{"id":2856,"date":"2025-04-30T10:28:08","date_gmt":"2025-04-30T14:28:08","guid":{"rendered":"https:\/\/council.nyc.gov\/press\/?p=2856"},"modified":"2025-04-30T11:06:20","modified_gmt":"2025-04-30T15:06:20","slug":"nyc-council-advances-legislation-to-reform-city-contracting-and-reduce-payments-delays-that-threaten-nonprofit-organizations-and-services","status":"publish","type":"post","link":"https:\/\/council.nyc.gov\/press\/2025\/04\/30\/2856\/","title":{"rendered":"NYC Council Advances Legislation to Reform City Contracting and Reduce Payments Delays that Threaten Nonprofit Organizations and Services"},"content":{"rendered":"

Bills would establish new city contracting agency, require faster payments, and strengthen accountability for delays <\/em> <\/p>\n

City Hall, NY \u2013<\/strong> Today, New York City Council Speaker Adrienne Adams, Council Members, and nonprofit service providers outlined legislative solutions to address longstanding nonprofit contract registration and payment delays<\/a> that currently threaten the delivery of essential services New Yorkers rely on and the stability of nonprofit organizations. At a press conference before the Council\u2019s hearing on the bills, nonprofit service providers spoke about the millions of dollars they are owed by the City, and how continued delays have resulted in layoffs, service reductions, accrual of debt, and even the shutting down of longtime organizations<\/a>.  <\/p>\n

The bills originate from proposals first put forward in Speaker Adrienne Adams\u2019 2025 State of the City<\/a> to address the chronic problems that threaten the survival of nonprofits by shifting payment timelines earlier, mandating reforms when there are delays, and establishing a Department of Contract Services. Following the press conference, the Council\u2019s Committee on Contracts and Committee on Children and Youth held a joint oversight hearing on the proposed legislation and heard from dozens of nonprofit service providers on the impact of unpaid contracts and delayed contract payments on their ability to pay staff, maintain operations, and serve New Yorkers. <\/p>\n

A livestream of the press conference can be found 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 their work are delayed,\u201d said Speaker Adrienne Adams<\/strong>. \u201cLate contract payments by the City are threatening the survival of nonprofit 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 sustain meaningful progress in resolving chronically late payments to those serving our communities. I thank the city\u2019s nonprofit organizations for their dedication and work to support New Yorkers, and we must work together to do right by them.\u201d <\/p>\n

In its Fiscal Year (FY) 2026 Preliminary Budget Response<\/a>, the Council also called for the mayoral administration to restore budget cuts from FY 2025 to the Mayor\u2019s Office of Contract Services (MOCS) that reduced its budget by 33 percent \u2013 approximately $16 million and a headcount reduction of 14 positions. The restoration of staff would allow the office to improve the delivery of timely payments and contract registrations.  <\/p>\n

A recent report<\/a> from the Council analyzing nonprofit contract payments indicated that in FY24, nearly $20 billion went towards paying for human services, including food assistance, childcare, mental health support, homelessness, and legal services. Yet, in FY24, 90% 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.  <\/p>\n

The legislation being heard today includes: <\/p>\n

Introduction 1247<\/strong><\/a>,<\/strong> sponsored by Speaker Adams<\/strong>, would require a percentage of contract awards to be paid to nonprofits at the start of the fiscal year once they are registered by the City Comptroller. It would also establish a process to recover funds in the case the City does not ultimately receive and accept the agreed-upon goods, services or construction.  <\/p>\n

Introduction 1248<\/strong><\/a>, sponsored by Speaker Adams<\/strong>, would establish a Department of Contract Services, the head of which would be the Commissioner of Contract Services, who would serve as the City Chief Procurement Officer. <\/p>\n

Introduction 1249<\/strong><\/a>,<\/strong> sponsored by Council Member Justin Brannan<\/strong>, would require city agencies to submit annual reports on contract registration for the previous fiscal year and corrective plans for contracts registered late. An agency would be required to submit a corrective action plan by January 1 if it: (1) registered 100 or more contracts or contracts valued at over $10 million in the previous fiscal year; and (2) more than 30 percent of its contracts or contract value were registered 90 days or more after their start dates. Such corrective action plans would need to analyze the causes of delays, specify improvements to be made, include implementation timelines, and set performance targets.   <\/p>\n

\u201cNonprofits are getting gutted by the federal government while being used as an interest-free credit card by the city government. Since our first hearing on nonprofit payment delays in 2022, contract payment delays have gotten worse, reaching over $1 billion in outstanding payments,\u201d said Council Member Julie Won, Chair of the Committee on Contracts<\/strong>. \u201cOur package of legislation pushes for more urgency in the contracting process by providing advanced payments for nonprofits, requiring corrective action plans for retroactive contract registration, and establishing a new Department of Contract Services. If the City continues delaying payments, nonprofits will continue to go into debt, nonprofit employees will not get paid on time, resulting in critical services to New Yorkers being delayed. Enough is enough. Mayoral agencies must pay nonprofits what they\u2019re owed on time.\u201d <\/p>\n

