(a) Policy.
(1) Purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only.
(2) The award of a contract to a contractor based on lowest evaluated price alone can be false economy if there is subsequent default, improper or exaggerated claims, late deliveries, or other unsatisfactory performance resulting in additional contractual and administrative costs. While it is important that City purchases be made at the lowest price, this does not require an award to a contractor solely because that contractor submits the lowest offer. A prospective contractor must affirmatively demonstrate its responsibility, including, when necessary, the responsibility of its proposed subcontractors.
(b) General standards.
(1) A responsible contractor is one which has the capability in all respects to perform fully the contract requirements and the business integrity to justify the award of public tax dollars.
(2) Factors affecting a contractor's responsibility may include:
(i) financial resources;
(ii) technical qualifications;
(iii) experience;
(iv) organization, material, equipment, facilities, and personnel resources and expertise (or the ability to obtain them) necessary to carry out the work and to comply with required delivery or performance schedules, taking into consideration other business commitments;
(v) a satisfactory record of performance;
(vi) a satisfactory record of business integrity;
(vii) where the contract includes provisions for reimbursement of contractor costs, the existence of accounting and auditing procedures adequate to control property, funds, or other assets, accurately delineate costs, and attribute them to their causes; and
(viii) compliance with requirements for the utilization of small, minority-owned, and women-owned businesses as subcontractors.
(3) Failure of a firm to provide relevant information specifically requested by the Contracting Officer may be grounds for a determination of non-responsibility.
(c) Special standards.
(1) When it is necessary for a particular contract or class of contracts, the Contracting Officer shall develop, with the assistance of appropriate specialists, special standards of responsibility. Special standards may be particularly desirable when experience has demonstrated that certain minimum experience or specialized facilities are needed for adequate contract performance.
(2) The special standards shall be set forth in the solicitation (and so identified) and shall apply to all bidders/proposers.
(3) Special standards must be based on demonstrated need and must not be used to artificially limit competition.
(d) Ability To meet standards.
(1) The prospective contractor may demonstrate the availability of necessary financing, equipment, facilities, expertise, and personnel by submitting upon request:
(i) evidence that such contractor possesses such necessary items;
(ii) acceptable plans to subcontract for such necessary items; and
(iii) a documented commitment from, or explicit arrangement with, a satisfactory source to provide the necessary items.
(2) A prospective contractor that has performed unsatisfactorily shall be presumed to be non-responsible, unless the Contracting Officer determines that the circumstances were beyond the contractor's control or that the contractor has taken appropriate corrective action. Past failure to apply sufficient tenacity and perseverance to perform acceptably is strong evidence of non-responsibility.
(e) VENDEX questionnaire.
(1) Definitions. For purposes of this section only, the following definitions apply:
Affiliate. An entity in which the parent of the contractor owns more than fifty percent of the voting stock, or an entity in which a group of principal owners which owns more than fifty percent of the contractor also owns more than fifty percent of the voting stock.
Contract. Any agreement between an agency, elected official, or the Council and a contractor, or any agreement between such a contractor and a subcontractor which:
(i) is for the provision of goods, services, or construction and has a value that when aggregated with the values of all other such agreements with the same contractor or subcontractor and any franchises or concessions awarded to such contractor or subcontractor during the immediately preceding twelve-month period is valued at $250,000 or more, or
(ii) is for the provision of goods, services, or construction, is awarded to a sole source, and is valued at $10,000 or more.
Contractor. All individuals, sole proprietorships, partnerships, joint ventures, or corporations who enter into a contract, as defined herein, with an agency, an elected official, or the Council.
Officer. Any individual who serves as chief executive officer, chief financial officer, or chief operating officer of the contractor, by whatever titles known.
Parent. An individual, partnership, joint venture, or corporation which owns more than fifty percent of the voting stock of a contractor.
Principal Owner. An individual, partnership, joint venture, or corporation which holds a ten percent or greater ownership interest in a contractor or subcontractor.
Subcontract. Any contract, as defined herein, between a subcontractor and a contractor.
Subcontractor. An individual, sole proprietorship, partnership, joint venture, or corporation which is engaged by a contractor pursuant to a contract, as defined herein.
