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Fixing the City's Broken Approach to Nonprofit Contracting


scott stringer

Comptroller Scott Stringer, a co-author (photo: @NYCComptroller)


From housing for homeless families to meals for our seniors, non-profit organizations are on the front lines of our city, supporting our most vulnerable neighbors. Yet these groups are surviving hand-to-mouth when it comes to funding and often it’s our own city government that’s stalling the contracting process and delaying payments that thousands of nonprofits rely on.

In a new report, New York City Comptroller Scott Stringer’s office looked at thousands of human service contracts, and found an astounding 90 percent were submitted to the Comptroller’s Office for registration by a City agency after the contract start date had already passed, with half of them arriving six or more months late. Some agencies, including the Department of Homeless Services and the Department of Education, submitted over 99% of their contracts late.

The consequences of the City’s chronic lateness are huge. Because vendors don’t get paid until their contracts are registered, widespread delays in the contracting process force cash-strapped nonprofits to take out loans, miss payroll, or potentially cut services, just to deal with the shortfall in cash. In the last fiscal year alone, nonprofits took 751 City-issued bridge loans worth $149.9 million in total to keep the wheels turning as the City slowly processed their contracts.

It’s unacceptable. The burden of the City’s sluggish procurement process shouldn’t fall on our non-profit partners. That’s why we’re calling for common-sense reforms to break through the bureaucracy.

The City should build a public tracking system for contracts. If you can track a package as it moves across continents, you should be able to track contracts as they move through City agencies. Moreover, the City must develop clear metrics and strict timeframes throughout the procurement process, which will bring a basic level of transparency and accountability into this system.

Consider this: a non-profit is awarded a City contract to provide job training, with a specific start date for summer programming. That contract then goes through multiple layers of bureaucracy at the contracting agency before going over to some, if not all, of the following oversight agencies for review: the Mayor’s Office of Contract Services, the Law Department, the Office of Management and Budget, the Department of Investigation, and the Division of Labor Services at the Department of Small Business Services.

These levels of review are crucial and help to safeguard the integrity of the City’s public procurement process, rooting out waste and fraud. But as these agencies are not held accountable to deadlines, the full process can take months or even years to complete before the contract arrives at the Comptroller’s Office for registration.

In the end, the non-profit is left waiting for its contract and subsequent payment, without information on the process. This forces hundreds of non-profits into an impossible catch-22: wait to begin work, which can stall vital services and drive up costs – and in reality is rarely possible – or begin work without a registered contract, which can jeopardize the organization’s finances.

But with strict time-frames and a tracking system, non-profits might be spared this turmoil and gain some control in a process that currently treats their ability to function and help thousands of New Yorkers as an afterthought.

What we’re putting forward is a blueprint for the City to do better. Making these fixes will bring the contracting process in line with the City’s priorities, because behind these contracts are people who need food to eat, a roof to sleep under, or someone to care for them. These people are our neighbors, our relatives, and our friends. And right now, the snail’s pace of City agencies is putting their care at risk.

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Scott Stringer is New York City Comptroller and Jose (Joey) Ortiz, Jr., is the Executive Director of the NYC Employment and Training Coalition. On Twitter @NYCComptroller and & @JoeyOrtizJr of @NYCETC_org

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