Bill S119-2013

Relates to advertisements for bids for certain public contracts

Relates to advertisements for bids for certain public contracts.

Details

Actions

  • Jan 8, 2014: REFERRED TO INFRASTRUCTURE AND CAPITAL INVESTMENT
  • Feb 1, 2013: COMMITTEE DISCHARGED AND COMMITTED TO INFRASTRUCTURE AND CAPITAL INVESTMENT
  • Jan 9, 2013: REFERRED TO LABOR

Memo

BILL NUMBER:S119                 REVISED 12/06/12

TITLE OF BILL: An act to amend the labor law, the general municipal law, the state finance law and the education law, in relation to advertisements for bids

PURPOSE OR GENERAL IDEA OF BILL: To prohibit the practice of job order contracting on public work contracts.

SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill amends section 220 of the labor law to provide that if the fiscal officer cannot determine the schedules or wages of the workers based on the specifications for a public work contract, the fiscal officer must reject any contract associated with that specific advertisement for bids.

Sections 2 and 3 of the bill amend subdivision I of section 10.3 of the general municipal law to require that all bids for a local public work contract state a fixed-dollar amount.

Sections 4 and 5 the bill amend subdivision 2 of section 10J of the general municipal law to require that the bid advertisement specifically describe the nature and type of work to be performed.

Section 6 of the bill amends section 135 of the state finance law to require that the specifications for a contract specifically describe the nature and type of work to be performed and that the bids submitted state a fixed-dollar amount.

Section 7 of the bill amends section 2590-p of the education law to require that each project for facilities included in the five-year capital plan for the New York City Community School District specifically describe the nature and type of work to be performed and that the estimated costs be for a fixed-dollar amount.

Section 8 establishes the effective date of the act.

EXISTING LAW: Subdivision 3 of section 220 of the labor law requires the fiscal officer to determine the schedule of prevailing wages and supplements required to be paid on a public work contract and also requires that the schedule be attached to the specifications for the contract.

The current law relating to the advertisement, specifications and bids for public work does not require the bidder to state a fixed price for its work in its bid.

JUSTIFICATION:

The practice of job order contracting on public work projects thwarts the purpose of New York's competitive bidding laws. A job order contract is an indefinite quantity contract for construction, renovation or repair work. It is usually a multi-year contract containing ambiguous project descriptions that does not require a

contractor to submit a bid for a fixed dollar amount. Instead, the bidders are informed about a range of tasks that mayor may not be needed to perform the contract. The contract is given a minimum to maximum value of its worth. The contractors then use a job order contracting book to bid on a scale, which is used to determine payment, as projects come up under the contract. The bidders do not know what specific type of work they are getting involved with and, therefore, cannot properly ascertain how much the project will cost them. If the unit bid is too low and they turn out to be underpaid and cost-saving measures become necessary, comers might be cut on public work projects, which would negate the purpose of this type of construction work.

Job order contracting puts potential bidders in the untenable position of having to submit a proposed contract price without full knowledge of their responsibilities under the contract. This can discourage certain contractors from bidding, or deny them a sufficient opportunity to estimate their lowest possible bid. These consequences violate one of the central purposes of the state's competitive bidder laws which the New York Court of Appeals has recognized is intended to protect the public treasury by obtaining the best work at the lowest possible price. Associated Builders and Contractors, Inc. v. City of Rochester, 67 N.Y.2d 854(1986). By requiring specific descriptions of the nature and type of work to be performed, and the submittal of a fixed bid amount, this legislation will provide a fairer process for bidders seeking to perform state and local public work in New York.

PRIOR LEGISLATIVE HISTORY: 2011-12: S.731 2010: S.8077 Referred to Labor

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall have become law, with provisions.


