-profits are required to start providinc
services by the start date of their contracts, the state is not required
to pay them within the same timeframe.

In order for non-profits to begin their work, they often have to take
out lines of credit to finance their operations. The May 2020 NYS Comp-
troller report notes, "the failure of the state agencies to process
contracts on time harms not for profit service providers, which in turn
erodes service delivery to vulnerable populations." The report recom-
mends that state agencies "take responsibility for their critical roles,
and make prompt contracting a priority."

This bill seeks to address this issue by requiring a state agency to
register contracts with non-profit oraanizations within 30 days of the
start date of the contract. This bill ensures timely payments to these
organizations so that they can continue providing vital services to our
state and to all New Yorkers.
 
PRIOR LEGISLATIVE HISTORY:

S8792/ A9741A: Passed Senate; Referred to Governmental Operations in
Assembly

 
FISCAL IMPLICATIONS:

None.

This act shall take effect immediately.