To Address Corruption Risks and Boost MWBE Contracting, Comptroller Asks Mayor

Mayor Adams, Comptroller Lander, & others (photo: Ed Reed/Mayoral Photography Office)

In a letter to City Hall last month, New York City Comptroller Brad Lander called on Mayor Eric Adams to make changes to the city’s procurement rules to prevent corruption and fraud in nonprofit human services contracts.

In the October 19 letter, Lander asked Adams to convene the Procurement Policy Board (PPB) to take steps to increase contract procurement for minority- and women-owned businesses (MWBEs) and address “corruption vulnerabilities” exposed in a Department of Investigation report released late last year, shortly before Adams took office. Those include few controls on contractors’ conflicts of interest and executive compensation, and gaps in spending documentation and review.

Adams and Lander, both Brooklyn Democrats newly-elected to their citywide positions, have already worked together on addressing other long-standing problems in city contracting, particularly timely payment to nonprofit contractors.

“Despite procurement being the vehicle for the City’s essential services from sheltering the homeless to feeding seniors, procurement reform often falls to the bottom of the priority list,” Lander said in a statement to Gotham Gazette.

“The vast majority of human services vendors are well above board and go beyond to serve New Yorkers,” he said. “But in order to provide the best services, our vendors should reflect the diversity of this city and our reforms must be able to weed out the occasional bad actor.”

The five-member Procurement Policy Board is appointed jointly by the mayor and comptroller, who both may hire and fire members at will. It is responsible for setting out rules related to soliciting bids and awarding and administering contracts. In a statement to Gotham Gazette, a spokesperson for Mayor Adams indicated that the mayor is open to working with the comptroller and Procurement Policy Board on reforms.

On October 6, Governor Kathy Hochul signed legislation to allow the PPB to double the level at which the city can contract with MWBEs outside of the competitive bidding process, raising the threshold from $500,000 to $1 million. In his letter to Adams, Lander said it was “imperative” that the PPB meet to raise the threshold, noting that previous increases have raised the average size of MWBE contracts and created more opportunities for those firms to get city business.

The number of non-competitive MWBE city contracts fell nearly 30%, from 1,242 in fiscal year 2020 to 870 in fiscal year 2021, a value of close to $8 million, according to the comptroller’s Annual Contracts Report.

“This will not only reduce barriers, but also help increase the volume and value of meaningful contracting opportunities for M/WBE firms,” Lander wrote of raising the threshold.

Asked what measures were in place to prevent misuse of these funds or ensure the city is paying for the best available services, a spokesperson for the Comptroller’s Office, which shared the letter with Gotham Gazette, said city agencies are responsible for vendor oversight. While contracts under $100,000 do not need to be sent to the comptroller, the office may audit the…