1. Purchasing in the 21st Century
Presented to:
SAMPO
at the
38th Annual Professional Development Conference
Date: May 12, 2016
Mary Anne Sadowski, Esq.
150 Motor Parkway, Suite 400
Hauppauge, New York 11788

2. General Municipal Law Section 103
General Municipal Law requires that bids be advertised and awarded pursuant to a competitive bidding process for:
Purchase contracts in excess of $20,000
Public Works contracts in excess of $35,000

3. Requirements of Law
General Municipal Law Section 103 requires that award be made to the lowest responsible bidder submitting a bid in response to an advertised bid
Requires a “sealed bid”
Responsiveness of the bidder must be determined first
Once responsiveness determined, review of bidder to determine its responsibility

4. 21st Century Purchasing: Electronic Bids
“Sealed bids” and “sealed offers” includes bids and offers submitted in an electronic format
Must be expressly authorized by the governing entity by way of resolution
Applies only to purchase contracts and contracts for services
Cannot be used for public works contracts which are subject to prevailing wage
Can be used as the exclusive method for receipt of bids ONLY for technology contracts

5. 21st Century Purchasing: Electronic Bids
Governing entity must designate the “receiving device” for transmission of an electronic bid
Must comply with requirements set forth in the State Technology Law
At a minimum, these include:
Documentation of the time and date of receipt of each bid and offer received electronically
Ability to authenticate the identity of the sender
Ensure the security of the information transmitted and
Ensure the confidentiality of the bid or offer until the time and date established for the opening of bids or offers
Timely submission of a bid remains the responsibility of the bidder
Entity utilizing the electronic bidding methodology is expressly exempt from liability in connection with delays of or interruptions in the receiving device designated for the submission and receipt of electronic bids and offers

6. 21st Century Purchase: Expansion of “Piggybacking” : GML §103(16)
Prior to enactment of GML §103(16), piggybacking doctrine applicable when purchasing from
NYSOGS (“State contract”)
County contract where county has authorized purchase by other municipalities pursuant to County Law §408-a
Applies only to purchases of apparatus, materials, equipment or supplies, or contracts for services related to the installation, maintenance or repair of apparatus, materials, equipment and supplies contract
§16 due to expire on July 31, 2017 and will be deemed repealed on that date (unless extended by new legislation)

7. 21st Century Purchasing: Expansion of “Piggybacking” GML §103(16)
Contract must have been let by the United States or any agency thereof, any state or any other political subdivision or district therein: Contracts by private parties do not fall within the exception!
AND
The contract must have been made available for use by other governmental entities:
the other governmental entity must have expressly indicated in the terms and conditions of the contract that it is available for use by other governmental entities
vendors cannot offer pricing in existing contracts to other municipalities
The contract must have been let in a manner that constitutes competitive bidding “consistent with state law”
“state law” refers to New York State’s bidding laws

8. 21st Century Purchase: Expansion of “Piggybacking”: Federal GSA Schedule Seventy
Prior to the change in legislation in 2011, purchases from the federal government not excluded from the competitive bidding requirements
Section 1-b of the GML added to permit the purchase of information technology and telecommunications hardware, software and professional services through cooperative purchasing pursuant to GSA Information Technology Schedule 70 or any successor schedule
Municipality must comply with federal schedule ordering procedures as provided by federal regulation
Compliance is deemed to constitute compliance with the competitive bidding requirements in GML §103
**Effective until July 31, 2019 (unless extended by new legislation)

9. 21st Century Purchase: Introduction of the Use of “Best Value” Awards
Prior to the change in legislation, purchase contracts in excess of $20,000 were required to be awarded to the lowest responsible bidder after the solicitation of sealed bids.
The Legislature amended General Municipal Law §103 to permit award of a purchase contract based upon the “best value” standard, rather than to the lowest bidder. The language of the statute is as follows:
“Purchase contracts (including contracts for service work, but excluding any purchase contracts necessary for the completion of a public works contract pursuant to article eight of the labor law) may be awarded on the basis of best value, as defined in section one hundred sixty-three of the State Finance Law, to a responsive and responsible bidder … in the manner provided by this section … “

10. 21st Century Purchase: Introduction of the Use of “Best Value” Awards
State Finance Law defines “best value” as follows:
“ … the basis for awarding contracts for services to the offerer which optimizes quality, cost and efficiency, among responsive and responsible offerers. Such basis shall consider every possible, objective and quantifiable analysis. Such basis may also identify a quantitative factor for offerers that are small businesses or certified minority– or woman-owned enterprises … “
To implement the use of “best value” standard for contract awards, the purchasing/ procurement policy should be amended to reflect that the municipality may in various circumstances utilize a “best value” manner of award.

11. 21st Century Purchase: Introduction of the Use of “Best Value” Awards
Where the basis for the award is “best value,” documentation in the procurement record should include:
a quantification of the criteria to be utilized in evaluating proposals
the rating assigned to each criterion and
the evaluation results of the bids received.
Specifically, the specifications should include the evaluation criteria the municipality intends to use in making an award, as well as the relative importance and/or weight each criteria will have and upon which a determination of “best value” will be made.
In addition, the governing body should adopt a resolution each time it seeks to make an award based upon “best value,” and delineate the evaluation criteria to be used in connection with an award.

12. 21st Century Purchase: Iran Divestment Act Certifications
Section 103-g(4) to the General Municipal Law known as the “Iran Divestment Act of 2012” enacted in 2012
Requires bidders to affirmatively certify the following
“By submission of this bid, each bidder and each person signing on behalf of any bidder certifies, and in the case of a joint bid each party thereto certifies as to its own organization, under penalty of perjury, that to the best of its knowledge and belief that each bidder is not on the list created pursuant to paragraph (b) of subdivision 3 of Section 165-a of the state finance law.”
Section 103-g applies to all contract bids which are required to be competitively bid, either by General Municipal Law §103 or Board policy.

13. 21st Century Purchase: Iran Divestment Act Certifications
The following language should be included in the “Instructions to Bidders” section of the bid specifications:
In accordance with the requirements of General Municipal Law §103-g (“The Iran Divestment Act of 2012”), the bidder is required to include with its bid either (1) the “Certification of Compliance with the Iran Divestment Act” or, in the case where the bidder is unable to make such certification, (2) the form titled “Declaration of Bidder’s Inability to Provide Certification of Compliance with the Iran Divestment Act”.

14. 21st Century Purchase: Iran Divestment Act Certifications
Pursuant to State Finance Law §165-a, the Commissioner of General Services is required to develop a list of persons that it determines engage in investment activities in Iran. Investment activities is defined as “the provision of goods, services or credit of $20,000,000 or more, relating to the energy sector”.
In connection therewith, General Municipal Law §103-g also requires that a certification from all bidders on public works or purchase contracts include an affirmative statement concerning such investment activity.
Bidders are required to either certify that they are not on the list created by the Commissioner of General Services or submit a declaration of the bidder’s inability to provide such a certification.

15. Questions