The Business Council opposes this bill, which would enact the so-called “Ethical Standards for State Agency Contractors Act.” This bill would place mandates on state contractors that are both duplicative of current law and are onerous to the vendor community. The bill memo states “while a majority of contractors deliver services with integrity, some contractors could, nonetheless, engage in misconduct.” We question the need for this legislation to cure hypothetical problems given existing statutory requirements as well as procedural standards used in state contracting.
State Finance Law requires commodity and service contracts to be awarded to responsible and responsive offerers; the basic components of vendor responsibility include a vendor's qualifications, including legal authority and past performance, financial stability and integrity. Each agency, in making a determination of responsibility, is allowed to emphasize the evaluation of certain criteria, and is also permitted to require additional standards it deems to be critical for the scope of individual contracts. To aid agencies in making base level responsibility determinations all vendors are required to register and regularly update information on the VendRep system administered by the Comptroller's office.
This bill would impose contract mandates on state contractors assisting in the performance of “inherently governmental activities” and “mission-critical functions” or those that provide services to an “information risk contract”. The definition of “information risk contract” included in this bill is very broadly written and as such could be too broadly interpreted. If an agency believes there is a need to protect information a contractor may come across in during the performance of a contract, they already have the ability to require non-disclosure agreements, codes of conduct or even contractor-mandated trainings in the terms of the contract. Additionally, the mandate requiring state contractors to train their employees and subcontractors at least twice a year on conflicts of interest and the protection of non-public information is both excessive and will be extremely costly.
One of the purposes of the state Procurement Council, established under State Finance Law, Article XI, Section 161, is to develop recommendations to improve state procurement policy and practices and to develop guidelines governing state agency procurement, including vendor responsibility determinations and contract terms and conditions. The Procurement Council is made up of state agencies, the division of budget, legislative appointees and a representative from the state comptroller's office. If there is a need to require mandated contract clauses and biannual trainings as this bill seeks to do, then it should first be brought to the Procurement Council before these duplicative and onerous provisions are put in statute.
For these reasons, The Business Council opposes this legislation and urges the Legislature to oppose it as well.