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New York City could jeopardize its modest progress in speeding up infamously late payments to nonprofit vendors, advocates fear, as the city office that handles those contracts is now faced with its own loss of funding.
The city’s late payments have long posed an existential threat to the network of nonprofits that contract with the government on everything from shelter services to anti-violence programs. Mayor Eric Adams has promised to tackle the problem, and won praise for clearing a longstanding backlog and slashing some processing time for contracts funded by the City Council.
But much of the problem remains, and the budget cuts that Adams imposed on city agencies beginning last year took a toll on the Mayor’s Office of Contract Services, which handles the payments. To comply with the cut, MOCS had to spend $7.2 million less on its own contract with IT company Accenture that maintains PASSPort, the city’s procurement portal — a reduction of 100,000 working hours.
“Honestly and candidly, there will be service impacts and service reductions,” MOCS First Deputy Director Kim Yu told a City Council committee during a hearing on Tuesday. Yu said that vendors who use PASSPort are likely to wait longer to get answers to their questions about late payments, while the city agencies who deal with nonprofits will have less time to train themselves on the portal.
That hamstrung help with PASSPort comes at an inopportune time, with MOCS now in the midst of a huge effort shifting all of its active contracts to PASSPort — a changeover that has caused even more short-term billing problems for many vendors. Meanwhile, the agency is dealing with short-staffing — its headcount has fallen by 8% to 166 employees since last year, in addition to 18 vacant positions.
Michelle Jackson, executive director of the Human Services Council, said Tuesday that the cuts to MOCS make her “very nervous,” given the uncertainty surrounding the PASSPort website. She, along with other nonprofit leaders who testified at Tuesday’s Council hearing, urged lawmakers to press the administration to give MOCS more resources during negotiations on the coming year’s budget.
City Hall spokeswoman Liz Garcia said in a statement that the Adams administration “has taken important steps to streamline the nonprofit procurement process.” The transition to PASSPort “has allowed us to overhaul an antiquated procurement process and turn to a more reliable digitized system with improved efficiency, accountability, and transparency,” she added.
“And in partnership with the comptroller’s office, we have delivered real progress — clearing over $6 billion in backlogged payments and helping more than 730 providers register contracts through the ‘clear the backlog’ initiative,” Garcia said. “We will continue to work closely with our nonprofit partners to ensure this transition goes as smoothly as possible.”
‘The silence speaks for itself’
Among the others who testified on Tuesday was Brenda Rosen, president and CEO of the homeless services provider Breaking Ground, who said her organization is owed $23 million by the Department of Homeless Services — including $12 million in repayments from invoices submitted to PASSPort.
“Given the growing financial risk of doing business with the city, we are fearful of taking on additional contracts to help thousands more unsheltered New Yorkers find homes,” Rosen said.
Besides slimming its contract with Accenture, the budget cuts also forced MOCS to pause a separate $1 million contract that covered quality assurance testing for PASSPort. When council contracts committee chair Julie Won asked MOCS officials who now monitors the heavily-used platform for quality assurance, the officials smiled sheepishly without responding.
“I think the silence speaks for itself,” Won said.
Council members introduced eight new bills on Tuesday intended to chip away at the problem, including legislation that would require the city to pay interest on late payments to nonprofits and another that would require the city to provide bridge loans to some contractors before they receive payments. Lisa Flores, director of MOCS, said the administration was generally opposed to the bills, saying the city could not make new cost commitments “in the present budget situation.”
Some 85% of nonprofit contracts were registered late in the first half of the current fiscal year, the city comptroller reported in January — meaning the vendors had to begin work before the city had finalized their contracts or made payments.
The Adams administration has implemented some changes recommended by a task force he convened on the issue, including creating a Mayor’s Office of Nonprofits and clearing some backlogged payments. But lawmakers faulted City Hall for not providing updates about its progress on other recommendations, such as launching a contact milestone tracker within PASSPort or creating a performance management system for contracts akin to the NYPD’s COMPStat.
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Nick Garber , 2024-06-04 23:09:20
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