NY State Fin L § 162 (2021)
2021 New York Laws STF - State Finance Article 11 - State Purchasing 162 - Preferred Sources.

§  162.  Preferred sources.  1. Purpose. To advance special social and economic goals, selected providers shall have  preferred  source  status for  the  purposes  of  procurement in accordance with the provisions of this section.  Procurement from these providers shall be  exempted  from the   competitive   procurement   provisions   of  section  one  hundred sixty-three of this article and other competitive procurement  statutes. Such  exemption  shall  apply  to  commodities produced, manufactured or assembled, including those repackaged to meet  the  form,  function  and utility  required  by  state  agencies,  in New York state and, where so designated, services provided by those sources in accordance  with  this section.   2.  Preferred  status.  Preferred status as prescribed in this section shall be accorded to:   a. Commodities produced by the correctional industries program of  the department  of corrections and community supervision and provided to the state pursuant to subdivision two of section one hundred eighty-four  of the correction law;   b.  Commodities  and  services  produced  by  any qualified charitable non-profit-making agency for the blind approved for such purposes by the commissioner of the office of children and family services;   c. Commodities and services produced by any special employment program serving mentally  ill  persons,  which  shall  not  be  required  to  be incorporated  and  which  is operated by facilities within the office of mental health and is approved for such purposes by the  commissioner  of mental health;   d.  Commodities  and  services  produced  by  any qualified charitable non-profit-making agency for other severely  disabled  persons  approved for  such  purposes  by  the  commissioner of education, or incorporated under the laws of this state and  approved  for  such  purposes  by  the commissioner of education;   e. Commodities and services produced by a qualified veterans' workshop providing  job  and  employment-skills training to veterans where such a workshop is operated by the United States department of veterans affairs and is manufacturing products or performing services within  this  state and   where   such  workshop  is  approved  for  such  purposes  by  the commissioner of education; or   f. Commodities and  services  produced  by  any  qualified  charitable non-profit-making  workshop  for  veterans approved for such purposes by the commissioner of education, or incorporated under the  laws  of  this state and approved for such purposes by the commissioner of education.   3.  Public  list  of  services  and  commodities provided by preferred sources.   a.  By  December  thirty-first,  nineteen  hundred  ninety-five,   the commissioner,  in consultation with the commissioners of corrections and community supervision, the office of children and family  services,  the office  of  temporary  and  disability  assistance,  mental  health  and education, shall prepare a list of all commodities and services that are available and are being provided as of said date, for purchase by  state agencies,  public  benefit  corporations  or political subdivisions from those  entities  accorded  preference  or  priority  status  under  this section.  Such  list  may  include  references  to  catalogs  and  other descriptive literature which are available directly  from  any  provider accorded  preferred  status  under  this section. The commissioner shall make this list available to prospective vendors, state agencies,  public benefit   corporations,  political  subdivisions  and  other  interested parties. Thereafter,  new  or  substantially  different  commodities  or services may only be made available by preferred sources for purchase by  more  than  one  state  agency,  public benefit corporation or political subdivision after addition to said list.   b.   After  January  first,  nineteen  hundred  ninety-six,  upon  the application  of  the   commissioner   of   corrections   and   community supervision,  the  commissioner  of  the  office  of children and family services,  the  office  of  temporary  and  disability  assistance,  the commissioner  of  mental  health  or the commissioner of education, or a non-profit-making facilitating agency designated  by  one  of  the  said commissioners  pursuant  to  paragraph  e  of  subdivision  six  of this section,  the  state  procurement  council  may   recommend   that   the commissioner:  (i)  add  commodities or services to, or (ii) in order to insure that such list reflects current production and/or availability of commodities and services, delete at the request of a  preferred  source, commodities  or  services  from,  the list established by paragraph a of this subdivision. The council may make a non-binding  recommendation  to the relevant preferred source to delete a commodity or service from such list. Additions may be made only for new services or commodities, or for services  or  commodities  that  are  substantially different from those reflected on said list for that provider. The decision to recommend  the addition  of  services  or  commodities  shall be based upon a review of relevant factors as  determined  by  the  council  including  costs  and benefits  to be derived from such addition and shall include an analysis by the office of general services conducted pursuant to subdivision  six of  this  section.  Unless  the  state  procurement council shall make a recommendation to the commissioner on any such  application  within  one hundred twenty days of receipt thereof, such application shall be deemed recommended.  In the event that the state procurement council shall deny any such application, the commissioner or non-profit-making agency which submitted such application may,  within  thirty  days  of  such  denial, appeal  such  denial  to  the commissioner of general services who shall review all materials submitted to the  state  procurement  council  with respect to such application and who may request such further information or  material as is deemed necessary. Within sixty days of receipt of all information or materials deemed necessary, the commissioner shall render a written final decision on the application which shall be binding  upon the applicant and upon the state procurement council.   c.  