S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6832--A
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 21, 2017
                                ___________
 
 Introduced by M. of A. GUNTHER, SANTABARBARA, BRINDISI, McDONOUGH, RICH-
   ARDSON,  RA,  THIELE,  WALSH  -- Multi-Sponsored by -- M. of A. ENGLE-
   BRIGHT -- read once and referred  to  the  Committee  on  Governmental
   Operations  -- recommitted to the Committee on Governmental Operations
   in accordance with Assembly Rule 3, sec. 2  --  committee  discharged,
   bill  amended,  ordered  reprinted  as amended and recommitted to said
   committee
 
 AN ACT to amend the state finance law, in relation to preferred  sources
   for state contracts for goods and services
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 162 of the state finance law, as added  by  chapter
 83  of  the laws of 1995, subdivision 2 as amended by chapter 501 of the
 laws of 2002, paragraph a of subdivision 2, paragraphs a and b of subdi-
 vision 3, subparagraph (i) of paragraph a of subdivision 4,  subdivision
 5,  and paragraphs a and d of subdivision 6 as amended by section 164 of
 subpart B of part C of chapter 62 of the laws of 2011,  paragraph  b  of
 subdivision  2  as  amended by chapter 519 of the laws of 2003, subpara-
 graph (iii) of paragraph b of subdivision 4 as amended by chapter 430 of
 the laws of 1997, paragraph e of subdivision 6 as amended by chapter 265
 of the laws of 2013, subdivision 7 as amended by chapter 426 of the laws
 of 2002, paragraph a of subdivision 8 as amended by chapter  95  of  the
 laws of 2000, is amended to read as follows:
   § 162. Preferred sources. 1. DEFINITIONS. AS USED IN THIS SECTION:
   (A) "PREFERRED SOURCE" SHALL MEAN:
   (I) COMMODITIES PRODUCED BY THE CORRECTIONAL INDUSTRIES PROGRAM OF THE
 DEPARTMENT OF CORRECTIONS AND COMMUNITY SUPERVISION;
   (II)  COMMODITIES  AND  SERVICES  PRODUCED BY ANY QUALIFIED CHARITABLE
 NON-PROFIT-MAKING AGENCY FOR THE BLIND APPROVED FOR SUCH PURPOSES BY THE
 COMMISSIONER OF CHILDREN AND FAMILY SERVICES;

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10450-04-8
              

 A. 6832--A                          2
 
   (III) 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;
   (IV)  COMMODITIES  AND  SERVICES  PRODUCED BY ANY QUALIFIED CHARITABLE
 NON-PROFIT-MAKING  AGENCY  FOR  OTHER  SIGNIFICANTLY  DISABLED   PERSONS
 APPROVED FOR SUCH PURPOSES BY THE COMMISSIONER OF EDUCATION, OR INCORPO-
 RATED UNDER THE LAWS OF THIS STATE AND APPROVED FOR SUCH PURPOSES BY THE
 COMMISSIONER OF EDUCATION;
   (V)  COMMODITIES  AND SERVICES PRODUCED 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 COMMISSION-
 ER OF EDUCATION;
   (VI) 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;
 OR
   (VII) COMMODITIES AND SERVICES PRODUCED BY A PRIVATE  VENDOR  ACCORDED
 PREFERRED SOURCE STATUS PURSUANT TO SUBDIVISION SEVEN OF THIS SECTION.
   B.  "FACILITATING ENTITY" SHALL REFER TO THOSE NON-PROFIT-MAKING ENTI-
 TIES IDENTIFIED PURSUANT TO PARAGRAPH  E  OF  SUBDIVISION  SIX  OF  THIS
 SECTION  BY  THE  COMMISSIONER  OF  CHILDREN  AND FAMILY SERVICES OR THE
 COMMISSIONER OF EDUCATION; AND THE COMMISSIONER OF MENTAL HEALTH.
   C. "PREVAILING MARKET PRICE" SHALL MEAN THE PREDOMINATE PRICE AT WHICH
 VENDORS OF THE SAME OR SIMILAR PRODUCT OR SERVICE 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. "UNDER  SIMI-
 LAR  TERMS" SHALL MEAN, WITHOUT LIMITATION, PROCUREMENTS CONDUCTED WITH-
 OUT COMPETITIVE BIDDING.
   2. 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.  Procure-
 ment from  these  providers  shall  be  exempted  from  the  competitive
 procurement  provisions of section one hundred sixty-three of this arti-
 cle 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 incorpo-
 rated and which is operated by facilities within the  office  of  mental