\u201cThe City of New York needs to pay their damn bills on time,\u201d said Council Member Justin Brannan<\/strong>. \u201cNonprofits help keep this city running and serve some of our most vulnerable neighbors but for years, the City of New York has abused them, taken them for granted, and treated them like an afterthought. It’s time we said enough is enough. If the City hires you to do the work, the City needs to pay you on time. This legislation is about basic fairness and fixing a broken system that has punished the very organizations that pick up the pieces when our government falls short. No more excuses. No more endless delays. We owe it to these unsung hero nonprofits and to the New Yorkers who rely on them to get this done.\u201d <\/p>\n

\u201cFor years, nonprofits have been pushed to the brink by the City\u2019s chronic delayed payments and mismanagement,\u201d said Michelle Jackson, Human Services Council Executive Director<\/strong>. \u201cThese bills are a huge step forward in giving providers access to funding earlier, getting more information on where delays are in the process, and in establishing a more comprehensive agency to streamline contracting. This proposed legislation is a key part of a comprehensive overhaul that\u2019s urgently needed to fix the broken systems that have failed human services providers and the New Yorkers who rely on them. New York nonprofits are critical to the fabric of all our communities, and it is beyond time they were treated fairly in the very basic sense of being paid timely for the work they perform.” <\/p>\n

\u201cCOFCCA member agencies deliver essential services to over 50,000 children and families across the five boroughs of NYC. They are the lifelines to New Yorkers in need of food, clothing, shelter, child care, mental health counseling, and educational and employment supports for youth,\u201d said Dr. Sophine Charles, Associate Executive Director of the Council of Family and Child Caring Agencies<\/strong>. \u201cAll of these services are in jeopardy and at risk of disruption when agencies are not paid on time. Nonprofit human services providers are critical partners strengthening the city and delivering vital services every day, and must be supported by the city providing timely payment. It’s very simple: without timely payment for their services, they cannot help families, pay their staff, pay their bills, and keep the lights on.\u201d <\/p>\n

\u201cDespite being owed hundreds of millions of dollars from contracts dating back to FY19, the non-profit homeless service providers that we represent have continued to fulfill their mission to serve NYC\u2019s homeless residents,\u201d said Kristin Miller, Homeless Services United\u2019s Executive Director<\/strong>. \u201cOur members continue to provide services despite not being paid, which means that some of our member organizations are forced to take out lines of credit to pay day-to-day expenses. Make no mistake \u2013 this is a crisis. Today\u2019s hearing is an important step towards increased oversight and greater functionality. We thank Speaker Adams, Finance Chair Brannan and the many City Council Members who continue to stand up and advocate on behalf of our member organizations and the people we serve.\u201d <\/p>\n

\u201cWe hear from many arts nonprofits who are waiting months \u2014 sometimes years \u2014 for the government to pay their contracts,\u201d said Kimberly Olsen, Executive Director of the New York City Arts in Education Roundtable<\/strong>. \u201cThis is not only unacceptable, but inexcusable for the thousands of teaching artists who rely on this money to live. We thank Speaker Adams for prioritizing the timely release of funds so that nonprofits and artists can continue providing a much needed service to our children.\u201d <\/p>\n

\u201cThe City\u2019s antiquated and inefficient contracting and payment process is threatening to derail the very initiatives the Adams Administration has prioritized,\u201d said Twyla Carter, Attorney-in-Chief and Chief Executive Officer at The Legal Aid Society.<\/strong> “Nonprofits\u2014tasked with delivering critical services like housing support and public benefits assistance \u2014are being forced to operate without payment for work already done. Without immediate and meaningful reform, providers will be unable to carry out this critical work, and it is New Yorkers in need who will suffer the consequences. The Legal Aid Society applauds the City Council for introducing legislation to fix this broken system and for convening today\u2019s hearing to further shine a spotlight on this pressing issue.\u201d <\/p>\n

\u201cRepresenting nearly 300 grantmaking institutions in the New York City metropolitan area, a powerful collective investing over $7 billion annually in our communities, Philanthropy New York firmly believes in the need to modernize New York City\u2019s contracting infrastructure and decisively address the debilitating effects of delayed payments,\u201d said Marlon Williams, Executive Vice President of Public Policy and Communications, Philanthropy New York<\/strong>. \u201cThis modernization offers a critical pathway to stability for our nonprofit partners, promising to dismantle the cumbersome systems that currently impede their essential contributions and allow the public sector to serve as an effective partner in supporting the nonprofit ecosystem. Recognizing the profound and growing urgency of this situation, we implore the Committee to swiftly champion solutions that will foster a healthier environment where these vital organizations can serve as the backbone of New York City’s social safety net and focus on their fundamental missions: to serve all New Yorkers with the dignity and support they deserve.\u201d <\/p>\n

