(a) Policy. Negotiated acquisition may be used for all categories of procurement under the circumstances and subject to the conditions set forth in this section. Authority for approvals or determinations required by this section shall not be delegated, unless otherwise stated herein.
(b) Procedures.
(1) Preliminary discussions. An agency may engage in preliminary discussions with a vendor to explore the feasibility of a proposed negotiated acquisition. Discussions are not negotiations for the selection of a vendor.
(2) The ACCO shall justify the use of the negotiated acquisition method by making a determination that it is not practicable and/or advantageous to award a contract by competitive sealed bidding or competitive sealed proposals due to one or more of the following circumstances and the basis thereof:
(i) there is a time-sensitive situation where a vendor must be retained quickly because:
(A) an agency needs to respond to a court order, stipulation, or consent decree;
(B) funds available from a source outside the City will be lost to the City;
(C) an existing vendor has been terminated, has defaulted, has withdrawn from, or has repudiated a contract, or has become otherwise unavailable, or an agency has decided not to renew or extend an existing contract in the best interest of the City and the agency requires a substitute or successor vendor; or
(D) a compelling need for goods, services, construction, and/or construction-related services exists that cannot be timely met through competitive sealed bidding or competitive sealed proposals;
(ii) there is a limited number of vendors available and able to perform the work;
(iii) there is a compelling need to extend a contract one or more times beyond the now-permissible cumulative twelve-month limit, provided that the vendor's performance is satisfactory or that any deficiencies have been or are addressed or are effectively addressed through a corrective action plan, and the extension(s) is for the minimum time necessary to meet the need;
(iv) there is a need to procure legal services or consulting services in support of current or anticipated litigation, investigative or confidential services:
(A) in the case of legal services or consulting services in support of current or anticipated litigation, unless otherwise provided by law, the Corporation Counsel or designee shall make this determination;
(B) in the case of investigative or confidential services, the Mayor or designee, the Corporation Counsel, or the Commissioner of DOI, whichever is applicable, shall make this determination;
(v) there is a need to procure construction-related services for a later phase of an ongoing complex construction project from the same vendor where it is not practicable to define the full scope of work at the beginning of the project, the original solicitation included notice that the selected vendor may be the only vendor eligible for later phases of the project, there are compelling programmatic reasons to use the same vendor for the successive phases, and the vendor's performance is satisfactory;
(vi) there is a need to procure changed or additional work on an ongoing construction project when an agency wishes to retain a new vendor because it is not practicable or advantageous to award such work by change order or modification to the original vendor;
(vii) there is a need to procure construction when, during an ongoing construction project, there is a compelling necessity to perform additional work, which constitutes a material change of scope, and the advantages of negotiating with either an existing vendor or a limited number of other vendors clearly outweigh the disadvantages of a lack of competition; or
(viii) there is a need to procure investment services, as described herein.
(3) The CCPO shall approve the use of the negotiated acquisition method for a particular procurement or for a particular type of procurement prior to the solicitation of vendor.
(4) The agency shall negotiate with all qualified vendors that have expressed interest unless the ACCO determines for a particular procurement or for a particular type of procurement that it is in the City's best interest to negotiate with fewer vendors, and the CCPO approves such determination.
(5) The ACCO or designee shall maintain a written record of the conduct of negotiations and the basis for every determination to continue or suspend negotiations with each vendor.
(6) The ACCO shall make a determination that award of the contract is in the best interest of the City and the basis thereof.
(7) Subparagraph (2)(iii) shall not apply to construction.
(c) Investment services. Negotiated acquisition may be used for one or more City Retirement Systems to award a contract to a vendor that has been providing investment management services to the Retirement System(s) under a program to foster the growth of small or new investment managers ("the Emerging Manager Program") as a manager or submanager, under the following conditions:
(1) the fund(s) have determined pursuant to a vote of its or their trustees, upon the presentation by the Comptroller or designee of his or her recommendation and after having been provided with a presolicitation report and such information from the relevant asset class investment consultant(s) of the Retirement System(s), that it is in the best interest of the fund(s) and the City for the Comptroller to award a contract through negotiated acquisition;
(2) the manager or submanager has provided investment management services to the pension funds under the Emerging Manager Program for a continuous period of at least twelve months, and where, if such investment management services have ended due to a contract expiration or termination, the contract ended no earlier than three (3) months prior to publication of the notice of intent to enter into negotiations;
(3) the services provided by the manager or submanager are still required;
(4) there is no competitive sealed proposals or Investment Manager Search process for the manager or submanager's eligibility level and type of investment service in which the manager or submanager could participate or could have participated so that the services that it provides would not be disrupted;
(5) the term of the new contract must not extend beyond the commencement date of contracts awarded pursuant to a competitive sealed proposal or Investment Manager Search process for a class of managers applicable to the manager or submanager for which the manager or submanager became eligible to compete;
(6) over the immediately preceding market cycle of at least three (3) years, the manager or submanager has demonstrated organizational and staffing stability; managed growth of assets; a sound investment strategy and process; strong risk management; consistency of rolling, risk-adjusted, excess, net-of-fee returns relative to its assigned benchmark index; and fair and reasonable fees for services provided;
(7) upon the request of a trustee(s), an investment manager proposed for award under this provision must be available to respond to questions related to the proposed award; and
(8) no contract procured pursuant to this provision may be executed without the approval of the fund(s), pursuant to a vote of its or their trustees, after a presentation by the Comptroller or his or her designee and submission of the Recommendation for Award which must include such information as necessary to establish that the manager or submanager meets the conditions for being awarded a contract under this section and provides fair and reasonable fees.
(d) Public notice. This subdivision shall not apply to negotiated acquisition below the small purchase limits or where the Corporation Counsel or designee has made a determination that such notice may disclose litigation strategy or otherwise impair the conduct of litigation by the City.
(1) Notice of intent to enter into negotiations. This paragraph shall not apply where negotiations will be entered into with vendors solicited solely from a PQL or where time constraints beyond the agency's control make such advance notice impractical.
(i) Frequency. Notice of intent to enter into negotiations shall be published at least once in the City Record at least ten calendar days before negotiations are expected to begin and shall be posted on the City’s website in a location that is accessible by the public simultaneously with its publication.
(ii) Content. Such notice of intent shall include:
(A) agency name;
(B) PIN;
(C) purchase description;
(D) estimated quantity, if any;
(E) name(s) of the proposed vendor(s), if applicable;
(F) summary of the basis of the determination to use negotiated acquisition;
(G) projected contract start and expiration dates; and
(H) how vendors may express interest in the instant procurement or in such procurement in the future, as applicable.
(2) Notice of award.
(i) Frequency. Notice of contract award shall be published at least once in the City Record within fifteen days after registration of the contract.
(ii) Content. Such notice of award shall include:
(A) agency name;
(B) PIN;
(C) purchase description;
(D) name and address of the vendor;
(E) dollar value of the contract;
(F) date of the published notice of intent to enter into negotiation, if applicable; and
(G) contract start and expiration dates.
(Amended City Record 1/29/2016, eff. 3/1/2016; amended City Record 12/15/2023, eff. 1/14/2024)