Text

STATE OF NEW YORK ________________________________________________________________________ 119 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sen. PERALTA -- read twice and ordered printed, and when printed to be committed to the Committee on Labor AN ACT to amend the labor law, the general municipal law, the state finance law and the education law, in relation to advertisements for bids THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph (c) of subdivision 3 of section 220 of the labor law, as separately amended by chapter 678 of the laws of 2007 and chap- ter 7 of the laws of 2008, is amended to read as follows: (c) It shall be the duty of the fiscal officer, as defined in this section, to ascertain and determine the schedules of supplements to be provided and wages to be paid workers, laborers and mechanics on such public work, prior to the time of the advertisement for bids, and such schedules shall be annexed to and form a part of the specifications for the work. Such fiscal officer shall file with the department having jurisdiction such schedules prior to the time of the commencement of the advertisement for bids on all public works proposed to be constructed. IF THE FISCAL OFFICER CANNOT ASCERTAIN OR DETERMINE SUCH SCHEDULES OR WAGES, OR DISTINGUISH BETWEEN THE CLASSIFICATIONS OF WORKERS ON SUCH PUBLIC WORK, IT SHALL BE THE DUTY OF THE FISCAL OFFICER TO REJECT ANY CONTRACT ASSOCIATED WITH THE ADVERTISEMENT FOR BIDS. The term "contract" as used in this article also shall include reconstruction and repair of any such public work, and any public work performed under a lease, permit or other agreement pursuant to which the department of jurisdic- tion grants the responsibility of contracting for such public work to any third party proposing to perform such work to which the provisions of this article would apply had the department of jurisdiction contracted directly for its performance, or where there is no lease, permit or other agreement and ownership of a public work is intended to
be assumed by such public entity at any time subsequent to completion of the public work. S 2. Subdivision 1 of section 103 of the general municipal law, as amended by section 1 of chapter 2 of the laws of 2012, is amended to read as follows: 1. Except as otherwise expressly provided by an act of the legislature or by a local law adopted prior to September first, nineteen hundred fifty-three, all contracts for public work involving an expenditure of more than thirty-five thousand dollars and all purchase contracts involving an expenditure of more than twenty thousand dollars, shall be awarded by the appropriate officer, board or agency of a political subdivision or of any district therein including but not limited to a soil conservation district to the lowest responsible bidder furnishing the required security after advertisement for sealed bids in the manner provided by this section, provided, however, that purchase contracts (including contracts for service work, but excluding any purchase contracts necessary for the completion of a public works contract pursu- ant to article eight of the labor law) may be awarded on the basis of best value, as defined in section one hundred sixty-three of the state finance law, to a responsive and responsible bidder or offerer in the manner provided by this section except that in a political subdivision other than a city with a population of one million inhabitants or more or any district, board or agency with jurisdiction exclusively therein the use of best value for awarding a purchase contract or purchase contracts must be authorized by local law or, in the case of a district corporation, school district or board of cooperative educational services, by rule, regulation or resolution adopted at a public meeting. ALL SUBMITTED BIDS FOR SUCH PUBLIC WORK CONTRACTS SHALL BE FOR A FIXED- DOLLAR AMOUNT. In any case where a responsible bidder's or responsible offerer's gross price is reducible by an allowance for the value of used machinery, equipment, apparatus or tools to be traded in by a political subdivision, the gross price shall be reduced by the amount of such allowance, for the purpose of determining the best value. In cases where two or more responsible bidders furnishing the required security submit identical bids as to price, such officer, board or agency may award the contract to any of such bidders. Such officer, board or agency may, in his or her or its discretion, reject all bids or offers and readvertise for new bids or offers in the manner provided by this section. In determining whether a purchase is an expenditure within the discretionary threshold amounts established by this subdivision, the officer, board or agency of a political subdivision or of any district therein shall consider the reasonably expected aggregate amount of all purchases of the same commodities, services or technology to be made within the twelve-month period commencing on the date of purchase. Purchases of commodities, services or technology shall not be arti- ficially divided for the purpose of satisfying the discretionary buying thresholds established by this subdivision. A change to or a renewal of a discretionary purchase shall not be permitted if the change or renewal would bring the reasonably expected aggregate amount of all purchases of the same commodities, services or technology from the same provider within the twelve-month period commencing on the date of the first purchase to an amount greater than the discretionary buying threshold amount. For purposes of this section, "sealed bids" and "sealed offers", as that term applies to purchase contracts, (including contracts for service work, but excluding any purchase contracts necessary for the completion of a public works contract pursuant to article eight of the
