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In a city prized as one of the world’s greatest shopping destinations, there’s no bigger buyer than New York City’s government. Between July 2022 and June 2023, City agencies awarded $41.1 billion in contracts for goods, services, and construction, surpassing the entire budgets of many state governments. Despite the crucial role procurement plays in fulfilling the daily needs of New Yorkers, most residents are unaware of the City’s purchasing process, which is essential to keep the city running smoothly. Those familiar with the process have long criticized the complex, and slow-moving system, where notable achievements are overshadowed by the outdated legal structure. The path forward is through reform, including legislation the City’s Capital Task Force has proposed in Albany to modernize public hearings.
The way the city buys is rooted in its charter reform of 1989, prior to which the Board of Estimate, imposed upon the city by the state during the fiscal crisis of the 1970s, would gather in marathon sessions lasting into the early morning approving rounds of contracts – a model distinctly disfavored under the 1989 reforms. As noted at the time, the perception of contracting decisions being the subject of political maneuvering between various elected officials into the wee hours was anathema to good governance and had a negative impact on accountability to the public for contracting decisions.
However, we are still grappling with rules and concepts that pre-date the 1989 charter, now thirty-five years old, and which bear little relation to its original goals.
A perfect example of this is the requirement under Section 326 of the charter that a public hearing be held for almost any contract with a value of $100,000 or more, a threshold unchanged since 1989. These hearings, modeled on the Board of Estimate era, provide only the illusion of transparency and public engagement without delivering any of the benefits.
The intentions behind having a contract public hearing requirement are no doubt admirable – aiming to be transparent and accountable – but the reality is that the public hearings accomplish neither.
Almost no one attends the hearings and few, if any, comments are received.
The burden, however, is real, with city agencies conducting over 700 hearings in the past year, each of which adds about three weeks to the procurement process.
Consider that the $100,000 threshold set in 1989 has never been adjusted higher for inflation, even as prices have more than doubled and the total value of New York’s procurement contracts have increased more than sixfold. In Fiscal Year 2023, contracts under $100,000 only added up to around $700 million, or about two percent of total procurement value.
Preparing inconsequential notices and attending empty meetings sap time and energy from skilled procurement officials and agency leaders. Meanwhile, the vendors and contractors who provide residents with vital city services are forced to endure delays.
There is a better way to do this. We can maximize public transparency in city contracting through technology and data tools that demystify the process and meet people where they are in terms of government interaction. This is the way forward highlighted by good government groups worldwide and the Adams administration has taken unprecedented steps to make this a reality in New York City, launching the PASSPort Public transparency portal to provide the public and potential vendors meaningful information.
Fortunately, Albany can unlock a better alternative. During the last legislative session, at the urging of the Adams administration, the State Senate unanimously passed Senate Bill S7383 (Sepulveda), but the State Assembly failed to vote on it (A.8864, Rajkumar). The State Senate has passed the bill again in the current session, and it is awaiting action by the Assembly.
We urge the state legislature to reconsider this crucial reform in the current session and we will be up in Albany to advocate for it.
The proposed bill would amend the City charter to replace public hearings with a seven-day online public-comment period, similar to the notice-and-comment rulemaking procedure used by administrative agencies, and more typical of municipal and state contracting nationwide. It would also authorize the Procurement Policy Board to set a different threshold to trigger the online comment requirement, allowing for public participation in high-dollar contracts deserving of increased attention while accounting for the growth of city contracting and inflation since 1989.
Procurement reform can unlock enormous public value by streamlining the City’s arduous and outdated system, all for relatively little political capital. That’s something New York’s leaders should buy into.
Lisa M. Flores is the City Chief Procurement Officer and Director of the NYC Mayor’s Office of Contract Services.
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Lisa M. Flores , 2024-04-03 12:03:04
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