The  list maintained by the office of general services pursuant to paragraph a of this subdivision shall be revised as necessary to reflect the additions and deletions of commodities and services approved by  the state procurement council.   4.  Priority accorded preferred sources. Except as provided in the New York state printing and public documents law, priority  among  preferred sources shall be accorded as follows:   a.  (i)  When  commodities  are  available,  in the form, function and utility required by a state agency, public authority, commission, public benefit corporation or political subdivision, said commodities  must  be purchased   first  from  the  correctional  industries  program  of  the department of corrections and community supervision;  (ii) When commodities are available, in the form, function and utility required by, a state agency or political subdivision or  public  benefit corporation having their own purchasing agency, and such commodities are not  available  pursuant  to  subparagraph  (i)  of this paragraph, said commodities  shall  then   be   purchased   from   approved   charitable non-profit-making agencies for the blind;  (iii)  When  commodities  are  available,  in  the  form, function and utility required by, a state agency or political subdivision  or  public benefit  corporation  having  their  own  purchasing  agency,  and  such commodities are not available pursuant to subparagraphs (i) and (ii)  of  this  paragraph,  said  commodities  shall  then  be  purchased  from  a qualified non-profit-making agency for other severely disabled  persons, a  qualified  special  employment program for mentally ill persons, or a qualified veterans' workshop;   b.  When  services  are  available,  in the form, function and utility required by, a state agency or political subdivision or  public  benefit corporation  having their own purchasing agency, equal priority shall be accorded the  services  rendered  and  offered  for  sale  by  qualified non-profit-making  agencies  for  the  blind  and  those  for  the other severely disabled, by qualified special employment programs for mentally ill persons and  by  qualified  veterans'  workshops.  In  the  case  of services:  (i)  state  agencies  or  political  subdivisions  or  public  benefit corporations having their own purchasing agency  shall  make  reasonable efforts to provide a notification describing their requirements to those preferred sources, or to the facilitating entity identified in paragraph e  of  subdivision  six  of  this  section,  which  provide the required services as indicated on the official  public  list  maintained  by  the office  of  general  services  pursuant  to  subdivision  three  of this section;  (ii) if, within ten days of the notification required by  subparagraph (i)  of  this  paragraph,  one or more preferred sources or facilitating entities identified in paragraph e of subdivision six  of  this  section submit  a  notice of intent to provide the service in the form, function and utility required, said service shall be purchased in accordance with this section. If more than one preferred source or  facilitating  entity identified  in  paragraph  e  of subdivision six of this section submits notification of intent and meets the requirements, costs  shall  be  the determining factor for purchase among the preferred sources;  (iii) if, within ten days of the notification required by subparagraph (i)  of  this  paragraph,  no  preferred  source  or facilitating entity identified in paragraph e of subdivision six of this  section  indicates intent  to  provide  the  service, then the service shall be procured in accordance with section one hundred sixty-three  of  this  article.  If, after  such  period,  a  preferred  source elects to bid on the service, award shall be made in accordance with section one  hundred  sixty-three of this article or as otherwise provided by law.   c.  For  the  purposes of commodities and services produced by special employment programs operated by facilities approved or operated  by  the office  of  mental health, facilities within the office of mental health shall be exempt from the requirements of subparagraph (i) of paragraph a of this subdivision. When such requirements  of  the  office  of  mental health cannot be met pursuant to subparagraph (ii) or (iii) of paragraph a of this subdivision, or paragraph b of this subdivision, the office of mental   health   may   purchase  commodities  and  services  which  are competitive in price and comparable in  quality  to  those  which  could otherwise  be  obtained  in  accordance  with this article, from special employment programs operated by facilities within the office  of  mental health or other programs approved by the office of mental health.   5.  Prices  charged  by  the  department  of corrections and community supervision. The prices to be charged for commodities  produced  by  the correctional  industries  program  of  the department of corrections and community supervision  shall  be  established  by  the  commissioner  of corrections  and  community  supervision  in accordance with section one hundred eighty-six of the correction law.   a. The prices established  by  the  commissioner  of  corrections  and community  supervision  shall be based upon costs as determined pursuant to this subdivision, but shall not exceed a reasonable fair market price  determined at or within ninety days before the time of sale. Fair market price as used herein means the price at which a vendor of  the  same  or similar  product  or service who is regularly engaged in the business of selling  such  product or service offers to sell such product or service under similar terms in the same market. Costs  shall  be  determined  in accordance with an agreement between the commissioner of corrections and community supervision and the director of the budget.   b.  A  purchaser of any such product or service may, at any time prior to or within thirty days of the time of sale, appeal the purchase  price in accordance with section one hundred eighty-six of the correction law, on  the  basis  that  it unreasonably exceeds fair market price. Such an appeal shall be decided by a  majority  vote  of  a  three-member  price review  board consisting of the director of the budget, the commissioner of corrections and community supervision and the commissioner  or  their representatives. The decision of the review board shall be final.   