{"id":2846,"date":"2025-04-17T14:11:30","date_gmt":"2025-04-17T18:11:30","guid":{"rendered":"https:\/\/council.nyc.gov\/press\/?p=2846"},"modified":"2025-04-17T14:11:30","modified_gmt":"2025-04-17T18:11:30","slug":"nyc-council-releases-new-report-outlining-challenges-for-nonprofits-to-receive-on-time-city-contract-payments-and-legislation-to-reduce-delays-scheduled-for-april-30-hearing","status":"publish","type":"post","link":"https:\/\/council.nyc.gov\/press\/2025\/04\/17\/2846\/","title":{"rendered":"NYC Council Releases New Report Outlining Challenges for Nonprofits to Receive On-Time City Contract Payments and Legislation to Reduce Delays, Scheduled for April 30 Hearing"},"content":{"rendered":"

Newly introduced bills follow Speaker Adams\u2019 2025 State of the City proposals to speed contract payments and reduce burdens for nonprofits by shifting payment timelines, mandating reforms, and restoring budget cuts to contracting staff<\/em><\/p>\n

City Hall, NY \u2013<\/strong> Today, the New York City Council released a new report that outlines the significant challenges faced by nonprofit service providers with receiving on-time contract payments from the City. The report introduced new legislation and budget investments to help reduce contract payment delays that threaten the stability of nonprofit organizations, with outstanding payments stretching into the millions of dollars. The new bills follow proposals from Speaker Adrienne Adams\u2019 2025 State of the City<\/a> to address the chronic problem that threatens the survival of nonprofits by shifting payment timelines earlier, mandating reforms when there are delays, and restoring budget cuts to city contracting staff. The legislation will be heard at an April 30 hearing by the Committee on Contracts.<\/p>\n

Read the Council\u2019s full report here<\/a>.<\/p>\n

\u201cNonprofit organizations deliver essential services that are critical to the health and safety of all New Yorkers, but they can\u2019t sustain operations or make payroll when city contract payments for completed work are delayed,\u201d said Speaker Adrienne Adams<\/strong>. \u201cIt\u2019s unreasonable to expect them to effectively function under fee-for-service contracts without timely reimbursement. Payment delays in the City\u2019s contracting process are threatening the survival of service providers, putting the entire sector, workers, and New Yorkers at risk. As I laid out in my 2025 State of the City address, the Council is advancing legislation to require the payment of agency awarded funds to nonprofits earlier in the process, so that providers are not struggling to pay their staff or chasing down the funding they are owed. We will also pursue legislation to require agencies to submit corrective action plans to create a stronger oversight system, and fight to reverse the mayor\u2019s budget cuts to city contracting staff. I thank my Council colleagues for their focus on addressing these important challenges, and I look forward to our work together to deliver long overdue solutions.\u201d<\/p>\n

Contract registration delays and other bureaucratic obstacles routinely hinder timely payments, creating financial strain for nonprofit organizations that are contracted to deliver human services to New Yorkers. In Fiscal Year 2024<\/a>, 90.59% of all nonprofit contracts were registered late, meaning contractors began work without a finalized contract or payment from the City. This was an increase from 88.19% in Fiscal Year 2023. In the latter year, the median cycle time for vendor payments to nonprofit and human services providers reached 355 days. These delays undermine the operations of human service providers and threaten to destabilize the nonprofit sector at a time when the City can least afford to lose critical services, as federal funding becomes increasingly uncertain. Addressing these longstanding procurement challenges is critical to ensuring the sustainability of the City\u2019s nonprofit sector and the essential services it provides to New Yorkers in every community. Under Speaker Adams’ leadership, the City Council has consistently sought to tackle deep-rooted inefficiencies in the City\u2019s procurement process that impair timely and reliable payments to nonprofit contractors.<\/p>\n

\u201cOur city leans on nonprofits to do the tough work government can\u2019t do alone. They\u2019re not asking for a pat on the back \u2014 they just want to be paid what they\u2019re owed,\u201d said Council Member Justin Brannan<\/strong>. \u201cThese procurement delays aren\u2019t just red tape anymore, they\u2019re a full-blown crisis. When nonprofits can\u2019t get paid, people lose services. With safety nets under attack nationwide, we need our nonprofit partners more than ever. No procurement, no peace.\u201d<\/p>\n

\u201cNearly 91 percent of nonprofit contracts were registered late in FY \u201824, up from 88 percent in FY \u201823. As the Chair of Contracts, I\u2019m excited to join Speaker Adams to introduce this package of bills addressing long-standing payment delays and inefficiencies in the City\u2019s contracting process. These bills build on our existing work by providing more funding for nonprofits at the time of contract registration, requiring agencies to file corrective action plans to prevent delays, and requiring the City to fully restore $3.65 million for MOCS in the FY \u201826 budget,\u201d said Council Member Julie Won. <\/strong>\u201cFunding cuts at the federal level mean that we must fight even harder for our nonprofits, which provide critical services for the most vulnerable New Yorkers. Thank you to Speaker Adams for your shared commitment in supporting nonprofits and working to pass this legislation.\u201d<\/p>\n

\u201cNonprofits are the backbone of our communities,\u201d said Council Member Althea Stevens<\/strong>. \u201cYet, for too long, these organizations have been forced to operate under a broken system that delays payments and jeopardizes their ability to serve. With this legislation and Speaker Adams\u2019 leadership, we are taking bold, necessary steps to hold agencies accountable, fix our procurement process, and ensure our nonprofits are paid on time. Supporting our nonprofits, strengthens the very fabric of New York City.\u201d<\/p>\n

Building on the recommendations of the Mayor and City Comptroller\u2019s Joint Task Force to Get Nonprofits Paid on Time<\/a>, these new legislative efforts aim to resolve challenges in the human services sector, which has historically been burdened by payment delays and cumbersome administrative processes. Through targeted reforms, the City Council has advanced measures that enhance transparency<\/a>, streamline operations<\/a>, and promote equity<\/a> within the procurement system, ensuring a fairer and more efficient process for all stakeholders. However, there are still greater improvements needed to streamline the procurement process.<\/p>\n

The Council\u2019s new solutions include:<\/p>\n