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* § 163. Purchasing services and commodities. 1. Definitions. For the
purposes of this section, the following terms shall have the following
meanings unless otherwise specified:
a. "Consortium" means like entities which agree to collectively
purchase commodities at a lower price than would be otherwise achievable
through purchase by such entities pursuant to other provisions of this
article.
b. "Emergency" means an urgent and unexpected requirement where health
and public safety or the conservation of public resources is at risk.
c. "Responsible" or "responsibility" shall have the same meaning as
such terms have been interpreted prior to the effective date of this
article.
d. "Responsive" means a bidder or other offerer meeting the minimum
specifications or requirements as prescribed in a solicitation for
commodities or services by a state agency.
e. "Specification" or "requirement" means any description of the
physical or functional characteristics or the nature of a commodity or
construction item, any description of the work to be performed, the
service or products to be provided, the necessary qualifications of the
offerer,the capacity and capability of the offerer to successfully carry
out the proposed contract, or the process for achieving specific results
and/or anticipated outcomes or any other requirement necessary to
perform the work. It may include a description of any obligatory
testing, inspection or preparation for delivery and use, and may include
federally required provisions and conditions where the eligibility for
federal funds is conditioned upon the inclusion of such federally
required provisions and conditions. Specifications shall be designed to
enhance competition, ensuring the commodities or services of any offerer
are not given preference except where required by this article.
f. "Procurement record" means documentation of the decisions made and
the approach taken in the procurement process.
g. "Sole source" means a procurement in which only one offerer is
capable of supplying the required commodities or services.
h. "Single source" means a procurement in which although two or more
offerers can supply the required commodities or services, the
commissioner or state agency, upon written findings setting forth the
material and substantial reasons therefor, may award the contract to one
offerer over the other. 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.
i. "Lowest price" means the basis for awarding contracts for
commodities among responsive and responsible offerers.
j. "Best value" means the basis for awarding contracts for services to
the offerer which optimizes quality, cost and efficiency, among
responsive and responsible offerers. Such basis shall reflect, wherever
possible, objective and quantifiable analysis.

2. Operating principles. The objective of state procurement is to
facilitate each state agency's mission while protecting the interests of
the state and its taxpayers and promoting fairness in contracting with
the business community. The state's procurement process shall be guided
by the following principles:
a. To promote purchasing from responsive and responsible offerers,
including small businesses.
b. To be based on clearly articulated procedures which require a clear
statement of product specifications, requirements or work to be
performed; a documentable process for soliciting bids, proposals or
other offers; a balanced and fair method, established in advance of the
receipt of offers, for evaluating offers and awarding contracts;
contract terms and conditions that protect the state's interests and
promote fairness in contracting with the business community; and a
regular monitoring of vendor performance.
c. To encourage the investment of the private and not-for-profit
sectors in New York state by making reasonable efforts to ensure that
offerers are apprised of procurement opportunities; by specifying the
elements of a responsive bid and disclosing the process for awarding
contracts including, if applicable, the relative importance and/or
weight of cost and the overall technical criterion for evaluating
offers; and by ensuring the procurement is conducted accordingly.
d. To ensure that contracts are awarded consistent with the best
interests of the state.
e. To ensure that officers and employees of state entities do not
benefit financially or otherwise from the award of state contracts.
f. To ensure regular and critical review of the efficiency, integrity
and effectiveness of the overall process.

