BILL NUMBER: S8792

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the state finance law, in relation to the time frame for
the implementation of contracts with not-for-profit corporations

 
PURPOSE:

to ensure a timely procurement process for nonprofits contracting with
the state

 
SUMMARY OF PROVISIONS:

Section one of the bill amends section 179-q of the state finance law to
define "registered contract"

Section two of the bill amends section 179-s of the state finance law to
require state agencies register contracts with not-for-profit organiza-
tions within thirty days of the start date of the contract.

              

Section three provides the effective date

 
JUSTIFICATION:

New York State often outsources crucial programs to not for profits,
like early childhood education programs, mental health counseling, and
shelter for the homeless. The state relies on the important work not for
profits do because without them, these vital programs may not exist.
However, not for profit organizations contracting with the state have
repeatedly expressed concerns with the timeliness, or lack thereof, of
the current contract and procurement process in New York State for
years. In an effort to address these concerns, the state enacted the
Prompt Contracting Law in 1991 to help expedite contracts and reduce the
fiscal stress on not for profits. Thirty years later, the problem
persists and not for profits are facing immense financial hardships as a
result.

In May of 2020, the Office of the NYS Comptroller released their
"Not-ForProfit Prompt Contracting Annual Report" that found 50% of
contracts in 2019 had not been, approved until after the start date of
such contracts, compared to 47% of contracts in 2018. A not for profit
cannot receive payment from the state until the contract is formally
approved by the state comptroller. So, while not for profits are
required to start providing services by the start date of their
contracts, the state is not required to pay them within the same time-
frame.

In order for the not for profits to begin their work, they often have to
take out lines of credit to get by in the meantime. The May 2020 NYS
Comptroller report states, "the failure of the state agencies to process
contracts on time harms not for profit service providers, which in turn
erodes service delivery to vulnerable populations." The report recom-
mends "state agencies should take responsibility for their critical
roles, and make prompt contracting a priority."

This bill seeks to address this issue by requiring a state agency to
register contracts with not for profit organizations within 30 days of
the start date of the contract. Not for profit organizations provide
essential services to our state and support our economy by providing
jobs through their programs in communities throughout the state. This
bill ensures timely payments to these organizations so that they can
continue providing vital services to our state and to all New Yorkers.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.