Nonprofits play a vital role in delivering essential services to New Yorkers. From afterschool programs, to childcare centers, to shelters and supportive housing, many of the most critical services that New Yorkers depend on are delivered by nonprofits that rely on City funding.
Unfortunately, while the City relies on nonprofits to perform essential work, it does a poor job paying them on time for the work they perform. As a result, many of the City’s nonprofit partners suffer significant and unpredictable financial hardships. Some are forced to take out costly loans to cover operational costs. Other providers are forced to lay off critical staff. Some cease working with the City or decline to take on new work out of fear that payment delays will make performance impossible. And some close their doors altogether, in part due to financial challenges triggered or exacerbated by late payments.
This issue is not new. Over the last several mayoral administrations, a complex and burdensome procurement landscape has frequently delayed payments to nonprofit partners. One core challenge is that many contracts with nonprofit providers are not registered on time. According to data provided by the Mayor’s Office of Contract Services, in Fiscal Year 2024 (FY24) 31% of all health and human services (HHS) contracts were sent to the Comptroller for registration late. Even after registration, invoicing practices lead to further delays in payment.
The issue of payment delays results from challenges in the procurement ecosystem, including bottlenecks in PASSPort, the city’s digital procurement platform. Originally intended to streamline procurement services, technical limitations and breakdowns in PASSPort are a major source of delayed payments. PASSPort lacks important functionality. For example, providers cannot submit all their contract actions at once for approval, and providers cannot view the agency-side actions related to payments. Additionally, internal processes frequently differ between agencies, but PASSPort lacks both agency-specific customization and the level of detail present in internal city agency financial systems. Further compounding these issues is a shortage of staff to handle review, notwithstanding a substantial increase in the number of contracts registered within PASSPort, as well as an absence of clear timelines for procurement actions.
Together, these issues plague and distract a nonprofit sector that should be spending its time focused on delivering badly needed services, not navigating the procurement system. To this date, the Commission has heard compelling testimony from nonprofit partners across the city and experts in procurement. Staff at the Commission recommend that, in the coming months, the Commission carefully consider potential Charter amendments to help address this longstanding problem.
Delays in nonprofit contract registration and payment are a chronic issue in New York City. Expert testimony and reports from experienced stakeholders demonstrate that problems with timely registration and payment stretch back at least through the Koch Administration.
In 1989, a State Commission on Government Integrity studying potential procurement reforms found the City’s procurement system “fragmented and chaotic” and “plagued by inordinate delays.”1 The 1989 State Commission observed that while “scattered attempts at reform have been made,”2 “reform requires a political commitment which, to date, has not been made.”3 The report recommended bringing the nation’s procurement experts to the City to help rebuild its system and celebrated promising changes coming from the 1989 Charter Revision Commission, which introduced the Procurement Policy Board.
In 2009, Mayor Bloomberg, facing “untenable” delays and demand for human services far greater than City systems could process, established the Strengthening Nonprofits Task Force.4 In 2010, the Bloomberg Administration released a concept paper outlining contemporary procurement pain points, including many that were remarkably similar to those in the 1989 report, such as an overly complicated system and lack of interagency process consistency.5 The 2010 report recommended that the City create a cross-agency prequalification process, eliminate backlogs, and foster greater interagency collaboration.
In 2013, the Bloomberg Administration announced the launch of the “HHS Accelerator,” the City’s first attempt at creating a streamlined, centralized digital nonprofit procurement process.6 The HHS Accelerator was celebrated by many in the human services space for introducing a more efficient system, reducing costs, and creating pathways for communication between agencies and nonprofits.7 However, significant problems remained in the City’s procurement system, including an “onerous and slow procurement process” and “considerable” payment lags.8
In 2017, the city launched PASSPort, which built on the HHS Accelerator by delivering a more sophisticated and streamlined platform. The HHS Accelerator was fully taken offline in July 2024.9
Unfortunately, despite over a decade of piloted solutions and task forces, delays in nonprofit payments have only worsened. Testimony before the Commission indicates that these delays cause severe operational issues for the nonprofits that partner with the City, hampering their ability to deliver critical services to New Yorkers.
Fred Shack, CEO of Urban Pathways, called City nonprofit procurement “fundamentally broken,” citing a lack of transparency and accountability, inadequate technology, and staffing shortages.10 Shack testified about a time-sensitive, critical initiative to serve veterans that a City commissioner personally asked him to undertake. Given the urgency associated with the program, Shack was promised that his contract would be registered in under three months and agreed to begin work immediately. Shack testified that the contract ultimately took 18 months to register, during which time Shack’s team was providing services entirely without compensation. Other expert testimony recounted similar stories in which providers were promised speedy contract registration and agreed to begin critical work immediately, only to face extensive delays in receiving payment.
