Presenter’s Contact Information Noreen J. VanDoren Assistant Counsel Office of General Services (518) OGS Website:

The State Finance Law impacts all procurements of goods and services
HOW??? Let’s find out…

State Finance Law Article 11 (Procurement Stewardship Act)
Governs the process for State agency acquisition of: Commodities Services Technology

CONTRACT Executive Law State Finance Law Case Law
Uniform Commercial Code CONTRACT Procurement Council Guidelines Federal Laws (e.g. Intellectual Property, Telecom) Regulations

Procurement Stewardship Act
Underlying Principles and Legislative Findings Responsibility of OGS and State Agencies in cooperation with OSC and DOB to: Provide for the wise and prudent use of public money in the best interests of the taxpayers of the state; Guard against favoritism, improvidence, extravagance, fraud & corruption; and Facilitate the efficient and timely acquisition of commodities and services of the highest quality at the lowest practicable cost within available resources.

State Agencies Provide the primary line of defense for protecting the integrity of the state’s procurement process. Responsible for ensuring decisions are made with the highest standards of professional practice.

Provide a “level playing field” among competitive bidders to enhance competition. Create a “procurement record” – Documentation of the method followed in the contracting process

Government Procurement & Competitive Bidding
Comprehensive Statutory Scheme Procurement Stewardship Act Article 11 State Purchasing Section Definitions State Procurement Council Preferred Sources

Section Purchasing services and commodities (Sunset: 6/30/08) 163-a Vendor preparation of specifications for technology procurements; prohibitions Exemptions Purchasing restrictions

Section Requirements for financed equipment acquisition Transfer and disposal of personal property The management of surplus computer equipment

Procurement Council established through
the passage of State Finance Law Section The Council’s purpose is to review, examine and develop improvements to the state’s procurement process.

Procurement Guidelines Detailed Guidance to State agencies on how to conduct procurements Summarizes the multiple approaches to buy Provide guidance for successful procurements Provides details on various purchasing methods Provides examples of good procurement practices (Currently under revision)

Definitions - State Finance Law § 160 Commodity Service Technology Costs Price Provides a foundation of commonly understood concepts to apply within public procurement infrastructure

Invitations for Bids (IFBs) Competitive Bidding Methodology Primarily used for procurement of commodities Basis for Contract Award - Meet specifications - Lowest price

Request for Proposals (RFPs) Competitive Solicitation Methodology Primarily used for procurement of services and technology Basis for Award Pre-established evaluation criteria where cost is not necessarily the determining factor “Best Value” to the purchaser is the determinative criteria

Best Value Documentation & Other Requirements Best Practices – Before You Solicit: Document the intended basis for award (such as meeting mandatory requirements, “best value” or “lowest price”). Determine the technical and financial evaluation criteria and relative weight. Quantify criteria whenever possible, to optimize quality, cost and efficiency. Determine and document the evaluation and selection process. Advertise the procurement.

Main Distinction between IFB & RFP “Lowest Price” vs. “Best Value”
Government Procurement & Competitive Bidding Main Distinction between IFB & RFP “Lowest Price” vs. “Best Value” [State Finance Law, §163]

“Lowest Price” The basis for awarding contracts for commodities among responsive and responsible offerors. [SFL§163(1)(i)] “Best Value” The basis for awarding contracts for services to the offeror which optimizes quality, cost and efficiency, among responsive and responsible offerors. Such basis shall reflect, wherever possible, objective and quantifiable analysis. Services include technology. [SFL§163(1)(j)]

Types of Contracts [State Finance Law §163] Centralized Contract Agency Specific Contract Preferred Sources Emergency Contract Single Source Contract Sole Source Contract Multiple Awards Piggybacking (Adoption of Another Government Entity Contract)

Centralized Contracts Any contract for the purchase of commodities or services, established or approved by the Commissioner of General Services as meeting the State's requirements including, but not limited to, any contract let by the federal government, other state or local governments or purchasing consortia. [SFL§160(1)]

Examples of Centralized Contracts: Vehicles & heavy equipment Pharmaceuticals & medical equipment Electronic Value Transfer (credit cards)/procurement card Fuel Oil, Gasoline, Road Salt PCs Rubbish Removal Telecommunications Systems & Services

Agency Specific Contracts Specialized Requirements Needed to Meet Agency Mission Consultant Services Prescription pads for DOH Digital Fingerprinting Identification Specialized Software Entertainment Services

Preferred Sources “To advance special social and economic goals, selected providers shall have preferred source status… Procurement from these providers shall be exempted from competitive procurement provisions.” [State Finance Law §162]

Preferred Status Correctional Services – Commodities Agencies for the Blind – Commodities & Services Special Employment for Mentally Ill – Commodities and Services Agencies for the Severely Disabled – Disabled Veterans – Commodities and Services Veterans – Commodities and Services Qualified Apparel Manufacturer – September 11th Registry

Public List of Commodities & Services Approval by Procurement Council Price Approval – Not greater than 15% above Prevailing Market Price Alternate Process for Procurements of Apparel & Textiles

Emergency Contracts Procurements may be made to meet emergencies arising from unforeseen causes without using a formal competitive process. Such procurements shall be made only under unusual circumstances and shall include a determination in the procurement record of the nature of the emergency and that the procurement was conducted in a fair and equitable manner. [State Finance Law §163(10(b))]

Single Source A procurement in which although two or more offerors can supply the required commodities or services, the Commissioner or State agency, upon written findings setting forth the material and substantial reasons therefore, may award the contract to one offeror over all others. The Commissioner or State agency shall document in the procurement record the circumstances leading to the selection of the vendor, including the alternatives considered, the rationale for selecting the specific vendor and the basis upon which it determined the cost was reasonable. [State Finance Law §163(1)(h)]

