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					OGS Procurement Services Group
 2006 State Purchasing Forum




        State Finance Law
        Presenter‟s Contact Information


Anne Phillips
    Associate Counsel
    Office of General Services
    anne.phillips@ogs.state.ny.us
    (518) 474-5607




       2006 Purchasing Forum – State Finance Law
                        State Finance Law     Case
                                              Law




 Uniform
Commercial
  Code                    CONTRACT




             2006 Purchasing Forum – State Finance Law
             Pre-1995 Public Contracting

Historical Context

• Purchase of Traditional Commodities
      - Capable of standardization
      - Articles of commerce (food, salt, linens)

• Public entities were predominantly large institutions

• Services were bought individually by government
     agencies


          2006 Purchasing Forum – State Finance Law
            Pre-1995 Public Contracting

Prior governing statute (§174 State Finance Law)
provided minimal guidance for procurement and
competitive bidding.

Agencies were essentially relegated to contract
awards for commodities to the lowest price bidder.

Contracts for services or services procurements were
not governed directly by statute.


         2006 Purchasing Forum – State Finance Law
     Post-1995 Procurement Stewardship Act


Major Change in the Framework for Public
Procurements

  • State Finance Law, Article 11

  • Effective Date: 4/1/95

  • Sunset Date: 6/30/06




        2006 Purchasing Forum – State Finance Law
           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.
         2006 Purchasing Forum – State Finance Law
            Procurement Stewardship Act

State agencies shall provide the state‟s primary line of

defense for protecting the integrity of the state‟s

procurement process and shall be responsible for

ensuring that the decisions made in executing that

process are made in accordance with the highest

standards of professional practice.




          2006 Purchasing Forum – State Finance Law
            Procurement Stewardship Act


• Provide a “level playing field” among competitive
      bidders to enhance competition.


• Requires a “procurement record” – a documented
      process which provides a balanced and fair
      method, established prior to receipt of offers, for
      evaluation of bids.



          2006 Purchasing Forum – State Finance Law
            Procurement Stewardship Act

Procurement Council established to review, examine

and develop improvements to procurement process

and competitive solicitation of bidding for

commodities, services and technology.




          2006 Purchasing Forum – State Finance Law
  Procurement Council [State Finance Law § 161]
• Nineteen Members
     - Chair – Commissioner of OGS
     - OSC
     - DOB
     - State Agency Representatives
     - Designated members
• Procurement Guidelines

• Procurement Policy

• Quarterly Meetings

• Strategic Plan
         2006 Purchasing Forum – State Finance Law
  Cooperative Efforts to Improve Public Procurement
                        Process
• Multi-agency Cooperative efforts (OSC, OFT, OGS,
     municipalities)

• Effort to coordinate information and expertise on
      statewide level

• Support necessary legislative and regulatory
    changes for best practice government
    procurement and competitive bidding

• Forum for exchange of views by participants with
     opposing or different interests in procurement


          2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding

Comprehensive Statutory Scheme

Procurement Stewardship Act

     Article 11

     State Purchasing

Section 160       Definitions

       161        State Procurement Council

       162        Preferred Sources

        2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding

Section 163      Purchasing services and
                 commodities
                 (Sunset: 6/30/05)

       163-a     Vendor preparation of
                 specifications for technology
                 procurements; prohibitions

        164      Exemptions

        165      Purchasing restrictions


         2006 Purchasing Forum – State Finance Law
Government Procurement & Competitive Bidding


  Section 166   Requirements for financed
                equipment acquisition

         167    Transfer and disposal of
                personal property

         168    The management of surplus
                computer equipment




      2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

Procurement Guidelines
Detailed Guidance to State agencies on how to
conduct procurements
  • Summarizes in one place the multiple approaches
         to procurement
  • Identifies essential elements of successful
            procurements
  • Provides valuable technical guidance on different
          approaches for structuring a procurement
  • Provides examples of good procurement practices


          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
                  Definitions

• Commodity
• Service
• Technology
• Costs
• Price

Provides a foundation of commonly understood
concepts to apply within public procurement
infrastructure


            2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
                  Definitions

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




           2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding
Request for Proposals (RFP’s)
  • 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

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
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.
         2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding


Distinction

      “Lowest Price” vs. “Best Value”
        [State Finance Law, §163]




       2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

“Lowest Price” „means the basis for awarding
contracts for commodities among responsive and
responsible offerors.‟


“Best Value” „means 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.‟

          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

Centralized Contracts

“Centralized Contract” means 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.