(2) Obligation to file questionnaires. VENDEX questionnaires shall be completed and filed by the contractor at least once within each three year period within which such contractor does business with the City. Each contractor shall certify at the time of award of each contract that all the information submitted within such three year period is current, accurate and complete. If changes have occurred within the three year period, the contractor shall update, prior to contract award, any previously-submitted VENDEX questionnaire to supply any changed information, and shall certify that both the updated and unchanged information is current, accurate and complete. If VENDEX questionnaires have not been submitted within three years, then such questionnaires shall be completed and filed:
(i) by applicants, at the time of an application for inclusion on a prequalified list, provided that this requirement shall not apply to applications under HHS Accelerator pursuant to 9 RCNY § 3-16;
(ii) by contractors, when requested by an agency or by the CCPO, but in any event before the Recommendation for Award is approved or not later than:
(A) thirty days after registration of the contract in the case of a contract of whatever value if the aggregate value of City contracts, franchises, and concessions awarded to that contractor including this one during the immediately preceding twelve-month period equals or exceeds $250,000, and
(B) thirty days after registration of the contract, where permitted pursuant to paragraphs (3) and (4) of this subdivision; or
(iii) by subcontractors, within thirty days after the ACCO has received from the prime contractor written notification of the identity of the proposed subcontractor and granted preliminary approval, if the aggregate value of City contracts, franchises, and concessions awarded that subcontractor including this one during the immediately preceding twelve-month period equals or exceeds $250,000.
(3) Late filing of information: when permitted. The VENDEX questionnaire may be submitted within thirty days after registration of the contract as provided in paragraph (4) of this subdivision in the following circumstances:
(i) emergency procurements as defined by 9 RCNY § 3-06;
(ii) accelerated purchases as defined by 9 RCNY § 3-07;
(iii) on a contract-by-contract basis where the CCPO, upon the written request of the ACCO, has determined that expedited procurement action is required due to urgent circumstances;
(iv) buy-against procurements pursuant to 9 RCNY § 4-07 where the contractor has not previously submitted a VENDEX questionnaire; and
(v) on a contract-by-contract basis with respect to information not required by local law where the CCPO, upon the written request of the ACCO, has determined that a specific portion of the information required by the questionnaire but not by local law is not accessible to the contractor despite good faith efforts to complete the filing in a timely fashion. The determination shall set forth with particularity the information which may be submitted late and the reasons for the later completion of the filing, and shall include the specific date by which the information shall be submitted.
(4) Late filing of information: required findings. In the circumstances set forth in paragraph (3) of this subdivision, the VENDEX questionnaire may instead be submitted after registration of the contract, provided that:
(i) the ACCO has notified the contractor in writing of its obligation to submit the VENDEX questionnaire as set forth in subdivision (e)(2) above;
(ii) the ACCO has determined that sufficient information concerning the prospective contractor is otherwise available to permit the determination of responsibility prior to receipt of the questionnaire; and
(iii) in addition, where the basis for the delayed submittal is an expedited procurement action due to urgent circumstances, the ACCO must provide a separate additional determination setting forth the specific documented reasons it is not feasible for the contractor to complete all or some specific portion of the VENDEX questionnaire as set forth in subdivision (e)(2) above. The ACCO's determination shall include the name and telephone number of the authorized representative of the contractor who provided information on which the ACCO relied in making the non-feasibility determination.
(5) Exemption: information not required by local law. On a contract- by-contract basis, where a contractor demonstrates compelling reasons that it is not feasible to supply a specifically identified portion of information which is required by the questionnaire but not by local law, the CCPO may exempt a contractor from the requirement to supply that portion of the required information, upon the written application of the ACCO setting forth with particularity:
(i) the efforts to obtain the required information;
(ii) the name and telephone number of the authorized representative of the contractor who made the request for exemption on behalf of the contractor;
(iii) the information to be covered by the exemption;
(iv) the compelling reasons why an exemption should be granted in this case, including why the circumstances are such that it is in the best interests of the City that the contract be awarded to this contractor; and
(v) the basis for finding the sufficient information concerning the prospective contractor is otherwise available to permit the determination of responsibility absent the exempted information. In these cases the CCPO shall state the reasons that granting the exemption serves the best interests of the City and shall provide a copy of this determination to the Comptroller within five days.
