Transparency and Accountability in the City's Use of Master Agreements
Committee on Contracts · June 17, 2026 · 1hr 50m
Source: https://hearinghearings.nyc/hearings/committee-on-contracts-transparency-and-accountability-in-the-citys-use-of-master-agreements-2026-06-17/
Video: https://councilnyc.viebit.com/vod/?s=true&v=NYCC-250-8-2_260617-130834.mp4

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While waiting: good afternoon and welcome to the New York City Council Committee on Contracts hearing. Please turn all devices on silent. Going forward, no one is to approach the dais. If you have any questions or you want to testify, please speak to one of the sergeants at arms.

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Chair, you are good.

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Thank you so much to the sergeant of arms. My name is Lincoln Restler. I have the privilege of chairing the Committee on Contracts. I would like to welcome my friend and colleague, the inimitable Gale Brewer. Thank you for joining us today.

Today we are holding an oversight hearing on the City's use of master contracts. Master agreements made up about 17% of the City's contract spending over the past four years. We paid over $8.8 billion for these goods and services. And yet there is no meaningful public record of what we purchased.

Master agreements are a critical and frankly helpful contracting tool. They are standing contracts that allow City agencies to quickly purchase laptops or hire security guards without running a new, years-long, painful procurement process. The City signs one master umbrella contract and every agency can then place individual orders off those contracts. It is essential that agencies have this flexibility in order to operate efficiently and serve New Yorkers well. But unlike regular contracts, where we have a detailed review process and transparent reporting on exactly what was spent, we currently have very limited information on purchase details for master agreements, or MA ones. Public records show only spending totals and not items, quantities and company details.

Last month, Comptroller Mark Levine released a compelling report on the master agreement contracts. His office found that between fiscal year 2022 and fiscal year 2025, the extent of the Adams administration mayoral agencies spent more than $8.8 billion through these delivery orders, issuing more than 28,000 orders each year. The estimated values agencies put on these contracts at registration bear limited relationship to what the City actually ends up spending. Agencies have overspent the combined value of these master agreement contracts by more than $1.6 billion over this four-year period. In 2023, DCAS registered an emergency master agreement with Garner Environmental Services. The estimated value was about $30 million. Since then, agencies have placed 103 delivery orders against that contract, spending more than $675 million — more than 20 times the estimated value of the contract. These were largely purchases to support asylum seekers, purchases that we absolutely needed to be able to effectuate quickly. But reporting later found that agencies paid wildly different amounts for the same service on this contract. H+H, for example — Health and Hospitals — paid $217 per hour for security guards, while New York City Emergency Management paid only $79 per hour for security guards, both far exceeding the City's rate on an existing contract at $24 an hour, which is a union contract for security guards at less than a quarter of the price that H+H paid.

Examples like this illustrate not that we need to eliminate this important contracting tool, but that we need to increase transparency and implement more rigorous standards and review to ensure we are planning properly and always getting the lowest price, to avoid wasting taxpayer dollars. The City's technology contracts are similarly opaque. OTI has a single citywide IT contract that covers 740 manufacturers and service providers. We have overspent on that contract by $2 billion without any reporting on what we actually purchased. There is no way to look at how many laptops or printers we purchased and how much they cost. While agencies are collecting invoices before making payments, without centralized reporting on purchases it is impossible for us to identify patterns and discrepancies between agency purchases.

Today we are hoping to gain more insight into the current review practices and protocols at MOCS, DCAS and OTI, and we hope that the administration is committed to working with the Council to increase transparency and oversight of this spending. I really do appreciate that the Mamdani administration has made clear that they are committed to identifying cost savings and efficiencies in contracts, and we hope to work together to identify additional savings that can be found through improved review protocols and systems upgrades.

Before we begin, I would like to thank our terrific Contracts Committee team for their hard work in preparing for today's hearing. Senior Counsel Alex Poling was very excited about this hearing and unfortunately has a sick kid, so I know he is watching from home. We appreciate all your help, Alex. And our terrific committee counsel Joe Harrington-Frazier, who transferred with me here from the district, although we still help out over there as well. Our policy analyst Alex Oblon, financial analyst Owen Kutowski, and the brains of our operation in Council District 33, my chief of staff Molly Haley.

I would now like to turn it over to the committee counsel to administer the oath and thank the panelists for joining us today. All right, we will now hear testimony from the administration. Before we begin, panelists please raise your right hand.

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When ready. Good afternoon, Chair Restler, CM Brewer and members of the Contracts Committee. My name is John Coté-Sowers and I serve as the Deputy City Chief Procurement Officer at the Mayor's Office of Contract Services.

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I am joined by Roman Goffman, Deputy Commissioner of the Office of Citywide Procurement at the Department of Citywide Administrative Services.

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Gail Tang, Deputy Commissioner of Financial Management and Procurement at the Office of Technology and Innovation, and Chantal Santos, Deputy Commissioner for Legal Matters. Thank you for the opportunity to testify today regarding the use of master agreements.

