N.Y. STF Law § 162 — New York Code / Act STF / Article 11 / Section 162
Preferred sources
Status: in_force

§ 162. Preferred sources.  1. Purpose. To advance special social and\neconomic goals, selected providers shall have preferred source status\nfor the purposes of procurement in accordance with the provisions of\nthis section.  Procurement from these providers shall be exempted from\nthe competitive procurement provisions of section one hundred\nsixty-three of this article and other competitive procurement statutes.\nSuch exemption shall apply to commodities produced, manufactured or\nassembled, including those repackaged to meet the form, function and\nutility required by state agencies, in New York state and, where so\ndesignated, services provided by those sources in accordance with this\nsection.\n  2. Preferred status. Preferred status as prescribed in this section\nshall be accorded to:\n  a. Commodities produced by the correctional industries program of the\ndepartment of corrections and community supervision and provided to the\nstate pursuant to subdivision two of section one hundred eighty-four of\nthe correction law;\n  b. Commodities and services produced by any qualified charitable\nnon-profit-making agency for the blind approved for such purposes by the\ncommissioner of the office of children and family services;\n  c. Commodities and services produced by any special employment program\nserving mentally ill persons, which shall not be required to be\nincorporated and which is operated by facilities within the office of\nmental health and is approved for such purposes by the commissioner of\nmental health;\n  * d. Commodities and services produced by any qualified charitable\nnon-profit-making agency for other disabled persons approved for such\npurposes by the commissioner of education, or incorporated under the\nlaws of this state and approved for such purposes by the commissioner of\neducation;\n  * NB Effective until October 4, 2028\n  * d. Commodities and services produced by any qualified charitable\nnon-profit-making agency for other severely disabled persons approved\nfor such purposes by the commissioner of education, or incorporated\nunder the laws of this state and approved for such purposes by the\ncommissioner of education;\n  * NB Effective October 4, 2028\n  * e. Commodities and services produced by a qualified veterans' entity\nproviding job and employment-skills training to veterans where such a\nentity is operated by the United States department of veterans affairs\nand is manufacturing products or performing services within this state\nand where such entity is approved for such purposes by the commissioner\nof education; or\n  * NB Effective until October 4, 2028\n  * e. Commodities and services produced by a qualified veterans'\nworkshop providing job and employment-skills training to veterans where\nsuch a workshop is operated by the United States department of veterans\naffairs and is manufacturing products or performing services within this\nstate and where such workshop is approved for such purposes by the\ncommissioner of education; or\n  * NB Effective October 4, 2028\n  * f. Commodities and services produced by any qualified charitable\nnon-profit-making entity for veterans approved for such purposes by the\ncommissioner of education, or incorporated under the laws of this state\nand approved for such purposes by the commissioner of education.\n  * NB Effective until October 4, 2028\n  * f. Commodities and services produced by any qualified charitable\nnon-profit-making workshop for veterans approved for such purposes by\nthe commissioner of education, or incorporated under the laws of this\nstate and approved for such purposes by the commissioner of education.\n  * NB Effective October 4, 2028\n  3. Public list of services and commodities provided by preferred\nsources.\n  a. By December thirty-first, nineteen hundred ninety-five, the\ncommissioner, in consultation with the commissioners of corrections and\ncommunity supervision, the office of children and family services, the\noffice of temporary and disability assistance, mental health and\neducation, shall prepare a list of all commodities and services that are\navailable and are being provided as of said date, for purchase by state\nagencies, public benefit corporations or political subdivisions from\nthose entities accorded preference or priority status under this\nsection. Such list may include references to catalogs and other\ndescriptive literature which are available directly from any provider\naccorded preferred status under this section. The commissioner shall\nmake this list available to prospective vendors, state agencies, public\nbenefit corporations, political subdivisions and other interested\nparties. Thereafter, new or substantially different commodities or\nservices may only be made available by preferred sources for purchase by\nmore than one state agency, public benefit corporation or political\nsubdivision after addition to said list.