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1. Introduction

Article XI §163(3)(a)(ii) of the State Finance Law states that "commodities contracts shall be awarded on the basis of lowest price to a responsive and responsible offerer"; and, §163(4)(d) states that "service contracts shall be awarded on the basis of best value to a responsive and responsible offerer."

Responsibility is described in the New York State Procurement Guidelines Section II – General Policy as follows:

"State agencies should only award contracts to vendors who are responsible. Agencies must administer a process in which offerers are required to provide assurances that they conform with responsibility requirements. Such requirements may include, but are not limited to, the offerer’s qualifications, financial stability and integrity. Responsibility differs from responsive in that it generally applies to the offerer and the constructs are established in case law. Responsive applies to the extent to which the offerer has complied with the specifications or requirements of the solicitation document."

This "best practices" document has been developed to assist agencies by describing the general scope of a responsibility determination; identifying specific information which might be considered in a responsibility determination; and, providing samples of documents which could be used to address responsibility issues. Agencies should adopt their own internal responsibility review procedures based on these guidelines.

2. Scope of Vendor Responsibility Determinations

Each agency is responsible for determining the scope of its vendor responsibility review and determination process. While all contracts must be awarded to a responsible bidder, a survey of State agency practices in determining vendor responsibility indicated that the scope of agency responsibility review efforts increase as the dollar value of the contract increases; and, that additional emphasis is placed on Financial Capacity and Responsibility/Integrity factors in service and technology contracts.

Apart from dollar value and contract complexity, other factors related to the procurement may support the need for more stringent responsibility reviews. For example, procurements that are critical to the agency’s mission may require extensive vendor reviews, as would a procurement in which a low bid is significantly lower than those of the competition.

Under the three basic components of vendor responsibility – Qualifications of the Firm, Financial Capacity and Responsibility/Integrity - agencies may identify and emphasize the evaluation of certain criteria it deems critical depending upon the nature and scope of the proposed contract. For example, a responsibility determination for a management or information technology consulting contract may emphasize vendor experience, resumes of project team members, etc., while a commodity award would normally focus on the firm’s capacity to produce and/or supply the commodity.

Responsibility criteria focus the agency’s analysis of the contractor’s capacity to fully perform the contract requirements in all respects and the business integrity to justify the award of public contracts. An unfavorable determination in one or more areas of evaluation need not result in a non-responsibility determination. Each contract award must be considered on a case-by-case basis after a comprehensive weighing of all factors.

3. Vendor Responsibility Criteria

Under the general scope of Qualifications of the Firm, Financial Capacity and Responsibility/Integrity, agencies may consider the following criteria:

1. adequacy of financial resources;
2. satisfactory technical qualifications;
3. satisfactory experience;
4. satisfactory record of performance;
5. adequacy of the organization, material, equipment, facilities and personnel resources and expertise necessary to carry out the work and meet required delivery or performance schedules;
6. necessary licenses, insurance and bonds;
7. satisfactory record of business integrity; and,
8. compliance with public policy issues.

Agencies may detail specific requirements within these criteria or they may add additional standards or criteria to reflect special contract requirements. In all cases, these standards must be rational, and based on demonstrated needs. They should not be used to artificially limit competition.

Depending upon the nature and scope of the contract requirements, certain responsibility criteria may overlap with issues of responsiveness. For example, a bid proposal in which a vendor indicates the firm cannot meet a required project deadline may be deemed either non-responsive (i.e. not meeting specifications) or non-responsible based on failure to meet (v) above. As a practical matter, agencies would reject the bid proposal as non-responsive rather than non-responsible, which would require more extensive review and have more far-reaching impact on the vendor.

4. Obtaining Information for Vendor Responsibility Evaluation

The most direct way to gather the information necessary to assess vendor responsibility is to ask bidders or vendors to supply the required information or to certify to the accuracy of responses to specific questions (e.g., Non-Discrimination in Employment in Northern Ireland). Attachments A and B are examples of questionnaires that address a broad range of responsibility/ integrity issues in a concise manner. Attachment A may be appropriate for use in procurements of lower dollar value or risk, or in "off-the-shelf" procurements; while Attachment B could be used in high value, high risk, mission critical or complex procurements.

Both Attachments A and B incorporate references, with some variations, which broaden the applicability of the responsibility inquiry to include the firm, any affiliates, any predecessor companies or entities, owner/director, officer, partner, proprietor, major stockholders or persons involved in the contracting process. Depending on the nature and scope of the procurement, agencies may require the firm to detail the specific nature of its relationships with other firms; to provide the names and addresses of key personnel as identified above, and to identify past ownership positions or officer status these personnel have had with other firms over the past three to five years. Responsibility/Integrity questions would then be made applicable to those firms as well.

Agencies may also use a variety of resources to obtain or to verify vendor information. For example:

• Vendor reliability and past performance can be verified by contacting other State agencies or vendor references.
• Vendor financial capacity can be verified by obtaining a credit rating service report or obtaining certified financial statements. On-line business services such as "edgar on-line" provide summaries of ownership and Securities and Exchange Commission filings with detailed information available through subscription.
• Information regarding liens, bankruptcies, civil and criminal court actions, federal or state agency legal actions, affiliates, key personnel, federal debarments, etc., can be obtained from a commercial service such as Lexis/Nexis (available on state contract) or OSHAData; or, by contacting the appropriate federal or state agency.