3. General provisions for purchasing commodities.
a. State agency procurement practices for commodities shall
incorporate the following:
(i) The purchase of commodities by state agencies including the office
of general services shall be conducted in a manner which accords first
priority to preferred sources in accordance with the provisions of this
article, second priority to centralized contracts, third priority to
agency or multi-agency established contracts and fourth priority to
other means of contracting.
(ii) Commodities contracts shall be awarded on the basis of lowest
price to a responsive and responsible offerer; or, in the case of
multiple awards, in accordance with paragraph c of subdivision ten of
this section.
(iii) The commissioner shall be responsible for the standardization
and centralized purchase of commodities required by state agencies in a
manner which maximizes the purchasing value of public funds.
(iv) The commissioner is authorized to permit any officer, body or
agency of the state or of a political subdivision or a district therein,
or fire company or volunteer ambulance service as such are defined in
section one hundred of the general municipal law, to make purchases of
commodities through the office of general services' centralized
contracts, pursuant to the provisions of section one hundred four of the
general municipal law. The commissioner is authorized to permit any
county extension service association as authorized under subdivision
eight of section two hundred twenty-four of the county law, or any
association or other entity as specified in and in accordance with
section one hundred nine-a of the general municipal law, or any other
association or entity as specified in state law, to make purchases of
commodities through the office of general services' centralized
contracts; provided, however, that such entity so empowered shall accept
sole responsibility for any payment due with respect to such purchase.
(v) Consistent with guidelines issued by the state procurement
council, state agencies may competitively purchase commodities procured
in accordance with this article in lieu of using centralized contracts
when the resultant price is less than the centralized contract price.
(vi) When justified by price, state agencies, and hospitals and
facilities managed and controlled by state agencies eligible pursuant to
section twenty-eight hundred three-a of the public health law, shall be
eligible to make purchases pursuant to guidelines issued by the state
procurement council from a consortium or comparable entity in lieu of
using centralized contracts for commodities.
(vii) The commissioner is authorized to enter into contracts pursuant
to the provisions of section twenty-eight hundred three-a of the public
health law.
(viii) The commissioner may permit and prescribe the conditions for,
(A) any association, consortium or group of privately owned or
municipal, federal or state owned or operated hospitals, medical
schools, other health related facilities or voluntary ambulance
services, which have entered into a contract and made mutual
arrangements for the joint purchase of commodities pursuant to section
twenty-eight hundred three-a of the public health law; (B) any
institution for the instruction of the deaf or of the blind listed in
section forty-two hundred one of the education law; (C) any qualified
non-profit-making agency for the blind approved by the commissioner of
social services; (D) any qualified charitable non-profit-making agency
for the severely disabled approved by the commissioner of education; (E)
any hospital or residential health care facility as defined in section
twenty-eight hundred one of the public health law; (F) any private
not-for-profit mental hygiene facility as defined in section 1.03 of the
mental hygiene law; and (G) any public authority or public benefit
corporation of the state, including the port authority of New York and
New Jersey and the interstate environmental commission, to make
purchases using centralized contracts for commodities. Such qualified
non-profit-making agencies for the blind and severely disabled may make
purchases from the department of correctional services' correctional
industries program subject to rules pursuant to the correction law.
b. The commissioner shall:
(i) determine, in cooperation with the state procurement council and
state agencies, the identity, form, function and utility of those
commodities which shall be made available on or through centralized
contracts. Criteria may include, but need not be limited to, the
availability of a volume discount, prior use of the commodity among
state agencies and the relative cost of establishing the contract, its
anticipated use and expected actual savings for the state. The
commissioner may also act as a broker for state agencies to procure
commodities.
(ii) determine the number and scope of centralized contracts for
commodities to be let during any period, including the letting of
multiple contracts to ensure the sufficient variety and uninterrupted
availability of commodities for state agency use.
(iii) maintain lists of firms which produce or manufacture or offer
for sale commodities in the form, function and utility required by state
agencies. The commissioner shall ensure such lists are updated
regularly. With the assistance of the department of economic development
and other state agencies, beginning on July first, two thousand one,
ensure the availability to all authorized purchasers of a centralized
list which identifies commodities offered by New York state's small
businesses and a centralized list which identifies commodities and
services offered by businesses certified pursuant to article fifteen-A
of the executive law. Such lists shall be updated semiannually and
designed to enable effective identification of New York state's small
businesses and businesses certified pursuant to article fifteen-A of the
executive law.
(iv) ensure the specification of commodities for centralized contracts
reflect the form, function and utility required by state agencies and
conform, wherever possible, to industry standards. Where necessary, the
commissioner may develop specifications for commodities. When not
otherwise forthcoming from a particular firm or industry, the
commissioner may request information from businesses for the purpose of
establishing or improving a specification. The office of general
services may assist agencies in developing specifications for
agency-procured commodity contracts when industry standards are not
available or appropriate. In all cases, specifications shall be
consistent with the requirements of state agencies.
(v) With the assistance of the department of economic development and
other state agencies, provide a training program once per year, in each
economic development region, as established in article eleven of the
economic development law, beginning January first, two thousand one, for
those businesses certified pursuant to article fifteen-A of the
executive law and those interested in becoming certified. Such training
program shall provide assistance with respect to participation as a
vendor in the procurement process, as established in this article.
(vi) With the assistance of the department of economic development and
other state agencies, provide training once per year for staff of each
state agency's minority and women business development office, or if an
agency does not have such an office, then an agency's representative.
Such training program shall consist of a meeting with such agencies'
representatives to inform each agency of how to encourage procurement of
commodities and services from businesses certified pursuant to article
fifteen-A of the executive law.
(vii) maintain a list of contractors which produce or manufacture or
offer for sale environmentally-sensitive cleaning and maintenance
products in the form, function and utility generally used by elementary
and secondary schools in accordance with specifications or guidelines
promulgated pursuant to section four hundred nine-i of the education
law.
c. When commodities are not available in the form, function and
utility required by state agencies through preferred sources or
centralized contracts, a state agency may, independently or in
conjunction with other state agencies, procure commodities in accordance
with the provisions of this section. State agencies may maintain
listings of firms, including those certified pursuant to article
fifteen-A of the executive law, or may use the office of general
services' listing of firms and may request assistance from the office of
general services. It shall be the responsibility of state agencies to
periodically advise the office of general services of those
agency-procured commodities which, due to the frequency of purchase or
related factors, should be made available through centralized contracts.
d. The commissioner may make, or cause to be made by a duly authorized
representative, any investigation which he or she may deem proper for
acquiring the necessary information from a state agency for the exercise
of his or her powers and duties under this subdivision. For such
purposes the commissioner may subpoena and compel the attendance of
witnesses before him or her, or an authorized representative, and may
compel the production of books, papers, records or documents. The
commissioner or a duly authorized representative may take and hear
proofs and testimony and, for that purpose, the commissioner or the duly
authorized representative may administer oaths. In addition, the
commissioner or the duly authorized representative:
(i) Shall have access at all reasonable times to offices of state
agencies;
(ii) May examine all books, papers, records and documents in any such
state agency as pertain directly to the purchase, control or
distribution of commodities; and
(iii) May require any state agency to furnish such data, information
or statement as may be necessary.