labor law) shall include bids and offers submitted in an electronic format including submission of the statement of non-collusion required by section one hundred three-d of this article, provided that the governing board of the political subdivision or district, by resolution, has authorized the receipt of bids and offers in such format. Submission in electronic format may, for technology contracts only, be required as the sole method for the submission of bids and offers. Bids and offers submitted in an electronic format shall be transmitted by bidders and offerers to the receiving device designated by the political subdivision or district. Any method used to receive electronic bids and offers shall comply with article three of the state technology law, and any rules and regulations promulgated and guidelines developed thereunder and, at a minimum, must (a) document the time and date of receipt of each bid and offer received electronically; (b) authenticate the identity of the sender; (c) ensure the security of the information transmitted; and (d) ensure the confidentiality of the bid or offer until the time and date established for the opening of bids or offers. The timely submission of an electronic bid or offer in compliance with instructions provided for such submission in the advertisement for bids or offers and/or the spec- ifications shall be the responsibility solely of each bidder or offerer or prospective bidder or offerer. No political subdivision or district therein shall incur any liability from delays of or interruptions in the receiving device designated for the submission and receipt of electronic bids and offers. S 3. Subdivision 1 of section 103 of the general municipal law, as amended by section 2 of chapter 2 of the laws of 2012, is amended to read as follows: 1. Except as otherwise expressly provided by an act of the legislature or by a local law adopted prior to September first, nineteen hundred fifty-three, all contracts for public work involving an expenditure of more than thirty-five thousand dollars and all purchase contracts involving an expenditure of more than twenty thousand dollars, shall be awarded by the appropriate officer, board or agency of a political subdivision or of any district therein including but not limited to a soil conservation district to the lowest responsible bidder furnishing the required security after advertisement for sealed bids in the manner provided by this section, provided, however, that purchase contracts (including contracts for service work, but excluding any purchase contracts necessary for the completion of a public works contract pursu- ant to article eight of the labor law) may be awarded on the basis of best value, as defined in section one hundred sixty-three of the state finance law, to a responsive and responsible bidder or offerer in the manner provided by this section except that in a political subdivision other than a city with a population of one million inhabitants or more or any district, board or agency with jurisdiction exclusively therein the use of best value of awarding a purchase contract or purchase contracts must be authorized by local law or, in the case of a district corporation, school district or board of cooperative educational services, by rule, regulation or resolution adopted at a public meeting. ALL SUBMITTED BIDS FOR SUCH PUBLIC WORK CONTRACTS SHALL BE FOR A FIXED- DOLLAR AMOUNT. In determining whether a purchase is an expenditure with- in the discretionary threshold amounts established by this subdivision, the officer, board or agency of a political subdivision or of any district therein shall consider the reasonably expected aggregate amount of all purchases of the same commodities, services or technology to be made within the twelve-month period commencing on the date of purchase.
