NY State debates certain social preferences

New York Spending Policies

The New York State Office of General Services (OGS) plays a central role in the spending of your tax dollars. Its Commissioner, John Egan, says in the simplest of terms OGS does a lot of the shopping for the state.

"We buy milk, we buy fuel oil, we buy automobiles," said Egan, in describing the hundreds of commodities and services OGS contracts for on behalf of the state and state supported agencies like school districts and local governments who can then avail themselves of the ability to purchase items off the contracts negotiated by OGS.

In her role as a Deputy Commissioner, Carla Rasmussen Chiaro oversees the purchase of up to $5.5 billion in goods and services annually and is responsible for ensuring that taxpayers get the best bang for their buck.

"We competitively bid all of our contracts, and they're awarded to the lowest bidder that comes in," said Chiaro, who says the key to savings is to "look for all opportunities for aggregating purchases."

Within the New York State Finance Law there is a clause mandating that state agencies buy from so called "preferred source vendors".

They are recognized under the law as being agencies with the purpose of advancing special social and economic goals.

These include not-for-profit industries which employ the blind and disabled and which sell everything from toner cartridges to American flags, and "Corcraft", an industries program run by the New York State Department of Correctional Services where prisoners make everything from textiles to office furniture.

The law also states that purchases from these preferred source vendors are exempt from statutory competitive procurement requirements.

Asked how closely her staff watches the market place to ensure that preferred vendors in particular -to whom state agencies need to give first priority for purchases- are charging a fair price, Chiaro said, "We review every application and any increase in costs associated they have to run by us also, so it's a significant amount of work for the procurement staff to review the applications. ...and we don't approve them if we don't feel they are competitive."

OGS has oversight of the prices charged by all preferred source vendors except for the largest one of all, Corcraft, where prices are set solely by the Department of Corrections.

When it was pointed out to Hurt that state procurement guidelines seem to indicate that taxpayer supported state agencies have no choice but to buy from Corcraft (a complaint most recently made by the State Education Department), Hurt said that's not entirely true.

"They can buy it from us, but if our products don't fit form, functionality, and utility those agencies can go anywhere they like to purchase those items."

Further, Hurt insists that price can be included as a factor of "form functionality and utility" as defined under the law.

Asked if he felt the law needed to be changed, Egan replied, "No, there's a good reason to do it. You know, a lot of us are frustrated social workers. There's a cost to doing some of these programs, and there's a cost to doing preferred sources. But there's a greater cost to not doing them."