 A. 6832--A                          3

 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 commission-
 er 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 commission-
 er 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 commis-
 sioner, in consultation with the commissioners of corrections and commu-
 nity supervision, [the office of] children  and  family  services,  [the
 office of] temporary and disability assistance, mental health and educa-
 tion, shall prepare a list (THE "PREFERRED SOURCE LIST OF OFFERINGS") of
 all  commodities  and services that are available and are being provided
 as of said date, for purchase by state agencies, public  benefit  corpo-
 rations  or  political subdivisions from those entities accorded prefer-
 ence or priority status under this section. Such list may include refer-
 ences to catalogs and other descriptive literature which  are  available
 directly  from  any provider accorded preferred status OR THE DESIGNATED
 FACILITATING ENTITY under this section. The commissioner shall make this
 list available to prospective vendors, state  agencies,  public  benefit
 corporations, political subdivisions and other interested parties. Ther-
 eafter,  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] FOR
 PURCHASES PURSUANT TO THE EXEMPTION ESTABLISHED PURSUANT TO THIS SECTION
 after addition to said list.
   b. After January first, nineteen hundred ninety-six, upon the applica-
 tion of the commissioner of corrections and community  supervision,  the
 commissioner  of  [the  office  of]  children  and  family services, the
 [office]  COMMISSIONER  of  temporary  and  disability  assistance,  the
 commissioner  of  mental  health  or the commissioner of education, or a
 non-profit-making facilitating [agency] ENTITY 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  commis-
 sioner:  (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

 A. 6832--A                          4
 
 relevant  factors  as determined by the council including THE PURPOSE OF
 THE PREFERRED SOURCE PROGRAM  IDENTIFIED  IN  SUBDIVISION  TWO  OF  THIS
 SECTION, costs and benefits to be derived from such addition, and [shall
 include]  an analysis by the office of general services conducted pursu-
 ant 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  OR  DESIGNATED  FACILITATING ENTITY 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. FOR THOSE COMMOD-
 ITIES AND SERVICES IDENTIFIED IN SECTIONS C  AND  E  OF  THE  "PREFERRED
 SOURCE  LIST  OF  OFFERINGS" AS OF JANUARY FIRST, TWO THOUSAND EIGHTEEN,
 ANY STATE AGENCIES, POLITICAL SUBDIVISIONS, PUBLIC BENEFIT  CORPORATIONS
 AND  OTHER  INTERESTED  PARTIES  CHOOSING  TO  PURCHASE FROM A PREFERRED
 SOURCE SHALL OBTAIN PRICE APPROVED PURSUANT TO SUBDIVISION SIX  OF  THIS
 SECTION.
   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 util-
 ity  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 depart-
 ment 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-pro-
 fit-making agencies for the blind;
   (iii) When commodities are available, in the form, function and utili-
 ty  required by, a state agency or political subdivision or public bene-
 fit corporation having their own purchasing agency, and such commodities
 are not available pursuant to subparagraphs (i) and (ii) of  this  para-
 graph,  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

 A. 6832--A                          5
 
 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 corpo-
 rations having their own purchasing agency shall make reasonable efforts
 to provide a WRITTEN 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] PRICE 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  iden-
 tified  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  compet-
 itive  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.

