Relates to requirements for certain contracts for materials, supplies, or services under $50,000; assures the prudent and economical use of public moneys in the best interests of the taxpayers; requires an authority in the city of New York to develop a procurement corruption prevention training program; makes related provisions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10286
SPONSOR: Rules (Rosenthal L) TITLE OF BILL:
An act to amend the public housing law, in relation to requirements for
certain contracts for materials, supplies, or services
PURPOSE OR GENERAL IDEA OF BILL:
To require the New York City Housing Authority (NYCHA) to develop poli-
cies and procedures governing the procurement of materials, supplies,
and services that are not required to be made pursuant to sealed bid
requirements.
SUMMARY OF SPECIFIC PROVISIONS:
Section one requires NYCHA to develop policies and procedures governing
the procurement of materials, supplies, and services that are not
required to be made pursuant to sealed bid requirements and provides
parameters for the policies and procedures.
Section two provides for the effective date.
JUSTIFICATION:
In February 2024, 70 NYCHA employees were arrested on federal bribery
and extortion charges related to the use of micro-purchases which are
not subject to competitive bidding requirements. It is alleged that
employees demanded over $2 million in payments in exchange for awarding
over $13 million in micro-purchase contracts, dating back to 2013.
The micro-purchase process can be a helpful mechanism to allow NYCHA to
make smaller repairs in a more timely manner. However, without proper
oversight it is ripe for abuse, ultimately leaving less funding avail-
able for crucial maintenance and repairs. This bill will assist NYCHA in
providing better oversight of how funding is spent and ensure residents
needs are being met efficiently.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
Undetermined.
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law. Effective immediately, the
addition, amendment and/or repeal of any rule or regulation necessary
for the implementation of this act on its effective date are authorized
to be made and completed on or before such effective date.
STATE OF NEW YORK
________________________________________________________________________
10286
IN ASSEMBLY
May 17, 2024
___________
Introduced by COMMITTEE ON RULES -- (at request of M. of A. L. Rosen-
thal) -- read once and referred to the Committee on Housing
AN ACT to amend the public housing law, in relation to requirements for
certain contracts for materials, supplies, or services
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The public housing law is amended by adding a new section
2 151-b to read as follows:
3 § 151-b. Additional requirements for contracts below a certain thresh-
4 old. 1. Contracts for materials, supplies, or services which are not
5 required by section one hundred fifty-one of this article to be made on
6 sealed bids shall be procured in a manner so as to assure the prudent
7 and economical use of public moneys in the best interests of the taxpay-
8 ers, to facilitate the acquisition of materials, supplies, and services
9 of maximum quality at the lowest possible cost under the circumstances,
10 and to guard against favoritism, improvidence, extravagance, fraud, and
11 corruption. To further such objectives, an authority shall adopt inter-
12 nal policies and procedures governing all procurements of materials,
13 supplies, and services which are not required to be made pursuant to the
14 sealed bid requirements of section one hundred fifty-one of this article
15 or of any other general or special law.
16 2. Such policies and procedures shall contain provisions which, among
17 other things:
18 a. prescribe a procedure for determining whether a procurement of
19 materials, supplies, and services is subject to a sealed bid and docu-
20 menting the basis for any determination that a sealed bid is not
21 required by law;
22 b. set forth when each such method of procurement will be utilized,
23 taking into account which method will best further the purposes of this
24 section and the cost-effectiveness of the method;
25 c. require adequate documentation of actions taken in connection with
26 each such method of procurement; and
27 d. identify the respective titles responsible for purchasing. Such
28 information shall be updated biennially.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15657-02-4
A. 10286 2
1 3. An authority in a city with a population over one million shall
2 consult with the department of investigation of the city of New York and
3 develop a procurement corruption prevention training program.
4 a. Such procurement corruption prevention training program shall be
5 interactive and include:
6 i. information concerning the federal, state, and local statues and
7 regulations related to gratuities and bribes;
8 ii. information concerning criminal liabilities related to gratuities
9 and bribes;
10 iii. examples of conduct that would constitute gratuities and bribes;
11 and
12 iv. information concerning employees' duties to report allegations of
13 bribery and corruption to the department of investigation of the city of
14 New York.
15 b. Such procurement corruption prevention training shall be provided
16 to all individuals with the respective titles identified in paragraph d
17 of subdivision two of this section on an annual basis.