4. General provisions for purchasing services. State agency
procurement practices for services shall incorporate the following:
a. The purchase of services by state agencies including the office of
general services shall be conducted in a manner which accords first
priority to preferred sources in accordance with the provisions of this
article when the services required are available in the form, function
and utility required by state agencies through a preferred source.
b. Centralized contracts for services may be procured by the office of
general services at the request of state agencies and state agencies may
when such centralized contracts are in the form, function or utility
required by said agency, purchase from established centralized
contracts. The state procurement council may, from time to time, require
that state agencies procure services from certain centralized contracts.
c. When services are not available from preferred sources consistent
with the provisions of this article in the form, function or utility
required by state agencies, state agencies may procure services
independently or in conjunction with other state agencies in accordance
with the provisions of this section.
d. Service contracts shall be awarded on the basis of best value to a
responsive and responsible offerer; or, in the case of multiple awards,
in accordance with paragraph c of subdivision ten of this section.
e. Any officer, body or agency of a political subdivision as defined
in section one hundred of the general municipal law or a district
therein, may make purchases of services through the office of general
services' centralized contracts for services, subject to the provisions
of section one hundred four of the general municipal law. The
commissioner may permit and prescribe the conditions for the purchase of
services through the office of general services' centralized contracts
for services by any public authority or public benefit corporation of
the state including the port authority of New York and New Jersey. The
commissioner is authorized to permit any public library, association
library, library system, cooperative library system, the New York
Library Association, and the New York State Association of Library
Boards or any other library except those which are operated by for
profit entities, to make purchases of services through the office of
general services' centralized contracts; provided, however, that such
entity so empowered shall accept sole responsibility for any payment due
with respect to such purchase.
f. (i) The state procurement council may issue guidelines for the
development of strategic partnering between the state and non-state
entities for the enhancement of the business interests of the state.
Strategic partnerships may be developed during the course of a long-term
contractual relationship between a state agency and the contractor and
take the form of the joint development of new commodities and services,
not otherwise available, which are cost-beneficial to the state.
Strategic partnerships may also include the sharing of expertise,
efforts and resources directed at providing goods and services in a
manner which provides best value to the state. Strategic partnerships
shall be accomplished by amendment to existing contracts, to make such
commodities, processes and services available to the state provided such
applications are cost beneficial. Ninety days prior to the mid-term
point of each such contract amendment based upon a strategic
partnership, each state entity involved in the contract must submit to
the state comptroller a detailed written analysis reviewing each of the
following:
(A) the continuing validity of the initial justification
documentation, submitted with original contract and any amendments
thereto;
(B) whether the commodities or services contracted for are currently
being utilized to the extent initially anticipated;
(C) a thorough analysis of changes in available technologies effecting
the continuing need for the commodities or services currently being
utilized;
(D) new products or services not available at the commencement of the
contract which may be more compatible with the needs of the state agency
or agencies involved;
(E) the non-state entity has performed satisfactorily throughout the
term of the contract; and
(F) a cost analysis setting forth the reasonableness for the
continuation of the contractual relationship with the non-state entity.
(ii) The state comptroller shall have ninety days to review such
documentation submitted by the state agency and may, during that period
or at the end of such period, request additional information from the
state agency. Further, the comptroller may transmit written suggestions
of possible modifications to be considered by the state agency to the
contract or any amendment thereto.
(iii) Guidelines must include the definition of a strategic
partnership, the conditions under which such a partnership provides the
state with best value acquisitions, the minimum expected outcomes and
the allowable term. Approval of a strategic partnering arrangement shall
be dependent on a written finding issued by the commissioner of the
state agency that the non-state entity has performed satisfactorily with
the state and that such an arrangement is in the best interest of the
state in accordance with state procurement council guidelines and
subject to the approval of the state comptroller.

