New York City Government Officials have been visited by federal investigators, highlighting the severity of corruption issues within the city government. Against this backdrop, on September 17th, New York City Comptroller and announced candidate for the next Mayor of New York City, Brad Lander, released a new report – “Prevent Corruption in Procurement,” outlining four steps to eliminate fraud, minimize corruption risks, and strengthen oversight in the city government’s outsourcing contracts.
“Public integrity is key to city government,” Comptroller Brad Lander said at a press conference. “Many essential services in New York City rely on contractors – from child care, meal delivery for the elderly, to school infrastructure and technology – so we must be able to rely on fair and transparent bidding by city government agencies, free from favoritism, and ensure that we receive what we pay for. But now, we are increasingly relying on no-bid contracts, many times not even knowing which subcontractors we are paying. It is an urgent moment for change.”
In the 2023 fiscal year, New York City signed 12,820 new procurement contracts worth $38.22 billion, exceeding the budgets of over 30 states.
Previously, the media exposed corruption in the New York City government’s procurement process. For example, on September 17th, Gathamist reported that a Texas commodity company, Somma, bribed Eric Goldstein, an official in charge of the annual $500 million public school meal budget at the Department of Education, to secure contracts for their products. Following repeated food quality issues, Goldstein was fired by the Department of Education in 2018, arrested in 2021, and eventually sentenced to 2 years in prison.
According to the New York Post, there is a significant amount of food waste or fraud in New York City’s relief program for incoming undocumented immigrants. DocGo, a company that signed contracts with the government, acquired over $400 million in immigration service contracts from New York City without a bidding process.
The Comptroller pointed out in the report that the city government must establish sound procedures to ensure integrity, protect city resources, and prevent corruption. However, procurement policies have always been at the bottom of the city’s priority list. The Adams administration’s lack of attention and commitment to reforming the city government’s procurement process has exacerbated registration and payment delays, posing increasingly severe challenges to many honest contracting partners and risks of corruption, fraud, and abuse of power. In both cases, the failure of procurement reform is undermining public trust in the New York City government.
Therefore, the Comptroller proposed four suggestions:
1. Strengthen supervision and accountability of subcontractors. While city procurement rules require approval of each subcontractor before starting work, the reality is that these reviews, approvals, and disclosures rarely occur. Since 2020, 17 departments have used uncertified subcontractors, creating significant risks of corruption and nepotism due to the lack of transparency.
2. Reduce overreliance on emergency procurement and minimize corruption risks in non-competitive procurement.
3. Address corruption loopholes in the oversight of social service contracts for non-profit organizations in New York City (according to a 2021 DOI report). With over 40% of the city’s contracting portfolio and $12 billion in public funds specifically allocated to social services by non-profit organizations, New York City must eliminate corruption loopholes in this sector to protect public integrity and restore trust in social services by non-profit organizations, effectively providing high-quality services to New Yorkers.
4. Enhance transparency to promote accountability, including developing a system to disclose contract delay situations, help agencies oversee outsourcing work, and streamline the management of backlogs and delays through the ContractStat system.
“New Yorkers deserve an honest, trustworthy, and well-managed city government to protect taxpayer funds from waste, fraud, and abuse,” Lander said. “We should seize this moment of crisis to make real change – so people can wake up every day knowing that the government is working for them.”
Mayor Adams briefly welcomed the Comptroller’s suggestions at a press conference held on the 17th. “Any idea that can enhance our enforcement of rules and procedures is welcome,” he said.