Contract Primer

How to Navigate This Document

Welcome to our primer on NYC contracting. This is our effort under Comptroller Lander’s Administration to provide the public with a straightforward guide to the basics of the City’s contracting workflows, and essential solicitation methods.

Readers are invited to review this Primer in its entirety or to jump around as needed to refresh around particular topics. This document is divided into three overarching sections:

1. Primer – This section contains information on NYC contracting including, but not limited to:
   1. Key entities in NYC Contracting
   2. Overview of the NYC Contracting Cycle
   3. Definitions of core contract categories and solicitation methods
   4. Details about additional contracting processes such as Real Property Transactions, Contract Modifications, Purchase Orders, and Task Orders
2. Public Resources – This section contains descriptions of essential public-facing resources for monitoring New York City contracting and spending trends.
3. Appendices – Contains helpful tables for navigating this Primer and running searches in the systems outlined in section II.

I. NYC Contracting: A Primer

This Primer provides a general overview of City contracting processes and solicitation methods. Understanding the frameworks behind why and how the City enters new contracts, as well as what happens during the term of a contract, can be helpful context when examining individual records as well as citywide trends.

Key Entities in City Contracting

Below are several entities that play a role in the City’s contract process at various, and in some instances multiple stages. This list is not intended to be an exhaustive accounting of every contracting agency or oversight body, but rather a preview of individuals and entities that are often referenced in this Primer.

Procurement Policy Board (PPB)

The PPB is the governing entity that is responsible for the promulgation of the City’s procurement rules. These rules inform the City’s procurement activities, including how the City solicits bids and proposals from vendors and how contracts are awarded. The PPB consists of five members, three of who are appointed by the mayor, and two of whom are appointed by the Comptroller. Besides making the rules that govern the City’s contracting process, the PPB has no authority with respect to the award or administration of any particular contract.

Franchise and Concession Review Committee (FCRC)

The FCRC is responsible for approving certain Franchise and Concession selections made by City agencies. The FCRC is comprised of the Mayor and a mayoral appointee, the Director of the Office of Management and Budget, the City’s Corporation Counsel, Borough Presidents, and the Comptroller. Each member of the FCRC holds one vote, except for the Borough Presidents, who share one vote. Concessions are subject to Title 12 of the Rules of the City of New York.

Office of the Mayor

The Mayor’s Office is responsible for managing the City’s procurement functions, including those relating to organization, personnel and structure. The Charter affords the Mayor with powers to approve the use of alternative procurement procedures, allow agencies to procure contracts by methods other than competitive sealed bidding, and maintain information regarding City contracts and contractors in a manner that is reasonably available for public inspection.[1]

City Chief Procurement Officer (CCPO)

The City Chief Procurement Officer is also the Director of the Mayor’s Office of Contract Services (MOCS). In this role, the CCPO exercises Mayoral procurement process powers, including those granted by the Charter, the Administrative Code, and the PPB Rules.  Pursuant to Executive Order 121 (2008), the CCPO has been delegated powers under the Mayor’s Office to establish procurement procedures, lead public hearings, and manage various contracting plans. The CCPO is responsible for the coordination and oversight of procurement activity for all Mayoral agency staff, including all Agency Chief Contracting Officers. Specifically, this oversight entails ensuring agency compliance with applicable rules, laws, and procedures so that certifications of procedural requisites are completed timely and accurately.

The Mayor’s Office of Minority and Women-Owned Business Enterprises (OMWBE)

OMWBE was created to address historic disparities in city contracting and provide minority and women entrepreneurs (M/WBEs) increased opportunities to do business with New York City. The office is responsible for developing policy, enhancing coordination among city agencies, and providing oversight and accountability of the city’s M/WBE program. OMWBE coordinates with mayoral agencies to increase utilization of M/WBEs in city contracting, and to hold agencies accountable to M/WBE participation goals. The office also provides direct support to M/WBE vendors seeking to work with the City.

Chief Business Diversity Officer

The Chief Business Diversity Officer of OMWBE was established in 2023 to support and elevate the City’s M/WBEs by making the City a more equitable and inclusive business environment. Pursuant to Executive Order 26 (2023), the Chief Business Diversity Officer, in consultation with MOCS and the New York City Department of Small Business Services (SBS), shall periodically review agency procurement data provided by MOCS and relevant research to (a) determine any changes in the ethnic or gender categories of M/WBEs to be classified as underutilized, (b) to identify meaningful progress towards addressing overall disparities in procurement across the City, and (c) to make any necessary adjustments to city policies based on such review.

The Mayor’s Office of Non-Profit Services (MONS)

MONS was established in 2022 to advance recommendations developed by the Joint Taskforce to Get Non-Profits Paid on Time. The mission of MONS is to promote thriving communities and the delivery of essential services across the City by amplifying and addressing the needs of non-profit organizations. It also leads efforts to coordinate between city agencies and non-profit leaders to center equity, inform City policy, and reduce barriers for non-profits to contract with the City.

Agency Chief Contracting Officer (ACCO)

Each contracting agency has an ACCO that is responsible for overseeing procurement functions on behalf of their agency, in conjunction with the CCPO. ACCO functions include, but are not limited to: developing solicitation materials; ensuring the selection of appropriate procurement methods; ensuring the integrity of the vendor selection process; vetting vendor backgrounds and making affirmative determinations of responsibility; and ensuring that vendor performance is evaluated throughout the life of a contract. ACCOs also advise agency staff on matters pertaining to procurement matters, Local Laws, and administrative requirements. ACCOs additionally serve as liaisons to MOCS. ACCOs are encouraged to collaborate with agency M/WBE Officers to ensure the success of their agency’s M/WBE goals.

M/WBE Officer

Section 6-129 of the Administrative Code mandates that agency M/WBE officers be either a deputy commissioner or other executive officer designated by the agency head. The M/WBE officer must report directly to the agency head on M/WBE activities carried out by the agency, including, but not limited to, general compliance, intra-agency coordination, and overseeing procurement participation goals.