5. Process for conducting state procurements. The process for
conducting state procurements for services and commodities shall be as
follows:
a. Determination of need. State agencies shall be responsible for
determining the need for a given service or commodity:
(i) For commodities, upon such determination of need, state agencies
shall ascertain whether the commodity is available in the form, function
and utility consistent with their needs from preferred sources and if
so, shall purchase said commodity from a preferred source in accordance
with the provisions of this article. If not so available, state agencies
shall determine whether the commodity is available in the form, function
and utility consistent with their needs on a centralized contract and if
so, except as provided in subparagraph (v) of paragraph a of subdivision
three of this section, shall purchase said commodity using the
centralized contract. If a commodity is not available in the form,
function and utility consistent with the needs of the state agency from
a preferred source or a centralized contract or as provided for in
subparagraph (v) of paragraph a of subdivision three of this section,
the state agency may procure the commodity independently or in
conjunction with another state agency in accordance with paragraph c of
subdivision three of this section.
(ii) For services, upon such determination of need, state agencies
shall ascertain whether the service is available in the form, function
and utility consistent with their needs from preferred sources and, if
so, shall purchase said service through the preferred source in
accordance with the provisions of this article. If not so available,
state agencies may:
(A) Purchase the service if it is available in the form, function and
utility consistent with their needs using an established centralized
contract procured by either the office of general services or another
state agency;
(B) Request that the office of general services procure such a
service, particularly with respect to those services having utility
and/or benefit to more than one state agency; or
(C) Procure the service independently or in conjunction with another
state agency.
b. The state procurement council may, from time to time, require state
agencies to procure certain services from centralized contracts.

6. Discretionary buying thresholds. Pursuant to guidelines established
by the state procurement council: the commissioner may purchase services
and commodities in an amount not exceeding fifty thousand dollars
without a formal competitive process; state agencies may purchase
services and commodities in an amount not exceeding fifteen thousand
dollars without a formal competitive process; and state agencies may
purchase commodities or services from small business concerns or those
certified pursuant to article fifteen-A of the executive law, or
commodities or technology that are recycled or remanufactured, in an
amount not exceeding fifty thousand dollars without a formal competitive
process.