 A. 6832--A                          6
 
   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.  (I)  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.
   (II) WITH RESPECT TO THE PURCHASE OF SERVICES, IT SHALL BE THE DUTY OF
 THE  COMMISSIONER  TO  REVIEW  AND  TO APPROVE THE PRICE OF ALL SERVICES
 OFFERED THAT HAVE A VALUE OVER TWO HUNDRED THOUSAND DOLLARS ANNUALLY, TO
 BE PROVIDED BY THE FACILITATING ENTITY IN RESPONSE TO THE WRITTEN  SCOPE
 OF  SERVICES ISSUED BY THE STATE AGENCY, POLITICAL SUBDIVISION OR PUBLIC
 BENEFIT CORPORATION. THE FACILITATING ENTITIES IDENTIFIED IN PARAGRAPH E
 OF THIS SUBDIVISION SHALL PROVIDE TO THE COMMISSIONER, WITHIN A  REASON-
 ABLE  TIME  FOLLOWING  THE  REQUEST, INFORMATION TO DETERMINE PREVAILING
 MARKET PRICE. SUCH INFORMATION SHALL INCLUDE  A  PRICE  APPLICATION  AND
 EITHER  COMPARABLE PRICING FROM PRIVATE CONTRACTS, BENCHMARKING PROVIDED
 BY AN INDEPENDENT THIRD PARTY SUPPLIED BY THE  FACILITATING  ENTITY,  OR
 ATTESTATION BY THE STATE AGENCY, POLITICAL SUBDIVISION OR PUBLIC BENEFIT
 CORPORATION  OF PRICE REASONABLENESS. WHERE APPROPRIATE, THE PROVIDER OF
 SUCH INFORMATION MAY REQUEST THAT  SUCH  INFORMATION  BE  EXEMPTED  FROM
 DISCLOSURE  IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (A) OF SUBDI-
 VISION FIVE OF SECTION EIGHTY-NINE OF THE  PUBLIC  OFFICERS  LAW.  STATE
 AGENCIES,  POLITICAL  SUBDIVISIONS,  OR  PUBLIC BENEFIT CORPORATIONS MAY
 ISSUE A REQUEST FOR THE INFORMATION TO ASSIST THE COMMISSIONER IN ESTAB-
 LISHING PREVAILING MARKET PRICES. THIS PRICE  REVIEW  PROCESS  SHALL  BE
 CONCLUDED WITHIN NINETY DAYS OF RECEIPT THEREOF BY THE COMMISSIONER OF A
 PRICE APPLICATION. OTHERWISE, SUCH APPLICATION SHALL BE DEEMED APPROVED.
   b.  In  determining  and  revising  the  prices of such commodities or
 services, IN INSTANCES WHERE  THE  PREVAILING  MARKET  PRICE  CANNOT  BE
 REASONABLY  DETERMINED  BY  COMPARABLE  PRICE  INFORMATION  FROM PRIVATE
 CONTRACTS, THIRD PARTY BENCHMARKING  OR  ATTESTATION  BY  THE  CUSTOMER,
 consideration shall be given to the reasonable costs of labor, materials
 and  overhead necessarily incurred by such preferred sources under effi-
 cient methods  of  procurement,  production,  performance  and  adminis-
 tration;  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  respon-
 sive 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-mak-
 ing  agency  for  the blind or other severely disabled shall accept sole
 responsibility for any payment due the vendor.

 A. 6832--A                          7
 
   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  adminis-
 tered  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-pro-
 fit-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 quali-
 fied 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 distrib-
 ution 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 employ-
 ment  program for mentally ill persons or any veterans' workshops quali-
 fied 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 appro-
 priate appointing agency as identified in paragraph e of subdivision six
 of this section, shall [conduct one or more pilot  studies]  REVIEW  AND
 APPROVE  APPLICATIONS  PROVIDED  BY  THE  FACILITATING  ENTITY 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 NON-PROFIT-MAKING entities
 accorded preferred source status [under] IDENTIFIED IN  PARAGRAPH  E  OF
 SUBDIVISION  SIX  OF  this  section. The binding agreement shall provide
 that:
   (i) The preferred source shall perform the majority of the work neces-
 sary 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] PURSUANT  TO
 THIS SECTION, and
   (iii) The partnering proposal offers the solicited services or commod-
 ities  at a price less than the price that otherwise would be charged by
 [a] THE preferred source THAT IS A PARTY TO THE PARTNERSHIP APPLICATION,
 OR