Testimony heard by the Commission detailed significant negative impacts that accompany delayed City reimbursements and grant payments. Providers testified about taking out high-interest loans while waiting for promised payments,11 curtailing programming,12 or even going out of business13 in response to payment delays. These costs are particularly painful for smaller community-based organizations, which lack the resources to weather delays. Michelle Jackson, Executive Director of the Human Services Council, testified that 60 providers surveyed by her network reported being owed a total of $350 million by the City. These 60 organizations had taken out $87 million in loans beyond the City’s loan fund, incurring an additional $6 million in interest.14 Kristin Miller, Executive Director of Homeless Services United, testified that 12 providers in the HSU network had over $170 million in pending budgetary actions with the City dating back to 2018, and that delays threatened providers with insolvency.15 Experts also testified that payment timelines are inconsistent across agencies, with some agencies providing payments faster than others.16
Technological issues at agencies are a continued source of delay. For example, PASSPort release 5—an update to the system—took place in November 2023, and in January 2024, City agencies began migrating from legacy system HHS Accelerator to PASSPort. Testimony from experts like Jackson emphasized that, while PASSPort did not create the issues that have compounded today’s late payments, the City’s migration to PASSPort created significant delays as the agencies adjusted to the new technology.17 Jackson recommended that providers be given the ability to conduct multiple actions in PASSPort simultaneously, rather than needing to wait for approval in between.18 Lauren Siciliano, COO of the Legal Aid Society, echoed this concern, noting that the inability to conduct multiple actions forces nonprofits into “unfair choices” between pursuing certain critical needs over others.19 Shack suggested additional changes to PASSPort, like adding a dashboard to show providers the current status of their contract.20
Testimony heard by this Commission has also indicated that staffing shortages contribute to chronic late payments.21 According to data provided by the Mayor’s Office of Contract Services, although the value of procurements has grown, the amount of active contracting staff at agencies has decreased over the past five fiscal years. There is also a low rate of retention among contracting staff at agencies, and there is a limited pool from which an agency can hire their Agency Chief Contracting Officer (ACCO).
Many of these issues, from technical shortcomings in the PASSPort system to staffing shortages at agencies, may not be amenable to resolution through Charter amendments. But given the persistence of nonprofit procurement challenges across multiple administrations, it is appropriate to ask whether structural changes to procurement and payment policy—which may be addressed through the Charter—are needed.
Procurement Roles in Government
Several actors play a role in efforts to curb backlogs and promote timely payment.
The Procurement Policy Board
The 1989 Charter revision created the Procurement Policy Board (PPB) to issue rules governing the contracting process, including “methods for soliciting bids or proposals and awarding contracts[,] the manner in which agencies shall administer contracts and oversee the performance of contracts and contractors[,]…the time schedules within which city officials shall be required to take actions[,]…and time schedules within which city officials should take action pursuant to any other provision of law or rule regarding individual contracts, which rules shall specify the appropriate remedies, including monetary remedies, for failure to meet the terms of any applicable schedule for taking such action.”22
Additionally, the Charter gives the PPB authority to promulgate rules “for the expeditious processing of payment vouchers by city agencies and departments including…a program for the payment of interest…to vendors on vouchers not paid within the maximum amount of time [established by PPB rulemaking].”23
The Mayor’s Office of Contract Services
The Mayor’s Office of Contract Services (MOCS) is an oversight and service office established by executive order in 1988.24 Over time, it has taken on additional responsibilities and practices that reflect the complexity of today’s procurement process. MOCS is led by a Director who also serves as the City Chief Procurement Officer (CCPO), the person in charge of all mayoral procurement.
While City agencies manage their own procurement processes, MOCS is responsible for overall oversight and facilitation of all City contracts. MOCS performs its oversight through PASSPort, the online platform maintained by MOCS that facilitates all steps of procurement. MOCS also issues guidance about contracting to City agencies, coordinates with contracting teams at each individual agency, and helps agencies troubleshoot procurement problems. MOCS facilitates relationships with vendors and service providers, offering trainings and workshops. It also administers specific services to nonprofits, including interest-free loans and guidance for easier approval of cost-of-living adjustments.25
The Mayor’s Office of Nonprofit Services
A more recent addition to this landscape is the Mayor’s Office of Nonprofit Services (MONS). In 2021, the City Council passed legislation establishing the office.26 The office is tasked with acting as liaison to not-for-profit organizations on City policies, regulations, contracting and funding opportunities, and programs and benefits affecting the nonprofit sector; working with agencies to refer nonprofits to City services that assist organizations in obtaining waivers, permits, registrations, approvals, or exemptions from agencies; and making referrals to State agencies and other organizations to aid in the incorporation or registration as nonprofits.27 The office also works with MOCS and other agencies to simplify interactions between nonprofits and City agencies. MONS is also responsible for developing a standing committee of nonprofits doing business with the City—the Mayor’s Nonprofit Advisory Council—to identify challenges affecting nonprofits, as well as encourage communication, collaboration, and consultation between the City and nonprofits.28
The Comptroller
Pursuant to the Charter, the Comptroller is responsible for the registration of contracts, which is the final step in the procurement process after finalization of contract terms, and prescribing methods “…for preparing and auditing vouchers before payment, preparing payrolls, and recording, reporting and accounting” among agencies.”29 This authority has been implemented through various directives and memoranda by the Comptroller.