Corporation Counsel

The Corporation Counsel is nominated by the Mayor and is subject to confirmation by the City Council. The Counsel functions to certify the City’s legal authority for, and approve, all “contracts, leases and other legal papers.”[2] As discussed in this Primer, the Corporation Counsel must also give prior approval to advance Emergency Procurement requests.[3]

Office of Management and Budget (OMB)

OMB is the City’s chief financial agency, responsible for developing City budgets and overseeing the budgets of nearly 90 agencies and related entities. OMB approval may be required during various stages throughout the contracting process. Additionally, OMB conducts a separate contract review on behalf of the Financial Control Board for consistency with the terms of the Financial Emergency Act. The OMB Director also sits on the FCRC.

Department of Investigation (DOI)

DOI is responsible for the investigation and referral of criminal prosecution for cases involving fraud, corruption, and unethical conduct among all persons and entities that receive City funds, including City employees and contractors. Among other tasks, DOI runs checks on individuals and/or vendors that are awarded contracts with the City to determine if they have been previously investigated by DOI.

Small Business Services (SBS)

SBS is mandated by the Charter to manage the City’s operations relating to business and economic development, the enhancement of economic development and financial opportunity for minority and women owned business enterprises, and the realization of equal employment opportunities by City contractors. SBS also contracts with and retains the New York City Economic Development Corporation to function as a development consultant, and to provide economic development-related services on behalf of the City. SBS runs New York City’s certification programs, including the M/WBE Program, the Emerging Business Enterprise (EBE) Program, and the Locally-based Business Enterprise (LBE) Program. SBS also maintains the Online Directory of NYC Certified Businesses.

Overview of Contract Cycle

While the Comptroller’s office plays an important role in City contracting, it is also often the last in a series of steps in the process. The Comptroller is also the only office in the contracting process to have a charter-mandated deadline to complete its work within 30 calendar days. Processes for planning, procurement, administration, and even aspects of oversight, are managed by the Mayor’s office or by executive leadership in “Non-Mayoral” and “Other Agencies”.[4]

Establishing Needs for Contracts

Contracts enable the City and its agencies to provide critical services for the public. An agency may determine that a new contract is needed to procure goods and services that are essential to its operations (e.g., securing office supplies or IT services for its staff). In other cases, an agency may need to use contracts as a mechanism to fulfill certain policy initiatives like expanding 5G access. How the City determines that a good, service, or construction is needed, and where and how they are delivered, varies. This Primer’s focus is on the procurement process, which involves the buying, purchasing, or acquisition of goods, services, or construction, after a need has been established.[5]

The PPB Rules, combined with relevant Executive Orders, Local Laws and other applicable rules and laws, set forth the procedural requirements for each procurement method discussed in this Primer. While the individual requirements vary based on the method, there are some milestones that are common across most contracting processes.

Pre-Solicitation

Actions for the pre-solicitation review phase (PSR), as defined by PPB rules, include assessing the existing market for the good, service, or construction; estimating the expected cost; and selecting the most appropriate procurement method for the City’s need.[6] Once the PSR is complete, the ACCO creates a summary of this information inclusive of the proposed procurement method. Depending on the procurement method, the expected cost, the type of goods or services, and other factors, MOCS and OMB may be required to approve the plan and certify that it complies with all applicable rules.

Agencies may only commence the procurement process once the ACCO has received all necessary approvals. Although the next step varies depending on the chosen procurement method, agencies must generally solicit quotes, bids or proposals from prospective vendors. The selected sourcing method also determines the level of competition and the way that an agency solicits interest from vendors. In some cases, the procurement method dictates that the agency must make the opportunity public to everyone. In other instances, the agency is given discretion as to how many vendors, or even from which singular vendor, it will make a solicitation.

Evaluation of Submissions

Procurement methods also inform what considerations agencies may take when selecting a vendor for a particular contract award. Selections may be based on price bid alone, or they may include qualitative factors as well. Some procurement methods don’t require the agency to make a substantive evaluation, however in most instances, a selected vendor must be found by the agency to have been responsive to all material terms and conditions of a solicitation, and to all specified requirements.[7]

Vendors that were found by an agency to not be responsive, and were therefore not awarded a contract, have the right to appeal. Unsuccessful vendors can also request that the agency meet to discuss the reasons that led to the non-award determination. Information learned from such debriefing sessions can better prepare a vendor to submit more successful bids and proposals in the future.

Award Process

Regardless of the method of selection or evaluation, the City can only make purchases from, and award contracts to, responsible vendors.[8] There are various tools and resources used by agencies when conducting a vendor background check to determine if the vendor is responsible.

In most instances where an agency selects a vendor for a new contract award, the vendor must submit disclosures into the Procurement and Sourcing Solutions Portal (PASSPort) pertaining to the organization’s history and its principal owners and officers.[9] Required disclosures include any adverse information relating to the organization, its principal owners, affiliated entities, and government contracts held by the organization or its affiliates, within relevant timeframes. If the disclosed information or concurrent agency background checks raise questions about the vendor’s business integrity, or the vendor’s ability to meet the contract’s requirements in a way that cannot be adequately addressed, the agency may find that the vendor is not responsible.

Only once an agency determines that a responsive vendor is also responsible may it then move forward with awarding and executing a contract. Prior to the final execution of a contract, the award process may include additional steps, including public hearings, as well as many of the same internal and outside oversight approvals that are required during the PSR stage.  Depending on the nature and dollar value of the final award, additional oversight approval from the Financial Control Board or one of the Deputy Mayors may be required. Once all procedural requisites are finalized, the agency can move the contract to the next and final stage of the process.

Contract Registration

The Comptroller’s Bureau of Contracts Administration (BCA) is responsible for the review and registration of all City procurement and revenue contracts, real property transactions, contract modifications, and task orders pursuant to the Charter, unless registration authority has been otherwise delegated.[10]  Although BCA’s review occurs towards the end of the City’s contracting cycle, this review ensures that public dollars are being used in accordance with applicable law. BCA specifically checks that the procedural requisites and required certifications discussed above have been followed, that there was no corruption in the letting of the contract, and that the awarded vendor has not been debarred.

BCA works diligently to complete its review in a timely manner so that vendors can be paid for the goods, services, or construction being provided and to reduce any risk of interruption of services to New Yorkers that may depend on a contract’s activities. Under the Charter, BCA must complete all registration reviews within 30 calendar days following an agency filing.[11] As indicated earlier, this is the only contracting milestone that has a required timeline for completion.

