Testimony of New York City Comptroller Brad Lander to the New York State Assembly Standing Committee on Local Governments Hearing on Local Government Procurement

Good morning, Chair Braunstein & Chair Thiele, Members of the Cities and Local Governments Committees, and members of the public. I am New York City Comptroller Brad Lander, and I am grateful for the opportunity to testify today.

The Comptroller is New York City’s chief financial and accountability officer, charged with working to promote the financial health, integrity, and effectiveness of New York City government, in order to strengthen trust, secure a thriving future for all New Yorkers, and build a more just, equitable, and resilient city. The Comptroller’s office provides checks and balances needed to hold city government accountable for budgeting wisely, investing responsibly, operating efficiently, acting fairly, living up to its obligations and promises, and paying attention to the long-term challenges we face together.

I want to thank you for convening this critically important conversation about ways to improve New York City’s ability to build a whole host of critical infrastructure projects more efficiently: our water supply and sewers, our roads and bridges, our parks and libraries, the resiliency projects that will protect us from the climate crisis.

Each year, the City of New York purchases billions of dollars of goods and services, ranging from schools supplies to massive infrastructure projects. Procurement policy often falls to the bottom of municipal priority lists, but for so much essential work, from combating homelessness to providing meals to seniors to fixing bridges to responding to disasters, procurement is how City government gets stuff done.

The Comptroller plays a critical role in infrastructure investments, through working with the Office of Management and Budget (OMB) to manage the municipal bonds that pay for it, through analysis of the capital budget, through contracts oversight and registration, through enforcement of the prevailing wage law, through claims adjustment, and through audits.

I have been advocating and working for capital process reform for over a decade, since my time in the City Council. When we brought “participatory budgeting” to New York City, which allowed residents to help shape which capital projects were funded in our neighborhood, they wanted to follow along with the projects, to see them become reality. We quickly learned that the majority of the City’s capital projects went over-time and over-budget, as a result of a litany of delays throughout the process. There was not even a database in place where members of the public could track projects through design, bidding, and construction, or where City Hall could keep track of projects in order to hold agencies accountable.

So I have been proud to work with Mayor Adams, Deputy Mayor Joshi, Commissioner Foley, and others in the Adams administration, as well as members of the Capital Process Reform Task Force, to identify and implement changes to make the City’s capital construction process more efficient – so we can bring projects in on-time and on-budget, and therefore make more investments with the limited resources we have. It’s not a secret that our offices don’t agree on everything; but it is testimony to how much we share a commitment to the future of our city that we are here today, together, to testify on capital process reform.   

As Deputy Mayor Joshi and Commissioner Foley have noted, we have all rolled up our sleeves and worked collaboratively to make the City’s capital procurement process more efficient and effective. I share in their appreciation for the progress we made last year in passing e-bidding, wrap-up insurance, and a host of measures to increase M/WBE participation and promote equity in procurement. 

We are also engaged together in hard work at the local level, to make managerial and implementation improvements. For example, the Mayor’s Office of Operations recently unveiled a new, comprehensive Capital Projects Tracker, mandated by a Local Law that I sponsored back in 2020. That tracker means not only that there now is a way for members of the public or media to track capital projects they are interested in, but also a strong management tool for comparing questions across agencies and driving change. In the Capital Process Reform Task Force, we recently heard a presentation on reforms underway at the NYC Department of Environmental Protection that are already making a big difference, and I hope will be adopted by other agencies.   

We support legislation by the Legislature that would grant New York City more flexibility to: 

• utilize alternative delivery methods like Progressive Design-Build and CM Build on more projects; and 
• replace in-person contracts public hearings – that no one attends 99% of the time – with broader and more useful public notice & comment. 

These steps will significantly reduce the amount of time and money it takes to build critically important pieces of public infrastructure, without sacrificing oversight, cost containment, or good government. Better capital projects delivery will help to save the city money, create good jobs, nurture flourishing neighborhoods, support a thriving economy, and build a resilient future in the face of climate change. 

Oversight 

As noted above, the Comptroller’s office plays a valuable oversight role City procurement. We register the vast majority of City contracts, over 10,000 each year, to insure that proper procurement procedures were followed. This includes confirming that the contracting agency has followed the guidelines for the procurement method they are using, that there was no corruption in the decision-making process, that contracting agencies have vetted vendors and verified that they are operating in good standing and eligible for City contracts, and that appropriate funds exist for the City to make payments to vendors.  

