Council approves reforms to city nonprofit contracting, including 50% advance payment on many contracts
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Summary
The council passed measures to reform nonprofit contracting processes, require agency reporting on late contract registrations, create an office of contract services, and require immediate 50% advance payments for many nonprofit contracts upon comptroller registration.
The New York City Council on Oct. 9 approved a package of measures aimed at improving the city’s nonprofit contracting and payment processes, including a requirement for partial advance payments to nonprofit contractors and the creation of a centralized procurement office.
Sponsors and the speaker framed the package as a response to long‑standing delays that have left nonprofits unpaid, interrupted services, caused debt and layoffs, and in some cases forced organizations to close. Intro 12‑49a would require human services agencies to submit annual reports on contract registration timing and to provide corrective action plans when agencies register 250 or more contracts (or $25 million in contract value) and more than half of those contracts were registered 90 days or more after their start dates.
Intro 12‑48b would establish an Office of Contract Services, led by a director who would serve as the city chief procurement officer with authority to coordinate procurement activities across mayoral agencies, conduct audit reviews, and provide training. Intro 12‑47b, sponsored by Speaker Adams and Council Member Julie Won, would require immediate advance payment of 50% of the value of a nonprofit’s contract with the city as an advance upon registration by the comptroller, with limited exclusions for emergencies and certain program types.
Speaker Adams described the reforms as a major change to protect service providers and stabilize the nonprofit sector. The floor discussion noted carve‑outs for emergency contracts, temporary housing assistance contracts processed by the Department of Homeless Services, and certain criminal justice or foster care contracts.
The items were amended and coupled on the general orders calendar and adopted as part of the package the council approved on the floor. Sponsors said agencies will need to coordinate to set administrative procedures for advance payments and to align procurement processes with the new office’s responsibilities.