Comptroller Stringer Announces Procurement Reform Plan to Protect Human Service Providers Supporting Children, Families, and Seniors

(New York, NY) — Today, New York City Comptroller Scott M. Stringer outlined a comprehensive plan to reform the City’s inefficient procurement process and address longstanding issues harming human services providers that deliver essential programs and support to children, families, and seniors. In a letter to Mayor Bill de Blasio, Comptroller Stringer and Deputy Comptroller for Contracts & Procurement Lisa Flores called for reforms to ensure that contracts are executed and implemented on time, that individuals providing services under those contracts are paid fairly, and that technology tools are implemented with all their promised functionality.  

“Human service providers are supporting the most vulnerable among us during one of the most challenging periods in our City’s history,” said Comptroller Stringer. “It’s vital that that the goods and services that New Yorkers rely on are delivered on time and on budget—but our current procurement process is plagued with inefficiencies and bureaucratic backlogs. The reforms we are proposing today will streamline the contracting process, ensure that our human services providers are paid fairly, and connect our children and seniors to the resources they need without disruption and delay.”

“Procurement reform is about good government and common sense,” said Deputy Comptroller Flores. “Human service providers are on the frontlines of the City’s pandemic response, and yet are forced to navigate an opaque and inefficient process that compromises their ability to help those most in need.  This procurement reform agenda will make contracting in New York City more accountable, more transparent, and more effective for vendors and the New Yorkers they serve. In FY21, human services represented 40%, or $12 billion, of the City’s contracting portfolio–far exceeding any other sector the City contracts with–and it is time for the contracting process to work for the nonprofit partners the City depends on.”

“The nonprofit human services sector shows up for New Yorkers every day, and during COVID-19 demonstrated how essential it is to the fabric of our city,” said Michelle Jackson, Executive Director, Human Services Council. “Unfortunately, the human services workforce is going on two years of egregious payment delays and without a necessary cost-of-living increase–jeopardizing the very organizations that millions of us rely on. The Human Services Council believes the reforms included in Comptroller Stringer’s Procurement Reform Plan are important guiding lights to highlight the worst failures of the system. HSC and our members our excited to partner with Mayor-Elect Eric Adams and Comptroller-Elect Brad Lander to tackle these issues and are grateful to Comptroller Stringer for his partnership with the sector.”
 
Contract Continuity

• Automatic, Short-Term Extensions for Human Services Contract

The PPB should explore the feasibility of adopting a new rule allowing nonprofit human service providers to automatically activate limited-time extensions for continuity of services when a formal extension or renewal process has not been initiated by an agency.

In many instances when contract processing and submission of contracts for registration are delayed, vendors will take on excessive risk and begin work before contract registration. This is common in human services, especially for contract renewals or extensions, where the provider will continue to deliver services to clients while waiting for the contract to be submitted for registration and for payment to be received.  Although the City offers interest-free bridge loans to nonprofit human services providers awaiting contract registration, this is a patchwork solution that still incurs costs, negatively impacts cashflow, and does little to encourage agency accountability in timely processing of contracts – in particular, the foreseeable renewals and extensions regarding existing services.

The new rule for limited-time extensions should require agency public reporting through PASSPort and implement financial consequences if agencies delay in initiating the formal extension or renewal process. The PASSPort system was established with the ability to automatically track applicable dates and this functionality should be used to enforce existing and new rules regarding timely extension, renewal, or potential re-letting of contracts.

• Agency Procurement Timeframes

• Key Performance Indicators

Monthly updates of key performance indicators, to be published by MOCS through PASSPort on the City’s website, should be required going forward.  Currently, § 2-04 of the PPB requires the City to centralize agencies’ human service contract plans to inform the public and the sector of new contracts and contract continuations. However, a broader requirement is necessary because the City does not leverage the plans or procurement metrics to drive down retroactivity. Key performance indicators that should be published to drive accountability in the procurement process include the number of days for each oversight agency to complete its review and approval, and data on agency’s preparation and finalization of the budget, legal review and approval, etc.

• Publishing Agency Compliance with PPB Rules

Currently, pursuant to PPB § 4-12(a)(ii), agencies wishing to replace, renew, or extend an expiring contract under certain PPB provisions must notify the selected vendor no later than 90 days prior to the expiration of the contract.  Additionally, this section requires agencies wishing to replace a contract by means of a new RFP award to publish a Notice of Solicitation no later than 250 days prior to the expiration of the contracts to be replaced. 

With the roll out of PASSPort and promised increase in accessible procurement data as a result, PPB §§ 2-04 and 4-12 should be amended to require recording and publishing of agency compliance with the 90- and 250-day deadlines.  Properly tracking agency compliance with PPB rules and deadlines prevents untimely submission of contracts for Comptroller registration and allows MOCS to institute penalties and remediation of these issues.

• Emergency Contract Riders

In the aftermath of an emergency, all too often, the City calls upon the nonprofit sector. The City depends on the sector to provide hands-on recovery services such as the distribution of food and provision of support service to vulnerable communities.  The sector always steps up, even though their contracts do not automatically allow for the provision of these services and do not contain funding to reimburse vendors. 

To address this problem, the City should include comprehensive “emergency contract riders” in all contracts.  These riders will allow the City to access services that are needed in emergency situations from existing vendors that have been previously vetted by City agencies.  In addition, the City should budget for “emergency contingencies” and include this funding in providers’ contracts so that it is accessible immediately in the event there is a citywide, statewide, or nationally declared emergency. 

Contract Payments

• Prompt Payment

The slow pace of New York City procurement can cause nonprofit human service vendors to provide service before payments can be issued, making it difficult for these vendors to cover their expenses.  Although PPB § 4-06 already allows vendors to receive interest on non-prompt payments, an amendment that ensures interest is paid on late payments under City contracts with nonprofit human service providers is necessary.  The amendment should allow agencies to implement a system of electronic invoicing, while requiring them to report dates of receipt and payment of invoices on PASSPort.

To ensure agency compliance, MOCS should be required to make quarterly reports on PASSPort regarding invoice receipt and payment dates, as well as payment on interest.  Also, interest payments should be automatically paid to providers through vendors’ human service contracts and not from the programmatic budgets.
 
Vendor Pay

• Cost of Living Adjustment for Human Service Workers

The City should re-introduce a cost of living adjustment (“COLA”) for human service workers.  In Fiscal Year 2018, the City introduced a three-year COLA for human services workers.  The COLA expired at the end of Fiscal Year 2020 and was not renewed.  This left frontline workers without a COLA increase in the middle of a pandemic.

Anticipating regular wage increases to keep up with cost of living increases is customary for City workers, and the City should do the same for its contracted public sector workforce.  COLAs should no longer be the subject of a protracted annual negotiation that is implemented through retroactive contract amendments.  The City should amend the standard human services contract to expressly include annual COLAs.  This can be modeled after the City’s construction or professional services contracts which allow for annual increases to certain titles that are tied to published pay indices, e.g. using the consumer price index (CPI) for escalation.

• Fair Pay for Human Service Workers

Compensation for those providing human services must be examined and addressed.  The human services workforce is predominantly comprised of women and people of color who are already facing larger issues of pay parity and equity.  Low compensation in the sector sometimes means the individuals who are providing critical services are also entitled to receive those services.  This inequity must be addressed.  

Continued Use of the Technology Solutions – Remote Access to Public Hearings

PPB § 2-11 should be amended to specifically establish a virtual public hearing option to complement the traditional in-person format using the infrastructure put in place during the COVID-19 pandemic.  The clear advantages are increased public access to government, increased transparency in the procurement process, and greater civic engagement
 
To read the full letter, click here.

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