6-a. Discretionary purchases. Notwithstanding the provisions of
subdivision two of section one hundred twelve of this chapter relating
to the dollar threshold requiring the state comptroller's approval of
contracts, or article four-C of the economic development law, the
commissioner of general services may make purchases or enter into
contracts for the acquisition of commodities and services having a value
not exceeding thirty thousand dollars without prior approval by any
other state officer or agency in accordance with procedures and
requirements set forth in this article.

7. Method of procurement. Consistent with the requirements of
subdivisions three and four of this section, state agencies shall select
among permissible methods of procurement including, but not limited to,
an invitation for bid, request for proposals or other means of
solicitation pursuant to guidelines issued by the state procurement
council. Except where otherwise provided by law, procurements shall be
competitive. State agencies shall document the determination of the
method of procurement and the basis of award in the procurement record.
Where the basis for award is the best value offer, the state agency
shall document, in the procurement record and in advance of the initial
receipt of offers, the determination of the evaluation criteria, which
whenever possible, shall be quantifiable, and the process to be used in
the determination of best value and the manner in which the evaluation
process and selection shall be conducted.

8. Public notice. All procurements by state agencies in excess of
fifteen thousand dollars shall be advertised in the state's procurement
opportunities newsletter in accordance with article four-C of the
economic development law.

9. Soliciting and accepting offers. For purchases from sources other
than preferred sources and for purchases in excess of the discretionary
buying threshold established in subdivision six of this section:
a. The commissioner or a state agency shall select a formal
competitive procurement process in accordance with guidelines
established by the state procurement council and document its
determination in the procurement record. The process shall include, but
is not limited to, a clear statement of need; a description of the
required specifications governing performance and related factors; a
reasonable process for ensuring a competitive field; a fair and equal
opportunity for offerers to submit responsive offers; and a balanced and
fair method of award. Where the basis for the award is best value,
documentation in the procurement record shall, where practicable,
include a quantification of the application of the criteria to the
rating of proposals and the evaluation results, or, where not
practicable, such other justification which demonstrates that best value
will be achieved.
b. The solicitation shall prescribe the minimum specifications or
requirements that must be met in order to be considered responsive and
shall describe and disclose the general manner in which the evaluation
and selection shall be conducted. Where appropriate, the solicitation
shall identify the relative importance and/or weight of cost and the
overall technical criterion to be considered by a state agency in its
determination of best value.
c. Where provided in the solicitation, state agencies may require
clarification from offerers for purposes of assuring a full
understanding of responsiveness to the solicitation requirements. Where
provided for in the solicitation, revisions may be permitted from all
offerers determined to be susceptible of being selected for contract
award, prior to award. Offerers shall be accorded fair and equal
treatment with respect to their opportunity for discussion and revision
of offers. Disclosure of the content of competing offers other than
statistical tabulations of bids received in response to an invitation
for bids, or of any clarifications of or any revisions thereto shall be
prohibited prior to award.
d. All offers may be rejected. Where provided in the solicitation,
separable portions of offers may be rejected.
e. Every offer shall be firm and not revocable for a period of sixty
days from the bid opening, or such other period of time specified in the
solicitation to the extent not inconsistent with section 2-205 of the
uniform commercial code. Subsequent to such sixty day or other specified
period, any offer is subject to withdrawal communicated in a writing
signed by the offeror.

* f. Prior to making an award of contract, each state agency shall
make a determination of responsibility of the proposed contractor.

* NB Effective until January 1, 2006

* f. Prior to making an award of contract, each state agency shall
make a determination of responsibility of the proposed contractor which
shall supplement, as appropriate, but not supersede the determination of
responsibility that may be required pursuant to section one hundred
thirty-nine-k of this chapter.