Purchases of commodities, services or technology shall not be arti- ficially divided for the purpose of satisfying the discretionary buying thresholds established by this subdivision. A change to or a renewal of a discretionary purchase shall not be permitted if the change or renewal would bring the reasonably expected aggregate amount of all purchases of the same commodities, services or technology from the same provider within the twelve-month period commencing on the date of the first purchase to an amount greater than the discretionary buying threshold amount. In any case where a responsible bidder's or responsible offerer's gross price is reducible by an allowance for the value of used machinery, equipment, apparatus or tools to be traded in by a political subdivision, the gross price shall be reduced by the amount of such allowance, for the purpose of determining the low bid or best value. In cases where two or more responsible bidders furnishing the required security submit identical bids as to price, such officer, board or agen- cy may award the contract to any of such bidders. Such officer, board or agency may, in his, her or its discretion, reject all bids or offers and readvertise for new bids or offers in the manner provided by this section. S 4. Subdivision 2 of section 103 of the general municipal law, as amended by section 4 of chapter 608 of the laws of 2011, is amended to read as follows: 2. Advertisement for bids and offers shall be published in the offi- cial newspaper or newspapers, if any, or otherwise in a newspaper or newspapers designated for such purpose. Such advertisement shall contain a statement of the time when and place where all bids received pursuant to such notice will be publicly opened and read and where the identity of all offerers will be publicly disclosed, and the designation of the receiving device if the political subdivision or district has authorized the receipt of bids and offers in an electronic format. SUCH ADVERTISE- MENT SHALL DESCRIBE SPECIFICALLY THE NATURE OF THE WORK, INCLUDING THE TYPE OF WORK TO BE PERFORMED, AND ENABLE THE BIDDER TO COMPLY WITH PARA- GRAPH (C) OF SUBDIVISION THREE OF SECTION TWO HUNDRED TWENTY OF THE LABOR LAW. Such board or agency may by resolution designate any officer or employee to open the bids and offers at the time and place specified in the notice. Such designee shall make a record of such bids and offers in such form and detail as the board or agency shall prescribe and pres- ent the same at the next regular or special meeting of such board or agency. All bids received shall be publicly opened and read at the time and place so specified and the identity of all offerers shall be public- ly disclosed at the time and place so specified. At least five days shall elapse between the first publication of such advertisement and the date so specified for the opening and reading of bids and offers. S 5. Subdivision 2 of section 103 of the general municipal law, as amended by section 5 of chapter 608 of the laws of 2011, is amended to read as follows: 2. Advertisement for bids and offers shall be published in the offi- cial newspaper or newspapers, if any, or otherwise in a newspaper or newspapers designated for such purpose. Such advertisement shall contain a statement of the time when and place where all bids received pursuant to such notice will be publicly opened and read and where the identity of all offerers will be publicly disclosed. SUCH ADVERTISEMENT SHALL DESCRIBE SPECIFICALLY THE NATURE OF THE WORK, INCLUDING THE TYPE OF WORK TO BE PERFORMED, AND ENABLE THE BIDDER TO COMPLY WITH PARAGRAPH (C) OF SUBDIVISION THREE OF SECTION TWO HUNDRED TWENTY OF THE LABOR LAW. Such board or agency may by resolution designate any officer or employee to
open the bids and offers at the time and place specified in the notice. Such designee shall make a record of such bids and offers in such form and detail as the board or agency shall prescribe and present the same at the next regular or special meeting of such board or agency. All bids received shall be publicly opened and read at the time and place so specified and the identity of all offerers shall be publicly disclosed at the time and place so specified. At least five days shall elapse between the first publication of such advertisement and the date so specified for the opening and reading of bids and offers. S 6. The second undesignated paragraph of section 135 of the state finance law, as amended by section 3 of part MM of chapter 57 of the laws of 2008, is amended to read as follows: Such specifications must be so drawn as to permit separate and inde- pendent bidding upon each of the above three subdivisions of work. All contracts hereafter awarded by the state or a department, board, commis- sioner or officer thereof, for the erection, construction or alteration of buildings, or any part thereof, shall award the three subdivisions of the above specified work separately to responsible and reliable persons, firms or corporations engaged in these classes of work. A contract for one or more buildings in any project shall be awarded to the lowest responsible bidder for all the buildings included in the specifications. ALL SUCH SPECIFICATIONS ISSUED PURSUANT TO THIS ARTICLE SHALL DESCRIBE SPECIFICALLY THE NATURE OF THE WORK, INCLUDING THE TYPE OF WORK TO BE PERFORMED, AND ENABLE THE BIDDER TO COMPLY WITH PARAGRAPH (C) OF SUBDI- VISION THREE OF SECTION TWO HUNDRED TWENTY OF THE LABOR LAW. EACH BIDDER FOR ANY PROJECT UNDER THIS ARTICLE SHALL SUBMIT BIDS FOR A FIXED-DOLLAR AMOUNT. S 7. Paragraphs a and d of subdivision 6 of section 2590-p of the education