(6) Exemption: sole source. In the case of a specific contract awarded in accordance with the sole source provision of 9 RCNY § 3-05 where a contractor refuses to supply some portion of the required information, but the need for the goods, services, or construction is such that is in the best interests of the City that the contract be awarded, the CCPO may exempt the contractor from the requirement for some specifically identified portion of information required by local law concerning the creation and maintenance of a computerized data base upon the written application of the ACCO setting forth with particularity:
(i) the efforts to obtain the required information;
(ii) the name and telephone number of the authorized representative of the contractor who refused, on behalf of the contractor, to supply the required information;
(iii) the information to be covered by the exemption;
(iv) the reasons why an exemption should be granted in this case; and
(v) the basis for finding that sufficient information concerning the prospective contractor is otherwise available to permit the determination of responsibility absent the exempted information.
(7) Reporting requirement for late filings and exemptions. A copy of the written request of the ACCO and the determination of the CCPO permitting late filing of required information pursuant to subdivision (e)(3) and (4) of this section, or granting an exemption pursuant to subdivision (e)(5) and (6) of this section shall be filed by the CCPO with the Comptroller within five days after it is made or approved by the CCPO.
(8) Contract terms and conditions.
(i) Late filing. Whenever the CCPO has permitted the filing of some or all of the required information within thirty days after the registration of the contract, the contract shall contain a clause requiring the submission of the required information within the required time period as a material term and condition of the contract and permitting termination without penalty to the City for violation of the condition, or in the event that:
(A) the Mayor or his/her designee determines on the basis of the belatedly filed information that it is in the best interest of the City to terminate the contract, and/or
(B) the Comptroller or his/her designee determines that the belatedly filed information reveals matters which if provided earlier would have provided a basis for an objection to registration of the contract by the Comptroller and the Mayor or his/her designee determines that he/she would have agreed with such determination and therefore it is in the best interest of the City to terminate the contract.
(ii) Subcontractors. Where appropriate, City contracts shall contain a clause requiring prime contractors to notify subcontractors of their obligation to complete and file VENDEX Questionnaires within thirty days after the ACCO has granted preliminary approval of the identified subcontractor, if the aggregate value of City contracts, franchises, and concessions awarded to a subcontractor during the immediately preceding twelve-month period equals or exceeds $250,000.
(9) Failure to submit information as required: consequences. Whenever a late filing of required information has been permitted in accordance with subdivision (e)(3) and (4) of this section and the contractor has failed to submit the required information within the required time period, that fact shall be communicated to the CCPO and the Comptroller immediately and shall be included within the VENDEX data base. Until such time as the required information has been filed with the CCPO,
(i) no further contract shall be awarded to that contractor,
(ii) the contractor shall be ineligible to bid or propose or otherwise be awarded a further contract, and
(iii) no payments shall be made to the contractor for performance pursuant to that contract unless authorized in writing by the CCPO.
(10) The Procurement Policy Board shall provide the City Council with periodic reports concerning permission for late filings and exemptions at intervals and with contents agreed upon by the Procurement Policy Board and the City Council.
(11) The questionnaire responses shall be entered into the citywide computerized VENDEX database no later than the completion of the Recommendation for Award.
(f) Department of investigation and administrative fee.
(1) Prior to making its determination of vendor responsibility, the agency shall request the Department of Investigation to conduct a Vendor Name Check on the proposed vendor, which shall consist of a review of the names on the Questionnaire and other information to ascertain whether the business or its affiliated individuals are or have, during a relevant period of time, been the subject of an investigation by the Department. The Department of Investigation shall undertake the review expeditiously and provide an explanation to an agency if its review is not completed within thirty calendar days of the request. If the Department of Investigation ascertains that there has been such an investigation, it shall provide a copy of any final report or statement of findings to the Agency Head for use in making the determination of responsibility. If the results of the review are not made available to the agency within thirty calendar days of the request, the agency may make its responsibility determination on the basis of the information then available to it.
(2) For any contract or subcontract that is subject to the Vendor Name Check process set forth in section (f)(1), the CCPO may charge a fee for the administration of the VENDEX system, including the Vendor Name Check process, in the amount of $175 for contracts of an estimated value less than or equal to $1,000,000 and $350 for contracts of an estimated value greater than $1,000,000. Such fee will be charged against payments made to the vendor on the contract at issue. The timing of the contract award shall not be affected by a fee incurred but not yet paid by the vendor. A prime vendor is responsible for the payment of fees for any subcontractors of the vendor for which Vendor Name Check requests are made. Nothing contained in these Rules shall prohibit a prime vendor from recovering from its subcontractors the amount of such fees attributable to those subcontractors. The VENDEX administrative fee may be waived at the discretion of the CCPO if it is determined that such waiver is in the City's best interest.