\n  b. After January first, nineteen hundred ninety-six, upon the\napplication of the commissioner of corrections and community\nsupervision, the commissioner of the office of children and family\nservices, the office of temporary and disability assistance, the\ncommissioner of mental health or the commissioner of education, or a\nnon-profit-making facilitating agency designated by one of the said\ncommissioners pursuant to paragraph e of subdivision six of this\nsection, the state procurement council may recommend that the\ncommissioner: (i) add commodities or services to, or (ii) in order to\ninsure that such list reflects current production and/or availability of\ncommodities and services, delete at the request of a preferred source,\ncommodities or services from, the list established by paragraph a of\nthis subdivision. The council may make a non-binding recommendation to\nthe relevant preferred source to delete a commodity or service from such\nlist. Additions may be made only for new services or commodities, or for\nservices or commodities that are substantially different from those\nreflected on said list for that provider. The decision to recommend the\naddition of services or commodities shall be based upon a review of\nrelevant factors as determined by the council including costs and\nbenefits to be derived from such addition and shall include an analysis\nby the office of general services conducted pursuant to subdivision six\nof this section. Unless the state procurement council shall make a\nrecommendation to the commissioner on any such application within one\nhundred twenty days of receipt thereof, such application shall be deemed\nrecommended. In the event that the state procurement council shall deny\nany such application, the commissioner or non-profit-making agency which\nsubmitted such application may, within thirty days of such denial,\nappeal such denial to the commissioner of general services who shall\nreview all materials submitted to the state procurement council with\nrespect to such application and who may request such further information\nor material as is deemed necessary. Within sixty days of receipt of all\ninformation or materials deemed necessary, the commissioner shall render\na written final decision on the application which shall be binding upon\nthe applicant and upon the state procurement council.\n  c. The list maintained by the office of general services pursuant to\nparagraph a of this subdivision shall be revised as necessary to reflect\nthe additions and deletions of commodities and services approved by the\nstate procurement council.\n  4. Priority accorded preferred sources. Except as provided in the New\nYork state printing and public documents law, priority among preferred\nsources shall be accorded as follows:\n  a. (i) When commodities are available, in the form, function and\nutility required by a state agency, public authority, commission, public\nbenefit corporation or political subdivision, said commodities must be\npurchased first from the correctional industries program of the\ndepartment of corrections and community supervision;\n  * (ii) When commodities are available, in the form, function and\nutility required by, a state agency or political subdivision or public\nbenefit corporation having their own purchasing agency, and such\ncommodities are not available pursuant to subparagraph (i) of this\nparagraph, said commodities shall then be purchased from approved\ncharitable non-profit-making agencies for the blind, provided, however,\nthe preferred source shall perform fifty percent or more of the work;\n  * NB Effective until October 4, 2028\n  * (ii) When commodities are available, in the form, function and\nutility required by, a state agency or political subdivision or public\nbenefit corporation having their own purchasing agency, and such\ncommodities are not available pursuant to subparagraph (i) of this\nparagraph, said commodities shall then be purchased from approved\ncharitable non-profit-making agencies for the blind;\n  * NB Effective October 4, 2028\n  * (iii) When commodities are available, in the form, function and\nutility required by, a state agency or political subdivision or public\nbenefit corporation having their own purchasing agency, and such\ncommodities are not available pursuant to subparagraphs (i) and (ii) of\nthis paragraph, said commodities shall then be purchased from a\nqualified non-profit-making agency for other disabled persons, a\nqualified special employment program for mentally ill persons, or a\nqualified veterans' entity; provided, however, the preferred source\nshall perform fifty percent or more of the work;\n  * NB Effective until October 4, 2028\n  * (iii) When commodities are available, in the form, function and\nutility required by, a state agency or political subdivision or public\nbenefit corporation having their own purchasing agency, and such\ncommodities are not available pursuant to subparagraphs (i) and (ii) of\nthis paragraph, said commodities shall then be purchased from a\nqualified non-profit-making agency for other severely disabled persons,\na qualified special employment program for mentally ill persons, or a\nqualified veterans' workshop;\n  * NB Effective October 4, 2028\n  b. * When services are available, in the form, function and utility\nrequired by, a state agency or political