Comptroller Stringer Audit: NYCHA’s Oversight of Construction Contracts is Flawed

New York, NY—Flaws in the New York City Housing Authority’s (NYCHA’s) oversight of contracts for roof replacements and other building rehabilitation efforts have jeopardized millions of dollars in investments and exposed residents to disruptions caused by weeks of construction delays, according to a new audit by New York City Comptroller Scott M. Stringer.

The audit found that NYCHA paid $180,000 for a new roof at Lafayette Gardens Building 5 and another $1.8 million for new roof installations at Pomonok Houses North, but despite making those substantial investments, the Authority accepted defective work, such as poor water‑drainage and insufficient flashing—conditions that could lead to leaks, shorten the useful life of the new roofs, and potentially lead to health and safety concerns for residents. In addition, at three of eight sampled developments, the Comptroller’s Office found that rehabilitation work was completed between 23 and 60 days late and the Authority failed to pursue close to $100,000 in liquidated damages it may have been entitled to for those delays.

“It’s unbelievable. We’re talking about what are supposed to be new roofs, but we found work that wasn’t up to industry standards. Hundreds of thousands of New Yorkers depend on NYCHA to competently fix its buildings. NYCHA needs to be more diligent to ensure that work is done properly,” said Comptroller Scott M. Stringer. “These are opportunities missed and dollars wasted. The agency must get its house in order, because as it faces massive shortfalls in funding, NYCHA must do its repair work well. Residents—and all New Yorkers—deserve and expect better. Enough is enough.”

More than 400,000 New Yorkers reside in NYCHA’s 328 public housing developments across the City’s five boroughs, and many of these buildings are aging. Currently, 270 NYCHA developments are 30 or more years old, and of those, 114 are more than 50 years old.  NYCHA’s Capital Projects Division (CPD) is tasked with preserving and modernizing public housing by providing professional design and construction services.  A major focus of NYCHA’s capital work is making buildings water-tight through rehabilitating and/or replacing building envelope components (roof, façade, windows, and foundation). The Comptroller’s audit reviewed whether NYCHA effectively monitors construction contracts involving building envelope work to ensure that required rehabilitation work is performed appropriately, on time and in compliance with contract terms and industry standards.

In particular, this audit found:

• Deficiencies in the finished work product observed at several locations during field inspections of a sample of the projects;
• Construction work was completed late at three of eight sampled developments undertaken by the Special Projects and Construction units;
• Inadequate project scoping at one of three sampled developments overseen by the Construction unit led to the questionable use of a change order to procure substantial additional work to address conditions that appear to have existed at the time the original contract was let; and
• Record-keeping weaknesses in Primavera, NYCHA’s construction project management software, which hampers oversight of project timelines and contributes to project delays.

By accepting faulty work, NYCHA may not be able to obtain service under its warranty agreements, thereby facing future additional costs while exposing residents to health and safety concerns.

Lafayette Gardens

Although NYCHA made an $180,000 investment for roof renovations at Lafayette Gardens Building 5, auditors observed and photographed ponding water on the roof more than 48 hours after a rainstorm – a direct violation of industry standards. Accordingly, the Comptroller’s office recommended that NYCHA correct the deficient roof repairs and seek to recoup the cost from its vendors, but instead the Authority declined to act, stating that because its own inspections found no ponding no corrective action was needed.

According to the National Roofing Contractors Association (NRCA), 48 hours is the acceptable duration for ponding water to remain on a roof after a rain for a roof system like Lafayette gardens Building 5. Furthermore, the Lafayette Gardens’ contract specification states that, “if any work leaks, fails to stay in place or results in ponding,” the work will be judged defective.

###