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Procurement Stewardship Act Issues

Staff Contact: Ken Pokalsky

The following is background information about six areas related to the Procurement Stewardship Act and illustrative questions to initiate discussion.

  1. Procurement Stewardship Act Sunset
    State Finance Law §163 of the 1995 Procurement Stewardship Act is due to expire on June 30, 2006. Absent legislative action, there would be no statutory competitive bidding requirements or other authorized methods to procure commodities, services and technology.
    • Have particular provisions of the Procurement Stewardship Act been beneficial? Problematic? If so, which one(s)?
    • What are the three most important changes that your organization would like to see if the Procurement Stewardship Act was continued?
    • Should the law be made permanent? Should the law be extended for 5 years? 1 year?

  2. Procurement Thresholds: Discretionary, Pre-Audit, Advertising

    The Procurement Stewardship Act sets three types of thresholds.

    Discretionary thresholds are monetary levels below which state agencies can procure commodities, services and technology without formal competitive bid. The regular discretionary threshold is currently $15,000. To encourage purchases from certified minority- or women-owned businesses (MWBE) and NYS small businesses (SB), and of recycled or remanufactured (RR) products, state law provides a higher discretionary threshold of $50,000.

    The pre-audit threshold is $15,000. Purchases under $15,000 do not have to be reviewed in advance by the Office of the State Comptroller (under the pre-audit requirements of State Finance Law §112).
    The advertising threshold is $15,000. Procurements below this amount do not have to be individually advertised in the NYS Contract Reporter.
    • Should the discretionary thresholds remain the same or be changed? If changed, what level would you recommend?
    • Do the higher discretionary thresholds for procurements from MWBE, SB and of RR products serve their intended purpose?
    • If the general discretionary threshold was increased, should the MWBE, SB and RR discretionary thresholds be increased to maintain this incentive? If so, how much?

  3. Preferred Sources, Minority and Women-Owned Business Enterprises, Small Businesses, and Recycled and Remanufactured Products
  4. Through the Procurement Stewardship Act, the State seeks to achieve certain socio-economic goals by requiring or encouraging procurement from designated groups. State Finance Law §162 provides an exemption from the competitive bidding requirements for the procurement of commodities and services provided by Preferred Sources when such commodities or services meet the agency’s stated “form, function or utility.” State Finance Law §163 specifies that priority be given to purchasing from (1) preferred sources, (2) centralized contracts, (3) agency or multi-agency contracts, and (4) other means of contracting, such as competitive or non-competitive purchasing. Also, it provides higher discretionary thresholds to encourage State agency purchasing from MWBE, SB and of RR products.
    • Should the law be amended to clarify these priorities?
      - What changes would benefit participation by the Preferred Sources, MWBE, SB and RR sellers?
    • What has been the experience with the MWBE certification and registration process administered by the Department of Economic Development?
    • Does your business receive suitable notice of opportunities for MWBE/SB/RR product sales? If not, what improvements can be made to this process?

  5. State Contract Process

    State laws, executive orders, guidelines and bulletins set forth requirements for the state contract process. They specify advertising requirements, mandatory elements for a solicitation, factors to evaluate in awarding a contract, specific information to collect from vendors, mandatory contract terms and conditions, and a multi-tiered contract approval. Some requirements are more detailed than others. A frequent observation about State procurement is that it takes too long and is too complicated. What suggestions might you have for streamlining the following state procurement processes:
    • Advertising and solicitation
    • Evaluation of bids and tentative award
    • Negotiation with vendor and internal approval
    • Approval by the Office of the State Comptroller
  6. Vendor Responsibility
    State Finance Law §163(9)(f) requires that, prior to contract award, State agencies make a “responsibility determination” that assesses the vendor’s legal authority, integrity, financial and organizational capacity, and past performance on government contracts. This determination becomes part of the procurement record. The Office of the State Comptroller has interpreted State Finance Law §112 to require that the Comptroller be satisfied that a proposed contractor is responsible before approving a contract award.

    A project is underway to retain vendor responsibility information in an Internet-based system, operated by OSC and available to all contracting state entities and vendors. Vendors will be able to enter and maintain responses to a standardized set of vendor responsibility questions with access only to their records. Authorized contracting entity and OSC users will access vendor information to conduct vendor responsibility reviews.
    • Since January 1, 2005, has your business submitted a vendor responsibility questionnaire for review to a State agency? If so, what was your experience?
    • What do you see as the benefits and drawbacks of a central database?
  7. Debriefing and dispute resolution process

    The Procurement Guidelines issued by the State Procurement Council require State agencies to provide vendors with an opportunity for a debriefing regarding a submitted proposal. State Finance Law §163(9)(e) prohibits disclosure of the content of competing offers or clarifications (other than statistical tabulations) prior to award. The administrative process for vendor debriefing is established by the procuring agency.

    Similarly, the administrative process for dispute resolution is established by the individual agency. Civil Practice Law and Rules Article 78 set forth the judicial process for dispute resolution.
    • Do you consider vendor debriefings to be a beneficial and useful tool?
    • Should there be a statutorily required vendor debriefing process? Why? If yes, what should the process entail?
    • Are you in favor of releasing information on competitive bids prior to the award of the contract?
    • Should the administrative resolution of disputes by the procuring agency be final, or should the vendor be provided with the opportunity to present their bid dispute to the Office of the State Comptroller?
    • Should parties not directly involved in a procurement be permitted to dispute the award?

Do you have recommendations for how to improve the administrative bid dispute processes currently used by state agencies?