subdivision or public benefit\ncorporation having their own purchasing agency, equal priority shall be\naccorded the services rendered and offered for sale by qualified\nnon-profit-making agencies for the blind and those for the other\ndisabled, by qualified special employment programs for mentally ill\npersons and by qualified veterans' entities; provided, however, the\npreferred source shall perform fifty percent or more of the work. In the\ncase of services:\n  * NB Effective until October 4, 2028\n  * When services are available, in the form, function and utility\nrequired by, a state agency or political subdivision or public benefit\ncorporation having their own purchasing agency, equal priority shall be\naccorded the services rendered and offered for sale by qualified\nnon-profit-making agencies for the blind and those for the other\nseverely disabled, by qualified special employment programs for mentally\nill persons and by qualified veterans' workshops. In the case of\nservices:\n  * NB Effective October 4, 2028\n  (i) state agencies or political subdivisions or public benefit\ncorporations having their own purchasing agency shall make reasonable\nefforts to provide a notification describing their requirements to those\npreferred sources, or to the facilitating entity identified in paragraph\ne of subdivision six of this section, which provide the required\nservices as indicated on the official public list maintained by the\noffice of general services pursuant to subdivision three of this\nsection;\n  (ii) if, within ten days of the notification required by subparagraph\n(i) of this paragraph, one or more preferred sources or facilitating\nentities identified in paragraph e of subdivision six of this section\nsubmit a notice of intent to provide the service in the form, function\nand utility required, said service shall be purchased in accordance with\nthis section. If more than one preferred source or facilitating entity\nidentified in paragraph e of subdivision six of this section submits\nnotification of intent and meets the requirements, costs shall be the\ndetermining factor for purchase among the preferred sources;\n  (iii) if, within ten days of the notification required by subparagraph\n(i) of this paragraph, no preferred source or facilitating entity\nidentified in paragraph e of subdivision six of this section indicates\nintent to provide the service, then the service shall be procured in\naccordance with section one hundred sixty-three of this article. If,\nafter such period, a preferred source elects to bid on the service,\naward shall be made in accordance with section one hundred sixty-three\nof this article or as otherwise provided by law.\n  c. For the purposes of commodities and services produced by special\nemployment programs operated by facilities approved or operated by the\noffice of mental health, facilities within the office of mental health\nshall be exempt from the requirements of subparagraph (i) of paragraph a\nof this subdivision. When such requirements of the office of mental\nhealth cannot be met pursuant to subparagraph (ii) or (iii) of paragraph\na of this subdivision, or paragraph b of this subdivision, the office of\nmental health may purchase commodities and services which are\ncompetitive in price and comparable in quality to those which could\notherwise be obtained in accordance with this article, from special\nemployment programs operated by facilities within the office of mental\nhealth or other programs approved by the office of mental health.\n  5. Prices charged by the department of corrections and community\nsupervision. The prices to be charged for commodities produced by the\ncorrectional industries program of the department of corrections and\ncommunity supervision shall be established by the commissioner of\ncorrections and community supervision in accordance with section one\nhundred eighty-six of the correction law.\n  a. The prices established by the commissioner of corrections and\ncommunity supervision shall be based upon costs as determined pursuant\nto this subdivision, but shall not exceed a reasonable fair market price\ndetermined at or within ninety days before the time of sale. Fair market\nprice as used herein means the price at which a vendor of the same or\nsimilar product or service who is regularly engaged in the business of\nselling such product or service offers to sell such product or service\nunder similar terms in the same market. Costs shall be determined in\naccordance with an agreement between the commissioner of corrections and\ncommunity supervision and the director of the budget.\n  b. A purchaser of any such product or service may, at any time prior\nto or within thirty days of the time of sale, appeal the purchase price\nin accordance with section one hundred eighty-six of the correction law,\non the basis that it unreasonably exceeds fair market price. Such an\nappeal shall be decided by a majority vote of a three-member price\nreview board consisting of the director of the budget, the commissioner\nof corrections and community supervision and the commissioner or their\nrepresentatives. The decision of the review board shall be final.