6.  Prices  charged by agencies for the blind, other severely disabled and veterans' workshops.   a. Except with respect to the correctional industries program  of  the department  of  corrections  and  community supervision, it shall be the duty of the commissioner to determine, and from time to time review, the prices of all commodities and to  approve  the  price  of  all  services provided  by  preferred  sources as specified in this section offered to state agencies, political subdivisions or  public  benefit  corporations having their own purchasing office.   b.  In  determining  and  revising  the  prices of such commodities or services, consideration shall be given to the reasonable costs of labor, materials and overhead necessarily incurred by  such  preferred  sources under  efficient  methods  of  procurement,  production, performance and administration; however, the prices of such products and services  shall be  as  close to prevailing market price as practicable, but in no event greater than fifteen percent above, the prevailing market  prices  among responsive offerors for the same or equivalent commodities or services.   c.  Such qualified charitable non-profit-making agencies for the blind and other severely disabled may make purchases of  materials,  equipment or  supplies,  except  printed  material, from centralized contracts for commodities in accordance with the  conditions  set  by  the  office  of general    services;    provided    that    the   qualified   charitable non-profit-making agency for the blind or other severely disabled  shall accept sole responsibility for any payment due the vendor.   d.  Such qualified charitable non-profit-making agencies for the blind and other severely disabled may make purchases of  materials,  equipment and   supplies   directly   from  the  correctional  industries  program administered  by  the  commissioner   of   corrections   and   community supervision,  subject  to  such rules as may be established from time to time pursuant  to  the  correction  law;  provided  that  the  qualified charitable  non-profit-making  agency  for  the  blind or other severely disabled shall accept  sole  responsibility  for  any  payment  due  the department of corrections and community supervision.   e.  The  commissioner  of  the  office of children and family services shall appoint the New York state commission  for  the  blind,  or  other non-profit-making  agency,  other than the agency representing the other severely disabled,  to  facilitate  the  distribution  of  orders  among qualified non-profit-making charitable agencies for the blind. The state commissioner  of  education  shall  appoint  a non-profit-making agency, other  than  the  agency  representing  the  blind,  to  facilitate  the distribution  of  orders  among  qualified  non-profit-making charitable agencies for the other severely disabled and  the  veterans'  workshops. The   state   commissioner   of   mental  health  shall  facilitate  the  distribution of  orders  among  qualified  special  employment  programs operated or approved by the office of mental health serving mentally ill persons.   f.  The  commissioner  may  request  the  state comptroller to conduct audits and examinations to be made of all records, books and data of any agency for the  blind  or  the  other  severely  disabled,  any  special employment  program  for mentally ill persons or any veterans' workshops qualified under this section to determine the costs  of  manufacture  or the  rendering  of  services and the manner and efficiency of production and administration of such  agency  or  special  employment  program  or veterans' workshop with relation to any product or services purchased by a  state  agency  or political subdivision or public benefit corporation and to furnish  the  results  of  such  audit  and  examination  to  the commissioner  for  such  action  as he or she may deem appropriate under this section.   7.  Partnering  with  preferred  sources.  The  commissioner  of   the appropriate   appointing   agency   as  identified  in  paragraph  e  of subdivision six of this section, shall conduct one or more pilot studies whereby a private vendor may be accorded  preferred  source  status  for purposes  of this section. The pilot studies shall seek to ascertain the benefits of partnerships between private  industry  and  those  entities accorded preferred source status as specified in this section. Preferred source status under a partnering arrangement may only be accorded when a proposal  to  a soliciting agency for commodities or services includes a binding agreement with one or more of the  entities  accorded  preferred source  status  under  this section. The binding agreement shall provide that:  (i) The preferred source  shall  perform  the  majority  of  the  work necessary to such offering, and  (ii)  The  partnering proposal includes bona fide long term employment opportunities for persons who could  otherwise  be  new  clients  of  an entity previously accorded preferred source status herein, and  (iii)  The  partnering  proposal  offers  the  solicited  services  or commodities at a price less than  the  price  that  otherwise  would  be charged by a preferred source.   8.  a.  The  commissioner  of  the appropriate appointing agency shall report by December thirty-first, two thousand four, to the governor, the chairperson of the senate finance  committee,  the  chairperson  of  the assembly  ways  and  means committee and the director of the budget, the results  and  findings  of  each  pilot  study  conducted,  pursuant  to subdivision  seven  of  this  section,  and  include recommendations for improving partnering with preferred sources.   b. The council  shall  report  to  the  governor,  legislative  fiscal committees  and  the  director  of  the budget by December thirty-first, nineteen hundred ninety-five and thereafter annually,  a  separate  list concerning  the denial of any application made pursuant to paragraph (b) of subdivision three of this  section,  the  reasons  for  such  denial, whether  such  denial  was  appealed  to the commissioner, and the final decision by the commissioner on such application.   9.  The  provisions  of  this  section  shall  supersede  inconsistent provisions  of  any  general, special or local law, or the provisions of any charter.