Photo by: Office of New York City Comptroller

The Joint Mayoral and Comptroller task force presented recommendations to improve contracting and get nonprofit service providers paid on time

NEW YORK, NY – New York City Comptroller Brad Lander and senior members of the New York City Mayor’s Office stood together to release the findings of “A Better Contract for New York: A Joint Task Force to Get Nonprofits Paid On Time.” Both offices announced five actionable steps to better manage and streamline the nonprofit contracting and procurement process while increasing accountability and transparency. The recommendations were the result of a joint task force first convened during the transition period to jump start solving long-standing issues in city governance that impact the delivery of services to New Yorkers.

“For too long, the City has relied on nonprofits to deliver essential services without holding up its end of the bargain,” said Mayor Eric Adams. “The failure to pay our nonprofits in a timely manner has not only hurt our nonprofit sector, which is predominantly made up of Black and Brown workers, but also the New Yorkers who rely on their services. The findings from this task force will guide needed reforms to our contracting and procurement rules, improving transparency and accountability throughout all stages of the process. I thank Comptroller Lander for his partnership, the members of this task force, and the human services providers who perform life-saving work for New Yorkers who need it most every day.”

“Our City’s nonprofit human service providers are lifelines for New Yorkers, providing essential services from feeding the elderly to mental health care, yet our City’s cumbersome contracting process has hindered many nonprofits’ abilities to deliver these critical services,” said Comptroller Brad Lander. “With input from dozens of organizations and agency stakeholders, Mayor Adams and I put our heads together to substantially improve the process for the organizations New Yorkers rely on. Our mission was to ensure timely payments to responsible contractors so that organizations can continue to serve New Yorkers, while maintaining appropriate oversight to prevent abuses. I look forward to working with Mayor Adams, his future appointment to the newly created Mayor’s Office of Nonprofits, and our city’s essential non-profit organizations to implement these overdue reforms.”
 
New York City contracts out many of its programs to nonprofits—from health and housing assistance, shelter operations to after school activities. Last year, the City procured $12 billion in human services, totaling 40% of procured goods and services. The nonprofit sector is a substantial part of the City’s economy, employing over 500,000 people, an overwhelming majority of whom are women and people of color. 
 
Unfortunately, many of these partners wait months, and up to more than a year, to get paid for services they provide to New Yorkers. In FY22, over three-quarters of the City’s contracts with nonprofit organizations arrived at the Comptroller’s office for registration after the start date. Delays and flaws in the process of registering and paying contractors have left many nonprofits in a lurch, taking out loans to continue their essential operations while they wait for reimbursement from the City.

“The overwhelming majority of human services nonprofit organizations serve in the best interest of the New Yorkers who rely on them, yet face too many challenges when doing business with the City. These organizations demonstrated endless commitment at the height of the pandemic when their workers showed up to make sure that residents were fed, housed, and had their most fundamental needs met when we were in crisis. Now we need to be there for them. These substantial reforms are grounded in shared accountability, greater transparency, and renewed leadership and management structures — which will ultimately get nonprofits paid on time for the services that build the City a stronger future,” said Annie Levers, Assistant Comptroller for Policy.

“Nonprofits provide numerous valuable services to the City of New York and its residents. Ensuring that they are paid on time and fairly is essential to getting resources in place that our city needs. As a backbone organization, United Way of New York City works closely with partners across sectors to make actionable change and initiatives that benefit New Yorkers in need. It is important for us to advocate on behalf of our nonprofit partners so that we can continue to support them in their timely and effective delivery of services that our city and residents depend on,” said Amy Sananman, Senior Vice President and Chief Impact + Strategy Officer at United Way of New York City.

“Our City’s human services partners show up every day to deliver critical services to our communities, including our most vulnerable residents. Their unwavering commitment is essential to the vitality and health of our City taking on greater significance during the pandemic,” said Lisa Flores, Director of Mayor’s Office of Contract Services. “MOCS is proud to be leading procurement reforms established by the Task Force that recognize our important partnership and make it easier for nonprofit partners to do business with the City.  A procurement system that is transparent, accountable and accessible is the cornerstone for realizing greater equity in New York City.”

“Our city’s non-profits provide essential human services to thousands of New Yorkers—from afterschool programs, violence interrupters, to housing the homeless, and their contracts should be paid on time through a transparent process. The Bureau of Contracts Administration welcomes these recommendations and we look forward to working with our agency partners to streamline the registration process for nonprofits while ensuring accountability and oversight. These recommendations will go a long way towards a system that not only greatly benefit the non-profits, but also all those who rely on their services day-in and day-out,” said Charlette Hamamgian, Deputy Comptroller for Contracts and Procurement.   

