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New York Government Contracts Compliance Update

A. Two Important Changes That Impact Government Procurements In New York.

In May, 2014, New York issued the long-awaited Procurement Guidelines. The Guidelines contain a detailed review of procurement basics and general rules for solicitations. There is a complete discussion of Invitation for Bids (“IFB”) and Request for Proposals (“RFP”), the two major procurement tools.

The second major change concerns procurement ethics. Procurements in New York are subject to the Procurement Lobbying Act. Actions such as providing a vendor with information that is not available to other vendors, accepting a gift, or having lunch with a potential vendor may violate this state ethics law.

For all State procurements, all bidders are provided a designated agency contact and may not contact other agency representatives concerning the solicitation. Questions regarding compliance are referred to the New York State Joint Commission on Public Ethics (“JCOPE”).

B. What Do Contractors Need To Know About New York Compliance Requirements – Ten Point Checklist.

  1. Procurement Lobbying Law — must be followed; only communicate with designated agency contact.
  2. Sales tax certification obtained.
  3. Vendor must demonstrate it is “responsive” and “responsible” under N.Y. State Finance Law. Art. XI, and with service contracts that it offers “best value” (optimizes quality, cost and efficiency); not necessarily low bid.
  4. Office of Information Technology Services (“ITS”) approval obtained for technical contracts.
  5. Prevailing wage schedule compliance for work on public projects.
  6. Consultant disclosure.
  7. References and compliance with Executive Law 15-A (MWBE and EEO) requirements.
  8. Workers’ compensation and disability benefits must be provided for those performing services.
  9. Bidders right to a debriefing. 10. Green purchasing goals policies specifications and standards, as required.

C. Best Practices.

  1. Legal Review — Provide time for your legal staff or outside counsel to review the solicitation to insure you have met all applicable compliance requirements.
  2. Before beginning process, you, the bidder, should know what the agency needs and the agency’s intended use of the product or service. You should become familiar with the end-users to bring better understanding to the response to the solicitation.
  3. On-Site Visits — Whenever possible, a bidder should visit the site of the services. For example, in contract for computer services, site visit will allow bidder to know what the equipment/facility looks like, how equipment is used/managed, what the security procedures are, and other considerations.
  4. Proper Planning — Allow adequate time to write a clear and comprehensive response to the solicitation; prepare any questions for the procuring agency in advance; always attend pre-bid conference(s) (in person if possible); consult with your business experts to insure RFP response is accurate; be certain to respond precisely to the solicitation requirements and don’t guess as to the agency’s intent.
  5. Involve and brief upper management of your company regarding the procurement process. Even seemingly straight forward procurements may become problematic. Management needs to be apprised of each development in the procurement process. When this happens, the bidder is able to make better informed decisions at critical points in the process.
  6. Document all phases of the procurement, including all communications with the agency (electronic or otherwise).
  7. Adopt Standard Solicitation Templates. It is acceptable to use a template when creating a document for a new procurement. However, it may need to be modified to meet the specific details of the solicitation. Also, changes in the law may occur that may impact the validity of the template.
  8. Insurance Requirements — Solicitations may require contractors to obtain insurance on behalf of New York State as a condition of doing business with the State. This is in addition to the standard workers’ compensation and disability insurance. The State Procurement Council has adopted guidelines for insurance requirements. Those guidelines may be found at:

9. Negotiations (RFP) – Post Award.

a. Prior to negotiating, identify known issues and identify acceptable alternatives.

b. Allow sufficient time to conduct negotiations.

c. Look for mutually beneficial solutions where bidder and agency both benefit form the terms. Use an incremental approach that will lead to an acceptable middle ground. d. Keep detailed notes of all negotiations and all revisions to terms should be memorialized. This will ensure that the ultimate contract with the agency includes all the terms agreed upon by the parties. ]

10. Know Your Legal Options in New York.

a. When the agency denies a bid and its decision is arbitrary or capricious, violates the RFP requirements or violates N.Y. State Finance Law, Art. XI, then a vendor may file an initial protest with (a) the agency, if provided for in procurement documents; or (b) in the first instance, with the Office of State Comptroller in the absence of provision in bid document for agency protest.

b. Where the agency allows for a protest and it is denied, an appeal may be taken to the Office of the State Comptroller.

c. Once agency action and administrative appeals are final, then a court challenge is allowed under N.Y. CPLR Art. 78 (standard is whether there is substantial evidence that agency action is arbitrary, capricious or illegal).

David J. Wukitsch, a member of McNamee Lochner P.C.., may be reached at (518) 447-3315 or