(g) Making the responsibility determination.
(1) The Contracting Officer shall use the following sources of information to support determinations of responsibility or non-responsibility:
(i) the VENDEX database of debarred, suspended, and ineligible contractors;
(ii) VENDEX and other records of evaluations of performance, as well as verifiable knowledge of contracting and audit personnel;
(iii) determinations of violations of employment-related federal, state, or local law or executive order, including but not limited to those relating to equal employment opportunity, prevailing wage, workplace health and safety, employee benefits, and employee wages and hours;
(iv) information supplied by the prospective contractor, including bid or proposal information, VENDEX and prequalification questionnaire replies, financial data, information on production equipment, and personnel information;
(v) pre-award survey reports; and
(vi) other sources such as publications, suppliers, subcontractors and customers of the prospective contractor, financial institutions, other government agencies, and business and trade associations.
(2) A Contracting Officer may notify the bidder or offeror of unfavorable responsibility information and provide the bidder or offeror an opportunity to submit additional information or explain its actions before adverse action is taken by the City.
(h) Determination of non-responsibility required.
(1) If a bidder or offeror who otherwise would have been awarded a contract is found non-responsible, a determination of non-responsibility setting forth in detail and with specificity the reasons for the finding of non-responsibility shall be prepared by the Contracting Officer.
(2) A copy of the determination of non-responsibility shall be immediately sent to the non-responsible bidder or offeror. Notice to the non-responsible bidder must be mailed no later than two business days after the determination of non-responsibility is made and must inform the contractor of the right to appeal the determination to the Agency Head or designee within ten calendar days of receipt. A copy of the determination of non-responsibility shall also be sent to the CCPO and Comptroller.
(3) The determination of non-responsibility shall be included in the VENDEX database.
(i) Determination of non-responsibility. An agency letting a contract by competitive sealed bid or competitive sealed bid from prequalified vendors may find the lowest responsive bidder(s) to be non-responsible in accordance with 9 RCNY § 2-08 of these Rules.
(j) Notice. After making a determination of non-responsibility, the ACCO shall notify the lowest bidder in writing of that determination. The notification shall state the reasons upon which the determination is based and shall inform the bidder of the right to appeal the determination of non-responsibility to the Agency Head and subsequently to the Mayor, and of the procedure for taking such appeals. The notification shall also contain the following statement:
The vendor shall also send a copy of its appeal to the New York City Comptroller, for informational purposes, at Office of the New York City Comptroller, Bureau of Contract Administration, 1 Centre Street, Room 727, New York, NY 10007, (212) 669-2323.
(k) Appeal to agency head. Appeals to the Agency Head of the determination of non-responsibility shall be made pursuant to the following procedure:
(1) Time for appeal. Any vendor who is determined to be non-responsible in connection with the award of a particular contract shall be allowed ten days from receipt of the agency's notification to file a written appeal of that determination with the Agency Head. Receipt of notice by the vendor shall be deemed to be no later than five days from the date of mailing or upon delivery, if delivered. Filing of the appeal shall be accomplished by actual delivery of the appeal document to the office of the Agency Head.
(2) Form and content of appeal by vendor. The appeal by the vendor shall be in writing and shall briefly state all the facts or other basis upon which the bidder contests the agency finding of non-responsibility. Supporting documentation shall be included.
(3) Agency head determination. The Agency Head shall consider the vendor's appeal, and shall make a prompt written decision no later than sixty days after receipt with respect to the merits of the bidder's appeal, except when such appeal relates to an Office of Labor Services determination of non-compliance with applicable equal employment opportunity requirements. Under such exception, the Office of Labor Services shall review all appeals and shall inform the Agency Head of its recommendation as to the merits of the vendor's appeal within forty-five days. The Agency Head or head of the Office of Labor Services may, in his or her sole discretion, meet with the vendor to discuss his/her appeal. If the Agency Head's determination is not made within the prescribed sixty days after receipt of the appeal, then the vendor may present the appeal to the Mayor.