18 4. An authority shall provide the individuals with the respective
19 titles identified in paragraph d of subdivision two of this section, in
20 writing in English and in the language identified by each individual as
21 the primary language of such individual, at the time of hiring and at
22 every annual procurement corruption prevention training provided pursu-
23 ant to subdivision three of this section, a compliant advisory alert
24 containing the information presented at such authority's procurement
25 corruption prevention training program and an acknowledgement form for
26 such individuals to sign stating that they have read, understood, and
27 agree to comply with the compliance advisory alert.
28 5. Every officer employee of an authority in a city with a population
29 over one million shall have an affirmative obligation to report, direct-
30 ly and without undue delay, to the department of investigation of the
31 city of New York any and all information concerning conduct which they
32 know or should reasonably know to involve corrupt or other criminal
33 activity or conflict of interest:
34 a. by another authority officer or employee, which concerns their
35 office or employment; or
36 b. by persons dealing with the authority, which concerns their deal-
37 ings with the authority. The knowing failure of any officer or employee
38 to report as required in this subdivision shall constitute cause for
39 removal from office or employment or other appropriate penalty.
40 6. An authority in a city with a population over one million utilizing
41 a pre-qualified list of bidders for contracts subject to this section
42 shall require all vendors on the pre-qualified list to attend a training
43 program developed in consultation with the department of investigation
44 of the city of New York prior to being placed on the pre-qualified list.
45 a. Such training program shall be interactive and include:
46 i. information about the authority's internal policies and procedures
47 governing all procurements of materials, supplies, and services which
48 are not required to be made pursuant to the sealed bid requirements of
49 section one hundred fifty-one of this article or of any other general or
50 special law;
51 ii. information concerning the federal, state, and local statues and
52 regulations related to gratuities and bribes;
53 iii. information concerning criminal liabilities related to gratuities
54 and bribes;
55 iv. examples of conduct that would constitute gratuities and bribes;
56 and
A. 10286 3
1 v. information regarding the vendor's responsibilities related to a
2 contract.
3 b. Upon completion of the training program in paragraph a of this
4 subdivision, vendors shall submit to the authority a signed acknowledge-
5 ment form stating: "I acknowledge and understand that offering, giving,
6 and/or accepting bribes, gratuities, and/or gifts is a criminal offence
7 under federal and New York state law".
8 7. Within ninety days of the effective date of this section, an
9 authority shall establish a schedule of reasonable costs for the fifteen
10 most common service requests, inclusive of related materials, which are
11 not required by section one hundred fifty-one of this article to be made
12 on sealed bids. Such schedule of reasonable costs shall be based on the
13 type of services and related materials. Any contract subject to this
14 subdivision where the cost exceeds the schedule of reasonable costs
15 shall include a written explanation for the additional cost. Such sched-
16 ule of reasonable costs shall be updated annually.
17 8. An authority shall display signage at developments and offices in a
18 conspicuous place accessible to employees stating the following:
19 "Offering, giving, and/or accepting bribes, gratuities, and/or gifts is
20 a criminal offence under federal and New York state law".
21 9. The quality assurance and compliance departments of an authority
22 shall conduct semiannual audits of the contracts subject to this
23 section. Such audits shall include but not be limited to the total
24 number of transactions, the average contract cost, the frequency with
25 which specific vendors perform work, recordkeeping, and compliance with
26 this section. The findings of such audits shall be posted publicly on
27 the website of the authority.
28 10. An authority in a city with a population over one million shall
29 report any irregularities related to contracts for materials, supplies,
30 or services to the department of investigation of the city of New York.
31 11. This section shall apply to any authority located in a city with a
32 population over one million.
33 § 2. This act shall take effect on the first of January next succeed-
34 ing the date on which it shall have become a law. Effective immediately,
35 the addition, amendment and/or repeal of any rule or regulation neces-
36 sary for the implementation of this act on its effective date are
37 authorized to be made and completed on or before such effective date.
