PRIORITY ISSUE: State Procurement Law

The adopted budget extended the “Procurement Stewardship Act” for one year – until 6/30/06 (see Part K of S.3666/A. 6840) – but contained no program reforms.

A handful of reform measures have been proposed. The most significant include:
• while Governor Pataki has yet to propose Section 163 amendments, he released a general reform package that, among other things, would have places significant limitations on so-called “procurement lobbying.” This package has yet to be introduced in the State Legislature.
• State Comptroller Alan Hevesi has issued a broad proposal to reform the state’s procurement law. Among other things, this proposal would: increase discretionary purchasing thresholds for state agencies; strengthen the incentive to award contracts to small businesses, MBEs and WBEs, and for purchase of recycled or remanufactured products; implement new post-award disclosure requirement; and implement a “centralized system for agencies to use in determining vendor responsibility.” This proposal also has yet to be introduced by the legislature. Check this site for details.
• A number of other procurement bills have been introduced, including A.3 (Silver), dealing with public authority procurement activity; A.9 (Silver), which regulates procurement lobbying; S.3173 (Winner), dealing with procurement lobbying; S.5106 (Leibell), dealing also with authority procurement efforts.

Of these proposals, A.9 has passed the Assembly, none others have been approved by either house.

Three way negotiations are underway on the issue of regulation of procurement lobbying. The Assembly has already passed a bill expanding the state Lobbying Act to cover procurement lobbying (A.9-C/Silver); the Senate has introduced legislation on the same topic - S.3173/Winner, which is still in Senate Finance. The Governor has released several program bills that have yet to be introduced - one would regulate procurement lobbying, another would largely ban the practice. A third Pataki proposal would generally ban an "gifts" to public officials from entities with formal dealing with the state. The Business Council has opposed excessively broad expansion of the Lobbying Act, or creation of new, ambiguous compliance provisions within the Lobbying Act.
A.3 bill text
A.9 bill text
S.3173 bill text
For more information, contact Ken Pokalsky via e-mail at ken.pokalsky@bcnys.org or phone at 518/465-7511.

The purchase of goods and services by state and local governments in New York represents more than $25 billion in economic activity, and represents a major marketing opportunity for many Business Council members.  Therefore, the Business Council has a significant interest in the major 2005 legislative issue related to government procurement - extension of the state procurement law.

Section 163 of the State Finance Law, which is set to expire on June 30, 2005, sets forth basic provisions for state procurement process. Among other things, Section 163:

The Business Council believes that it is essential that the legislature act to extend the procurement statute by the June 30 sunset date. To do otherwise would cause significant disruption in the state's ability to function, and the business communities' ability to engage in this significant market segment. We believe that the current procurement act has served the state - and the business community - reasonably well, and should be extended largely "as is."

In addition, the legislature will be considering a number of other changes to state procurement law, outside of Section 163. These include, but are not limited to, proposals to create centralized bidder/vender registries, expand various purchase preference provisions, increases in discretionary bidding thresholds, incorporation of printing procurement into the general procurement law, and expanded provision to promote the purchase of recycled and re-manufactured goods. The Business Council believes that, while some of these proposals have real merit, their consideration should not be allowed to delay extension of Section 163.