 A. 6832--A                          8
 
   (IV) THE PARTNERING PROPOSAL ALLOWS THE PREFERRED SOURCE TO ENGAGE  IN
 AN  APPROVED OFFERING THAT WOULD ALLOW FOR EMPLOYMENT OPPORTUNITIES THAT
 WOULD NOT OTHERWISE BE ABLE TO PROVIDE ON ITS OWN.
   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 subdivi-
 sion 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.
   §  2. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6832--B
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 21, 2017
                                ___________
 
 Introduced by M. of A. GUNTHER, SANTABARBARA, BRINDISI, McDONOUGH, RICH-
   ARDSON, RA, THIELE, WALSH, SEPULVEDA -- Multi-Sponsored by -- M. of A.
   ENGLEBRIGHT -- read once and referred to the Committee on Governmental
   Operations  -- recommitted to the Committee on Governmental Operations
   in accordance with Assembly Rule 3, sec. 2  --  committee  discharged,
   bill  amended,  ordered  reprinted  as amended and recommitted to said
   committee -- again  reported  from  said  committee  with  amendments,
   ordered reprinted as amended and recommitted to said committee
 
 AN  ACT to amend the state finance law, in relation to preferred sources
   for state contracts for goods and services
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Paragraph  m of subdivision 2 of section 161 of the state
 finance law, as amended by section 13 of part L of  chapter  55  of  the
 laws of 2012, is amended to read as follows:
   m.  Establish and, from time to time, amend guidelines with respect to
 publishing by state agencies of quarterly listings of projected procure-
 ments having a value greater than five thousand dollars  but  less  than
 [fifty]  TWO  HUNDRED  thousand dollars in the procurement opportunities
 newsletter established by article four-C  of  the  economic  development
 law.
   §  2.  Section 162 of the state finance law, as added by chapter 83 of
 the laws of 1995, subdivision 2 as amended by chapter 501 of the laws of
 2002, paragraph a of subdivision 2, paragraphs a and b of subdivision 3,
 subparagraph (i) of paragraph a of subdivision  4,  subdivision  5,  and
 paragraphs a and d of subdivision 6 as amended by section 164 of subpart
 B  of  part C of chapter 62 of the laws of 2011, paragraph b of subdivi-
 sion 2 as amended by chapter 519 of the laws of 2003, subparagraph (iii)
 of paragraph b of subdivision 4 as amended by chapter 430 of the laws of
 1997, paragraph e of subdivision 6 as amended by chapter 265 of the laws
 of 2013, subdivision 7 as amended by chapter 426 of the laws of 2002 and
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10450-06-8

 A. 6832--B                          2
 
 paragraph a of subdivision 8 as amended by chapter 95  of  the  laws  of
 2000, is amended to read as follows:
   § 162. Preferred sources. 1. DEFINITIONS. AS USED IN THIS SECTION:
   (A) "PREFERRED SOURCE" SHALL MEAN:
   (I) COMMODITIES PRODUCED BY THE CORRECTIONAL INDUSTRIES PROGRAM OF THE
 DEPARTMENT OF CORRECTIONS AND COMMUNITY SUPERVISION;
   (II)  COMMODITIES  AND  SERVICES  PRODUCED BY ANY QUALIFIED CHARITABLE
 NON-PROFIT-MAKING AGENCY FOR THE BLIND APPROVED FOR SUCH PURPOSES BY THE
 COMMISSIONER OF CHILDREN AND FAMILY SERVICES;
   (III) 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;
   (IV) COMMODITIES AND SERVICES PRODUCED  BY  ANY  QUALIFIED  CHARITABLE
 NON-PROFIT-MAKING   AGENCY  FOR  OTHER  SIGNIFICANTLY  DISABLED  PERSONS
 APPROVED FOR SUCH PURPOSES BY THE COMMISSIONER OF EDUCATION, OR INCORPO-
 RATED UNDER THE LAWS OF THIS STATE AND APPROVED FOR SUCH PURPOSES BY THE
 COMMISSIONER OF EDUCATION;
   (V) COMMODITIES AND SERVICES PRODUCED 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 COMMISSION-
 ER OF EDUCATION;
   (VI)  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;
 OR
   (VII)  COMMODITIES  AND SERVICES PRODUCED BY A PRIVATE VENDOR ACCORDED
 PREFERRED SOURCE STATUS PURSUANT TO SUBDIVISION SEVEN OF THIS SECTION.
   B. "FACILITATING ENTITY" SHALL REFER TO THOSE NON-PROFIT-MAKING  ENTI-
 TIES  IDENTIFIED  PURSUANT  TO  PARAGRAPH  E  OF SUBDIVISION SIX OF THIS
 SECTION BY THE COMMISSIONER OF  CHILDREN  AND  FAMILY  SERVICES  OR  THE
 COMMISSIONER OF EDUCATION; AND THE COMMISSIONER OF MENTAL HEALTH.
   C. "PREVAILING MARKET PRICE" SHALL MEAN THE PREDOMINATE PRICE AT WHICH
 VENDORS  OF  THE SAME OR SIMILAR PRODUCT OR SERVICE 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. "UNDER SIMI-
 LAR TERMS" SHALL MEAN, WITHOUT LIMITATION, PROCUREMENTS CONDUCTED  WITH-
 OUT COMPETITIVE BIDDING.
   2.  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.  Procure-
 ment  from  these  providers  shall  be  exempted  from  the competitive
 procurement provisions of section one hundred sixty-three of this  arti-
 cle  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