BCA conducts parallel reviews (under the same 30 calendar-day timeframe) with the Comptroller’s Bureau of Accountancy (BOA) for contracts processed from the City’s Capital Projects Fund.  Contracts produced out of the Capital Projects Fund are financed by capital dollars as opposed to expense funds, because they produce assets that provide an economic benefit to the City over an extended period, greater than one year; meaning they are long-lived assets.

Capital projects funded by capital dollars lead to the creation of various types of capital assets, which includes land, buildings, equipment (including software), lease assets and infrastructure.  As part of the capital registration process, BOA reviews the Fixed Asset Intent document (FN) processed in the NYC Financial Management System (FMS) to verify, at a minimum, the accuracy of the following information with respect to the capital project: asset class, useful life, capitalization trigger, and compliance with certain requirements of Comptroller’s Directive 10 and Directive 30. The purpose of BOA’s review is to allow the City’s audited financial statements presented in the form of the Annual Comprehensive Financial Report (ACFR) to adequately report the City’s capital assets in accordance with generally accepted accounting principles (GAAP). [12]

Post-Registration

Once a contract has been registered, the agreement is legally implemented, and the agency can pay vendors for the goods, services, or construction being provided. Agencies are required to monitor the performance of contracted vendors and to take action if vendors are no longer able to meet the terms of the contract, or if a vendor integrity issue is discovered that could lead to a non-responsibility determination. Finally, agencies are authorized to change certain aspects of registered agreements through the modification process, which is discussed later in this Primer.[13]

Contract Categories Overview

Contract actions are an essential vehicle for the City to meet its needs. This Primer categorizes and defines new contract actions (CT1s, RCT1s, MA1s, and MMA1s) into five groups including: competitive methods; limited or non-competitive methods; transactions that are not subject to Procurement Policy Board (“PPB”) rules; supplemental contracts; and revenue contracts.[14][15][16] This Report primarily derived contract groupings from FMS Award Method codes, which reflect different ways that the City solicits proposals and bids.

Agencies select award methods based on guiding procurement rules (most often set by the PPB), and with an eye towards maximizing value for a particular need.[17] For instance, competitive methods are designed to secure the best value by measure of price or quality, and PPB rules note that there is a preference for awarding contracts by competitive sealed bidding.[18] However, there are often situations where other value interests may supersede open competition, such as when services need to be procured quickly in response to an emergency, or when only one vendor provides a good or service.

Table 5 below provides a summary of the contract groups and subgroups that are defined in this Primer.

Table 5: Breakdown of Contract Groups

Group 1: Competitive Method Contracts

Of all five contract groups, competitive methods tend to account for the largest share of registered contract value in NYC. As noted above, the award methods that comprise this contract group are designed to help the City obtain the highest value based on price or quality.

The PPB also provides the City with opportunities to consider which offer for goods or services represents the “best value” to the City under competitive award methods.  “Best Value” is a basis for awarding contracts, which allows agencies to consider objective and quantifiable analysis of factors, aside from price alone, to optimize quality, cost, and efficiency. Since the original Best Value rule was introduced in 2013, the City has expanded on it to support increased utilization of M/WBEs. For example, amendments adopted into the PPB rules in January of 2020 allow City agencies to weigh a vendor’s M/WBE status in Best Value considerations when evaluating bids and proposals.[21]

For the purposes of this Primer, competitive methods include registered contract actions that were awarded via competitive sealed bids and competitive sealed proposals, including from a prequalified vendor list (PQVL), and accelerated procurements.

Competitive Sealed Bid Contracts

Competitive Sealed Bid (CSB) is a default award method under the PPB rules, General Municipal Law (GML) 103 and most other municipal procurement rules. [22] It functions to award contracts to responsive and responsible vendors that provide the lowest price point for a particular good, service, or construction while still meeting the agency’s programmatic requirements and needs. Agencies must specify their requirements and criteria for vendors, which may include contractual terms and conditions, as well as minimum qualifications that must be met by the vendor, by issuing an invitation for bid (IFB).[23] CSBs are most often used for contracts pertaining to goods and construction. In fact, absent specific directives from other legal authority, CSBs are the required method for any contracts pertaining to public works contracts.[24]

Agencies may also solicit CSBs by sending notice to a PQVL. Agencies may establish PQVLs for different types or sizes of projects.  While opportunities for vendors to join an agency’s prequalified group must be continuously available to the public, and notice placed at least annually in the City Record, these lists are intended to save time by identifying prospective vendors that are known to hold the requisite experience or meet other needs set forth by the City.[25]While all vendors must still be found responsible by an agency before being awarded a new CSB contract, agencies can conduct a preliminary background check on PQVL vendors to reduce the risk of a non-responsibility determination.

Competitive Sealed Proposal Contracts

Competitive Sealed Proposals (“CSP”) are another competitive method whereby agencies solicit goods, services, or construction-related services via a Requests for Proposal (“RFP”). RFPs are generally used when the scope of a need is not well defined, and an agency needs to understand an applicant vendor’s approach to make the best award determination. Agencies must award proposals that are determined to be the most advantageous to the City, and may take into consideration price, but also other criteria set forth in the RFP, such as a vendor’s technical approach, organizational capability, organizational capacity, and M/WBE status.[26] Other factors outside of the RFP cannot be considered by agencies when making award decisions, although there are generally multiple rounds of evaluation, and opportunities for vendors to interview or present their proposal to an agency. [27] Like with CSBs, agencies can also issue an RFP notice to a PQVL list.

Accelerated Procurement Contracts

Accelerated Procurements enable agencies to fast track the bidding process for commodity purchases such as fuel that must be obtained quickly due to shortages or rapid price fluctuations. Pursuant to the PPB Rules, contracts procured under this method are not required to be registered, but agencies must file all required documents with the Comptroller within 30 calendar days.[28] Accelerated Procurements are also exempt from public hearing requirements, but agencies must make contract award decisions based solely on which responsive and responsible vendor offers the best price[29]. Agencies may only use this method for commodities that have been determined eligible for Accelerated Procurement by the City Chief Procurement Officer (CCPO). Eligible commodities are typically those at risk of falling into short supply or those that are subject to short-term price fluctuations.

