When the annual city budget depends on New York City’s economic health, every dollar counts — whether spent directly by a city agency or by private contractors while delivering needed services to the public.
At a time when we depend more and more on the public sector workers who serve our communities, and when equity is a top priority for delivering the critical services that the public demands, we need smart legislation to protect our public workforce from displacement. That’s why the New York City Council must pass Int. 863-A when it comes before the Contracts Committee on Thursday.
For decades, past mayoral administrations moved to award contracts to private interests under the guise of cost savings and efficiency. This was a false premise, as overruns cost the public millions of dollars while creating a “shadow government” of contractors with limited oversight and endless potential for corruption.
This practice ultimately led to what District Council 37 helped expose as the CityTime scandal, in which the Bloomberg administration awarded a multi-million dollar contract to several private entities for a modernized timekeeping and payroll system for city workers.
Instead of generating cost-savings and a streamlined system, the contract reached more than half a billion dollars with little to no work accomplished. The scandal landed six contractors, the project manager, and a city official in federal court with multiple fraud convictions.
Despite an effort to claw back most of the stolen funds, the City of New York still lost $200 million on the CityTime project. Under no circumstances can we run the risk of this ever happening again.
In the wake of the scandal, reforming the system of “contracting-out” led to the passage of Local Law 63 in 2011, which requires agencies to publish procurement plans and prevent displacement of the public workforce. Int. 863-A is a necessary update to refine oversight of the city’s contracts by our elected leaders.
The bill would amend the City Charter to expand procurement procedures and the public notification timeline for specific city contracts. The process expands access and bidding opportunities for minority-owned businesses, and adds more time for public comment and the Council’s consideration of contracts.
The amendment raises the bar for review on proposed contracts from $200,000 to $1 million and requires additional evidence that proves certain service contracts won’t displace city workers. The bill also applies the rules from Local Law 63 when renewing or modifying current contracts.
As the city moves forward from the economic consequences of the COVID-19 pandemic, these changes must be made. Int. 863-A intends to protect our hardworking public employees from losing their jobs to private contractors. As an added measure, the amendment enhances oversight protections to ensure selected contractors deliver on their promises.
Expansion of oversight includes putting the responsibility on the affiliated city agency to show whether a proposed contract will weaken the responsibilities of workers employed within that agency. If the agency demonstrates the contract will not affect the public workforce, it will be required to issue a certification signed by the agency’s head stating that no such changes will occur in contract actions, including soliciting bids, extensions, renewals, or other modifications to the contract.
If the contract requires public employees to relocate to another role or agency, the city must provide assistance for these workers, including training in positions in the contracting agency or with another city department. The expense for this assistance is included in the cost of the contract.
The legislation intends to encourage increased participation and more opportunities for all potential contractors to participate in the city’s procurement process by providing an equitable approach to awarding these contracts.
This bill levels the playing field for certified minority- and women-owned businesses in the process of awarding service contracts from the city’s agencies. Int. 863-A sets stronger standards and reporting requirements for the city to follow, such as preventing management from artificially dividing individual contracts, thereby reducing their value, and implements additional safeguards to ensure full compliance for the term of each contract.
Passage of Int. 863-A is an important tool to help close gaps in oversight during the city’s process for contracting out services. The bill protects the jobs of the essential public workers who run New York City and holds private contractors accountable for delivering the services we pay for and entrust them to provide.
Brannan is the City Council Finance Chair. Garrido is the executive director of District Council 37, New York City’s largest public employee union.