law, paragraph a as added by chapter 738 of the laws of 1988 and paragraph d as amended by chapter 91 of the laws of 2002, are amended to read as follows: a. For each project included in an approved five-year educational facilities capital plan, the chancellor shall develop a detailed scope of the project, which shall include the following: (i) the purposes and public to be served, (ii) the programs to be conducted in the facility, (iii) the gross amounts of space and bulk for any building or structure, (iv) identification of the intent to use architectural, engineering or other consultant services and estimated fees for such consultant services (v) the schedule of design and construction, (vi) the total estimated project costs, including costs for site acquisition, prepara- tion and tenant relocation, design, construction and equipment, (vii) maximum estimated expenditures for the project for each fiscal year until its completion, (viii) costs associated with maintenance and oper- ation of the physical plant and (ix) such other information as the chan- cellor shall specify. In the event, a project consists of a program element without identification of the particular education facility at which such project is to be performed, the detailed scope of the project shall specify the nature of the work to be performed, applicable price and quality standards, a list of the schools eligible for such work, annual performance targets and the total estimated costs of such project during each fiscal year until its completion. ALL SUCH ESTIMATED COSTS AND PRICES SHALL BE FOR A FIXED-DOLLAR AMOUNT. d. For projects to be funded pursuant to subdivision four of this section, the chancellor shall transmit the detailed scope of each such project to the director of management and budget of the city for approval.
(i) Except as provided in paragraph b of this subdivision, no expenses shall be incurred by the city board or the authority for any such project prior to approval of the detailed scope of any such project. SUCH DETAILED SCOPE OF THE PROJECT SHALL DESCRIBE SPECIFICALLY THE NATURE OF THE WORK, INCLUDING THE TYPE OF WORK TO BE PERFORMED. (ii) No detailed scope of project shall be approved unless the total estimated costs of such project, together with the aggregate estimated costs of all projects for which a detailed scope has theretofore been approved, are within city capital budget appropriations available there- for. A detailed scope of project that is not disapproved by the director of management and budget within thirty days of its submission shall be deemed approved. To the extent the director disapproves all or part of a scope, he or she shall set forth in writing the reasons therefor. (iii) Upon approval of the detailed scope of project, the chancellor shall refer such project to the New York city school construction authority for implementation in accordance with an agreement between the authority and the city board and shall transmit the approved project scope to the comptroller, whereupon the total estimated costs of such project as set forth in such approved project scope shall be available for expenditure. ALL SUCH ESTIMATED COSTS SHALL BE FOR A FIXED-DOLLAR AMOUNT. (iv) Approval of the director of management and budget shall be required for any material change in the approved detailed scope of project or for any increase in the total cost of such project in excess of any reserve provided in the approved detailed scope of project. Such approval shall be given or deemed given in the manner provided herein. (v) The provisions of this paragraph shall not apply to emergency projects undertaken pursuant to paragraph h of subdivision two of this section, the estimated costs of which, together with the costs of other projects undertaken pursuant to said paragraph h, does not exceed the amount set forth in the educational facilities capital plan for activ- ities pursuant to paragraph h of subdivision two of this section. S 8. This act shall take effect on the ninetieth day after it shall have become a law, provided however, that the amendments to subdivision 1 of section 103 of the general municipal law made by section two of this act shall be subject to the expiration and reversion of such subdi- vision pursuant to subdivision (a) of section 41 of part X of chapter 62 of the laws of 2003, as amended, when upon such date the provisions of section three of this act shall take effect, provided further, that the amendments to subdivision 2 of section 103 of the general municipal law made by section four of this act shall be subject to the expiration and reversion of such subdivision pursuant to subdivision (a) of section 41 of part X of chapter 62 of the laws of 2003, as amended, when upon such date the provisions of section five of this act shall take effect; provided, further, that the amendments to paragraph d of subdivision 6 of section 2590-p of the education law made by section seven of this act shall not affect the repeal of such paragraph and shall be deemed repealed therewith.

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