Procurement Process
The contract registration and invoicing process has many steps that must be completed for a vendor to receive payment for services rendered. For non-discretionary projects, under most circumstances a competitive process—typically a Request for Proposals (RFP) when procuring human services—is issued to solicit proposals from potential vendors.30 Following solicitation, the proposals are evaluated by the issuing agency and recipients are selected. Before an award is finalized, the contracting agency along with MOCS must typically hold a public hearing to solicit public feedback on any proposed contracts over $100,000 in value that are solicited through a method other than competitive sealed bids (for which selections are solely based on lowest price).31
Once final awards are determined, the contract drafting and registration process begins. At this point, the contracting agency and an awardee must negotiate the specific terms of the contract—using the prior solicitation as a basis. This stage can include finalization of scope of services, reimbursement rates, and salary levels. The procurement process is reviewed by various oversight entities including MOCS, the Office of Management and Budget (OMB), and the Law Department. MOCS verifies that proper procurement and contracting procedure is being followed. OMB ensures that there is sufficient funding for the contract in the relevant agency’s budget, and—if being funded via the city capital budget—that a given project meets capital eligibility requirements.32 The Law Department confirms that the contract complies with all relevant laws, that its terms adhere to relevant citywide practice and also does not expose the city to unnecessary legal liability.33 Each of these oversight stages can require significant back and forth between the oversight entity and the contracting agency—with the contracting agency having to confer with the vendor if the information requested by the oversight entity is not readily available.34
Following finalization of the terms, the contract is sent to the Comptroller’s Office for registration. The Comptroller’s Office has 30 days to either register the contract or return it to the agency in accordance with its Charter powers. If no action is taken within the 30-day timeframe, the contract is deemed registered.35
Payment Process
Following registration, the vendor can begin submitting invoices for their incurred expenses to the contracting agency for payment. For most contracts, invoicing is conducted through PASSPort.36 Prior to providing payment, the agency ensures all the claimed expenses fit within the terms of the contract and that all necessary documentation has been submitted.37 If there are errors with an invoice, it must be corrected prior to a vendor receiving payment. For example, agencies may decline to pay an invoice absent adequate documentation of expenses, because the invoice seeks reimbursement for services not delineated in the contract, or because certain performance metrics were not met.38 The specific terms of the contract with the agency dictate the intervals for invoices and payments.39
Once an invoice is confirmed, payment is processed by the contracting agency to the vendor. Typically, an invoice must be approved and final before a subsequent invoice can be processed—thus a single invoice can cause a bottleneck on payments for a provider. Compounding the complexity for providers is that many nonprofits receive multiple sources of funding including city, state, federal, and private monies. Each of these revenue streams can have different requirements, requiring organizations to parse out which costs are applied to each contract, adding time and complication to the invoicing process.40 At the end of a fiscal year, payments due for outstanding invoices are reserved in an agency’s accrual budget so that payments can be made for services delivered in a fiscal year after the close of said fiscal year’s budget.41
Recent Initiatives
Below are ongoing and recent initiatives intended to address the issue of late payments to nonprofit providers.
Backlog Efforts
According to data from MOCS, as of January 2025, there were $4.76 billion in unregistered contracts from FY23-FY25 across the health and human services agencies.
The Adams Administration has undertaken several efforts to reduce backlogs across health and human services agencies, including a 2022 “Clear the Backlog Initiative” that cleared $4.2 billion for 451 providers through registering or sending 2,600 contracts for registration.42
In October of 2024, MOCS launched a Payment Backlog Initiative focused on FY23-25 payments for four agencies with the largest invoice payment backlog amounts: DHS, DSS/HRA, DOHMH, and MOCJ. When the initiative concluded in December 2024, over $1 billion was disbursed and over 3,700 invoices were processed. This process involved identifying an appropriate invoice scope, regularly convening with agencies to troubleshoot, and monitoring and reporting progress.43
In January 2025, MOCS launched a new initiative to address the contract backlog with DHS, DSS/HRA, DOHMH, MOCJ and DYCD, with a scope totaling $1.1 billion44
Executive Order 47 of 2025
On January 24, 2025, Mayor Adams issued Executive Order 47 (EO 47), which requires certain human services agencies to designate a Chief Nonprofit Officer to serve as a direct point of contact for nonprofits, in an effort to ensure their concerns are acknowledged and addressed promptly. EO 47 also mandates the development of a performance dashboard to track progress in contract registration and payment timelines.