 A. 6832--B                          3

 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 incorpo-
 rated  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 commission-
 er 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 commission-
 er 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 commis-
 sioner, in consultation with the commissioners of corrections and commu-
 nity supervision, [the office of] children  and  family  services,  [the
 office of] temporary and disability assistance, mental health and educa-
 tion, shall prepare a list (THE "PREFERRED SOURCE LIST OF OFFERINGS") of
 all  commodities  and services that are available and are being provided
 as of said date, for purchase by state agencies, public  benefit  corpo-
 rations  or  political subdivisions from those entities accorded prefer-
 ence or priority status under this section. Such list may include refer-
 ences to catalogs and other descriptive literature which  are  available
 directly  from  any provider accorded preferred status OR THE DESIGNATED
 FACILITATING ENTITY under this section. The commissioner shall make this
 list available to prospective vendors, state  agencies,  public  benefit
 corporations, political subdivisions and other interested parties. Ther-
 eafter,  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] FOR
 PURCHASES PURSUANT TO THE EXEMPTION ESTABLISHED PURSUANT TO THIS SECTION
 after addition to said list.
   b. After January first, nineteen hundred ninety-six, upon the applica-
 tion of the commissioner of corrections and community  supervision,  the
 commissioner  of  [the  office  of]  children  and  family services, the
 [office]  COMMISSIONER  of  temporary  and  disability  assistance,  the
 commissioner  of  mental  health  or the commissioner of education, or a
 non-profit-making facilitating [agency] ENTITY 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  commis-
 sioner:  (i)  add commodities or services to, or (ii) in order to insure
 that such  list  reflects  current  production  and/or  availability  of

 A. 6832--B                          4
 
 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 THE  PURPOSE  OF
 THE  PREFERRED  SOURCE  PROGRAM  IDENTIFIED  IN  SUBDIVISION TWO OF THIS
 SECTION, costs and benefits to be derived from such addition, and [shall
 include] an analysis by the office of general services conducted  pursu-
 ant  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  OR  DESIGNATED  FACILITATING  ENTITY  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. FOR THOSE  COMMOD-
 ITIES  AND  SERVICES  IDENTIFIED  IN  SECTIONS C AND E OF THE "PREFERRED
 SOURCE LIST OF OFFERINGS" AS OF JANUARY FIRST,  TWO  THOUSAND  EIGHTEEN,
 ANY  STATE AGENCIES, POLITICAL SUBDIVISIONS, PUBLIC BENEFIT CORPORATIONS
 AND OTHER INTERESTED PARTIES  CHOOSING  TO  PURCHASE  FROM  A  PREFERRED
 SOURCE  SHALL  OBTAIN PRICE APPROVED PURSUANT TO SUBDIVISION SIX OF THIS
 SECTION.
   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 util-
 ity 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  depart-
 ment 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-pro-
 fit-making agencies for the blind;
   (iii) When commodities are available, in the form, function and utili-
 ty required by, a state agency or political subdivision or public  bene-
 fit corporation having their own purchasing agency, and such commodities
 are  not  available pursuant to subparagraphs (i) and (ii) of this para-
 graph, said commodities shall then be purchased from  a  qualified  non-
 profit-making  agency  for  other severely disabled persons, a qualified

