1. Orange-Ulster BOCES presents….

2.  General Municipal Law (GML) section 103  Defines bidding to include:  How to advertise  Electronic bidding (permission)  Sets Thresholds:  $10,000 for purchases of commodities  $20,000 for “public works” contracts

3.  Requires advertising in official newspaper(s)  “5 days shall elapse”  Requires a record (abstract) of all bid prices  Requires public bid opening and reading

4.  Allows for “piggybacking” from any County in NYS:  Must implore same T&Cs – lower price okay!  Exempts emergency situations:  Must be a threat to public building, property, life, safety or health.

5.  Standardization clause  Requires 3/5 vote of all members of governing body  Used for reasons of efficiency or economy  Allows for purchase of second-hand supplies, materials and equipment from Federal Government, NYS or any other political subdivision without bidding.

6.  Those who willfully prevent competitive bidding:  Subject to misdemeanor charge!  Penalty not more than $1,000 and 12 months in jail!

7.  Allows for set-asides for food products bidding  Must require substantial portions of growing and processing to take place in NYS.  Provides special provisions for the following provided they are purchased from NYS growers:  Eggs  Livestock  Fish  Dairy Products (Except Milk)

8.  Can purchase Milk from suppliers employing less than 40 persons under certain circumstances.

9.  BID MISTAKE  “sole remedy” for bid mistake is to allow firm to withdraw entire bid.  Must meet certain criteria.

10.  Sports equipment provision  Allows BOE to determine apparent low bidders responsibility based on “labor standards”

11.  Grants authority to use NYS Office of General Services (OGS)  GML 104-b  Mandates adoption of local policy & who is responsible for adoption and re-affirmation.

12.  Required in the policy:  Procedure to determine when competitive bidding is required;  Mandates that policy must use verbal and written quotes;  Mandates that policy must explain when each is to be used;  Requires documentation;  Requires documentation when low bidder is not used.

13.  Comments concerning policies solicited from officers  Requires board to annually review its policies

14.  Allows for payment, as deposit, not to exceed $100 for the return of plans.

15.  Requires clause stating that assignment may not take place without consent of municipality  Releases obligations to pay (except certain expenses) is assignment occurs without consent

16.  Defines and prohibits conflicts of interest

17.  Defines Preferred Sources  Preferred Source Status assigned to:  Corrections (CORCRAFT)  Blind (IBNYS) & Disabled (NYSID)  Veterans  Mentally Ill

18.  Products are not “forced” – they must meet:  Form  Function  Utility  Law allows for challenge to corrections pricing  Allows for 15% differential with other Preferred Sources

19.  Allows for lease of personal property  Leases may not exceed term of current school year UNLESS considered “ordinary contingent expense”  Requires that price of lease subject to bidding requirements

20.  To qualify as a professional service, it:  Must involve the application of specialized expertise, the use of professional judgment or discretion, or a high degree of creativity in the performance of the contract.  May sometimes involve a relationship of personal trust and confidence.

21. Professional Services The primary rationale for this exception is that these services are not the type of “public work” which may be properly the subject of general competition based solely upon compliance with objective, uniform standards set forth in specifications, with an award to the lowest responsible bidder. -NYS Comptrollers Opinion 93-7

22. NYS GML 104 addresses professional services as follows: Goods and services which are not required by law to be procured by political subdivisions or any districts therein pursuant to competitive bidding must be procured in a manner so as to assure the prudent and economical use of public moneys in the best interest of the taxpayers of the political subdivision or district, to facilitate the acquisition of goods and services of maximum quality at the lowest possible cost under the circumstances, and to guard against favoritism, improvidence, extravagance, fraud and corruption. To further these objectives, the governing board of every political subdivision and any district therein, by resolution, shall adopt internal policies and procedures governing all procurements of goods and services which are not required to be made pursuant to the competitive bidding requirements of section one hundred three of this article or of any other general, special or local law.

23. The Comptroller has highlighted schools’ misunderstanding of the professional services exemption in many recent audits: District officials did not establish adequate controls over purchasing. Although the Board has adopted a purchasing policy, the policy does not specify the methods to be used when obtaining professional services. As a result, nine of 12 professional service providers we tested were awarded contracts totaling $366,000 without soliciting requests for proposals or using other forms of competition. In addition, although the policy requires written quotes for purchases between $1,001 and $10,000, District officials did not obtain written quotes for nine purchases totaling $16,300. Due to the failure to establish and adhere to effective purchasing policies and procedures, there is an increased risk that goods and services of the right quality at the lowest cost have not been obtained in the best interest of District taxpayers. NYS Comptrollers Audit, June 2009

24. The District’s purchasing policy needs to be improved. The District’s purchasing policy does not require the use of competition or contain procedures to be used to procure professional services, which are exempt from competitive bidding. We found that the District contracted with four professional services providers, who were paid a total of $79,686, without using competition, such as a request for proposal (RFP) process or obtaining quotes. Although District officials used an RFP process for auditing services, they did not select the lowest cost vendors, and did not have any documentation to justify the selection. As a result, the District does not have adequate assurance that it has received the best service at the lowest cost. We also determined that 16 purchases totaling $20,364 were made prior to the completion of purchase orders. Making purchases prior to completing purchase orders could result in unnecessary purchases and over-spending. NYS Comptrollers Audit, February 2009

25. For example, the District’s purchasing policy is inadequate and does not comply with General Municipal Law (Law) because the policy does not require District officials to seek competition or include procedures to be used when procuring professional services. The District obtained the services of 14 of 23 professional service providers who were paid $540,822, for services such as legal, nursing, and physical therapy, without seeking competition through requests for proposals (RFP) or quotations. We also found that the policy does not require written agreements with professional services providers. There are no written contracts for 14 of 36 special education service providers, who were paid a total of $119,447 for services provided during the 2007-08 and 2008-09 fiscal years. Finally, District officials did not select the lowest priced auditing firm and did not document why the highest priced firm was selected for auditing services, whose fee was $18,000 more than the lowest proposal. The auditor was paid a total of $59,650 during the audit period. As a result, there was an increased risk that professional services were not procured in the most prudent and economical matter. NYS Comptrollers Audit, May 2009

26. Based on the issues related to the dysfunction of the NYS Senate, legislative proposals related to procurement were not considered. One bill that has the support of NYSAMPO (A07114) provides for major reform to the General Municipal Law. The legislation is titled the Local Government Procurement Reform Act of 2009. The proposed changes are as follows:

27.  Requirement for continuing education for each government employee with procurement responsibility.  Local policy mandated by GML 104-b will require that each local government agency, annually identify by name the individual or individuals responsible for compliance with the requirements of the General Municipal Law.  Provides for an increase to the minimum bidding thresholds, raising the commodities threshold from $10k to $25k and public works limits from $20k to $50k.  Inserts a section allowing for local governments to purchase GSA contracts that are open to local governments.

28. Mark P. Coleman, CPPB Orange-Ulster BOCES 53 Gibson Road Goshen, NY 10924 (845) 291-0180 mcoleman@ouboces.org www.ouboces.org