New York Laws
Article 11 - State Purchasing
162 - Preferred Sources.

(i) state agencies or political subdivisions or public benefit
corporations having their own purchasing agency shall make reasonable
efforts to provide a notification describing their requirements to those
preferred sources, or to the facilitating entity identified in paragraph
e of subdivision six of this section, which provide the required
services as indicated on the official public list maintained by the
office of general services pursuant to subdivision three of this
section;
(ii) if, within ten days of the notification required by subparagraph
(i) of this paragraph, one or more preferred sources or facilitating
entities identified in paragraph e of subdivision six of this section
submit a notice of intent to provide the service in the form, function
and utility required, said service shall be purchased in accordance with
this section. If more than one preferred source or facilitating entity
identified in paragraph e of subdivision six of this section submits
notification of intent and meets the requirements, costs shall be the
determining factor for purchase among the preferred sources;
(iii) if, within ten days of the notification required by subparagraph
(i) of this paragraph, no preferred source or facilitating entity
identified in paragraph e of subdivision six of this section indicates
intent to provide the service, then the service shall be procured in
accordance with section one hundred sixty-three of this article. If,
after such period, a preferred source elects to bid on the service,
award shall be made in accordance with section one hundred sixty-three
of this article or as otherwise provided by law.
c. For the purposes of commodities and services produced by special
employment programs operated by facilities approved or operated by the
office of mental health, facilities within the office of mental health
shall be exempt from the requirements of subparagraph (i) of paragraph a
of this subdivision. When such requirements of the office of mental
health cannot be met pursuant to subparagraph (ii) or (iii) of paragraph
a of this subdivision, or paragraph b of this subdivision, the office of
mental health may purchase commodities and services which are
competitive in price and comparable in quality to those which could
otherwise be obtained in accordance with this article, from special
employment programs operated by facilities within the office of mental
health or other programs approved by the office of mental health.
5. Prices charged by the department of corrections and community
supervision. The prices to be charged for commodities produced by the
correctional industries program of the department of corrections and
community supervision shall be established by the commissioner of
corrections and community supervision in accordance with section one
hundred eighty-six of the correction law.
a. The prices established by the commissioner of corrections and
community supervision shall be based upon costs as determined pursuant
to this subdivision, but shall not exceed a reasonable fair market price
determined at or within ninety days before the time of sale. Fair market
price as used herein means the price at which a vendor of the same or
similar product or service who is regularly engaged in the business of
selling such product or service offers to sell such product or service
under similar terms in the same market. Costs shall be determined in
accordance with an agreement between the commissioner of corrections and
community supervision and the director of the budget.

b. A purchaser of any such product or service may, at any time prior
to or within thirty days of the time of sale, appeal the purchase price
in accordance with section one hundred eighty-six of the correction law,
on the basis that it unreasonably exceeds fair market price. Such an
appeal shall be decided by a majority vote of a three-member price
review board consisting of the director of the budget, the commissioner
of corrections and community supervision and the commissioner or their
representatives. The decision of the review board shall be final.
6. Prices charged by agencies for the blind, other disabled and
veterans' entity.
a. Except with respect to the correctional industries program of the
department of corrections and community supervision, it shall be the
duty of the commissioner to determine, and from time to time review, the
prices of all commodities and to approve the price of all services
provided by preferred sources as specified in this section offered to
state agencies, political subdivisions or public benefit corporations
having their own purchasing office. The commissioner's price review and
approval shall not be required for any purchases below one hundred
thousand dollars.
b. In determining and revising the prices of such commodities or
services, consideration shall be given to the reasonable costs of labor,
materials and overhead necessarily incurred by such preferred sources
under efficient methods of procurement, production, performance and
administration; however, the prices of such products and services shall
be as close to prevailing market price as practicable, but in no event
greater than fifteen percent above the prevailing market prices for the
same or equivalent commodities or services.
c. Such qualified charitable non-profit-making agencies for the blind
and other disabled may make purchases of materials, equipment or
supplies, except printed material, from centralized contracts for
commodities in accordance with the conditions set by the office of
general services; provided that the qualified charitable
non-profit-making agency for the blind or other disabled shall accept
sole responsibility for any payment due the vendor.
d. Such qualified charitable non-profit-making agencies for the blind
and other disabled may make purchases of materials, equipment and
supplies directly from the correctional industries program administered
by the commissioner of corrections and community supervision, subject to
such rules as may be established from time to time pursuant to the
correction law; provided that the qualified charitable non-profit-making
agency for the blind or other disabled shall accept sole responsibility
for any payment due the department of corrections and community
supervision.
e. The commissioner of the office of children and family services
shall appoint the New York state commission for the blind, or other
non-profit-making agency, other than the agency representing the other
disabled, to facilitate the distribution of orders among qualified
non-profit-making charitable agencies for the blind. The state
commissioner of education shall appoint a non-profit-making agency,
other than the agency representing the blind, to facilitate the
distribution of orders among qualified non-profit-making charitable
agencies for the other disabled and the veterans' entities. The state
commissioner of mental health shall facilitate the distribution of
orders among qualified special employment programs operated or approved
by the office of mental health serving mentally ill persons.
f. The commissioner may request the state comptroller to conduct
audits and examinations to be made of all records, books and data of any
agency for the blind or the other disabled, any special employment

program for mentally ill persons or any veterans' entity qualified under
this section to determine the costs of manufacture or the rendering of
services and the manner and efficiency of production and administration
of such agency or special employment program or veterans' entity with
relation to any product or services purchased by a state agency or
political subdivision or public benefit corporation and to furnish the
results of such audit and examination to the commissioner for such
action as he or she may deem appropriate under this section.
7. Partnering with preferred sources. Private vendors may be accorded
preferred source status but only when a proposal to a soliciting agency
for commodities or services includes a binding agreement with one or
more of the entities accorded preferred source status under this
section. The binding agreement shall provide that:
(i) The preferred source shall perform the majority of the work
necessary to such offering, and
(ii) The partnering proposal includes bona fide long term employment
opportunities for persons who are clients of an entity accorded
preferred source status herein, and
(iii) The partnering proposal offers the solicited services or
commodities at a price less than the price that otherwise would be
charged by the preferred source.
8. The council shall report to the governor, legislative fiscal
committees and the director of the budget by December thirty-first,
nineteen hundred ninety-five and thereafter annually, a separate list
concerning the denial of any application made pursuant to paragraph b of
subdivision three of this section, the reasons for such denial, whether
such denial was appealed to the commissioner, and the final decision by
the commissioner on such application.
9. The provisions of this section shall supersede inconsistent
provisions of any general, special or local law, or the provisions of
any charter.