City Hall, NY – Today, the New York City Council’s Committee on Contracts will review several bills that advance critical reforms to address payment delays for nonprofit organizations delivering essential services for New Yorkers. Introduction 1392, sponsored by Speaker Adrienne Adams, would require advance payments for contracts under the purview of the Department of Homeless Services (DHS) and Mayor’s Office of Criminal Justice (MOCJ) on a quarterly basis starting in 2026. The bill would also establish a three-year pilot program in 2027 to also make these contract payments quarterly for all other city agencies.

The proposed legislation builds on the Council’s multi-year efforts to resolve the payment delay issues that have resulted in service interruptions, organizations accruing debt, layoffs, and even organizations shutting down altogether. At the October 9th Stated Meeting, the Council passed legislation stemming from Speaker Adams’ 2025 State of the City address, including Introduction 1247-B, which requires immediate advance payment of 50 percent of the value of a nonprofit’s contract with the City as an advance upon registration by the comptroller

Below are the Speaker’s full remarks for the hearing as prepared for delivery.

Good afternoon. Thank you, Chair Won, for your continued leadership and for leading today’s committee hearing on this important legislation, including my bill, Introduction 1392.

I also want to thank my colleagues, our dedicated staff who have worked tirelessly on these critical reforms, and the advocates, organizations, service providers, and members of the administration whose insights have helped shape our comprehensive response to this procurement crisis.

Right now, nonprofits are struggling to make payroll because of delayed payments. Human service contracts face extraordinary delays—often months, and sometimes over a year—between when work begins, and when organizations actually get paid.

During this time, they’re providing shelter to unhoused New Yorkers, delivering meals to homebound elderly, coordinating legal services, organizing mental health supports, and fighting for justice-involved individuals—all while worrying the lights could get shut off.

The City effectively forces these organizations to collectively pay millions of dollars on bridge loans because our procurement process isn’t working the way it should.

Introduction 1392 seeks to help address these payment issues. Instead of having vendors taking out loans to cover the City’s delays, we can provide routine, timely payments for the vital services they perform every day, so these organizations can focus their resources on efficient program delivery and sound organizational management, rather than financial survival.

This isn’t a loan or a handout to contractors—it’s the City paying our own bills on time, rather than forcing vendors to float money at their expense or miss payroll and payments to vendors.

The City has budgeted for these services and has committed to these contracts. The question is whether we make vendors pay interest on emergency loans while they wait for us to process paperwork, or whether we provide payment they can depend on and in a timely way. Introduction 1392 ensures that we do the latter.

Starting January 1st, 2026, the bill would require city agencies to provide at least twenty-five percent of a contract’s annual value, each quarter, for contracts with the Department of Homeless Services for temporary housing assistance and the Mayor’s Office of Criminal Justice.

This will ensure consistent cash flow for vendors delivering vital services like shelter and those who are justice involved. For multi-year contracts, these advances continue seamlessly into subsequent years, so organizations can actually plan and invest in their capacity, instead of constantly scrambling to cover immediate costs.

The bill also launches a pilot program beginning January 1st, 2027, extending quarterly advances to other agency contracts valued at one million dollars or more. This pilot will allow us to evaluate the effectiveness of quarterly advances across a broader range of procurement, with annual reports on agency implementation and compliance.

By January 1st, 2030, we will have a better understanding of the effectiveness of this approach, and whether to make it permanent across more of the City’s contracts.

Introduction 1392 also includes smart safeguards to protect taxpayer dollars. Advances won’t apply to portions of contracts funded by the state or federal government if doing so would be incompatible with such funding.

Advance payments can be withheld from contractors who fail to submit required invoices for three or more consecutive months, unless the contracting agency was responsible for the delay. Agencies will also need to establish clear processes to reclaim funds if services are not delivered or if actual costs fall short.

Introduction 1392 is about fairness and fiscal responsibility, and it builds on the momentum from the package of bills we announced at this year’s State of the City and passed on October 9th. Those recently passed laws provide 50% advance payments at registration for nonprofit services, codify the Mayor’s Office of Contract Services, and require agency corrective action plans.

Together, these efforts represent a comprehensive push to make our procurement system fairer, more efficient, and more supportive of the critical organizations that comprise our nonprofit community.

Our city’s nonprofits are on the frontlines of our communities. Speeding up these burdensome processes will help to ensure that they can focus on delivering life-saving care, and not on chasing the dollars they’re owed.

I look forward to hearing from members of the administration and stakeholders today about Introduction 1392 and the other bills under consideration, as we continue to prioritize timely payments and strong vendor partnerships.

Thank you, and now I will turn it back to Chair Won.

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