New Reporting System Will Increase Transparency
& Reduce Possibility for Fraudulent Billing
Comptroller
John C. Liu and Mayor Michael R. Bloomberg today announced that New
York City will become the first municipality
in the country to establish a comprehensive subcontracting database and
publicly report payments made by prime contractors to subcontractors,
which will greatly enhance the City’s – and the public’s – ability to
monitor billions of dollars worth of contract
activity. The new reforms will also strengthen the City’s capacity to
detect and address potentially fraudulent billing practices, further
ensure the timeliness of payments from contractors to subcontractors and
more seamlessly track the utilization of minority-
and women-owned businesses on subcontracted City work. The Mayor’s
Office of Contract Services and the Comptroller’s Office have been
working on this subcontracting initiative for more than a year, and
recently began a pilot program with vendors serving as
initial testers.
“Today marks the start of a new era of scrutiny for outside contractors,” said
Comptroller Liu. “Giving all New Yorkers the ability to keep an
eye on this information will give contractors 8.3 million more reasons
to spend tax dollars as prudently as possible. It’s great that the Big
Apple is setting another national benchmark
for government transparency.”
“From
creating a Citywide Performance Reporting tool, which allows the public
to track agency performance, to establishing the City’s Open
Data Portal, which makes more than a thousand agency data sets
available for public use, we’ve worked to make City government more open
and transparent,” said
Mayor Bloomberg. “These new reporting requirements will help us
to continue to lead the way in making government more accessible and
accountable to the public.”
“This collaborative process produced an effective, efficient system that will reduce the risk of waste and fraud,” said
Vanessa Champion, Chief of Staff and Special Counsel, Office of Comptroller Liu.
“By using the latest technology, we are furthering our goal of enhancing transparency,” said
Andrea Glick, Director of the Mayor’s Office of Contract
Services. “The new subcontracting database is a win for the City, and we
are thankful to our partners for helping ensure its launch.”
Beginning
this month, on any new contract valued over $1 million, all prime
vendors will have to disclose information on the City’s Payee
Information
Portal, including the names of subcontractors hired as well as each and
every payment to them. In June, the ceiling is lowered to contracts
above $250,000, which will ensure approximately 96 percent of all
dollars spent on City contracts are captured in this
new database. The work to design and develop this new tracking system
was completed by CGI, based on a fixed-price deliverable contract for a
cost of $1.6 million. In the event a prime vendor fails to carry out
their responsibility, the City has the right
to withhold payment until all requirements have been met.
The
City’s new requirements will create a central infrastructure to improve
oversight, further reduce the possibility of fraudulent billing
and ensure that the City is meeting its minority and women-owned
business enterprise goals. Since Local Law 129 was first enacted in
December 2005, certified minority and women-owned businesses have won
thousands of contracts – worth billions of dollars in
total aggregate value – in prime and subcontracts with the City of New
York.
Once
these new protocols are established, each payment and data set will be
fully integrated with the Comptroller’s Checkbook NYC fiscal
transparency
website – which was launched with the assistance from the Mayor’s
Office of Contract Services – placing never-before-seen subcontract data
in the public domain.
The
City modeled its groundbreaking reforms on the Federal Funding
Accountability and Transparency Act, which was signed into law in 2006
and
requires Federal contractors to disclose their subcontractors through a
searchable website. Unlike the Federal government, however, the City is
the first in the nation to publicly disclose both the names of
subcontractors and payments made to them.
“Citizens
Union commends Comptroller Liu and Mayor Bloomberg for working
collaboratively to provide more complete information about payments
made to subcontractors through the Comptroller’s transparency website,
Checkbook,” said
Dick Dadey, Executive Director of Citizens Union. “Given the
large size of certain contracts, it is important to provide New Yorkers
with greater detail regarding those subcontractors who perform services
for the city of New York. This new level of
detail will give New Yorkers more information on how their tax dollars
are being spent and on whom. Such greater public scrutiny could result
in cost savings.”
“This
initiative improves transparency of New York City’s operations and is
an important step forward for facilitating oversight of the city’s
contracting operations,” said Citizens Budget Commission President Carol Kellermann.
“New
Yorkers will be getting a much more complete picture of how contractors
and subcontractors are spending their tax dollars, thanks to Mayor
Michael Bloomberg and Comptroller John Liu,” said Gene Russianoff, senior attorney for the New York Public Interest Research Group.
“Congratulations to Mayor Bloomberg and Controller Liu,” said
John Kaehny, Executive Director of Reinvent Albany and Co-Chair
of the NYC Transparency Working Group. “Digitizing and reporting
subcontractor payments is a huge leap forward in accountability and
transparency. Though somewhat dry and esoteric, this
new reporting system has big implications for reducing corruption and
improving efficiency, and when fully in place, will make New York City
one of the most fiscally transparent cities in the world. When the
subcontractor data is put into the Checkbook NYC
platform, it will become instantly available for the rest of government
and the public to use.”
Comptroller
Liu and Mayor Bloomberg thanked the members of the Mayor’s Office of
Contract Services, including Director Andrea Glick and Deputy
Director for Research and Information Technology Ezra Polonsky, the
Comptroller’s Office – led by Chief of Staff Vanessa Champion – and
Robert Townsend at the Financial Information Services Agency for their
efforts on the project.