The Department of Citywide Administrative Services (DCAS) tends to be the only agency that uses the Accelerated Procurement method. Absent directives to delegate this authority, DCAS is mandated under the Charter to purchase, inspect, store and distribute all goods, supplies, materials, equipment and other personal property required by any City agency.[30]

Group 2: Limited or Non-Competitive Methods

There are many circumstances where price and quality considerations still play a driving force in award decisions but are nonetheless qualified by other value interests. Agencies may use limited or non-competitive procurement methods for circumstances when full competition is neither practical nor possible. These circumstances include, but may not be limited to:

1. Time-sensitivity: The City may need to preserve continuity of services if a vendor contract is terminated for any reason.
2. Market constraints: The number of vendors who are able to provide a particular good or service may be limited.
3. Legal or statutory guidelines: Directives from legislation or federal grants may inform how a selection process can be managed.

While responsible for less registered contract value than competitive methods, limited or non-competitive procurement methods often comprise a larger share of new procurement contracts.

Buy-Against Contracts

Buy-Against procurements are used by City agencies to preserve the continuity of goods or service provision after a vendor defaults on their contract, or following the termination of a vendor’s contract because of a material breach to the agreement.[31] The new contract cannot exceed the term remaining on the contract that was defaulted or terminated.[32]

Demonstration Project Contracts

Demonstration Project procurements are for short-term, carefully planned, pilot exercises designed to test and evaluate the feasibility and application of a new product, approach or technology that is not already used in the City.[33] This method allows agencies to evaluate the effectiveness, efficiency, and the reliability of a new product or service without committing a large amount of resources. Agencies may solicit vendors for such projects, or they can award Demonstration Project contracts in response to an unsolicited proposal. In order to use this procurement method, agencies must demonstrate that:

• Testing is needed to evaluate the service or product.
• The service or product cannot be reasonably acquired through a competitive solicitation.
• The product or service is not currently in use by the City.
• The results of the project will be documented and made publicly available.
• The product or service will be procured competitively going forward if testing supports continued use.
• Any outside funding used to justify the demonstrated project award is appropriately documented.

Determined by Government Mandate Contracts

This procurement method must be used when terms set by a non-City funding source, a statute or rule, a court order or consent decree, or some other applicable law dictates that an agency must use a particular method or source for procuring goods and services.[34] For example, Section 162 of New York State Finance Law allocates a preferred source status to vendors which exempts them from competitive procurement requirements in the interest of advancing special social and economic goals.[35] Alternatively, agencies may apply for federal funds to provide goods and services to city residents which, if granted, necessitate that the agency contract with a particular vendor. Click this link to access the New York State Office of General Services Preferred Source Guidelines.

Discretionary (Line-Item Appropriation) Contracts

Discretionary procurements reflect agreements between City agencies and nonprofit organizations, or public service providers, that have been selected by City elected officials other than the Mayor and the Comptroller, or allocated through line-item appropriations in the city budget.[36] While the vast majority of elected official selections are made through the City Council, the list of elected officials that are able to enter into discretionary contracts also includes the five Borough Presidents.

Click this link to access the City’s Discretionary Award Tracker, which allows users to search the status of all City Council Discretionary Awards from the previous three fiscal years.

Click this link to access expenses funded against City Council Discretionary awards by organization, Council Member, Borough, or Fiscal Year.

Emergency Procurement Method: Pursuant to Procurement Rules

The Charter and PPB rules define an emergency condition as “an unforeseen danger to life, safety, property, or a necessary service” which creates an immediate and serious need for goods, services, or construction that cannot be met quickly enough through normal procurement methods.[37] Agencies seeking to utilize this procurement method must solicit and receive prior approval from the Comptroller’s Office and Corporation Counsel/Law Department.[38] They must also seek to obtain as much competition in vendor selection as is possible and practical given the conditions of the emergency.

Agencies then submit a formal emergency declaration to the Comptroller’s Office and Corporation Counsel for approval, and to the City Council for notice. The emergency declaration must include information about the emergency itself, the goods or services or construction needed, the projected cost, the vendor selected in the emergency procurement, and basis of the awarded vendor’s selection. The requirement to register a contract before it becomes effective is waived for EPs under PPB rules, however agencies are required to submit a copy of the contract for an audit of the procedures and the emergency’s basis with 30 days of award.[39] While work can begin under the framework of the emergency declaration once an award is made, agencies must still submit contract packages to the Comptroller’s Office in order for funds to be released for payment.

Government-to-Government Contracts

Government-to-Government contracts are used in circumstances where agencies determine that it is in the City’s best interest to procure goods, services, construction, or construction-related services from another governmental entity.[40] In such cases, the accepted price, terms, and conditions of the contract is negotiated between the agency and the governmental entity. The agency’s Chief Accounting Officer (ACCO) must cite the reasons why procurement through another government agency is in the city’s best interest in a written determination, which is subject to approval by the CCPO.[41]

Innovative Procurement Contracts

An Innovative Procurement is a way for the City to test and evaluate the feasibility and application of new procurement methods that are not yet authorized by the PPB Rules.[42] No later than eight months following the registration of a contract procured via an Innovative Procurement method, the CCPO must submit a report recommending whether it would be in the City’s best interests to codify the new procurement method going forward.[43]

The Innovative Procurement method has also advanced the City’s use of the “Design-Build” project delivery method, which is intended to expedite the completion of major public works projects. Design Build uses a two-step qualifications-based procurement process to select a single team of designers and builders to support public works projects from start to finish. The use of this method allows City agencies to make a contract award to a single vendor, based on Best Value, that will be responsible for overseeing all phases of the project, including design and construction. By going through a single vendor, Design Build is ultimately intended to reduce costs and expedite project completion while ensuring quality control and compliance.

The passage of the New York City Public Works Investment Act (PWIA) in December 2019 authorized the Department of Design and Construction (DDC), Department of Transportation (DOT), Department of Parks and Recreation (DPR), Department of Environmental Protection (DEP), School Construction Authority (SCA), New York City Housing Authority (NYCHA), and Health and Hospitals Corporation (HHC)—to use Design Build method as described above.[44] However, as the current PPB Rules do not contemplate a process to procure both design and construction services in the same contract, these City agencies must leverage the Innovative Procurement method to operationalize the PWIA authority under New York State law.