 A. 6832--B                          5
 
 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 corpo-
 rations having their own purchasing agency shall make reasonable efforts
 to provide a WRITTEN 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] PRICE 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  iden-
 tified  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  compet-
 itive  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

 A. 6832--B                          6

 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.  (I)  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.
   (II) WITH RESPECT TO THE PURCHASE OF SERVICES, IT SHALL BE THE DUTY OF
 THE  COMMISSIONER  TO  REVIEW  AND  TO APPROVE THE PRICE OF ALL SERVICES
 OFFERED THAT HAVE A VALUE OVER TWO HUNDRED THOUSAND DOLLARS ANNUALLY, TO
 BE PROVIDED BY THE FACILITATING ENTITY IN RESPONSE TO THE WRITTEN  SCOPE
 OF  SERVICES ISSUED BY THE STATE AGENCY, POLITICAL SUBDIVISION OR PUBLIC
 BENEFIT CORPORATION. THE FACILITATING ENTITIES IDENTIFIED IN PARAGRAPH E
 OF THIS SUBDIVISION SHALL PROVIDE TO THE COMMISSIONER, WITHIN A  REASON-
 ABLE  TIME  FOLLOWING  THE  REQUEST, INFORMATION TO DETERMINE PREVAILING
 MARKET PRICE. SUCH INFORMATION SHALL INCLUDE  A  PRICE  APPLICATION  AND
 EITHER  COMPARABLE PRICING FROM PRIVATE CONTRACTS, BENCHMARKING PROVIDED
 BY AN INDEPENDENT THIRD PARTY SUPPLIED BY THE  FACILITATING  ENTITY,  OR
 ATTESTATION BY THE STATE AGENCY, POLITICAL SUBDIVISION OR PUBLIC BENEFIT
 CORPORATION  OF PRICE REASONABLENESS. WHERE APPROPRIATE, THE PROVIDER OF
 SUCH INFORMATION MAY REQUEST THAT  SUCH  INFORMATION  BE  EXEMPTED  FROM
 DISCLOSURE  IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (A) OF SUBDI-
 VISION FIVE OF SECTION EIGHTY-NINE OF THE  PUBLIC  OFFICERS  LAW.  STATE
 AGENCIES,  POLITICAL  SUBDIVISIONS,  OR  PUBLIC BENEFIT CORPORATIONS MAY
 ISSUE A REQUEST FOR THE INFORMATION TO ASSIST THE COMMISSIONER IN ESTAB-
 LISHING PREVAILING MARKET PRICES.  SUBCONTRACTING A PORTION OF THE  WORK
 UNDER  THE  PREFERRED  SOURCE PROGRAM SHALL BE AUTHORIZED PROVIDED THAT:
 THE ANNUAL VALUE OF THE SUBCONTRACT DOES NOT EXCEED  AUTHORIZED  THRESH-
 OLDS FOR DISCRETIONARY PURCHASE LEVELS; AND THE SERVICE PROVIDED THROUGH
 A  SUBCONTRACT IS INTEGRAL TO THE SERVICE BEING DELIVERED BY THE PROVID-
 ING PREFERRED SOURCE AGENCY OR PARTNERSHIP. WHEN THE SUBCONTRACTED  WORK
 IS NOT A PREFERRED SOURCE SERVICE, IT MUST BE SOURCED FROM A CENTRALIZED
 CONTRACT  WHEN  AVAILABLE,  UNLESS  A  BETTER VALUE CAN BE ACHIEVED FROM
 ANOTHER SOURCE. IF THE SUBCONTRACT  IS  SOURCED  OUTSIDE  A  CENTRALIZED
 CONTRACT THE SUBCONTRACTING SHALL BE SOURCED COMPETITIVELY BY THE FACIL-
 ITATING  AGENCY  OR THE PERFORMING PREFERRED SOURCE PROVIDER OR PARTNER.
 ALL DIRECT LABOR HOURS PERFORMED BY A SUBCONTRACTOR SHALL BE INCLUDED IN
 THE REQUIRED VALUE ADDED LABOR RATIO REQUIREMENTS.   THIS  PRICE  REVIEW
 PROCESS  SHALL BE CONCLUDED WITHIN NINETY DAYS OF RECEIPT THEREOF BY THE

