Competitive Bid Preferences
This Business Council opposes this legislation that would amend the competitive bidding provisions of our State Finance Law by giving a five percent bid preference for bidders whose “headquarters and primary business presence” are located within New York State.
While we appreciate the intent of promoting governmental sales by in-state business, the bill would actually result in economic damage for New York businesses looking to do business with other states.
Existing Section 165 of the State Finance Law prohibits the state from entering into a contract with a business from a state that gives preference to in-state business (i.e., “employs a preference or price distorting mechanism to the detriment of or otherwise discriminates against a New York state business enterprise in the procurement of commodities and services by the same or a non-governmental entity influenced by the same.”) Empire State Development is charged with maintaining a list of such discriminatory jurisdictions, currently listing Alaska, Hawaii, Louisiana, South Carolina, West Virginia, and Wyoming. In effect, businesses from those states are “blackballed” for New York procurement purposes.
Numerous other states have similar “discriminatory jurisdiction” provisions. As a result, if S.7596 were enacted into law, New York businesses would be barred from wining procurement contracts with most other state governments. By closing off out-of-state procurement markets, we believe this legislation would have an overall adverse impact on in-state business.
There are other steps that the state could take to increase participation by New York business in the government procurement process, including outreach efforts, technical assistance and others.
However, for the reasons discussed above, The Business Council opposes the adoption of this type of “discriminatory jurisdiction” legislation.