Intergovernmental Procurement Contracts

Intergovernmental Procurement contracts are used by agencies looking to procure goods, services, or construction by tapping into a contract held by another government agency. Under PPB rules, a city agency can procure through the United States General Services Administration or any other federal agency or the New York State Office of General Services or any other State agency if the price for goods is lower than the prevailing market rate and the costs for services or construction are reasonable.[45] This process can save the City time and help it to realize significant cost savings stemming from volume discounts set forth in the parent contract.

Micropurchases

Micropurchases are used to buy goods and services up to $20,000 for most services, or up to $35,000 for construction services.[46] If these thresholds are not surpassed, including through any future contract modifications, agencies may buy from any available and responsible vendor at a fair price, without any competition. Agencies making micropurchases must ensure that such purchases are distributed appropriately, including to M/WBEs. Agencies are prohibited from engaging in the practice of contract splitting, whereby the full value of a project is artificially divided to keep contract values under the allowable threshold.

Negotiated Acquisition and Negotiated Acquisition Extension Contacts

Under section 3-04 of the PPB rules, agencies can move to limit competition via a negotiated acquisition procurement when the ACCO determines, with CCPO approval, that:

1. There is a time-sensitive situation where a vendor must be retained quickly to meet the terms of a court order or consent decree, to avoid loss of available funding, or to ensure continuity of services.
2. There are a limited number of vendors available and able to perform required work.
3. There is a need to procure legal services or consulting services in support of current or anticipated litigation, investigative or confidential services.
4. There are previously unforeseen or unforeseeable construction-related service needs, typically after construction has begun, that cannot be addressed by a change order or other contract modification.

Negotiated Acquistion Extensions (NAE) are typically used when agencies have exhausted all contractual renewals, as well as contract extensions permitted by other sections of the PPB Rules, because goods or services were needed for a longer time than originally anticipated, or because the agency has not been able to procure a replacement contract in a timely manner.

Small Purchase Contracts – General

Small Purchase procurements enable the City to procure goods, services, and construction above the micropurchase limit without competition or public advertisement as long as the amount of the contract is below a “small purchase limit” set by the PPB and the City Council.[47] The current small purchase limit is generally $100,000, however the threshold for the M/WBE Non-Competitive Small Purchase method, described below, is higher. Like micropurchases, agencies cannot surpass the threshold, including through future contract modifications, and must ensure that the value of purchases are not artificially divided to keep contract values under the small purchase threshold.

Note: small purchase procurements are capped at the above-mentioned dollar threshold because their sourcing methods differ than those used for higher dollar value procurements.[48] For instance, PPB Rules outline a competition objective for the Small Purchase contracts, currently known as the “5+10” method.[49] Specifically, agencies are required to solicit bids from a list of five randomly selected vendors and at least ten randomly selected City-certified M/WBE vendors when making awards for goods and services (over $20,000) as well as construction (over $35,000), as long as the total value of the contract does not exceed $100,000. Vendors are randomly selected from the citywide bidders list based on FMS commodity codes that are entered into the system by an agency. Agencies can proceed without competition if only one responsive bid or offer is received as long as the ACCO determines the price to be fair and reasonable, and that other vendors had an opportunity to respond.

Small Purchase Contracts – M/WBE Non-Competitive

M/WBE vendors are and historically have been underrepresented in City contracting. The M/WBE Non-Competitive Small Purchase (NCSP) method was established in 2017 to increase the participation of M/WBE vendors doing business with the city by streamlining aspects of the contracting process.

The PPB rules were amended in 2017 to allow the City to purchase goods, standard services, and professional services from any City-certified M/WBE valued over $20K (or $35K for construction) up to and including $150,000 without a formal competitive process.[50] In November 2019, PPB unanimously voted to amend PPB Rule 3-08 again to increase this dollar threshold up to $500K, consistent with Chapter 98 of the laws of 2019. This threshold was then increased to $1 million following New York State legislation passed in October 6, 2022.[51] In June 2023 the PPB rules were amended to align with the threshold stipulated by State legislative authority, which will allow the City the flexibility to quickly implement the change moving forward.[52] On June 6, 2023, the New York State Senate passed legislation that will amend the City Charter to increase the dollar threshold for the M/WBE NCSP method from $1 million to $1.5 million.

To further reduce delays for agencies and M/WBE vendors, the Comptroller’s office signed a delegation and approval document allowing agencies to self-register contracts procured under this method in exchange for certain reporting requirements. Under the terms of this delegation, documentation must still be filed with the Comptroller’s Office within 30 calendar days of self-registration consistent with requirements outlined in the Charter.

Sole Source Contracts

Sole Source procurements are used when only one vendor is capable of producing, or able to provide, a required good, service or construction.[53] Whenever an agency determines that there is only a single source, it must publish notice in the City Record (CR) and solicit the application of vendors qualified to provide the required good or service in the future.[54] The agency must also file its Sole Source determination with the Comptroller’s Office.[55]

Group 3: Transactions Not Subject to PPB Rules

The contracts in Group 3 reflect transactions that are either not mentioned in the PPB rules or are otherwise explicitly excluded in Section 1-02(f). This group tends to make up a relatively small share of the City’s contracting footprint.

Force Account Negotiation Contracts

A Force Account is the use of a grantee’s own labor force to carry out a capital project. Force Account agreements enable City agencies to enter into contracts with various railroad agencies and companies, such as the New York City Transit Authority, the Metropolitan Transit Authority, and the Long Island Rail Road, when rehabilitation and reconstruction work must be performed on City-owned property (including bridges and streets, which are above or adjacent to train traffic). Payments made under Force Account contracts are typically used towards labor, material, and equipment.

Grants Agreements

A “Grant” is a cash transfer made by a government entity to another government entity, a quasi-public entity, a private organization, or an individual, for use by the recipient in accomplishing objectives established by the recipient.[56] This contrasts with typical procurement methods where a government entity is seeking the delivery of a specified end-product like a good or service. Grantees must often meet specific parameters in order to be eligible for a grant, but they are not bound by a contract for services.