Sole Source Sole Source means a procurement in which only one offeror is capable of supplying the required commodities or services. [State Finance Law §163(1)(g)]

Multiple Awards The Commissioner or State agency may elect to award a contract to one or more responsive and responsible offerors provided, however, that the basis for the selection among multiple contracts at the time of purchase shall be the most practical and economical alternative and shall be in the best interests of the State, and further provided that the requirements set forth herein shall not preclude the Commissioner from establishing multiple award contracts for reasons including increased opportunities for small businesses to participate in State contracts. [State Finance Law §163(10)(c)]

The Commissioner of General Services may authorize purchases required by state agencies or authorized purchasers by letting a contract or by approving the use of a contract let by any department, agency or instrumentality of the United States government and/or any department, agency, office, political subdivision or instrumentality of any state or states. [State Finance Law §163(10)(e)]

The Commissioner of General Services is authorized to let centralized contracts for joint purchasing by New York State and any department, agency or instrumentality of the United States government and/or any state including the political subdivisions thereof; provided however that any entity incurring a liability under such contract shall be responsible for discharging said liability. [State Finance Law §163(10)(f)]

Under this authority, the State can recognize and use or be a part of contracts of other public purchasers. In most instances, these other government entities establish their agreements using competitive solicitations. This procurement methodology has proven to be a tool that provides a means to meet special requirements or to efficiently and economically meet the needs of State agencies and Authorized Users.

Note: These contracts and purchases also need to be supported by a procurement record and are subject to OSC approval.

Piggybacking Agreements Have provided for imaging systems, landscape furniture, cellular telephone service and mission specific consultant services such as Year 2000 programming. Joint Agreements Have provided for pharmaceuticals (Minnesota multi-state) and traffic cones (New England States and New York).

Process for Conducting Procurements
Developing the Procurement Determination of Need Form, Function & Utility Decisions for Centralized Contracts - Discretion of OGS Commissioner – “in cooperation with State Procurement Council and state agencies,”

Criteria OGS uses includes, but is not limited to: Availability of a volume discount; Prior use of the commodity among state agencies; Relative cost of establishing the contract; Anticipated use; and Expected actual savings for the State.

Drafting & Issuing Agency Contracts IFB vs. RFP NYS Contract Reporter Advertisement - Required if Contract Value Over $15,000 [Article 4C Economic Development Law] - Receipt of offers minimum of fifteen business days after notice published Appendix A (Standard Clauses for State Contracts)

Drafting & Issuing the Document Appendix B (OGS General Specifications for Procurement Contracts) Non-Collusive Bidding Certificate MacBride Certification Procurement Lobbying Certification [SFL §139 j & k] Responsibility Questionnaire Sales Tax Certification Consultant Disclosure

Discretionary Thresholds for Purchasing State Agencies up to $50,000 (OGS $85,000) State Agencies up to $100,000 - For recycled or remanufactured commodities or technology - From small businesses - From ESDC certified minority/ women-owned business enterprises

Use of Mini Bids Another competitive solicitation technique employs multiple contract awards where vendors present their qualifications and agree to standard terms and conditions for a multiple year contract term with not to exceed prices – backdrop contracts. State agencies and Authorized Users present their technical needs to a pool of qualified contractors (“Project Definition” or “Mini Bid”) choosing the best value solution.

Use of Mini Bids (continued) This allows the purchaser to focus on meeting their operational or functional requirements and cut down on the contract cycle time often reducing the procurement time to weeks rather than months.

Use of Mini Bids Computer Consulting, Systems Integration and Training Agreements with categories of services Telephone Systems and Maintenance Third Party Financing Services Microcomputer Systems Security Guards

Bid Evaluation & Approvals Responsive Offeror - Material vs. Non-Material Deviations Clarifications, revisions, discussions, where provided in the solicitation Responsible Offeror (FLIP) Due Diligence Due Process - Prior Contract History Only debarment in NYS is for prevailing wage rate, labor law and procurement lobbying violations

Vendor Responsibility Due Process and the Opportunity to be Heard Procurement determinations arising from the need to ascertain the responsibility of a vendor/bidder impose a duty on the State agency to provide an opportunity to be heard It is the policy of the Office of General Services’ (OGS) Procurement Services Group (PSG) to provide vendors with an opportunity to administratively resolve complaints or inquiries related to PSG bid solicitations or contract awards. Bidders are encouraged to seek resolution of complaints through consultation with PSG staff. All such matters will be accorded impartial and timely consideration

Bid Evaluation & Approvals Bid Disputes - No statutory right - Commissioner's responsibility to make an award consistent with procurement laws Elements of defensible decisions

Government Procurement and Competitive Bidding
Bid Evaluation Approvals Required Approvals Department of Law Specialty Contracts - Civil Service - Office for Technology - Division of the Budget Office of the State Comptroller

Selection and Contract Award Using Bid Documents for Contract Award Negotiate Contract

Other Relevant Laws Section 112 State Finance Law OSC Approval Section 138 State Finance Law Non-Assignment of State Contracts Section 139-d State Finance Law Non-Collusion by Bidders

Other Relevant Laws Sections 139-j and 139-k State Finance Law Restriction on Contracts and Disclosure of Contacts Section 220 and 240 Labor Law Prevailing Wage Rate Article 2 Uniform Commercial Code Sales

Questions ?

Presenter’s Contact Information Noreen J. VanDoren Assistant Counsel Office of General Services (518) OGS Website:

Presenter’s Contact Information Noreen J. VanDoren Assistant Counsel Office of General Services (518) OGS Website:

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