(4) Notification to vendor of agency head decision. A copy of the decision of the Agency Head shall be sent to the vendor. If the Agency Head upholds the ACCO's finding of non-responsibility, the Agency Head shall inform the vendor of the right to appeal the decision to the Mayor, and of the procedure for taking such an appeal.
(5) Delegation. The Agency Head may designate a senior agency official, other than the ACCO or his or her subordinates, to consider this appeal.
(6) Finality. The Agency Head's decision of a vendor's appeal shall be final unless further appealed to the Mayor.
(l) Stay of award of contract pending agency head decision. Award of the contract shall be stayed pending the rendering of a decision by the Agency Head unless the ACCO makes a determination that execution of the contract without delay is necessary to protect substantial City interests. Where the award is not stayed, the vendor shall be advised of this action in the determination of non-responsibility or if the stay is removed at a later date, notification shall be provided to the vendor no later than two business days after such determination is made.
(m) Appeal to Mayor. Appeals to the Mayor of the Agency Head decision upholding a determination of non-responsibility shall be made pursuant to the following procedure:
(1) Delegation. The Mayor may delegate responsibility for deciding this appeal to the CCPO.
(2) Time for appeal. Any vendor who wishes to appeal the decision of the Agency Head shall be allowed ten calendar days from receipt of the Agency Head's notification to file a written appeal of that determination with the Mayor or CCPO. Receipt of notification by the vendor shall be deemed to be no later than five days from the date of mailing or upon delivery, if delivered. Filing of the appeal shall be accomplished by actual delivery of the appeal document to the Office of the Mayor.
(3) Form and content of appeal by vendor. The appeal by the bidder shall be in writing and shall briefly state all the facts or other basis upon which the bidder contests the agency finding of non-responsibility. Supporting documentation shall be included.
(4) Mayoral determination. The Mayor or CCPO shall consider the vendor's appeal, and shall make a prompt written decision with respect to the merits of the vendor's appeal. The Mayor, in the Mayor's sole discretion, may meet with the bidder to discuss the appeal.
(5) Notification to bidder of mayoral decision. A copy of the decision of the Mayor or CCPO shall be sent to the vendor.
(6) Finality. The decision by the Mayor or CCPO of a vendor's appeal from an Agency Head decision concerning non-responsibility shall be final.
(n) Stay of award of contract pending decision by Mayor or his designee. Award of the contract shall be stayed pending the rendering of a decision by the Mayor or CCPO, unless the ACCO has made a determination pursuant to these Rules that the execution of the contract without delay is necessary, or the Mayor or CCPO, in their discretion, determine that it is in the best interests of the City to go forward with the award of the contract.
(o) Documentation. Documents reflecting the agency determination of non-responsibility and any appeal and decision with respect to appeal, and evidence of having supplied written notifications as required by these Rules, shall be sent to the CCPO for inclusion in the VENDEX database.
(p) Rehabilitation of vendors. An application for a declaration of rehabilitation may be made by any vendor who has been found non-responsible by one or more City agencies, if such vendor has either declined to appeal or exhausted the process for appealing such non-responsibility determination(s) as set forth in this section, or by any vendor that is the subject of any unfavorable responsibility information recorded in the VENDEX database as a caution(s). A declaration of rehabilitation will not result in deletion of the underlying non-responsibility determination or caution from the VENDEX database, but a summary of such declaration or of any decision denying such an application shall be entered into the VENDEX database for consideration by agency Contracting Officers in making future responsibility determinations. In making responsibility determinations, Contracting Officers may rely upon the declaration of rehabilitation in lieu of requiring a vendor to explain negative responsibility information in accordance with subdivision (g)(2) of this section.
(1) Time for filing. No application for a declaration of rehabilitation may be filed prior to the latest date for filing of an appeal of a non-responsibility determination in accordance with subdivision (k)(1) of this section. If a vendor pursues an appeal in accordance with subdivision (k)(1) of this section, no application for a declaration of rehabilitation may be filed prior to the latest date for filing of an appeal to the Mayor in accordance with subdivision (m)(2) of this section. The submission of an application for a declaration of rehabilitation shall not toll the time limits set forth in this section for filing an appeal.