Miscellaneous Contracts

The award methods in this group are generally used by agencies for contracts that don’t fall squarely into any other category. Such contracts could reflect billing and accounting services, for the administration of insurance premiums, or reimbursements to non-public schools for school security services.

Professional Membership Contracts

Agencies use Professional Membership contracts to establish or renew memberships for agency personnel in professional associations.[57] Examples include bar associations, government groups, or other industry associations.

Regulated by Government Commission

This category includes contracting methods for Public Utility and Cable Service contracts.

Agencies use Public Utility methods when entering into agreements with public utilities regulated by the NYS Public Service Commission (“NYSPSC”), where rates charged to customers have been tariffed pursuant to the Public Service Law, or where there are no practical competitive alternatives.[58] Such services typically include local telephone services, as well as purchases relating to electricity, gas, water, and steam.

Agencies may use a Cable Service procurement method when contracting for cable television services or other public services that are similarly regulated by the NYSPSC.[59] It is also used to cover contracts with utilities regulated by the Federal Energy Regulatory Commission or the Federal Communications Commission.

Subscriptions Contracts

Agencies use this method to purchase electronic or paper-subscriptions to magazines, periodicals, or off-the-shelf training series.[60] Certain software licenses may also be procured via subscription contracts. Agencies do not need to engage in a competitive search for subscription services as this method falls outside of the PPB rules, and because there is often only one provider for a desired subscription.

Group 4: Supplemental Contracts

The contracts in Group 4 reflect new agreements whose terms were set forth by a preceding contract. They are distinct from modifications to existing contracts, which this Primer will discuss in greater detail under “Additional Contracting Processes”.

Renewals

Agencies use Renewals to continue the provision of goods, services, or construction with the same vendor following the expiration of a prior base contract. Under the terms of PPB rules, the Renewal contract must have substantially the same terms and conditions as the original contract, but may possibly have revised quantities, lists, or schedules of items to be supplied which do not alter the scope of the contract.[61] Renewal options are established in the base contract and are used at the sole discretion of the City agency. Vendors receive notice about renewal options during the original solicitation and are obligated to comply if the agency elects to exercise a renewal. Contracts may have one or multiple renewal options.

Assignments

Assignments are used by the City to transfer some or all of the terms of an existing contract to a different vendor by means of a new contract. Agencies can choose to approve a vendor’s request to assign their contract so as to preserve the continuity of good and services. Assignments are typically associated with situations where a vendor has merged with another business entity or sold their business.

Group 5: Revenue Contracts

This group of contracts generally reflect agreements that endow vendors with the right to use the City’s property in exchange for payment or for the provision of public services. Since agencies may use procurement methods discussed above, like CSBs or CSPs, to procure revenue contracts, the agreements making up Group 5 were isolated based on the RCT1 transaction code, which is used in FMS to record and track revenue agreements.

The definitions and guidelines pertaining to the first three types of revenue contracts outlined under Group 5; Franchises, Concessions, and Revocable Consents, are defined in Chapter 14 of the Charter. With limited exceptions, all monies generated from these revenue agreements are deposited into the City’s General Fund.[62]

Group 5 also includes Corpus Funded agreements, which relate to the City’s asset management activities. Corpus Funded agreements are currently recorded in FMS as revenue transactions, but they do not actually generate revenues for the City.

Franchise Agreements

Under terms set forth in the Charter, agencies can endow vendors with the right to occupy or use City property to provide a public service.[63] These agreements are subject to review and approval by the City’s Franchise and Concession Review Committee (FCRC), which is comprised of the Mayor and a mayoral appointee, the Director of the Office of Management and Budget, the City’s Corporation Counsel, and the Comptroller.

Franchises have been recently used for the development of broadband internet services by private companies, via a public right-of-way.

Concession Agreements

Agencies use Concession Agreements to bestow vendors with the ability to privately use City-owned property.[64] Most NYC residents and visitors would recognize examples of Concessions such as the pushcarts in City parks, various outdoor markets and cafes located on City land, or among the City’s golf courses. Like Franchises, Concession Agreements are also subject to oversight by the FCRC. In exchange for use of City-owned property, the agencies typically generate revenue from vendors in the form of guaranteed annual fees or a gross share of sales.

Revocable Consent Agreements

Revocable Consent Agreements enable the city to permit applicants to engage in construction projects, for private use and benefit, on or around City-owned property.[65] As its name suggests, these agreements may be granted for a fixed term, and are revocable at any time by the administering City agency. Common examples of revocable consents include things like the placement of pipes under city property by a gas company, or the construction of sidewalk cafes.

Corpus Funded Agreements

The Comptroller serves as the fiduciary for New York City’s five pension funds, investing responsibly to ensure long term returns from, and growth of, retirement funds for City employees. Corpus Funded Agreements function as a mechanism to finance investment management services related to the City’s five pension funds. Dollar values associated with Corpus Funded Agreements reflect funds paid from the corpus of City pension funds, rather than revenues generated.

The public can view updates relating to assets under management anytime on the Comptroller’s website.

Additional Contracting Processes

This Section of the Primer provides additional context around other contracting actions that reflect a significant portion of the City’s contracting activity.

Real Property Transactions

Real Property Transactions are non-revenue contracts that are also not defined as procurements in either Chapter 13 of the Charter or in the PPB rules. These transactions tend to include Agreements, Real Estate Sales and Purchase Agreements, and Watershed Agreements.

Lease Agreements

The City frequently enters in to Lease Agreements with private landlords to secure the use of real property for agency business or to facilitate other public services. These agreements are not subject to competitive bidding requirements.

Real Estates Sales and Purchase Agreements

Agencies can use this method to purchase property from a seller, or to reimburse a property owner for the use of their space.

Watershed Agreement

The NYC Watershed consists of the Catskills, Delaware and Croton waterway systems. According to the NY Department of State, it spans 2,000 square miles and contains 19 reservoirs. The NYC Watershed serves 9 million New Yorkers with 1.3 billion gallons of water daily, and the City’s Watershed Agreement, which was signed in January 1997, grants New York City Department of Environmental Protection (DEP) authority to manage the City’s watershed properties. DEP is also responsible for the operation of the City’s water assets through service contracts.

