This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

HEALTH AND HEALTH SERVICES - Municipal Nursing Homes (participation in group purchasing programs)
PUBLIC CONTRACTS - Contracts Not Requiring Bidding (purchases by municipal nursing homes pursuant to a group purchasing program)

PUBLIC HEALTH LAW, §2803-a; GENERAL MUNICIPAL LAW, §103(8): A municipal nursing home may participate in group purchasing programs operated pursuant to Public Health Law, §2803-a. Purchases made pursuant to such programs are exempt from statutory competitive bidding requirements.

You ask whether General Municipal Law, §103(8), which exempts "municipal hospitals" from competitive bidding when they purchase goods, supplies and services under joint contracts and arrangements entered into pursuant to Public Health Law, §2803-a, is applicable to a county nursing home.

County Law, §408-a provides that every officer, board or agency of a county shall let all purchase contracts to the lowest responsible bidder after advertisement for bids where so required by General Municipal Law, §103. General Municipal Law, §103(1) provides that, except as otherwise expressly provided by the State Legislature or by a local law adopted prior to September 1, 1953, all purchase contracts in excess of $5,000 shall be awarded by the appropriate officer, board or agency of a political subdivision to the lowest responsible bidder after public advertisement. Subdivision 8 of section 103, however, provides an exception to the competitive bidding requirements contained in subdivision one for purchases by "municipal hospitals" under arrangements entered into pursuant to Public Health Law, §2803-a.

Public Health Law, §2803-a provides, in pertinent part, as follows:

Hospitals are hereby authorized, under such rules and regulations as the [state hospital review and planning] council may authorize, to enter into contracts and make arrangements among themselves and among other municipal, state, federal or privately owned hospitals, or any medical schools, or other health related facilities having or utilizing hospital services or facilities or voluntary ambulance services registered or certified pursuant to article thirty of the public health law, whether or not located in this state or elsewhere, for the *** joint purchases of goods, supplies and services *** (see also 10 NYCRR, §400.4).

The purpose of the exception in General Municipal Law, §103(8) is to allow municipal hospitals to participate in coordinated group purchasing programs under Public Health Law, §2803-a for the purpose of realizing significant cost savings (see Governor's Approval Memo, L 1977, ch 897).

The term "municipal hospital" is not defined for purposes of General Municipal Law, §103(8) (see General Municipal Law, §100). Public Health Law, §2801[1], however, defines the term "hospital" for purposes of section 2803-a of that law as follows:

1. 'Hospital' means a facility or institution engaged principally in providing services by or under the supervision of a physician or, in the case of a dental clinic or dental dispensary, of a dentist, for the prevention, diagnosis or treatment of human disease, pain, injury, deformity or physical condition, including, but not limited to ... nursing homes ...

Therefore, county nursing homes clearly are authorized to participate in joint purchase arrangements under Public Health Law, §2803-a.

Since the purpose of General Municipal Law, §103(8) is to exempt from competitive bidding purchases by "municipal hospitals" made pursuant to Public Health Law, §2803-a, it follows, in our opinion, that the definition of "hospital" applicable to section 2803-a is also applicable to section 103(8). Accordingly, we conclude that purchases made by a county nursing home under a joint purchase arrangement pursuant to Public Health Law, §2803-a are exempt from the competitive bidding requirements of General Municipal Law, §103.

February 6, 1989
Joan Cleekey, Assistant Budget Officer
County of Franklin