S T A T E O F N E W Y O R K
________________________________________________________________________
7578--C
Cal. No. 828
2021-2022 Regular Sessions
I N S E N A T E
December 8, 2021
___________
Introduced by Sens. MANNION, CLEARE, JORDAN, PALUMBO, SKOUFIS, THOMAS --
read twice and ordered printed, and when printed to be committed to
the Committee on Rules -- recommitted to the Committee on Procurement
and Contracts in accordance with Senate Rule 6, sec. 8 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- reported favorably from said committee, ordered
to first and second report, ordered to a third reading, amended and
ordered reprinted, retaining its place in the order of third reading
-- again amended and ordered reprinted, retaining its place in the
order of third reading
AN ACT to amend the state finance law, in relation to preferred source
status for entities that provide employment to certain persons
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraphs d, e and f of subdivision 2, subparagraph (iii)
of paragraph a and the opening paragraph of paragraph b of subdivision 4
of section 162 of the state finance law, paragraphs d and e of subdivi-
sion 2 as amended and paragraph f of subdivision 2 as added by chapter
501 of the laws of 2002, subparagraph (iii) of paragraph a and the open-
ing paragraph of paragraph b of subdivision 4 as added by chapter 83 of
the laws of 1995, are amended to read as follows:
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' [work-
shop] ENTITY providing job and employment-skills training to veterans
where such a [workshop] ENTITY is operated by the United States depart-
ment of veterans affairs and is manufacturing products or performing
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13840-07-2
S. 7578--C 2
services within this state and where such [workshop] ENTITY is approved
for such purposes by the commissioner of education; or
f. Commodities and services produced by any qualified charitable non-
profit-making [workshop] ENTITY 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.
(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] ENTITY; PROVIDED, HOWEVER, THE PREFERRED SOURCE
SHALL PERFORM FIFTY PERCENT OR MORE OF THE WORK;
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] ENTITIES; PROVIDED,
HOWEVER, THE PREFERRED SOURCE SHALL PERFORM FIFTY PERCENT OR MORE OF THE
WORK. In the case of services:
§ 2. Subdivisions 6, 7 and 8 of section 162 of the state finance law,
subdivisions 6 and 8 as added by chapter 83 of the laws of 1995,
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 e of subdivi-
sion 6 as amended by chapter 265 of the laws of 2013, subdivision 7 as
amended by chapter 426 of the laws of 2002 and paragraph a of subdivi-
sion 8 as amended by chapter 95 of the laws of 2000, are amended to read
as follows:
6. Prices charged by agencies for the blind, other [severely] disabled
and veterans' [workshops] ENTITY.
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. THE COMMISSIONER'S PRICE REVIEW AND
APPROVAL SHALL NOT BE REQUIRED FOR ANY PURCHASES BELOW ONE HUNDRED THOU-
SAND DOLLARS.
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
S. 7578--C 3
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
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 distrib-
ution of orders among qualified non-profit-making charitable agencies
for the other [severely] disabled and the veterans' [workshops]
ENTITIES. The state commissioner of mental health shall facilitate the
distribution of orders among qualified special employment programs oper-
ated 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]
ENTITY qualified under this section to determine the costs of manufac-
ture or the rendering of services and the manner and efficiency of
production and administration of such agency or special employment
program or veterans' [workshop] ENTITY 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 exam-
ination to the commissioner for such action as he or she may deem appro-
priate 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 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] PRIVATE VENDORS MAY BE
ACCORDED PREFERRED SOURCE STATUS BUT 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 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] ARE
CLIENTS of an entity [previously] accorded preferred source status here-
in, and
S. 7578--C 4
(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.
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.
§ 3. The state procurement council shall submit a report by December
31, 2024, to the governor, the speaker of the assembly, and the tempo-
rary president of the senate on the direct labor workforce employed in
the provision of preferred source commodities and services, including
but not limited to objectives for direct labor to be provided under a
preferred source agreement by persons who are blind, veterans or by
people with disabilities, participation levels of persons who are blind,
veterans or by people with disabilities in preferred source contracts,
and recommendations for improving partnering with preferred sources.
§ 4. This act shall take effect immediately; provided that section one
of this act shall expire and be deemed repealed three years after such
effective date; and provided further that this act shall not apply to
any contracts or requests for proposals issued by government entities
before such date.
