May 18, 2021
From Sen Borrello:
Legislation sponsored by Senator George Borrello that would expand the opportunities for New York State-based businesses to access state government contracts was advanced by the Senate’s Procurement and Contracts Committee today.
The measure, S.5479-B, which received the unanimous support of committee members, would help mitigate the competitive disadvantage that New York’s highly taxed and regulated environment imposes on businesses by allowing qualified in-state vendors the opportunity to match the lowest bid of an out-of-state competitor, provided the in-state supplier’s offer was within a range of 15 percent. Agencies would then have the opportunity to give preference to the in-state bidder.
Senator Borrello, the Ranking Member on the committee, noted that utilizing out-of-state vendors for state contracts has become a “disturbing trend,” and has the effect of enriching the economies of other states with the tax dollars of hardworking New York State residents.
“New York perennially ranks near the bottom on measurements of the favorability of its tax and regulatory climate. No one is more painfully aware of the difficulty of operating here than small businesses, who are forced to navigate a maze of red tape and pay some of the highest taxes in the nation,” said Senator Borrello. “Those added cost burdens place our businesses at a disadvantage when they are bidding against out-of-state vendors who don’t have to pay New York taxes and thus, can operate more cheaply.”
He pointed to several recent examples where the state rejected qualified, in-state businesses and nonprofits in favor of vendors from other states, including:
Syracuse-based pharmacy provider HealthDirect, which lost a contract for institutional pharmacy services in Western New York with the Office for People with Developmental Disabilities (OPWDD) to Ohio-based Omnicare Corporation. Among the casualties of this decision were HealthDirect’s small independent pharmacy subcontractors, including Patient’s Pharmacy in Jamestown, a certified MWBE business and a HealthDirect subcontractor for many years;
Approximately $966 million in state contracts which went to out-of-state vendors for marketing and advertising materials, forms, and mail and printing services, despite the availability of Preferred Source and in-state vendors qualified to handle such services, an issue which was outlined in an August 24, 2020 article by the Times Union.
“The state should be utilizing every opportunity to encourage and support in-state businesses as contract partners with state agencies. Those contractors pay state and local taxes, provide jobs for New York residents, and enhance the quality of life in our communities. Those are dividends that out-of-state vendors cannot provide,” he added. “The legislation I am sponsoring would simply help level the playing field, which is currently skewed in the wrong direction. I am grateful to Procurement and Contracts Chair, Senator Reichlin-Melnick, and all the committee members, for advancing this measure. As we look to stimulate our state’s economic recovery, this bill offers an important and common-sense step forward.
The bill now heads to the Senate Finance Committee for consideration.