(2) Form and content of filing. To apply for a declaration of rehabilitation, a vendor must submit a written application to the CCPO. The rehabilitation application shall be certified by the applicant to the effect that all of the information supplied is true to the best of the applicant's knowledge, information and belief. The application shall state how the applicant has demonstrated its responsibility for future procurement awards, and shall:
(i) demonstrate that the issues leading to the relevant non-responsibility determination or to the relevant caution(s) have been remedied by the applicant, and
(ii) set forth any additional remedies or corrective actions the applicant is willing to undertake as a condition of a final declaration of rehabilitation by the CCPO.
(3) Remedies. Remedies or corrective actions may include, but are not limited to:
(i) retaining an auditor, monitor, technical consultant or independent private sector inspector general with the consent of the Department of Investigation to review the applicant's business practices, oversee its performance and/or develop specific remedies with respect to the subject matter of the non-responsibility determination(s) or caution(s):
(ii) ownership changes and/or reorganizations of the legal structure of the applicant in a manner that appropriately remedies the issues raised in the non-responsibility determination(s) or caution(s);
(iii) dismissing employees whose actions were the subject matter of the non-responsibility determination(s) or caution(s);
(iv) entering into certification agreements with the Department of Investigation prescribing corrective actions and/or otherwise appropriately remedying the subject matter of the non-responsibility determination(s) or caution(s);
(v) resolving judicial or administrative proceedings that were the subject matter of the non-responsibility determination(s) or caution(s) under terms demonstrating that such concerns have been appropriately remedied; or
(vi) engaging in any other lawful action leading to resolution of the issues that were the subject matter of the non-responsibility determination(s) or caution(s), or demonstrating that any negative responsibility information recorded as a caution has been appropriately remedied.
(4) Notice to agencies. The applicant shall concurrently provide a copy of its application for rehabilitation to the Department of Investigation, the Comptroller and to the Contracting Officer of any agency that found such applicant non-responsible or requested that negative responsibility information be entered as a caution in the VENDEX database.
(5) CCPO decision. The CCPO shall review the filing, shall consult with the Department of Investigation and may consult with any other relevant government agency, prior to making a final decision concerning the application for a declaration of rehabilitation. The CCPO may seek additional information from the applicant. Upon review of the filing and any subsequent submission by the applicant, the CCPO shall issue a decision granting or denying the application for declaration of rehabilitation. In making such decision, the CCPO may consider a broad range of factors, which may include, but is not limited to, the following:
(i) The public policy expressed in these Rules that the vendors have the capability in all respects to perform fully the requirements of public contracting and the business integrity to justify the award of public tax dollars;
(ii) The bearing of any criminal, false, fraudulent or other activities of the vendor, its affiliates and current and past owners, principals, employees, or their associates or other persons or entities on the skill, judgment and integrity of the vendor or on its fitness or ability to perform as a public contractor, and the time elapsed since and seriousness of such activities;
(iii) Any information produced by the vendor or available from other sources relevant to its rehabilitation, including the adequacy of the remedies or corrective actions identified by the applicant, or to any other factor bearing on the vendor's skill, judgment and integrity or its fitness or ability to perform as a public contractor. The CCPO may condition any declaration of rehabilitation upon the applicant's completion of the specific additional corrective actions, if any, set forth in such declaration. The CCPO decision granting or denying the application for declaration of rehabilitation shall be final and a record of the determination shall be included in the VENDEX database.
(6) Notification of decision. A copy of the CCPO decision granting or denying the application for declaration of rehabilitation shall be mailed to the vendor, with copies to the Department of Investigation, the Comptroller and the Contracting Officer of any agency that found such applicant non-responsible or requested that negative responsibility information be entered as a caution in the VENDEX database.
(7) Effect. Nothing in this subdivision shall preclude an agency Contracting Officer from finding a vendor to be responsible where such vendor has not applied for a declaration of rehabilitation or where an application for such declaration has been denied. Furthermore, nothing in this subdivision shall preclude an agency Contracting Officer from finding a vendor to be non-responsible, notwithstanding a declaration of rehabilitation.
(Amended City Record 1/29/2016, eff. 3/1/2016; amended City Record 10/1/2018, eff. 11/5/2018; amended City Record 4/17/2024, eff. 5/17/2024)