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Technology Contracts | IT Services Contracts | Telecom Contracts

Importants Facts

Recent Changes to OGS Technology Contract Purchasing Guidelines

OGS continues to work with OSC to simplify technology purchasing for agencies. Guidelines have been and are continuing to be made more uniform, based on the type of technology contract. Recent changes include:

  1. Guidelines for microcomputers (PCs), printers, software, networking hardware and software, interactive voice response systems (IVR) and video conferencing are now very similar (see "Guidelines for Specific Contracts").
  2. Under the new guidelines for the above 6 areas, OSC pre-audit of purchases has been removed. However, agencies are required to have a procurement record for purchases above $50,000 and the procurement record will be subject to a post audit by OSC.
  3. Single or sole source purchases involving OGS contractors may now be made under the applicable OGS contract (see "Single and Sole Source Purchases" below).

Types of Technology Contracts

There are three fundamental types of technology contracts, depending upon the process OGS employs in establishing the contract. The three types are:

  1. "Direct Purchase:" The OGS contract price is competitively bid and is the best price available. Agencies issue purchase orders directly against the contract in accordance with the contract guidelines (see "Guidelines for Specific Contracts). These purchases are not subject to OSC pre-audit but may be subject to a post audit by OSC.
  2. "Best and Final:" OGS does either a preliminary competitive bid or a negotiated contract where the pricing is a good, competitive price at quantity one. However, since OGS contracts are IDIQ (Indefinite delivery, indefinite quantity) contracts, the agency, at the time of purchase, can often obtain better pricing based on its volume or commitment level, by obtaining a best and final price among OGS contract holders for the specific technology being purchased. These purchases are not subject to OSC pre-audit, but may be subject to a post audit by OSC.
  3. "Formal Mini-bid:" OGS does not perform competition in establishing the OGS contract and pricing is maximum not to exceed. In technology, these contracts are PBX and IT Services. These contracts are subject to OSC pre-audit above $15,000 (see "Guidelines for Specific Contracts) and are subject to OSC post audit when $15,000 or less.

Office for Technology (state agencies only)

Before a State agency purchases from any OGS technology contract, Office for Technology approval of the agency's intent to purchase must be obtained for:

  1. Any software purchase above $20,000
  2. Any hardware or services purchase above $50,000

See "Additional References" for OFT's policies.

Guiding Principles

OGS contracts are IDIQ contracts. Pricing is good at quantity one, but it is important that Authorized Users do their part to ensure that they are getting the best deal possible. The following suggestions will enable this process:

  • Consolidate purchases across the agency; don't let each department or office cut orders for its own requirements.
  • Place as few orders as possible; make infrequent large purchases to increase volume.
  • For State agencies, whenever possible plan purchases so they may be aggregated across the agency, with other agencies or included in the Office for Technology's aggregated buys. If this is not possible, always solicit "best and final" offers from as many contractors as can reasonably be expected to meet your needs or negotiate directly in the event of a single or sole source requirement.
  • When soliciting "best and final" offers or negotiating, determine in advance what additional considerations are the most valuable (i.e., lower pricing, extended warranties, free or more deeply discounted training or consulting, etc.).
  • Determine the value of existing equipment and look for opportunities to trade in existing equipment against the acquisition of new equipment.
  • If resellers are allowed to participate in the contract, solicit best and final pricing among the resellers if at all possible. This is particularly important when it has been determined that the requirement can only be met by a single brand of hardware or software.
  • Determine when is the best time to negotiate with the contractor (for example: market place conditions, company's fiscal year end)? Note that this may be different for each contractor. Users should seek information, which enables them to properly plan the best time to negotiate.
  • Consult the OSC Bulletin No. G-68, which is a good source for negotiation techniques, under "Additional References."

Single/Sole Source Purchases:

On occasion, an Authorized User may have a single or sole source purchase in a technology area. For state agencies, any single or sole source purchases must be made in accordance with Procurement Council Guidelines [see "Additional References" above (refer to Procurement Council Guidelines, Section 4 Procurement Techniques, F. Single /Sole Source)].

For those single or sole source purchases related to an OGS centralized contract (e. g.: a need for services on an OGS software contract where the software developer is the only vendor that can perform the services), an agency may make the purchase under the OGS contract, provided that the agency makes a justification for the single or sole source purchase, reasonableness of price and obtains OSC approval for the Single or Sole Source Exemption. Upon OSC approval of the exemption, the Agency is required to publish an exemption notice in the NYS Contract Reporter.

Other examples of single/sole source purchases under OGS technology contracts include:

  1. An IT Services purchase where there is only one contractor capable of performing a specific project due to unique factors in the project scope.
  2. When performing Annual Competition or Transactional Purchases, there may be instances when a single or sole source represents "best value".
  3. Justifying a specific manufacturer's equipment as sole source. Here, documentation must include a list of specific features or factors that distinguish the equipment from other available contract equipment and why such features/factors are required/important to the agency. If the selected manufacturer includes resellers in the contract, the justification for single source must include documentation as to why competition between the manufacturer and/or among resellers is not a viable option.

OSC Pre-audit Levels

Here is a quick reference table of what OGS technology contract purchases require OSC pre-audit and at what dollar thresholds:

Type of Contract OSC Pre-audit (Y/N) Threshold
IT Services Yes Agency Discretionary Limit (usually $15,000)
PBX Installations Yes Agency Discretionary Limit (usually $15,000)
Single/Sole Source Purchases (outside the scope of contract) Yes Above Agency Discretionary Level
All Other Technology and Telecommunications Contracts No None (see Guidelines for Specific Contracts)