Enacts the comprehensive diversity in procurement and employment act of 2023 to encourage full and equal participation in public sector business opportunities across the state.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2503
SPONSOR: Vanel TITLE OF BILL:
An act to amend the state finance law and the executive law, in relation
to the comprehensive diversity in procurement and employment act of 2023
PURPOSE OR GENERAL IDEA OF BILL:
Enacts the comprehensive diversity in procurement and employment act of
2023
SUMMARY OF PROVISIONS:
Section 1 under section 162 of the state finance law would state that
payments to agencies for the blind or other severely disabled and veter-
ans' workshops shall be fifteen days after receipt of an invoice with
certain requirements.
Section 2 under subdivision 2 and 3 of section 179-f of the state
finance law would state that payments to agencies for preferred source,
service disabled veteran-owned business, or minority and women owned
business enterprises.
Section 3 amends the executive law to expand .the responsibility of the
chief diversity officer to also include preferred source and disabled
veteran-owned business enterprises.
Section 4 is the effective date..
JUSTIFICATION:
New York State has historically been a leader in inclusion and the fight
for full participation of all segments of society in our economy and
communities. Many specific initiatives in New York have resulted in real
progress in certain areas. Despite the best efforts of legislative
bodies, economic development officials, and program staff at various
levels of government, diverse segments of New York's population continue
to struggle to find meaningful employment, even in good economic
times.People who are blind or legally blind, people with severe disabil-
ities, and veterans returning from service are among those who strive
for full inclusion and upward mobility through employment. Statistics
show there is much more to do. to make the American Dream a reality for
these segments of our society. By turning the tide, we will not only
improve the lives of New Yorkers, but create new taxpayers in communi-
ties across the state.New York has always been among the first to take
on the fight for these men and women. The Preferred Source law, enacted
in 1948, was an innovative statute to advance special social and econom-
ic goals. But the law hasn't been updated for more than 20 years. A
comprehensive strategy to increase employment opportunities for people
who are blind or severely disabled through greater utilization of the
Preferred Source Program will harness the true buying power of the
public sector to create new taxpayers.The current Preferred Source stat-
ute requires state agencies, public benefit corporations (including most
public authorities), municipalities, and school districts to purchase
commodities and services from Preferred Sources first, if the Preferred
Source offering meets the entity's needs for "form, function, and utili-
ty." Preferred Source offerings and pricing are pre-approved by the
Office of General Services (OGS), eliminating the need for resource- and
time-intensive competitive bidding processes.New York State has three
Preferred Source organizations: New York State Preferred Source Program
for New Yorkers Who Are Blind (NYSPSP), NYS Industries for the Disabled
(NYSID), and the NYS Department of Correctional Services, Division of
Industries (Corcraft). Employment opportunities for people who are blind
or disabled are supported by the purchase of goods and services the
public sector needs to operate, such as office, safety and medical
supplies; mops and brooms and cleaning solutions; ja nitorial and laun-
dry services; and call center, document imaging and transcription
services.The Comprehensive Diversity in Procurement and Employment Act
of 2023 will improve the Preferred Source program by mandating timely
payments to Preferred Source agencies, as well as Minority and Women-
owned Business Enterprises (MWBE) and Service Disabled Veteran-owned
Businesses (SDVOB). This reform will eliminate the frequent problem of
long-overdue payments from New York State to MWBE, SDVOB and non-profit
entities producing goods and services and employing New Yorkers who are
blind or disabled. On average, 60 percent of these businesses receive
payment for their invoices to the public more than 30 calendar days from
the invoice date.Improving upon legislation signed into law in 2017 for
a small group of vendors, this section will expand the definition of
entities required to receive timely payments to include economically
vulnerable groups, and require payment in no more than fifteen calendar
days, excluding legal holidays, after receipt of an invoice for the
amount of the contract payment due.The bill also will expand the juris-
diction of New York State Chief Diversity and Compliance Officers to
include intra-agency compliance with the Preferred Source and SDVOB
programs to encourage full and equal participation in public sector
business opportunities across the state. Statistics indicate a signif-
icantly higher rate of unemployment among these segments of the popu-
lation - in some cases approaching 70 percent - an alarming statistic
considering overall unemployment in New York is less than 5 percent.
