Governor Paterson Announces Changes to the Procurement Stewardship Act

Amendments to the Procurement Stewardship Act will enable small- and women- and minority-owned businesses to compete for state contracts

by / June 23, 2008

New York Gov. David A. Paterson joined State legislative leaders to announce an agreement on legislation which provides for major improvements and strategic changes to the 1995 Procurement Stewardship Act. These improvements will modernize the Act's requirements for the benefit of state agencies, local governments and the business community.

The Procurement Stewardship Act sets out the public procurement infrastructure for state agencies to competitively bid and contract for commodities, services and technology so that they can effectively and efficiently carry out their missions and provide essential services to the citizens of New York.

"This legislation will make procurement opportunities more accessible for all New Yorkers, especially small- and women- and minority- owned businesses," said Paterson. "Ensuring that our small businesses have the resources to be competitive with larger companies is a significant step in the overall economic development of our state. I am also pleased that with this legislation, procurement opportunities will be made more readily available through the Internet."

First and foremost, the bill supports more transparent and competitive state procurement practices by requiring agencies to better justify their approach when not using a standard competitive procurement, and to make public on their agency's Web site the reasons for contracting directly with a specific business. Agencies will also be responsible to publish information on winning bidders, and the Office of General Services (OGS) will make public its reasons for selections on centralized contracts.

Provisions of the bill also embrace the digital economy by clarifying that procurements can be conducted through the use of the Internet and other electronic tools. These changes open the procurement process to more businesses, and thereby increase competition. To enhance awareness of business opportunities, the Department of Economic Development will now publish the procurement opportunities newsletter on a daily basis and make it available, free of charge, on the Internet. In addition, the state's Procurement Council will study and report on possible approaches to developing an e-procurement system for New York.

The legislation also recognizes the importance of streamlining the public procurement process, while simultaneously supporting social and economic goals of the state. To that end, the ability for the state to purchase from small business will now be enhanced by new provisions which encourage regional contracts, and open the state's centralized contracts for continuous recruitment.

Municipalities will also benefit from the legislation because they will continue to be able to utilize the centralized contracts let by OGS and they will now have the right to purchase state surplus property before such property is made available for sale to the public on E-Bay. The state's business partners will benefit as well, as the bill requires a more open process for debriefing losing bidders, and clarifies the standard under which state agencies may use their discretionary purchasing authority.

Commissioner John C. Egan of OGS said: "Each year OGS administers more than 2,500 centralized contracts -- ranging from the purchase of green cleaning products and office supplies to school buses and snow plows -- with a combined value of more than $5 billion. The reforms agreed to by Governor Paterson and the legislative leaders allow OGS to continue putting policy into practice. The increased opportunity for small businesses to secure a state contract offers the potential to add employees and expand their business enterprise while at the same time increasing competition and reducing costs for taxpayers."

The current Act is set to expire on June 30, 2008. This legislation extends the Act for four years and continues authority for OGS to bid and award centralized contracts, under which state agencies, local governments and other authorized entities purchase an estimated $5.3 billion in commodities, services and technology.

The amendments originate from several public hearings conducted by the State Assembly in 2005 and 2008. The hearings addressed concerns of vendors, including specifically New York state small businesses and MWBEs. Additions to the legislation reflect testimony received and feedback provided at the hearings. OGS also conducted a number of public forums across the state in 2005 to address procurement concerns.

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