Timely Registration Initiative for Fiscal Year 2026 (FY26)
Each year, MOCS works in partnership with the health and human services agencies, OMB, and the Law Department in an attempt to ensure that contracts for the upcoming fiscal year are submitted to the Comptroller for registration on time as part of the Timely Registration Initiative. The FY26 Timely Registration Initiative kicked off in January, in coordination with the contract backlog push.45 This initiative covers some 900 contract actions (including bids, contract renewals, negotiated acquisitions) anticipated for FY26, which is a 34% increase from FY25.
MOCS and City Hall monitor agency performance toward meeting contract milestones throughout the initiative. To help clear the path for contract submission, MOCS provides technical assistance and vendor outreach. MOCS has also provided delegation of certain procurement certification, and the Law Department has provided delegation for approval for certain contracts.
Returnable Grant Fund and Contract Advances
There are two primary mechanisms in place to assist nonprofit providers who face potential cash flow issues due to delayed contract registration and invoicing difficulties. First is the Returnable Grant Fund (RGF), which was established in 1992. Operated by Fund for the City of New York (FCNY), the RGF offers no-interest and low-interest loans to nonprofit providers while they wait for their contract to be registered. These funds typically can cover up to three months of critical expenses, including rent, utilities, and payroll.46 The RGF underwent changes in January 2024 to simplify its procedure and enhance its impact. These changes included streamlining and shortening the application, expanding eligibility for nonprofit and human services providers, reducing FCNY administrative steps necessary to approve loans, and the provision of eligibility and compliance assistance. In Fiscal Year 2024, 186 providers took advantage of $89 million through the Returnable Grant Fund to cover operation costs while awaiting contract registration.47
Additionally, HHS providers may receive 25% of their contracted value up front without needing to submit invoices. A provider is eligible to request the advance once the contract is registered and the budget is approved—with the goal of alleviating cash flow issues faced by providers either through delayed contract registration or delayed invoicing.48
Both the RGF and advanced payments can provide critical assistance. But both can also add further complications to the invoicing process. The advanced amount is recouped later in the year, normally by applying the amount due against the amount invoiced. Agencies have reported that some providers receiving loans and advances may be disincentivized from filing timely invoices for the final months of the fiscal year, since payment incorporates recoupment of those advances.49
Interest Payments
Section 4-06(a) of the PPB Rules states that it “is the policy of the City of New York to process contract payments efficiently and expeditiously so as to assure payment in a timely manner to firms and organizations that do business with the City.” The section further provides that interest shall be paid on late payments. Late payment is normally defined as payments made more than 30 days after the receipt of a “proper invoice” (i.e., an invoice which contains all required information and documentation).50 Interest payments are not required in a number of circumstances, most notably when “payment on the invoice is delayed because of a disagreement between an agency and a vendor over the amount of the payment and other issues concerning compliance with the terms of a contract.”51 The prompt payment interest rate is set jointly by the City Comptroller and OMB; as of the publication of this report, it is currently 4.875%.
Contracting agencies are also required to make interest payments on contracts that are registered late. A contract is considered to be registered late for purposes of interest payments when the registration occurs more than 30 days after the start date of the contract.52 The interest payment shall be “only to reimburse the vendor for interest actually incurred by the vendor pursuant to a loan taken out by the vendor; where such loan was used and interest incurred because of the untimely registration of a contract.”53 Importantly, a provider is not eligible to receive interest payments on a late contract if the provider had been offered an interest-free loan in connection with the contract in question and declined it.54 In Fiscal Year 2023, the net interest payments made by City agencies amounted to $459,377.55
Discretionary Contract Reform
Contracts funded with City Council and Borough President discretionary dollars, which do not have to be competitively bid and instead can be awarded directly to a nonprofit organization, have proven to be a particular and growing source of agency bottlenecks.56 When distributing discretionary funds, elected officials often seek to maximize the number of community organizations receiving these dollars even though the total amount distributed does not necessarily increase. Thus, there are numerous groups receiving relatively small sums of money for which a contract must nevertheless be drafted and registered.57 Further, discretionary awards are not made until the beginning of the fiscal year in which the services are to take place. A scope of services must then be negotiated, exacerbating the difficulty of processing discretionary contracts in a timely manner.58 These realities add to overall volume of contracts that must be processed.
For instance, in July 2023, the City announced a reform to allow multiyear contracting on Council discretionary contracts.59 The multiyear contract reform allows organizations to enter one three-year contract per City agency. In years two and three of the contract, no registration process is necessary, and the amount of discretionary funding awarded is within the registered contract amount.60 This discretionary contract reform was projected to reduce nine months of contract processing in years two and three of eligible contracts.61
Areas to Explore
The Commission staff recommends that the Commission consider several reforms suggested by impacted nonprofits, members of the public, and subject matter experts.