As required by the City Charter, we perform this duty within 30 days (we are the only agency in the procurement process with a deadline). While we approve the overwhelming majority of contracts submitted to us (98.8% thus far this term), we have declined to register some due to procedural concerns.  

We also publish annual reports on city contracting, M/WBE contracting, the City’s capital debt & obligations which pay for these projects, and claims against the City (which include many construction and delay claims). This year, we also conducted an extensive review of emergency contracts, and published an extensive primer on the City procurement process. Building from these reviews, we work with the Administration to strengthen the process – to balance the very real need for oversight to insure integrity and cost-competitiveness with appropriate flexibility to deliver projects on-time and on-budget.  

For example, we are in the process of broadening contract provisions for “Expanded Work Allowances,” essentially a contingency, which we have piloted with DDC, and believe can work for other City agencies, to prevent the time-consuming process of contract amendments. On the other hand, after an extensive review of emergency procurement, we recently shifted prior approval for emergency procurement for asylum seeker services from a blanket approval back to contract-specific approval. We have proposed updated systems and tools to better track the use and impact of best value procurement, subcontracting, and other elements of the procurement system. 

For projects that are subject to City or State prevailing wage laws, we also conduct investigations and enforcement actions to insure compliance. 

As these examples suggest, we have a good system of checks-and-balances, that provide for transparency and integrity. We are confident that we can incorporate alternative project delivery methods into that system, with appropriate approvals, oversight, and reports, to achieve the benefits without sacrificing the necessary oversight safeguards.  

Contracting oversight from OMB, Corporation Counsel, MOCS, and the Comptroller’s Office will continue ensure that all proper steps have been taken in the procurement of contracts. The same statutes that empower the Conflicts of Interest Board, the Department of Investigation and other oversight entities to protect the City from impropriety will remain in place for alternative delivery procurements and will not be affected by this legislation. 

Transparency 

Transparency is an essential component of the procurement process. The proposed legislation will not compromise it; in fact, it will improve it. The threshold for public hearings on City contracts has not been revised in 35 years (since 1989). Currently, public hearings are required on procurements above $100,000, a requirement which adds three to four weeks to the procurement process for each contract undergoing a public hearing. This requirement adds little transparency or public engagement, since 99% of the time, no one attends the contracts hearing.  

This requirement comes from an earlier era, when contractors who lost a bid might want to learn who had won it, to see the price they had bid. However, as proposed by S7383 (sponsored by State Senator Sepulveda), which would allow the City’s Procurement Policy Board to update the threshold, this function can be fulfilled more effectively simply by requiring that the same basic contract information which is now made available in the hearing would, instead, by made public electronically on the vast majority of City contracts. Providing the option of online public commenting would be a sufficient alternative to still give the public opportunity to comment, while streamlining the process. An online process would give many more people access to the contract information and save three to four weeks that now go to noticing and holding the hearing.  

To be clear, the proposed legislation would not affect the ULURP process, or other more meaningful public input requirements. 

The public will continue to have access to essential procurement information in PASSPort Public – which provides up-to-date information and status updates concerning vendors, solicitations, and contract registrations. Furthermore, the public will maintain insights on these contracts after registration through Checkbook NYC. Checkbook NYC is an online transparency tool maintained by my Office that enables users to examine a majority of the City’s contract data, including the dates and value of contract payments. 

Additionally, as mentioned above, the newly created Capital Projects Tracker offers a new layer of insight regarding the status of capital projects to the public. This Tracker, launched November 1st of this year, was mandated by Local Law 37 of 2020 (which I authored) and provides a detailed view into the City’s capital process including total cost, current project phase, projected completion dates and other project specific details. This public transparency tool, which I have advocated for since my time as a City Councilmember, will provide clarity and support managerial improvements to get NYC’s schools, parks, bridges and roads, resiliency, and other projects built on-time and on-budget. 

Closing 

In closing, I want to echo the sentiments of Deputy Mayor Joshi, Commissioner Foley and my fellow Task Force members on the importance of continuing what we started last year.  

As the City’s Chief Accountability Officer, I believe we owe it to New Yorkers to spend public dollars efficiently. I am confident that expanding alternative delivery methods (including progressive design-build and CM build) and reducing the public hearing threshold are two impactful ways to do just that, and that they can be implemented without compromising critical oversight or transparency that my office values, and New York rightly demands. 

Thank you again for holding this hearing. We look forward to working with you this coming session to pass these bills, and then to implement capital process reforms that help secure the future of our city.  

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