Diversity refers not only to race and gender; it includes other groups
who face barriers to full and equal participation in the workforce and
our communities. This legislation expands the Chief Diversity Officer's
scope to include populations economically vulnerable due to legal blind-
ness or other severe disability. Embracing these thousands of New York-
ers previously left behind will have a positive, permanent impact on
state and local economies and lessen the burden on critical social
service programs. While OGS and the Office of Children and Family
Services (OCFS) have made great strides with existing resources, New
York needs to broaden the scope of the office of the Chief Diversity
Officer and empower compliance officers to engage more meaningfully in
their agencies to achieve full diversity. Because it utilizes Compliance
Officers already employed in state agencies,
this proposal has no fiscal impact. More fully embracing the intent and
potential of existing state procurement programs designed to create
employment and economic opportunities will spur greater economic inde-
pendence for New. Yorkers who have historically faced barriers to full
and equal participation in the workforce. As a result, more of them will
earn and spend wages in their communities across the state, thereby
increasing personal income and sales tax receipts.It is important to
note that private business cannot be designated as preferred source,
although there are currently many small businesses, including MWBEs and
SDVOBs across the state, that partner with a Preferred Source. In fact,
Preferred Source entities currently partner with MWBEs and SDVOBs across
New York. From a cleaning solutions company on Long Island, to a light-
ing company in Manhattan, an apparel company in Brooklyn, and a medical
supply company in the Mohawk Valley, Preferred Source entities, MWBEs
and SDVOBs not only operate in New York, they thrive. But more can be
done. State law should reflect our shared commitment to expanding
economic opportunity for all New Yorkers, both through private-sector
businesses and non-profit entities. If enacted, the Comprehensive Diver-
sity in Procurement and Employment Act of 2023 will remove barriers and
foster greater understanding and utilization of these similar, but
nuanced, procurement programs.
PRIOR LEGISLATIVE HISTORY:
01/28/21 referred to governmental operations
01/05/22 referred to governmental operations
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined
EFFECTIVE DATE:
Effective immediately
STATE OF NEW YORK
________________________________________________________________________
2503
2023-2024 Regular Sessions
IN ASSEMBLY
January 26, 2023
___________
Introduced by M. of A. VANEL -- read once and referred to the Committee
on Governmental Operations
AN ACT to amend the state finance law and the executive law, in relation
to the comprehensive diversity in procurement and employment act of
2023
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "comprehensive diversity in procurement and employment act of 2023".
3 § 2. Subdivisions 1 and 9 of section 162 of the state finance law, as
4 added by chapter 83 of the laws of 1995, are amended to read as follows:
5 1. Purpose. To advance special social and economic goals, selected
6 providers shall have preferred source status for the purposes of
7 procurement in accordance with the provisions of this section. Procure-
8 ment from these providers shall be exempted from the competitive
9 procurement provisions of section one hundred sixty-three of this arti-
10 cle and other competitive procurement statutes. Such exemption shall
11 apply to commodities produced, manufactured or assembled, including
12 those repackaged to meet the form, function and utility required by
13 state agencies, public authorities, commissions, public benefit corpo-
14 rations, political subdivisions, or municipal corporations in New York
15 state and, where so designated, services provided by those sources in
16 accordance with this section.
17 9. Payments to agencies for the blind, other severely disabled and
18 veterans' workshops. The required payment date shall be fifteen calendar
19 days, excluding legal holidays, after receipt of an invoice for the
20 amount of the contract payment due; except when:
21 (a) the state comptroller in the course of his or her audit determines
22 that there is reasonable cause to believe that payment may not properly
23 be due, in whole or in part;
24 (b) in accordance with specific statutory or contractual provisions,
25 payment must be preceded by an inspection period or by an audit to
26 determine the resources applied or used by a contractor in fulfilling
27 the terms of the contract;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03496-01-3
A. 2503 2
1 (c) the necessary state government appropriation required to authorize
2 payment has yet to be enacted;
3 (d) the cash balance of the fund or sub-fund from which the payment is
4 to be made is insufficient to finance the payment;
5 (e) a proper invoice must be examined by the federal government prior
6 to payment; or
7 (f) the goods or property have not been delivered or the services have
8 not been rendered by the contractor in compliance with the terms or
9 conditions of the contract.