Modifications

Agencies are authorized to change certain aspects of existing registered agreements, such as:

• Updating contract amounts to reflect additional authorized or omitted work;
• Extending the duration of a contract for good and sufficient cause (generally not for longer than an additional year); and
• Administrative reasons, such as encumbering funds to expense contracts or revising commodity and accounting lines.[66]

Any change that requires a material alteration to the scope of work outlined in an initial contract’s terms cannot be resolved by a modification. The agency must instead procure a new contract in such cases.

Registration authority for most administrative modifications, as well as expense contract modifications adjusting the amount of an underlying contract by less than 10% of its original value, are typically delegated to City agencies.[67] Modifications that encumber funds against capital contracts, as well as modifications that change the duration of a contract are typically subject to review and registration by the Comptroller.^[68]

Modifications extending the underlying duration of a contract also typically add funds to finance the continuation of the good or service provision. However, modifications can also be used to reduce the amount of funds associated with an underlying contract in some cases.

Construction Change Orders

Construction change orders (CCO) reflect a subset of the modifications discussed above. They are typically used to authorize non-material additional labor and/or equipment needed to complete a construction project. CCO conditions are often categorized as follows: scope change (non-material only); administrative change; design omission; field condition or a design error. In addition, there may be other changes that don’t fit within the above categories but still require a modification to the construction contract, such as extra work, Comptroller dispute determinations, and no-cost change orders.

Due to the unpredictable nature of New York City construction, as well as lengthy CCO approval process, the Comptroller’s Office held discussions with DDC, the Office of Management and Budget (OMB), and the Law Department, before ultimately authorizing DDC to use an Expanded Work Allowance (EWA) on all contracts. EWA provides for a funded, pre-registered allowance in a construction contract that can be accessed as a project progresses to enable faster payments to contractors when certain types of common, but unanticipated, project conditions arise (i.e., the “known” unknowns). EWA has resulted in a significant reduction in the time between the discovery of an eligible project condition and the issuance of additional payment. In light of this success, the Comptroller’s Office is working with other City construction agencies to expand use of the EWA program.

Task Orders

Task Orders (TO) are used by agencies to procure particular goods or services under terms that have already been established under an existing “master agreement” contract.[69] The registration value of a master contract reflects the maximum amount the city may need to spend, but funds are issued to vendors via TOs. Both master agreements and TOs must be registered to be legally implemented.

The City may use a master agreement and TO framework when it is unclear how frequently the good or service may be needed. Agencies can issue a task order to an awarded vendor under the terms of a registered master agreement on an as-needed basis. This framework can enable City agencies to jointly realize cost savings by volume that would not otherwise be accessible if the good or service was procured by a single agency via a general contract. Master awards can also be awarded to multiple vendors, so that agencies can procure services through a “mini-bid” or “mini-proposal” competition, or on a rotational basis.[70]

Purchase Orders

Purchase Orders (PO) are an official document of the City notifying the successful vendor of the authority to supply goods or services. A PO formalizes a purchase transaction with a vendor at or below small purchase limits unless the order is being placed against an existing contract.[71] Agencies approve purchase orders for a good or service at a given value, and then issue payments up to that maximum value as the good or service is provided.

Common PO classifications include:

• PODs (Commodity Purchase Orders – Micropurchases) – typically limited to $20K;
• POC (Commodity Purchase Orders – Small Purchases) – typically limited to $20K; and
• PCC1s (Commodity Purchase Orders – Small Purchase Construction) – typically limited to $35K.

II. Public Resources

Checkbook NYC

In July of 2010 the Comptroller’s Office launched Checkbook NYC, an online transparency tool that for the first time placed the City’s day-to-day spending in the public domain. Checkbook NYC provides up-to-date information about the City’s financial condition.

Checkbook NYC also contains most of the City’s contract data. This tool enables users to examine data on its “Contracts” tab by fiscal year (or other date ranges), procurement category, contract types, and more.

Helpful Links:

• Click this link to access Checkbook NYC
• Click this link to view videos on how to navigate Checkbook NYC’s search functions

PASSPort Public

Procurement and Sourcing Solutions Portal (PASSPort) is the City of New York’s end-to-end digital procurement platform that manages every stage of the procurement process from vendor enrollment to the solicitation of goods and services, to contract registration and management. PASSPort Public refreshes data periodically from PASSPort such that the public can derive insight into the City’s procurement system.[72]

Helpful Links:

• Click this link to access PASSport Public
  • Browse vendors
  • Browse solicitations
  • Browse contracts

Agency Procurement Plans (M/WBE, LL63, and Human Services)

Under Local Law 1 of 2013, SBS and the Mayor’s Office of Contract Services (MOCS) are required to publish an annual plan and schedule listing anticipated contracting opportunities for the coming fiscal year. These plans include the following information for each solicitation: the specific type and scale of the services to be procured, the term of the proposed contract, the method of solicitation the agency intends to utilize, and the anticipated fiscal year quarter of the planned solicitation.

Similarly, under Local Law 63 of 2011, MOCS is required to publish a plan and schedule detailing the anticipated contract actions (for certain categories of procurement) of each City agency for the upcoming fiscal year. This requirement applies to contracts valued at more than $200K providing standard or professional services, including against agency task orders.

Lastly, MOCS also publishes plans reflecting proposed procurements relating to human service programs. This information is collected from, and organized by, city agencies.

Helpful Links:

• Click this link to view M/WBE Procurement plans by agency
• Click this link to view LL63 plans by agency
• Click this link to view Human Service procurement plans by agency

City Record Online

The City Record Online (CROL) is a fully searchable database of notices published in the City Record newspaper which includes but is not limited to: public hearings and meetings, public auctions and sales, solicitations and awards and official rules proposed and adopted by city agencies.

Helpful Links:

• Click here to access the City Record On Line
• Click here to view the CROL user manual

III. Appendices

Appendix 1 – New Contract Categories with Corresponding Award Method and Contract Type Codes

Appendix 2 – Award Method Codes

Appendix 3 – Contract Type Codes

Appendix 4 – Agency Codes

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Endnotes

[1] NYC Charter §322, §327, and §334

[2] NYC Charter §327(b), 394(b)

[3] NYC Charter §315

[4] See Section III for agency category definitions

[5] 9 RCNY §1-01 (e).