* NB Effective January 1, 2006

g. A procurement record shall be maintained for each procurement
identifying, with supporting documentation, decisions made by the
commissioner or state agency during the procurement process. The
procurement record shall include, but not be limited to each contract
amendment and the justification for each.

10. Letting of contracts. Contracts for commodities shall be awarded
on the basis of lowest price to a responsive and responsible offerer.
Contracts for services shall be awarded on the basis of best value from
a responsive and responsible offerer. Multiple awards for services and
commodities shall be conducted in accordance with paragraph c of this
subdivision.
a. Selection and award shall be a written determination in the
procurement record made by the commissioner or a state agency in a
manner consistent with the provisions of the solicitation. In the event
two offers are found to be substantially equivalent, price shall be the
basis for determining the award recipient or, when price and other
factors are found to be substantially equivalent, the determination of
the commissioner or agency head to award a contract to one or more of
such bidders shall be final. The basis for determining the award shall
be documented in the procurement record.
b. Single or sole source procurements for services or commodities, or
procurements made to meet emergencies arising from unforeseen causes,
may be made without a formal competitive process and shall only be made
under unusual circumstances and shall include a determination by the
commissioner or the state agency that the specifications or requirements
for said purchase have been designed in a fair and equitable manner. The
purchasing agency shall document in the procurement record, subject to
review by the state comptroller, the bases for a determination to
purchase from a single source or sole source, or the nature of the
emergency giving rise to the procurement.
c. The commissioner or state agency may elect to award a contract to
one or more responsive and responsible offerers 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.
d. It shall be in the discretion of the commissioner or state agency
to require a bond or other guarantee of performance, and to approve the
amount, form and sufficiency thereof.
e. The commissioner may authorize purchases required by state agencies
or other authorized purchasers by letting a contract pursuant to a
written agreement, 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.
f. The commissioner is authorized to let centralized contracts, in
accordance with the procedures of this section, 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.

11. Reasonableness of results. It shall be the responsibility of the
head of each state agency to periodically sample the results of the
procurement process to test for reasonableness; to ensure that the
results withstand public scrutiny and that the quality and the price of
the purchase makes sense; and to ensure that purchasing is conducted in
a manner consistent with the best interests of the state.

12. Review by the office of the state comptroller. Review by the
office of the state comptroller shall be in accordance with section one
hundred twelve of this chapter.

13. Technological procurement improvements. The state procurement
council may request that the office of general services provide, or
recommend to the state comptroller to provide for the utilization of
technological advances and efficiencies in the procurement process
including, but not limited to, electronic ordering and payment,
procurement cards and similar improvements.

14. Reporting. To support prudent procurement management, oversight
and policy-making, the department of audit and control shall report
annually on a fiscal year basis by July first of the ensuing year to the
state procurement council, the governor, and the legislative fiscal
committees providing data concerning active procurement contracts above
fifteen thousand dollars, including but not limited to:
(i) a listing of individual and centralized contracts, including
vendor name, comptroller approval dates, dollar value of such contracts,
the state agency which let the contract and/or state agencies which
purchased off centralized contracts, expenditures made on each such
contract and by which agencies during the fiscal year and life to date,
citing contract category codes, source selection method, including
"lowest price", "best value", sole source, single source, negotiated and
emergency procurement subtotaled by agency and by type of commodity or
service;
(ii) frequency of contracts awarded during this fiscal year by number
of bids/proposals and source selection method;
(iii) number of contracts disapproved by the department of audit and
control during the fiscal year and reasons for disapproval by agency and
by source selection method, number and outcome of bid protests; and
(iv) a summary report listing total number and amount of contracts
awarded for the prior fiscal year and total year-to-date expenditures
for all contracts, with subtotals by agency and major contract category
including, but not limited to, consultant, construction, equipment,
grants, leases, land claim, miscellaneous services, printing, repayment
agreements, revenue agreements, intergovernmental agreements, and
commodities; a comparison of centralized and agency contracts by number
of contracts, number of agencies purchasing off of centralized contracts
or entering into contracts, contract amounts and year-to-date
expenditures; comparison of contracts by source selection method by
number of contracts, contract amounts, and year-to-date expenditures.

* NB Repealed June 30, 2006

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