Elevating and Empowering MOCS
Several experts, including Jackson, Miller, and Louisa Chafee, Executive Director of the Independent Budget Office (IBO), testified in favor of incorporating MOCS, which currently exists by executive order, into the Charter.62 A new Charter-mandated MOCS could be charged with a duty to standardize agency invoicing and payment processes, such as rules governing the partial payment of invoices. It could also be charged with establishing timeframes for contract processing and requiring reporting of compliance with timeframes to promote transparency and accountability.63 These functions reflect both MOCS’ current role—the oversight and facilitation of all city contracts, management of PASSPort, and the issuance of guidance to city agencies on procurement—and an effort to buttress its supervisory functions.
In reviewing whether to establish MOCS in the Charter, the Commission may consider a number of issues, including how a new Charter-mandated MOCS would interact with existing entities with roles in the procurement process, such as the PPB, Law Department, and the Office of the Comptroller. For example, in determining whether a Charter-mandated MOCS should establish timeframes for contract processing and payment, the Commission may consider how this power would interact with the PPB’s existing authority to establish rules for “expeditious processing of payment vouchers by city agencies and department,”64 and its power to set “time schedules” respecting registration and other contract actions.65 The Commission may also weigh the benefits of MOCS’ current existence—including the flexibility that comes from an entity governed by executive order—against the benefits of enshrining MOCS in the Charter.
Contract Advances, Partial Payment, and Interest for Late Payment
The Commission also heard testimony proposing Charter amendments that would require additional contract advances, partial payment of invoices, or the payment of interest for late contract registration or delayed payments.
One reform proposed by Chafee of the IBO would mandate advances for some categories of contracts, such as human services contracts provided by vendors in good standing.66 Advances offer a direct response to the problem of delayed payment, as they give providers earlier access to funding that can sustain performance while payment processing remains ongoing. At the same time, an advance is only available once the contract registered, so it does not solve the problem of nonprofits performing work at risk and facing operational shortfalls while registration is pending.
Advances are an existing feature of some City practices. Today, HHS providers may receive 25% of their contracted value up front without needing to submit invoices.67 In the realm of cultural grants, awardees are often able to access 80% of their total allocated funding up front.68 At the same time, cultural grantees are subject to a rigorous financial and operational vetting as part of the Cultural Development Fund process, which helps to ensure vendor integrity and performance.69
In a similar proposal, Chafee suggested new rules requiring the City to partially pay a certain percentage of each invoice from a contractor in good standing, even as the remainder of an invoice faces continued review.70
In exploring these reforms, the Commission may consider the appropriate scope of any new advance or partial-payment policy, as well as whether it could be workably limited to vendors in good standing in order to safeguard taxpayer funds and promote contract performance. The Commission may weigh whether the administrative burden of managing a new advance or partial-payment policy would further strain already-taxed agency capacity, exacerbating underlying performance issues. The Commission may also consider how to design a system that ensures advances or partial payments do not reduce a vendor’s incentive to promptly and properly invoice.
Others recommend altering the rules governing interest payments by City agencies due to late contract registration and delayed invoice processing. As discussed above, PPB rules currently establish a limited mechanism for agencies to pay interest payments to vendors that incur interest fees on loans taken out as a result of delayed contract registration or late payment after submission of a proper invoice.71 Proposed reforms include amending the Charter to include a more categorical requirement that the City pay interest on late payments, potentially paired with a requirement that agency budgets include appropriations to be used for interest on late payments in the event such payments are needed.72
Requiring the City to take responsibility for interest on late payments could help providers by defraying the cost of taking on loans while a payment is delayed, but it does not directly address the core issue of delayed payment itself, including the operational difficulties that arise from unpredictable and prolonged payment delays. Instead, the goal of late payment policy is to incentivize agencies to pay invoices on time, by requiring them to internalize the cost of delays.73
In examining this potential reform, the Commission may consider whether agencies would respond to a more categorical interest payment requirement by improving performance. The Commission may consider whether such a rule, if it hinges on the timeliness and completeness of vendor submissions, could lead to further friction and delay between agencies and vendors about whether and when submissions were properly made. The Commission may consider whether any such requirement, if it inflates overall program costs, would lead to a reduction in critical services for New Yorkers. And the Commission may consider the extent to which the current contracting inefficiencies lie within City agencies, as opposed to other players and factors.
PPB Structural Changes
The Human Services Council also proposed reforms to the structure of the PPB, such as mandating a minimum number of PPB meetings each year and requiring additional transparency into PPB proceedings.74 Today, the Charter does not specify the frequency of PPB meetings, and public meetings of the PPB have historically been inconsistent. The Board’s calendar archive lists 10 public meetings and hearings in 2024 and seven in 2023, but just one in 2022 and zero between 2020 through the end of 2022.75 Separately, staff at the Commission heard proposals to alter the membership of the PPB, including by expanding the number of appointees on the body or requiring appointees with particular backgrounds or expertise.