“Human services Nonprofits fill local needs and gaps with targeted services that the City is unable to carry out. It’s unacceptable that these trusted community partners have seen their finances collapse as a result of delays and inefficiencies in the City’s contracting process,” said Council Member and Contracts Committee Chair Julie Won. “As Chair of the Contracts Committee, I look forward to partnering with the Mayor, Comptroller, and the Nonprofits to reform our city’s slow and broken contracting process, starting by holding a hearing on the much-maligned PASSPort system this week. Until my last day in office, I will work to streamline outdated processes and inefficiencies across our city’s procurement and contracting process.”

“The city’s procurement process is inequity hidden in plain sight. I’ve heard from nonprofits who are owed millions for essential services they have already rendered to the neediest New Yorkers. We need to make sure we can pay our contracted service providers on time not just because it’s the right thing to do, but because people in New York City need us to. It’s great and long overdue that we have a mayor, comptroller, partners in the council, and a community of respected nonprofit leaders all committed to getting this right. In this case, the cliché of government efficiency really means something: unless we live up to it and make sure nonprofits have their funds when they need them, working class New Yorkers are the ones last left on the hook,” said Council Member and Chair of the Finance Committee Justin Brannan.
The primary recommendations for reforms included:

1. Accountability and Transparency: Create new systems that both hold city stakeholders accountable for timely procurement and contracting and increase transparency to nonprofit providers and the public, including creating Contract-stat– a public data dashboard similar to Compstat.
2. Streamline and Modernize: Reduce inefficiencies and delays in the procurement and contracting process with improved and expanded adoption of the PASSPort digital procurement system across agencies.
3. Fairness and Equality: Lower the burden incurred by smaller, primarily BIPOC-led nonprofits when contracting with the City, including increasing the Returnable Grant Fund and rewriting the standard human services contract to acknowledge cost escalations, like cost of living adjustments, that would increase the original cost of these vital services contracts without the need for amendments.
4. Leadership and Management Practices: Establish leadership and management practices at the highest levels of city government, including the new Mayor’s Office of Nonprofits, with input from nonprofit organizations.
5. Capacity Building: Strengthen the capacity of nonprofit organization’s administrative and contracting capabilities through training and technical assistance to support nonprofits

The Mayor and Comptroller are jointly responsible for procurement and contract administration, each playing a defined role to protect public funds and award contracts fairly. Both offices have committed to ensure nonprofit contractors are paid on time, in full, on a predictable schedule, while preserving appropriate oversight to prevent abuses – and requires continued coordination between Mayoral agencies and the Comptroller’s Bureau of Contract Administration.

“It was an honor to serve with fellow nonprofit leaders as Mayor Eric Adams and Comptroller Brad Lander stood together to release the findings of ‘A Better Contract for New York: A Joint Task Force to Get Nonprofits Paid On Time.’ We were tasked with giving open and honest feedback on our experience with city procurement. What we came up with is what we have all been waiting for– needed change to make our contracting job easier to serve the very communities city funding is aimed to serve,” said Dr. Debbie Almontaser, CEO and Founder, Bridging Cultures Group Inc.

“We at Community Capacity Development, salute Mayor Adams and Comptroller Lander for their leadership in reforming the city’s procurement process on behalf of not-for-profit organizations delivering essential services to the city. Our organization’s contract was just registered six months late, and we have yet to be paid despite providing life-saving programs for neighborhoods facing gun violence. As a frontline organization working with grassroots community groups to stem the tide of violence and promote human justice, this timely contracting reform will make the difference between life and death. With our collective-input and sustained effort, these recommendations are a harbinger of future progressive community-oriented policies targeting not-for-profit organizations serving marginalized communities in New York,” said K. Bain, Founder and CEO of Community Capacity Development and Co Founder of the NYC Crisis Management System.
 
“It is my honor to represent the performing arts nonprofit community on this important task force. Our shared commitment to strengthening the nonprofit sector and elevating all of our collective work is an important priority. This action plan provides clear guidelines for movement forward as we begin to address essential changes that must be made,” said Alejandra Duque Cifuentes, Executive Director, Dance/NYC.

“We are proud to be part of this joint task force, which includes the Mayor’s office and the Comptroller’s office and introduces a new spirit of collaboration. This partnership builds on and enhances the work of the City Department for the Aging and its network of providers, which ultimately benefits all New Yorkers. Even in the darkest days of the pandemic, our network of providers never stopped serving older New Yorkers and delivering critical services. Providing our partners with a more efficient approach to contract registration and expedited reimbursement of invoices will help them better fulfill their mission and the goals of the City’s Community Care Plan for older adults,” said Commissioner Lorraine Cortés-Vázquez, Department for the Aging.

“The mission of the NYC Department of Youth and Community Development (DYCD) is to invest in a network of community-based organizations to operate a continuum of afterschool, community center, youth workforce, runaway and homeless youth, and anti-poverty programs that provide opportunities for New Yorkers and communities to flourish. Critical partners in achieving that mission are DYCD’s network of nonprofit providers—they are essential community institutions and one of New York City’s greatest assets. During the pandemic, we witnessed again the strength and commitment of the City’s community-based organizations in serving New Yorkers. DYCD is dedicated to improving the contracting process, and we look forward to working with our Administration colleagues, Comptroller’s Office, City Council, and the provider community in advancing the recommendations of the Action Memo,” said Anthony Ng, DYCD Acting Chief of Staff and Task Force member.