In obtaining vendor data from outside sources, agencies should be aware of any potential problems with the reliability, accuracy and timeliness of the data. Agencies should independently verify information which reflects negatively on a vendor’s responsibility.

Attachment C provides a more comprehensive listing of evaluation factors which may be considered in a responsibility determination.

5. Review of Responsibility Information

If a vendor discloses derogatory information, or if an agency’s contract review reveals such information, the agency should take affirmative steps to verify the information before a non-responsibility determination is made. The agency should:

Contact the Vendor – The most direct way to resolve issues and confirm the accuracy of any derogatory information is to contact the vendor in writing and request additional information or clarification.

Have the Vendor Address the Specific Problem – Certain problems, such as a vendor’s failure to pay taxes, can be readily resolved and corrective action by the vendor may result in the vendor being deemed responsible.

Assess the Information and Contracting Options – Not all information of a derogatory nature may be sufficient to result in a non-responsibility determination; and, in some cases an agency may need to contract with a vendor even if there are strong indications of non-responsibility. In such cases, agencies may wish to award based on a vendor certification that it is in compliance, or will comply, with any specific responsibility conditions imposed by the agency under the contract terms.

6. Non-Responsibility Determinations

1. Pre Bid – If an agency has previously found a vendor to be non-responsible, or has knowledge of a vendor’s past violations, convictions, non-performance, etc., the agency must still provide the vendor with an opportunity to bid and then consider the issue of responsibility on a case-by-case basis.
2. Pre-Award - If an otherwise award eligible vendor is determined to be non-responsible, the agency should notify the vendor in writing of the basis for that determination. The vendor should be provided the opportunity to submit additional information, clarification or explanation; and, to request a hearing which should be conducted prior to award.

Agencies should include information concerning a non-responsibility determination in the Procurement Record provided to the Office of the State Comptroller.

Attachment A

Attachment B

All new mailing list applicants are required to complete this form at the time of application. Companies are responsible for updating information in their Responsibility Questionnaire as changes occur. Any vendor recommended for award on a New York State contract will be required to have this form on file prior to the award date.

QUESTIONS:
Within the past five years, has your firm, any affiliate, any owner or officer or major stockholder (5% or more shares) or any person involved in the bidding or contracting process been the subject of any of the following:

1. a judgment or conviction for any business-related conduct constituting a crime under local, state or federal law including, but not limited to, fraud, extortion, bribery, racketeering, price-fixing, or bid collusion?

________YES ________NO

2. a criminal investigation or indictment for any business-related conduct constituting a crime under local, state or federal law including, but not limited to, fraud, extortion, bribery, racketeering, price-fixing, or bid collusion?

________YES ________NO

3. an unsatisfied judgment, injunction or lien obtained by a government agency including, but not limited to, judgments based on taxes owed and fines and penalties assessed by any government agency?

________YES ________NO

4. an investigation for a civil violation by any local, state or federal agency?

   ________YES ________NO

5. a grant of immunity for any business-related conduct constituting a crime under local, state or federal law including, but not limited to, fraud, extortion, bribery, racketeering, price-fixing, or bid collusion?

________YES ________NO

6. a local, state, or federal suspension, debarment or termination from the contract process?

________YES ________NO

7. a local, state or federal contract suspension or termination for cause prior to the completion of the term of a contract?

________YES ________NO

8. a local, state, or federal denial of award for non-responsibility?

________YES ________NO

9. an agreement to a voluntary exclusion from bidding/contracting?

________YES ________NO

10. an administrative proceeding or civil action seeking specific performance or restitution in connection with any local, state or federal contract?

________YES ________NO

11. a State Labor Law violation deemed willful?

________YES ________NO

12. a firm-related bankruptcy proceeding?

________YES ________NO

13. a sanction imposed as a result of judicial or administrative proceedings relative to any business or professional license?

________YES ________NO

14. a denial, decertification, revocation or forfeiture of Women’s Business Enterprise, Minority Business Enterprise or Disadvantaged Business Enterprise status?

    ________YES ________NO

15. a rejection of a low bid on a local, state or federal contract for failure to meet statutory affirmative action or M/WBE requirements on a previously held contract?

________YES ________NO

16. a consent order with the New York State Department of Environmental Conservation, or a federal, state or local government enforcement determination involving a violation of federal, state or local government laws?

________YES ________NO

17. an occupational Safety and Health Act citation and Notification of Penalty containing a violation classified as serious or willful?

________YES _________NO

18. a rejection of a bid on a New York State contract for failure to comply with the MacBride Fair Employment Principles?

________YES ________NO

19. a citation, notice, violation order, pending administrative hearing or proceeding or determination for violations of:

• federal, state or local health laws, rules or regulations
• unemployment insurance or workers’ compensation coverage or claim requirements
• ERISA (Employee Retirement Income Security Act)
• federal, state or local human rights laws
• federal or state security laws
• federal INS and Alienage laws
• Sherman Act or other federal anti-trust laws

________YES ________NO

NOTES:
Information on the following additional topics should also be submitted with this questionnaire. Check "none" if topic does not apply.

1. agency complaints or reports of contract deviation received within the past two years for contract performance issues arising out of a contract with any federal, state or local agency?

______NONE

2. disputes within the past two years concerning your company’s failure to provide commodities or services to political subdivisions within the past two years pursuant to centralized contracts with the New York State Office of General Services?

______NONE

3. Employee Identification No., Social Security No., Name, DBA, trade name or abbreviation previously or currently used by your business which is different from that listed on your mailing list application form?

______NONE

Attachment C