In examining potential structural changes to the PPB, the Commission may consider how changes to the membership of the Board or structure of its meetings would affect decision making.
Discretionary Contracts
Providers who hold human services discretionary awards have historically experienced significant delays in payments. Discretionary awards make up 40% of retroactive human services contracts, contributing to the overall contract backlog city-wide, even as they represent just 2% of the total value of human services contracts.76
To help alleviate delays in discretionary contract payment, staff at the Commission have received recommendations to permit the Department of Youth and Community Development (DYCD), the largest holder of human services discretionary awards, the authority to process City Council discretionary awards as grants under Charter Chapter 30. This new authority would vest the DYCD commissioner with the power to designate eligible community-based organizations who would then receive funding up to $20,000 through a grant-based model, rather than traditional contract methods.
Treating City Council discretionary awards as grants could deliver simpler and more streamlined payment to nonprofits for services rendered. The Department of Cultural Affairs (DCLA) employs a similar process for discretionary awards for up to $1,000,000. However, they also rely on a peer review panel to evaluate each recipient in addition to standard vendor integrity checks, which would be difficult to implement given the scale of vendors who currently receive funding up to $20,000.77
In evaluating this proposal, the Commission may balance the benefits of a faster payment process for this category with the need to safeguard taxpayer funds and ensure vendor performance. If funds are to be distributed through grant awards, performance management must occur outside the typical invoicing process, which may impose new demands on staff capacity and vendor integrity mechanisms. Limiting this option to a category of responsible vendors could help address concerns, but would also require a new process to determine which vendors are eligible. Finally, given the role of the Council in discretionary awards, the Commission may consider close coordination between the Council and agencies in vetting vendors, monitoring performance, and taking corrective action.
Additional Methods to Streamline Contracting
Others have recommended ways to streamline contract renewal and facilitate master contracts for pre-qualified vendors.
The City spends extensive time renewing contracts year-over-year with responsible vendors. The renewal process is sometimes started late, even when City agencies know they intend to re-up their contract with the same provider, which can cause delays in service and payment. As a result, some, including Miller of Homeless Services United, have suggested that the Charter be amended to facilitate a swifter renewal process for responsible vendors.78 Others have suggested reforms to promote the use of “master agreements” for pre-qualified responsible vendors, on the theory that master agreements could expedite the procurement and contracting processes by establishing a list of pre-qualified vendors and predetermined contractual parameters for specific categories of work. In exploring the possibility of automatic renewals and expanded use of master agreements, the Commission may evaluate the benefits of these alternatives in reducing contracting backlogs, while also considering the need to ensure agencies retain flexibility over vendor selection and program structure. The Commission may also consider whether these specific proposals are suitable for inclusion in the Charter or are better left to agency policymaking.
References
1. State of New York Commission on Government Integrity, A Ship Without a Captain: The Contracting Process in New York City, Dec. 1989, at 1.
2. Id.
3. Id. at 30.
4. Human Services Council, The New York City Procurement Reform Project: A Report by the Human Services Council of New York, Apr. 30, 2015, at 5.
5. Office of the Deputy Mayor for Health and Human Services and Mayor’s Office of Contract Services, HHS Accelerator: Achieving High Performance Relationships with Providers of Human Services, Apr. 2010.
6. Office of the Mayor, Mayor Bloomberg and Deputy Mayor Gibbs Launch HHS Accelerator, First Comprehensive System in Nation to Electronically Issue RFPs and Receive Funding Proposals from Non Profit Organizations, Nov. 1, 2013; Human Services Council, The New York City Procurement Reform Project: A Report by the Human Services Council of New York, Apr. 30, 2015, at 5.
7. Dan Rosenblum, “HHS Accelerator a slow ‘success story,’” City & State, Dec. 22, 2016.
8. Office of the New York City Comptroller, A Better Contract for New York: A Joint Task Force to Get Nonprofits Paid on Time, Feb. 2022, at 7.
9. Mayor’s Office of Contract Services, PASSPort: Procurement and Sourcing Solutions Portal; Mayor’s Office of Contract Services, About HHS Accelerator.
10. Fred Shack, CEO of Urban Pathways, Queens Hearing (Feb. 24, 2025) (testimony) at 37.
11. Lauren Siciliano, COO of the Legal Aid Society, Queens Hearing (Feb. 24, 2025) (testimony) at 35.
12. Michelle Jackson, Executive Director of the Human Services Council, New York City Charter Revision Commission 2025: February 2025 Testimony by the Human Services Council of New York (Feb. 21, 2025) (written testimony).
13. Id.
14. Michelle Jackson, Executive Director of the Human Services Council, Queens Hearing (Feb. 24, 2025) (testimony); Human Services Council, HSC City Procurement Survey Results: Summary, Nov. 14, 2024.