 A. 6832--B                          7
 
 COMMISSIONER OF A PRICE APPLICATION. OTHERWISE, SUCH  APPLICATION  SHALL
 BE DEEMED APPROVED.
   b.  In  determining  and  revising  the  prices of such commodities or
 services, IN INSTANCES WHERE  THE  PREVAILING  MARKET  PRICE  CANNOT  BE
 REASONABLY  DETERMINED  BY  COMPARABLE  PRICE  INFORMATION  FROM PRIVATE
 CONTRACTS, THIRD PARTY BENCHMARKING  OR  ATTESTATION  BY  THE  CUSTOMER,
 consideration shall be given to the reasonable costs of labor, materials
 and  overhead necessarily incurred by such preferred sources under effi-
 cient methods  of  procurement,  production,  performance  and  adminis-
 tration;  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  respon-
 sive 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-mak-
 ing  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  adminis-
 tered  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-pro-
 fit-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 quali-
 fied  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 distrib-
 ution  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 employ-
 ment program for mentally ill persons or any veterans' workshops  quali-
 fied  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  appro-
 priate appointing agency as identified in paragraph e of subdivision six
 of  this  section,  shall [conduct one or more pilot studies] REVIEW AND
 APPROVE APPLICATIONS PROVIDED  BY  THE  FACILITATING  ENTITY  whereby  a

 A. 6832--B                          8
 
 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  NON-PROFIT-MAKING  entities
 accorded  preferred  source  status [under] IDENTIFIED IN PARAGRAPH E OF
 SUBDIVISION SIX OF this section. The  binding  agreement  shall  provide
 that:
   (i) The preferred source shall perform the majority of the work neces-
 sary 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] PURSUANT TO
 THIS SECTION, and
   (iii) The partnering proposal offers the solicited services or commod-
 ities at a price less than the price that otherwise would be charged  by
 [a] THE preferred source THAT IS A PARTY TO THE PARTNERSHIP APPLICATION,
 OR
   (IV)  THE PARTNERING PROPOSAL ALLOWS THE PREFERRED SOURCE TO ENGAGE IN
 AN APPROVED OFFERING THAT WOULD ALLOW FOR EMPLOYMENT OPPORTUNITIES  THAT
 WOULD NOT OTHERWISE BE ABLE TO PROVIDE ON ITS OWN.
   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 subdivi-
 sion 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)]  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.
   §  3. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6832--C
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 21, 2017
                                ___________
 
 Introduced by M. of A. GUNTHER, SANTABARBARA, BRINDISI, McDONOUGH, RICH-
   ARDSON,  RA,  THIELE, WALSH, ABINANTI, BARRON -- Multi-Sponsored by --
   M. of A.  ENGLEBRIGHT, GALEF -- read once and referred to the  Commit-
   tee  on  Governmental  Operations  --  recommitted to the Committee on
   Governmental Operations in accordance with Assembly Rule 3, sec. 2  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee -- again reported  from  said  committee
   with  amendments, ordered reprinted as amended and recommitted to said
   committee -- again  reported  from  said  committee  with  amendments,
   ordered reprinted as amended and recommitted to said committee
 
 AN  ACT to amend the state finance law, in relation to the definition of
   prevailing market price
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision  6 of section 162 of the state finance law is
 amended by adding a new paragraph g to read as follows:
   G. FOR THE PURPOSES  OF  THIS  SUBDIVISION  ONLY,  "PREVAILING  MARKET
 PRICE"  SHALL  MEAN  THE  AVERAGE  PRICE AT WHICH VENDORS OF THE SAME OR
 SIMILAR PRODUCT OR SERVICE 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.
   § 2. This act shall take effect on the first of January next  succeed-
 ing the date on which it shall have become a law.
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10450-09-8