“For too long, local government has disrespected and undervalued the efforts of New York City’s nonprofits and their employees, the majority of whom are women and People of Color. This commitment by Mayor Adams and Comptroller Lander reflects an overdue and substantive shift in the way the City treats our essential work. It also gives us many reasons to be optimistic about the relationship between the non-profit and public sectors in New York City in the years ahead,” said Alan van Capelle, CEO and President, Educational Alliance.

 “Settlement houses, along with a constellation of nonprofits across the city, work tirelessly to deliver vital programs that children and families need to survive and thrive; food, shelter, education, employment, healthcare, and the arts – essential services that serve as a lifeline to countless New Yorkers and are the fabric of the safety net that is needed to help the city recover from COVID.  As a provider with an extensive range of government contracts and partnerships, Henry Street Settlement understands how critically important it is that the procurement and payment process function efficiently and effectively in order for providers to be able to execute and deliver on their mission.  We commend Mayor Adams, Comptroller Lander, and the task force for taking on such fundamentally important issues and for the commitment to implement policy and practice that will improve the human service sector’s ability to benefit those we serve,” said David Garza, President and CEO, Henry Street Settlement. 

“Over 90% of Department of Homeless Services contracts are not registered until after their start date yet, the nonprofits upon which the City relies to uphold the right to shelter remain open, providing shelter, meals, and rehousing support to tens of thousands of New Yorkers every day.  The fiscal strain can be enormous, and the costs of these delays have pushed responsible nonprofits to the brink compromising the City’s ability to identify enough good partners who can afford to do this vital work. Homeless Services United is grateful to Mayor Adams and Comptroller Lander for taking on this challenge and collaborating with the sector to solve this long standing problem. Their demonstrated commitment to timely contracting and payment gives us hope that we can finally get the sector on secure financial footing so we can focus on delivering the quality services our clients deserve,” said Catherine Trapani, Executive Director, Homeless Services United.

“Nonprofit human services providers have long been a backbone of both the economic and social fabric of New York, but are often treated as an afterthought by government partners. Nowhere is this more clear than in the extreme delays in paying providers for critical, lifesaving services. Mayor Adams and Comptroller Lander took a huge step in acknowledging the invaluable role of the sector by making procurement a key transition issue with this task force. We applaud them for hitting the ground running with a series of important recommendations, and for including the sector in this process. This will ensure that New Yorkers get the support they need to not only survive, but thrive. The Human Services Council and our members look forward to continuing our partnership, and seeing these recommendations to completion so that our communities can continue to depend on human services nonprofits for essential programs,” said Michelle Jackson, Executive Director, Human Services Council of New York.

“I applaud Mayor Adams and Comptroller Lander for convening the Task Force and releasing these critically important recommendations. The speedy implementation of these recommendations will reduce wasted non-profit staff time and wasteful interest expense, improving the quality of non-profit services that millions of New Yorkers rely on every day,” said Ben Thomases, Executive Director of Queens Community House.

“It is heartening to see Mayor Adams and Comptroller Lander jointly acknowledge New York City’s procurement problems, seek reforms to a system that unfairly burdens the nonprofit sector, and to also take responsibility to address contract registration and payment delays in a timely manner.  For too long, the City has taken advantage of the heart, soul, and budgets of the nonprofit sector.  Settlement houses, in partnership with the City, remain committed to their neighbors and to strengthening their communities with early childhood education, after school, senior services, mental health counseling and adult literacy programs. We look forward to ‘A Better Contract for New York’,” said Susan Stamler, Executive Director at United Neighborhood Houses. 

“In New York City, human service nonprofits sustain and support vulnerable New Yorkers. Government supports this work through the procurement system. UJA-Federation of New York stands with Mayor Adams and Comptroller Lander in recognizing that New York City’s procurement system is in high need of restructuring and improvement. This important report, created with a broad group of stakeholders, and issued less than 45 days into Mayor and Comptroller’s administrations, speaks to the commitment of the Mayor and Comptroller to reform procurement and their priority on the partnership, both between their offices and with New York’s nonprofit community,” said Louisa Chafee, Senior Vice President, Public Policy & External Relations, UJA-Federation of New York. 

“VOA-Greater New York is proud to provide housing, health and wealth-building services that help to end homelessness in NYC.  We believe that a vibrant nonprofit sector, unencumbered by systemic financial risk, can be a powerful force for transformative change in NYC. We are grateful to Mayor Eric Adams and Comptroller Brad Lander for convening this task force. The recommendations in this report serve as a roadmap to ensuring that the City’s procurement and contracting process enhances the quality of services we provide to our neighbors in need, and I look forward to working with them both on implementing these reforms,” said Myung Lee, CEO of VOA-Greater New York.
 
For the full report read here and for the full article read here.