[6] PPB Rules §2-02(a). Note that this Section also sets forth exclusions to the PSR.

[7] PPB Rules §2-07(a)

[8] PPB Rules §2-08(a)

[9] PASSPort is a digital procurement platform, managed by MOCS, that helps certain NYC agencies manage various stages of the procurement process from vendor enrollment, to the solicitation of goods and services, to contract registration and administration.

[10] In addition to exclusions listed in NYC Charter §328(d), agencies have been delegated authority to register contracts for goods and services transactions valued at less than $25,000 and construction transactions valued at less than $50,000 internally without having to submit the transactions to BCA for review and registration. When an agency exercises this delegation, BCA performs no registration review function nor is BCA responsible for performing any aspect of the registration process on behalf of the awarding agency in FMS.

[11] NYC Charter §328(a)

[12] NYC Charter §93(n)

[13] See “Modifications” under “Additional Contract Processes” in this Section for more information.

[14] CT1 is a general contract used for both expense and capital contracts; RCT1 is a revenue contract; MA1 is a master agreement and MMA1 is a multiple master award contract used when more than one contract will be awarded to a vendor.

[15] The Procurement Policy Board (PPB) is the governing entity that is responsible for the promulgation of the City’s procurement rules. These rules inform the city’s procurement activities, including how the City solicits bids and proposals from vendors and how contracts are awarded. The PPB consists of five members, three of who are appointed by the mayor, and two of whom are appointed by the Comptroller.

[16] Since the award methods used to for Revenue Actions overlap with the awards methods listed in the other contract groups, the transactions in contract Group 5 are identified by FMS Transaction Code RCT1.

[17] The Department of Education, for example, must also reference their own Procurement Policy and Procedures (PPP).

[18] See PPB Rules §3-01(b).

[19] Each subgroup is comprised of one or more award methods or contract types. See Appendix 24 in Section XII of this Report for a breakdown of award methods or contract types within each subgroup.

[20] Since the award methods used to enter into Revenue Actions may overlap with the awards methods listed in the other Contract Group, the transactions in Contract Group 5 are identified by FMS Transaction Code RCT1. The subcategories denoted in Contract Group 5 reflect contract type categories, rather than award methods.

[21] See PPB Rules §1-01(e), 3-02(o)(1)(iv), 3-03(a)(1), 3-03(g), and 3-03(g)(6)

[22] GML §103 and applicable sections of the Code of Federal Regulations (CFR)

[23] NYC Charter §313(b)

[24] GML §100(5)

[25] NYC Charter §324

[26] PPB Rules §3-03(a)

[27] NYC Charter §319

[28] PPB Rules §3-07(e)(3)

[29] NYC Charter §326(a)

[30] NYC Charter §823(a)

[31] PPB Rules §1-01(e)

[32] PPB Rules §4-07(a)

[33] PPB Rules §3-11(a)

[34] 9 RCNY §1-02(d)

[35] STF Chapter 56, Article 11

[36] 9 RCNY §1-02(e)

[37] NYC Charter §315 and PPB §3-06

[38] During a state of emergency and in limited circumstances, the Mayor can issue Executive Orders that suspend local laws and regulations, subject to review and renewal every five days. For example, during his tenure, Mayor Bill de Blasio issued several emergency executive orders (E.E.O.) suspending procurement law and rules. E.E.O. 101, for instance, modified the PPB’s emergency procurement method, suspending the Comptroller’s prior approval and registration for emergency contracting, and was subsequently revoked.

[39] See PPB § 2-12(e). Section 328(d)(1) has a similar clause, but states that the agency shall submit the contract “as soon as is practicable”

[40] 9 RCNY §3-13

[41] PPB Rules §3-13(c)

[42] 9 RCNY §3-12(a)

[43] 9 RCNY §3-12(f)

[44]  A7636B §2(a)

[45] PPB Rules §3-09(a)

[46] 9 RCNY §3-11(a)

[47] PPB Rules §3-08(a)

[48] Agencies can still choose to utilize non-small purchase procurement methods for contracts valued under the small purchase limits.

[49] PPB Rules§3-08(c)

[50] Micropurchases are used to buy goods and services up to $20,000 for most services, or up to $35,000 for construction services (9 RCNY § 3-11(a)) As long as these thresholds are not surpassed, including through any future contract modifications, agencies may buy from any available vendor at a fair price, without any competition.

[51] Assembly Bill A10459

[52] The PPB is comprised of five members, two of whom are appointed by the Comptroller. Until such time that the increase is permanently codified under the PPB rules, City agencies can procure contracts under the higher threshold using the Innovative Procurement method discussed above.

[53] 9 RCNY §1-01(e)

[54] NYC Charter §321

[55] PPB Rules: §3-05(b)

[56] 9 RCNY §1-02(f)

[57] 9 RCNY §1-02(f)(4)

[58] 9 RCNY §1-02(f)(2)

[59] 9 RCNY §1-02(f)(3)

[60] 9 RCNY §1-02(f)(5)

[61] PPB Rules §4-04(a)

[62] NYC Charter §109

[63] NYC Charter §362(b)

[64] NYC Charter §362(a)

[65] NYC Charter §362(d)

[66] 9 RCNY §4-02

[67] Modifications to capital funded contracts still require Comptroller registration, even if the amount of the adjustment is within 10% of the baseline value.

[68] Excluding cases where authority has been delegated to City agencies or is otherwise not legally required

[69] The data provided in this section is limited to TOs/CTA1s issued pursuant to master agreements registered using the Transaction Code “MMA1.” It does not include instances where agencies purchase goods using a Direct Order (“DO”) issued through agreements registered using the Transaction Code “MA1.”

[70] PPB Rules §3-02(t), (j)).

[71] PPB Rules §1-01

[72] The information in PASSPort public only represents a portion of total city contracts as the data sourced within PASSPort (Procurement Solutions and Strategic Sourcing Portal) has only been available in the system since January 2020.

[73] Since the award methods used to enter into Revenue Actions may overlap with the awards methods listed in the other Contract Group, the transactions in Contract Group No. 5 are identified by FMS Transaction Code RCT1. The subcategories denoted in group 5 reflect contract type categories, rather than award methods.