             2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding

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

          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding

Agency Specific Contracts

Specialized Requirements Needed to Meet Agency
Mission

  • Consultant Services
  • “Do Not Call” Registry
  • Digital Fingerprinting Identification
  • Specialized Software
  • Entertainment Services


         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

Preferred Sources [State Finance Law §162]

“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.”




          2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding
Preferred Status
  • Correctional Services – Commodities
  • Agencies for the Blind – Commodities & Services
  • Agencies for the Severely Disabled – Commodities
          and Services
  • Special Employment for Mentally Ill – Commodities
          and Services
  • Disabled Veterans – Commodities sand Services
  • Veterans – Commodities and Services
  • Qualified Apparel Manufacturer – September 11th
            Registry

         2006 Purchasing Forum – State Finance Law
Government Procurement & Competitive Bidding


• 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


       2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

Emergency Contracts
[State Finance Law §163(10(b))]

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.

          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
Single Source
Single Source means 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.
           2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

Sole Source

Sole Source means a procurement in which only one
offeror is capable of supplying the required
commodities or services.




          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
Multiple Awards [State Finance Law §163(10)(c)]
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.

           2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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)

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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.




          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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.


           2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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.

          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

Note:

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




         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
• 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).
         2006 Purchasing Forum – State Finance Law
       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,”




          2006 Purchasing Forum – State Finance Law
       Process for Conducting Procurements

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.



          2006 Purchasing Forum – State Finance Law
       Process for Conducting Procurements

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)

         2006 Purchasing Forum – State Finance Law
       Process for Conducting Procurements
Drafting & Issuing the Document

• Appendix B (OGS General Specifications for
     Procurement Contracts)
• Non-Collusive Bidding Certificate
• MacBride Certification
• Executive Order No. 127 – Providing for Additional
     State Procurement Disclosure
• Responsibility Questionnaire
• Sales Tax Certification

          2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding

Discretionary Thresholds for Purchasing
• State Agencies up to $15,000 $50,000
• State Agencies up to $50,000 $100,000
     - For recycled commodities or technology

     - For remanufactured commodities or
          technology

     - From small businesses

     - From certified minority/women-owned
          business enterprises

         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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.

          2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

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.




          2006 Purchasing Forum – State Finance Law
 Government Procurement & Competitive Bidding

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




         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
Bid Evaluation & Approvals
• Responsive Offeror
    - Material vs. Non-Material Deviations
    - Clarifications, revisions, discussions, where
          provided in the solicitation
• Responsible Offeror
    - Due Diligence
     - Due Process
     - Prior Contract History
     - No debarment in NYS, other than for
           prevailing wage rate or labor law
           violations
         2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding
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
           2006 Purchasing Forum – State Finance Law
  Government Procurement & Competitive Bidding

Bid Evaluation & Approvals

• Bid Disputes
     - No statutory right
     - Commissioner's responsibility to make an
         award consistent with procurement laws

• Elements of defensible decisions




         2006 Purchasing Forum – State Finance Law
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



         2006 Purchasing Forum – State Finance Law
Government Procurement and Competitive Bidding

Selection and Contract Award

  • Using Bid Documents for Contract Award

  • Negotiate Contract




        2006 Purchasing Forum – State Finance Law
Government Procurement and Competitive Bidding
Other Relevant Laws

  • Section 112 State Finance Law
          OSC Approval
  • Section 97-g State Finance
          Law Centralized Services
  • Section 138 State Finance Law
          Non-Assignment of State Contracts
  • Section 139-d State Finance Law
          Non-Collusion by Bidders


        2006 Purchasing Forum – State Finance Law
Government Procurement and Competitive Bidding
Other Relevant Laws

  • Sections 139-j and 139-k State Finance Law
          Restriction on Contracts and Disclosure
          of Contacts
  • Section 144-a State Finance Law
          Rock Salt Preference
  • Section 220 and 240 Labor Law
          Prevailing Wage Rate
  • Article 2 Uniform Commercial Code
           Sales

        2006 Purchasing Forum – State Finance Law
        Presenter‟s Contact Information


Anne Phillips
    Associate Counsel
    Office of General Services
    anne.phillips@ogs.state.ny.us
    (518) 474-5607




       2006 Purchasing Forum – State Finance Law

				
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