\u201cTime and time again the non-profit sector has been told by the City to wait, that improvements to contracting and more timely payments were to come, and still the delays continue,\u201d said Keriann Pauls, Interim Executive Director, TakeRoot Justice<\/strong>. \u201cBut today is a day of action and we are thrilled to see Speaker Adams and members of City Council elevate this issue through proposed legislation and oversight, to bring about real change. Paying non-profits on time is essential to ensure our doors remain open and our services continue for New Yorkers who need them most.\u201d <\/p>\n

\u201cLate contract payments to the human services sector aren’t merely bureaucratic failures\u2014they’re a direct threat to the well-being of all New Yorkers,” said Jennifer Jones Austin, CEO and Executive Director of the Federation of Protestant Welfare Agencies (FPWA)<\/strong>. “The city must act decisively now, not only to clear the backlog of existing contract payments but to fundamentally repair a broken system that undermines the essential services nonprofits provide. In a city where 62% of residents face economic insecurity, we have more than just a fiscal obligation\u2014we have a moral imperative to create conditions where all New Yorkers can thrive. We thank the City Council for recognizing this crisis and its dual threat to the well-being of our city’s communities and the vitality of the human services organizations that care for them. Every delayed payment represents real people denied critical support when they need it most.\u201d <\/p>\n

\u201cMake the Road NY proudly serves some of the most vulnerable members of our community with essential health, education, and legal services, but we cannot do this critical work on unstable financial footing,\u201d said Sienna Fontaine, Co-Executive Director, Make the Road NY<\/strong>. \u201cChronic delays in contract payments force nonprofits like ours to make impossible choices\u2014delaying services, stretching already-limited resources, or fronting costs we cannot afford. This legislative package is a vital step toward a more equitable and functional partnership between the City and the non-profit services sector. Releasing 80% of contract funds upfront and increasing transparency will allow us to focus on what matters most: delivering justice, stability, and support to the communities we serve.\u201d <\/p>\n

\u201cWhen contracts and payments are delayed for many months, if not years, it puts extraordinary strain on non-profit human service providers partnering with the City and ultimately jeopardizes the ability of providers to deliver the services intended to be supported with these public dollars,\u201d said Jessica Rose, Executive Director of Brooklyn Legal Services Corporation A.<\/strong> \u201cWe applaud the City Council\u2019s efforts though this package of bills to try to address these challenges so that the City and their non-profit partners can more effectively and sustainably accomplish our mutual goals in service of the New York City community.\u201d <\/p>\n

\u201cA snapshot survey last month found that the City owes sixteen of our settlement house member organizations more than $90 million in late contract payments. Nonprofits\u00a0cannot run programs on IOUs from the City,\u201d said Susan Stamler, Executive Director of United Neighborhood Houses<\/strong>.\u00a0\u201cRight now, nonprofits are forced to take out lines of credit just to ensure their staff are paid and critical programs for New Yorkers continue. This is deeply troubling. I want to thank the Speaker and the City Council for taking the lead on this issue. Nonprofits deserve better.\u201d<\/p>\n

“Woodside on the Move has served Western Queens for nearly 50 years, not for profit, but for purpose. Yet while we meet and exceed our obligations, the City delays payments, stalls contracts, and forces nonprofits like ours to float services with money we don\u2019t have,” said William Jourdain, Executive Director of Woodside on the Move<\/strong>. “This isn\u2019t a clerical error, it\u2019s a failure of public accountability. If we were a year late, we\u2019d lose our contracts. When the City\u2019s a year late, there are no consequences. That\u2019s why we\u2019re calling on the Council to pass Intros 1247, 1248, and 1249. Common-sense, urgently needed reforms that impose real deadlines, ensure transparency, and begin restoring trust between the City and its nonprofit partners. We are not vendors, we are the City\u2019s human infrastructure. We deserve timely funding, respect, and the dignity of a system that works.”<\/p>\n

###<\/p>\n","protected":false},"excerpt":{"rendered":"

Bills would establish new city contracting agency, require faster payments, and strengthen accountability for delays <\/em> <\/p>\n

City Hall, NY \u2013<\/strong> Today, New York City Council Speaker Adrienne Adams, Council Members, and nonprofit service providers outlined legislative solutions to address longstanding nonprofit contract registration and payment delays<\/a> that currently threaten the delivery of essential services New Yorkers rely on and the stability of nonprofit organizations.<\/p>\n

…<\/p>\n

READ MORE<\/a><\/small><\/strong><\/p>\n","protected":false},"author":219,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2856","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/posts\/2856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/users\/219"}],"replies":[{"embeddable":true,"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/comments?post=2856"}],"version-history":[{"count":0,"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/posts\/2856\/revisions"}],"wp:attachment":[{"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/media?parent=2856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/categories?post=2856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/council.nyc.gov\/press\/wp-json\/wp\/v2\/tags?post=2856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}