\n  6. Prices charged by agencies for the blind, other disabled and\nveterans' entity.\n  a. Except with respect to the correctional industries program of the\ndepartment of corrections and community supervision, it shall be the\nduty of the commissioner to determine, and from time to time review, the\nprices of all commodities and to approve the price of all services\nprovided by preferred sources as specified in this section offered to\nstate agencies, political subdivisions or public benefit corporations\nhaving their own purchasing office. The commissioner's price review and\napproval shall not be required for any purchases below one hundred\nthousand dollars.\n  b. In determining and revising the prices of such commodities or\nservices, consideration shall be given to the reasonable costs of labor,\nmaterials and overhead necessarily incurred by such preferred sources\nunder efficient methods of procurement, production, performance and\nadministration; however, the prices of such products and services shall\nbe as close to prevailing market price as practicable, but in no event\ngreater than fifteen percent above the prevailing market prices for the\nsame or equivalent commodities or services.\n  c. Such qualified charitable non-profit-making agencies for the blind\nand other disabled may make purchases of materials, equipment or\nsupplies, except printed material, from centralized contracts for\ncommodities in accordance with the conditions set by the office of\ngeneral services; provided that the qualified charitable\nnon-profit-making agency for the blind or other disabled shall accept\nsole responsibility for any payment due the vendor.\n  d. Such qualified charitable non-profit-making agencies for the blind\nand other disabled may make purchases of materials, equipment and\nsupplies directly from the correctional industries program administered\nby the commissioner of corrections and community supervision, subject to\nsuch rules as may be established from time to time pursuant to the\ncorrection law; provided that the qualified charitable non-profit-making\nagency for the blind or other disabled shall accept sole responsibility\nfor any payment due the department of corrections and community\nsupervision.\n  e. The commissioner of the office of children and family services\nshall appoint the New York state commission for the blind, or other\nnon-profit-making agency, other than the agency representing the other\ndisabled, to facilitate the distribution of orders among qualified\nnon-profit-making charitable agencies for the blind. The state\ncommissioner of education shall appoint a non-profit-making agency,\nother than the agency representing the blind, to facilitate the\ndistribution of orders among qualified non-profit-making charitable\nagencies for the other disabled and the veterans' entities. The state\ncommissioner of mental health shall facilitate the distribution of\norders among qualified special employment programs operated or approved\nby the office of mental health serving mentally ill persons.\n  f. The commissioner may request the state comptroller to conduct\naudits and examinations to be made of all records, books and data of any\nagency for the blind or the other disabled, any special employment\nprogram for mentally ill persons or any veterans' entity qualified under\nthis section to determine the costs of manufacture or the rendering of\nservices and the manner and efficiency of production and administration\nof such agency or special employment program or veterans' entity with\nrelation to any product or services purchased by a state agency or\npolitical subdivision or public benefit corporation and to furnish the\nresults of such audit and examination to the commissioner for such\naction as he or she may deem appropriate under this section.\n  7. Partnering with preferred sources. Private vendors may be accorded\npreferred source status but only when a proposal to a soliciting agency\nfor commodities or services includes a binding agreement with one or\nmore of the entities accorded preferred source status under this\nsection. The binding agreement shall provide that:\n  (i) The preferred source shall perform the majority of the work\nnecessary to such offering, and\n  (ii) The partnering proposal includes bona fide long term employment\nopportunities for persons who are clients of an entity accorded\npreferred source status herein, and\n  (iii) The partnering proposal offers the solicited services or\ncommodities at a price less than the price that otherwise would be\ncharged by the preferred source.\n  8. The council shall report to the governor, legislative fiscal\ncommittees and the director of the budget by December thirty-first,\nnineteen hundred ninety-five and thereafter annually, a separate list\nconcerning the denial of any application made pursuant to paragraph b of\nsubdivision three of this section, the reasons for such denial, whether\nsuch denial was appealed to the commissioner, and the final decision by\nthe commissioner on such application.\n  9. The provisions of this section shall supersede inconsistent\nprovisions of any general, special or local law, or the provisions of\nany charter.\n