15. Kristin Miller, Executive Director of Homeless Services United, New York City Charter Revision Commission 2025 - Testimony by Homeless Services United (Apr. 8, 2025) (written testimony).
16. Michelle Jackson, Executive Director of the Human Services Council, New York City Charter Revision Commission 2025: February 2025 Testimony by the Human Services Council of New York (Feb. 21, 2025) (written testimony); Louisa Chafee, Executive Director of the Independent Budget Office, Queens Hearing (Feb. 24, 2025) (testimony).
17. Michelle Jackson, Executive Director of the Human Services Council, Queens Hearing (Feb. 24, 2025) (testimony).
18. Id.
19. Lauren Siciliano, COO of the Legal Aid Society, Queens Hearing (Feb. 24, 2025) (testimony).
20. Fred Shack, CEO of Urban Pathways, Queens Hearing (Feb. 24, 2025) (testimony).
21. Julie Won, Councilmember, Queens Hearing (Feb. 24, 2025) (testimony) at 65.
22. Charter § 311(b); 1989 Charter Revision Commission, Final Report of the New York City Charter Revision Commission: January 1989-November 1989, at 25.
23. Charter § 332(b).
24. Edward Koch, Exec. Order No. 114, Establishment of the Office of Contracts in the Office of the Mayor (Apr. 13, 1988).
25. New York City Council Committee on Contracts Fiscal Year 2023 Preliminary Budget Hearing, Mayor’s Office of Contract Services, “Testimony of Director Lisa Flores,” (Mar. 3, 2022) at 4-14; New York City Committee on Contracts Oversight Hearing – Updates to the Procurement and Sourcing Solutions Portal (PASSPort), “Testimony of Director Lisa Flores,” (Feb. 17, 2022) at 11-20. Mayor’s Office of Contract Services, FY25-27 Cost of Living Adjustment Investment Provider FAQ, Jun. 20, 2024.
26. Local Law No. 164 of 2021.
27. Id.
28. Charter § 20-o; Mayor’s Office of Nonprofit Services, Nonprofit Advisory Council to the Mayor’s Office of Nonprofit Services.
29. Charter § 93(h).
30. Mayor’s Office of Contract Services, Agency Indicators Report - Fiscal 2024, Agency Procurement by Method.
31. Procurement Policy Board Rules § 2-11. Note that emergency contracts and accelerated procurements are also exempted from the public hearing requirement.
32. Capital projects have additional levels of review since they are funded out of the New York City capital budget, which is largely financed by bond sales. For more information on the capital process, see Independent Budget Office, Understanding New York City’s Budget: A Guide to the Capital Budget.
33. Citizens Budget Commission, 9 Things New Yorkers Should Know About How New York City Buys Stuff, Feb. 21, 2019.
34. Depending on the contract, there can also be further review by the Department of Investigation for vendor integrity. The Department of Small Business Services may also review for conformity with equal opportunity requirements. Id.
35. Charter § 328.
36. Department of Finance, PASSPort Financials, “Frequently Asked Questions: Do I have to start submitting my invoices in PASSPort?”
37. Office of New York City Comptroller, Contract Primer, Jan. 15, 2024, at 16. Vendors who provide services prior to contract registration face further payment complications as the scope of services is not finalized and might exclude services previously delivered by the provider under the assumption they would be included in the final contract.
38. Mayor’s Office of Contract Services, Standard Health and Human Services Invoice Review Policy, Jan. 1, 2021, at 4-8; Department of Homeless Services (DHS), Human Service Providers Fiscal Manual, Feb. 2023, at 58-59. The DHS Manual explains: “An invoice may be returned, from DHS to the provider, for incomplete submission, variance to back-up documentation, or significant variances in recurring costs.”
39. Mayor’s Office of Contract Services, PASSPort Financials, “Frequently Asked Questions: Are the contract term dates the same for all agencies?”
40. New York City, New York State, and the US Government all have different start and end dates to their fiscal years.
41. For an example of instructions relating to accrual budgeting, see Administration for Children’s Services, Guide to Preventative Services Programs, Revised Nov. 2011, at 4.
42. NYC Office of the Mayor, “Mayor Adams Announces City has Unlocked More Than $4.2 Billion in Contractual Dollars for Nonprofits Through ‘Clear the Backlog Initiative,’” Jul. 29, 2022.
43. NYC Office of the Mayor, “Mayor Adams Appoints Michael Sedillo as Executive Director of Mayor’s Office of Nonprofit Services, Announces Several New Efforts to Pay Nonprofit Providers Faster,” Jan. 3, 2025.
44. New York City Council Committee on Contracts Fiscal Year 2026 Preliminary Budget Hearing, Mayor’s Office of Contract Services, “Testimony of Director Lisa Flores,” Mar. 24, 2025.
45. New York City Council Committee on Contracts Fiscal Year 2026 Preliminary Budget Hearing, Mayor’s Office of Contract Services, “Testimony of Director Lisa Flores,” Mar. 24, 2025.
