OVERVIEW

When a State agency awards a term contract that allows for the purchase of commodities on an as-needed basis, the contract should be established as a Purchase Authorization contract (Purchase Authorization).

This section provides information related to Office of the State Comptroller (OSC) funds reservation requirements for Purchase Authorizations, instructions for numbering Purchase Authorizations and forms/templates to use when establishing Purchase Authorizations.

FUNDS RESERVATION

In most cases, the State agency is not required to create a funds reservation for anticipated fiscal year purchases when submitting the Purchase Authorization to OSC for review. (Exception: If the contract provides for a guaranteed minimum purchase, OSC will require a pre-encumbrance reserving funds for the guaranteed purchase amount.) See XI.2.C Contract Funds Reservation for additional information.

TERM AND PRICE ADJUSTMENTS

A Purchase Authorization can be bid for a contract term not to exceed five years and may contain provisions for price adjustments if provided for in the Invitation for Bid (IFB).

UTILIZATION

The State agency establishes the contract amount for the Purchase Authorization based on estimated usage over the contract term. Once the Purchase Authorization has been approved, the State agency can issue purchase orders against the contract, as needed, without OSC prior approval. OSC prior approval is required for any contract amendments, including renewals and price changes. Purchase Authorizations may be bid with multi-agency participation, if eligible agencies are listed in the IFB. See XI.8.B Multi-Agency Contracts for additional information.

Process and Transaction Preparation:

Purchase Authorization contracts must use a standard contract letter format. The New York State Contract ID is assigned to the Purchase Authorization by the State agency and must include the appropriate contract prefix (see XI.2.B.2 New York State Contract Identifiers for additional information). Submit a signed copy of the contract letter and all other required documentation to OSC. Required documentation may include the original bid, any rejected or protested bids, the bid tabulation, and proof of advertising in the Contract Reporter. See XI.2.E Submission of Agency Contracts and Amendments, and XI.2.G Submission and Retention of Bids/Proposals for additional information.

In addition, OSC requires a copy of the Notice of Contract Award. This Notice of Contract Award should contain an itemized listing of the items awarded to the vendor, along with all pricing information, for audit purposes. (Note: The terms and conditions specified in the particular IFB may vary from the sample. However, all IFB specifications and the Notice of Contract Award must contain a reference to Appendix A, the New York State Standard Contract Clauses).

A suggested format for renewals is linked. Submit a copy of the renewal to OSC, along with any other required documentation for each renewal.

Once an agency has determined whether a contract transaction is subject to prior approval by OSC (see XI.2.A - Thresholds, for additional information), the agency selects the appropriate Audit Type.

Purchase Authorization contracts should be created in the Statewide Financial System (SFS) using the appropriate Contract Profile based upon funds reservation requirements.

In most cases, Purchase Authorizations are created in SFS with a Contract Profile that does not require a funds reservation (e.g. PANR0015).

Exception: If the Purchase Authorization provides for a guaranteed minimum purchase, a pre-encumbrance reserving funds equal to the guaranteed minimum purchase amount is required. For these exceptions, the Purchase Authorization must be created in SFS with a Contract Profile that requires a funds reservation (e.g. PAFR0016).

For additional instruction on this topic, visit the job aids published to SFS Coach. SFS Coach is accessible from the SFS home page after logging in with your SFS user ID and password.

When the purchase authorization is approved by OSC, OSC will transmit an approval notification. A copy of the signed signature page will be available for download in the EDSS. It will be the contracting entity’s responsibility to attach the signature page to the proper contract documents.

Guide to Financial Operations

REV. 09/27/2024