10 The required payment date shall be fifteen calendar days, excluding
11 legal holidays, after such conditions described in paragraphs (a)
12 through (f) of this subdivision have been satisfied or rectified, and
13 provided further that all reasonable and practicable efforts shall be
14 taken to satisfy or rectify such conditions as soon as possible.
15 10. The provisions of this section shall supersede inconsistent
16 provisions of any general, special or local law, or the provisions of
17 any charter.
18 § 3. Subdivisions 2 and 3 of section 179-f of the state finance law,
19 subdivision 2 as amended by chapter 36 of the laws of 2016, subdivision
20 3 as amended by chapter 568 of the laws of 2015, are amended, and three
21 new subdivisions 7, 8 and 9 are added to read as follows:
22 2. The required payment date shall be thirty calendar days, excluding
23 legal holidays, provided, however, that for a small business, preferred
24 source, service disabled veteran-owned business, or minority and women-
25 owned business enterprise the required payment date shall be fifteen
26 calendar days, excluding legal holidays, absent a showing by the
27 contracting agency of circumstances beyond its control, provided that
28 the small business submits its invoice electronically, in conformance
29 with the policies and procedures of the accounting and financial manage-
30 ment system of state government and identifies that it is seeking expe-
31 dited payment as a small business, or in the case of final payments on
32 highway construction contracts seventy-five calendar days, excluding
33 legal holidays, after receipt of an invoice for the amount of the
34 contract payment due; except when:
35 (a) the state comptroller in the course of his or her audit determines
36 that there is reasonable cause to believe that payment may not properly
37 be due, in whole or in part;
38 (b) in accordance with specific statutory or contractual provisions,
39 payment must be preceded by an inspection period or by an audit to
40 determine the resources applied or used by a contractor in fulfilling
41 the terms of the contract;
42 (c) the necessary state government appropriation required to authorize
43 payment has yet to be enacted;
44 (d) [a proper invoice must be examined by the federal government prior
45 to payment;
46 (e)] the goods or property have not been delivered or the services
47 have not been rendered by the contractor in compliance with the terms or
48 conditions of the contract;
49 [(f)] (e) the required payment date is modified in accordance with
50 subdivision three of this section; or
51 [(g)] (f) in the case of final payments on highway construction
52 contracts the commissioner of transportation determines that the
53 contractor has failed to properly submit the necessary documents and
54 other submissions prescribed by the contract specifications and require-
55 ments, by the provisions of subdivision eight of section thirty-eight of
56 the highway law, and by all other applicable state and federal laws in
A. 2503 3
1 order to enable the department of transportation to process the final
2 payment properly and expeditiously.
3 Any time taken to satisfy or rectify any of the types of conditions
4 described in paragraphs (a) through [(e)] (d) or [(g)] (f) of this
5 subdivision shall extend the required payment date by an equal period of
6 time, provided, however, that for small businesses, preferred sources,
7 service disabled veteran-owned businesses, or minority and women-owned
8 business enterprises, the required payment date shall be fifteen calen-
9 dar days, excluding legal holidays, after such conditions have been
10 satisfied or rectified, and provided further that all reasonable and
11 practicable efforts shall be taken to satisfy or rectify such conditions
12 as soon as possible.
13 3. Each state agency shall have fifteen calendar days after receipt of
14 an invoice by the state agency at its designated payment office, or in
15 the case of an invoice received from a small business, preferred source,
16 service disabled veteran-owned business, or minority and women-owned
17 business enterprise, seven calendar days, to notify the contractor of
18 (a) defects in the delivered goods, property, or services, (b) defects
19 in the invoice, or (c) suspected improprieties of any kind; and the
20 existence of such defects or improprieties shall prevent the commence-
21 ment of the time period specified in subdivision two of this section.
22 When a state agency fails to notify a contractor of such defects or
23 suspected improprieties within fifteen calendar days, or seven calendar
24 days if such contractor is a small business, preferred source, service
25 disabled veteran-owned business, or minority and women-owned business
26 enterprise, of receiving the invoice, the number of days allowed for
27 payment of the corrected proper invoice will be reduced by the number of
28 days between the fifteenth day, or seventh day if payment of such proper
29 invoice is for a small business, preferred source, service disabled
30 veteran-owned business, or minority and women-owned business enterprise,
31 and the day that notification was transmitted to the contractor. If the
32 state agency, in such situations, fails to provide reasonable grounds
33 for its contention that a defect or impropriety exists, the required
34 payment date shall be calculated from the date of receipt of an invoice.