46. Mayor’s Office of Contract Services, Returnable Grant Fund.
47. Mayor’s Office of Contract Services, 2024 Citywide Indicators Report – Returnable Grant Fund.
48. Mayor’s Office of Contract Services, Partnering with Nonprofits, “Supporting Nonprofit Cashflow.”
49. New York City Council Committee on Education Oversight Hearing on Early Childhood Education, “Testimony of Deputy Chancellor Ahmed,” at 75-76, Oct. 19, 2022.
50. Procurement Policy Board Rules § 4-06(b).
51. Procurement Policy Board Rules § 4-06(d)(3).
52. Procurement Policy Board Rules § 4-12.
53. Procurement Policy Board Rules § 4-12(d)(i).
54. Id.
55. Mayor’s Office of Contract Services, Prompt Payment Interest Rate.
56. Procurement Policy Board Rules § 1-02(e).
57. New York City Council, Fiscal Year 2025 Adopted Expense Budget Adjustment Summary / Schedule C, Appendix B, Jun. 30, 2024; NYC Office of Comptroller, Later Than Ever: An Analysis of NYC Agency Contracts in Fiscal Year 2019, Mar. 2020, at 12.
58. NYC Office of the Comptroller, Retroactivity Trends in NYC Agency Contracts, Dec. 2021, at 18.
59. NYC Office of the Mayor, Mayor Adams and Comptroller Lander Announce New Reforms to cut Red Tape, Make it Easier for Nonprofits to get Paid on Time, Jul. 20, 2023.
60. Mayor’s Office of Nonprofit Services, FY24 Multiyear Discretionary Contracting Provider FAQ.
61. NYC Office of the Mayor, “Mayor Adams and Comptroller Lander Announce New Reforms to Cut Red Tape, Make it Easier for Nonprofits to Get Paid on Time,” Jul. 20, 2023.
62. Michelle Jackson, Executive Director of the Human Services Council, Queens Hearing (Feb. 24, 2025) (testimony); Kristin Miller, Executive Director of Homeless Services United, New York City Charter Revision Commission 2025 - Testimony by Homeless Services United (Apr. 8, 2025) (written testimony); Louisa Chafee, Executive Director of the Independent Budget Office, Queens Hearing (Feb. 24, 2025) (testimony).
63. Fred Shack, CEO of Urban Pathways, Testimony Before the NYC Charter Revision Commission. Presented by Frederick Shack, CEO, Urban Pathways, (Feb. 23, 2025) (written testimony); Michelle Jackson, Executive Director of the Human Services Council, New York City Charter Revision Commission 2025: February 2025 Testimony by the Human Services Council of New York (Feb. 21, 2025) (written testimony); Louisa Chafee, Executive Director of the Independent Budget Office, Queens Hearing (Feb. 24, 2025) (testimony); Kristin Miller, Executive Director of Homeless Services United, New York City Charter Revision Commission 2025 - Testimony by Homeless Services United (Apr. 8, 2025) (written testimony).
64. Charter § 332(b).
65. Charter § 311(b)(6).
66. Louisa Chafee, Executive Director of the Independent Budget Office, Queens Hearing (Feb. 24, 2025) (testimony), at 12; Procurement Policy Board Rule § 2-08. Procurement Policy Board Rule § 2-08 stipulates that “purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only.”
67. Mayor’s Office of Contract Services, Partnering with Nonprofits.
68. Department of Cultural Affairs, Cultural Development Fund Fiscal 2024 Renewal Guidelines, at 13.
69. Department of Cultural Affairs, Reporting.
70. Louisa Chafee, Executive Director of the Independent Budget Office, Queens Hearing (Feb. 24, 2025) (testimony).
71. Procurement Policy Board Rules §§ 4-06, 4-12.
72. Michelle Jackson, Executive Director of the Human Services Council, New York City Charter Revision Commission 2025: February 2025 Testimony by the Human Services Council of New York (Feb. 21, 2025) (written testimony); Kristin Miller, Executive Director of Homeless Services United, New York City Charter Revision Commission 2025 - Testimony by Homeless Services United (Apr. 8, 2025) (written testimony).
73. Id.
74. Michelle Jackson, Executive Director of the Human Services Council, New York City Charter Revision Commission 2025: February 2025 Testimony by the Human Services Council of New York (Feb. 21, 2025) (written testimony).
75. Mayor’s Office of Contract Services, Procurement Policy Board, “Archived Public Meetings/Public Hearings.”
76. NYC Office of the Comptroller, Bureau of Contracts Administration, NYC Contracts: Caught in the Slow Lane
77. Department of Cultural Affairs, About CDF / Registration.
78. Kristin Miller, Executive Director of Homeless Services United, New York City Charter Revision Commission 2025 - Testimony by Homeless Services United (Apr. 8, 2025) (written testimony).