35 7. As used in this section, "preferred source" shall mean a qualified
36 charitable not-for-profit agency for the blind approved for such
37 purposes by the commissioner of the office of children and family
38 services, any special employment program serving mentally ill persons
39 which is operated by facilities within the office of mental health and
40 is approved for such purposes by the commissioner of mental health, a
41 qualified charitable not-for-profit agency for other severely disabled
42 persons approved for such purposes by the commissioner of education or
43 incorporated under the laws of this state and approved for such purposes
44 by the commissioner of education, or a qualified charitable not-for-pro-
45 fit workshop for veterans approved for such purposes by the commissioner
46 of education or incorporated under the laws of this state and approved
47 for such purposes by the commissioner of education.
48 8. As used in this section, "certified service disabled veteran-owned
49 business enterprise" shall have the same meaning as set forth in article
50 seventeen-B of the executive law.
51 9. As used in this section, "minority and women-owned business enter-
52 prise" shall have the same meaning as set forth in article fifteen-A of
53 the executive law.
54 § 4. Section 4-a of the executive law, as added by chapter 175 of the
55 laws of 2010, is amended to read as follows:
A. 2503 4
1 § 4-a. Chief diversity officer. A chief diversity officer for the
2 state shall be appointed by the governor and shall receive a salary to
3 be fixed by the governor within the amount appropriated therefor. The
4 chief diversity officer's responsibilities shall include the following:
5 1. Advise and assist the governor in formulating policies relating to
6 workforce diversity including the use of preferred sources, service
7 disabled veteran-owned business enterprises and minority and [women's]
8 women-owned business enterprises;
9 2. Work with the director of the division of minority and women's
10 business development and the division service disabled veteran's busi-
11 ness development to prepare an annual plan for ensuring full compliance
12 with [article fifteen-a] articles fifteen-A and seventeen-B of [the
13 executive law] this chapter and article eleven of the state finance law
14 by state agencies and the use of diversity practices and preferred
15 sources by such agencies and public authorities;
16 3. Work with the commissioner of the office of children and family
17 services to prepare an annual plan for ensuring full compliance with
18 section one hundred sixty-two of the state finance law by state agen-
19 cies;
20 4. Work with the director of the office of general services and the
21 division of service disabled veterans' business development to prepare
22 an annual plan for ensuring full compliance with the service-disabled
23 veteran-owned business act by state agencies;
24 5. Advise the governor and the agencies regarding any measures neces-
25 sary to ensure full compliance with [article fifteen-a] articles
26 fifteen-A and seventeen-B of this chapter and article eleven of the
27 state finance law in connection with the use of diversity and service
28 disabled veterans practices and preferred source plans by such agencies
29 and by state public authorities;
30 [4.] 6. Serve as a member of the state procurement council established
31 under section one hundred sixty-one of the state finance law;
32 [5.] 7. Serve as the governor's liaison with organizations represent-
33 ing minority and women-owned business enterprises, preferred sources and
34 service disabled veteran-owned business enterprises and other organiza-
35 tions related to diversity in the state workforce and in state contract-
36 ing;
37 [6.] 8. Serve as the governor's liaison to the small business advisory
38 council for issues related to the creation of a diverse workforce and
39 state procurement practices relating to minority and women-owned busi-
40 ness enterprises, preferred sources and service disabled veteran-owned
41 business enterprises;
42 [7.] 9. Review and consult with the director of minority and women's
43 business development [regarding policies], the director of the division
44 of service disabled veterans' business development and the commissioner
45 of the office of children and family services relating to minority and
46 women-owned business [enterprise] enterprises, service disabled veter-
47 an-owned business enterprises and preferred sources contract specialists
48 at state agencies; and
49 [8.] 10. Engage in other actions assigned to him or her by the gover-
50 nor relating to diversity in hiring or promotion of the state workforce
51 and in encouraging diversity practices and compliance with [article
52 fifteen-a] articles fifteen-A and seventeen-B of this chapter and arti-
53 cle eleven of the state finance law in procurement.
54 § 5. This act shall take effect immediately.