MOCS serves as the City's central procurement oversight and policy office. In that role we support agencies navigating the City's procurement framework, promote consistency and efficiency across the City's contracting processes. Procurement is one of the ways City government delivers for New Yorkers. Agencies need goods and services to keep buildings operating, maintain technology systems, support programs and respond to changing needs. At the same time, public purchasing must be accountable, competitive and understandable.

Master agreements are one tool the City uses to meet those responsibilities. They allow the City to establish contract vehicles in advance for goods and services they need, even when the exact quantity or scope is not known at the time of the agreement. By combining similar needs across agencies, master agreements also allow the City to use its purchasing power to seek better pricing and value than an individual agency would be able to obtain on its own.

This helps agencies avoid starting a new procurement each time a common or recurring need arises, while preserving the procurement controls that apply to City contracting. MOCS acknowledges the Comptroller's review and looks forward to continued conversations around improving transparency into the agency utilization of master agreements. Today's hearing is an opportunity to explain how these agreements work, why agencies use them and how the

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City can continue improving public understanding of agency usage over time. For goods, master agreements allow agencies to purchase from agreements that have already gone through a competitive process to establish fair and reasonable pricing. This is particularly valuable when the City can leverage the competitive market, using the collective needs of the entire City to encourage competition and secure better pricing than individual agencies would be able to achieve on their own. These agreements can support recurring needs such as equipment, supplies and other goods used across multiple agencies.

For services, master agreements generally establish the overall scope, eligible vendor or vendor pool, and pre-negotiated terms, conditions and pricing. When an agency needs a specific service, the agency issues a task order that defines the particular scope of work, pricing, payment terms and other details needed for that agency's use of the agreement. Task orders allow the agency to tailor the assignment to its actual need while using the contract structure that has already been established through the procurement process. Depending on the structure of the agreement, the assignment of work can occur through nondiscretionary or discretionary rotation, additional competition such as a mini-bid or mini-RFP process, or another process established in the terms of the agreement. Master agreements also include different pricing and payment models, including maximum rates, milestone-based payments or payment after successful delivery.

Taken together, this structure allows the City to move more efficiently without requiring agencies to start from the beginning each time a similar need arises. It reduces duplicative procurement work, creates a more consistent structure for agencies to use and allows the City to leverage its purchasing power where multiple agencies have similar needs. The goal is not to avoid oversight. The goal is to establish an appropriate procurement vehicle in advance so agencies can access goods and services efficiently when the need arises.

The process does not end when a master agreement is established. Master agreements remain subject to agency chief contracting officer review, MOCS review where applicable, contract registration and Comptroller audit authority, and ongoing contract management responsibilities after award. Before implementation, master agreements are reviewed and registered consistent with the City's contract registration requirements. For master services agreements, related task orders provide additional detail about the specific assignment and are also registered. For other master agreement structures, agency usage is reflected through purchase orders, FMS information, agency records and related procurement documentation.

Those steps are important. They help confirm that the agreement has gone through the applicable procurement process, that the City has the authority and funding to proceed and that the agency remains within the scope of the terms of the underlying agreement. At the agency level, the use of the master agreement still requires agencies to define their needs, document the goods or services being purchased, confirm funding availability and follow the applicable purchase order or task order process. In other words, the existence of a master agreement does not eliminate agency responsibility for appropriate use, contract administration or fiscal controls.

One area where terminology can create confusion is the distinction between MA1 and MA1 agreements. At a high level, MA1 agreements are master agreements that allow agencies to issue orders — known as direct orders or delivery orders — against the pre-established contract. These agreements are often used for goods or other situations where the contract establishes available line items, pricing or other terms in advance, while agency-specific quantities are determined as the need arises. One simple example is a contract for the purchase of window air conditioners.

MA1 agreements differ from master services agreements, which generally involve a structure where the master service agreement is registered and issued, and agencies later issue task orders for specific assignments. Task orders define the particular scope of work, pricing, payment terms and other details needed for the agency's use of the agreement. These agreements are often used for services where agencies need similar types of support, such as technical assistance, professional services or quality assurance, but where the specific scope of each assignment depends on the agency's need.

Based on a preliminary internal review, the City has approximately 652 active MA1 contracts whose aggregate registered value is approximately $7.6 billion, and approximately 552 MA1 contracts whose aggregate registered value is approximately... These agreements represent a significant procurement universe and are used across agencies to support goods, services, technology, construction and other recurring or citywide needs.

The aggregate registered values reflect the potential spending by the City through these master agreements, based on anticipated agency needs and historical utilization patterns. Realized spending can be significantly different and depends on future agency purchasing decisions and operational requirements. As master agreements are used across agencies, the central transparency question is how agency activity under the contract is reflected over time.

The Comptroller's report focuses attention on that issue: how agency-level usage of the master agreement is captured, presented and understood. That distinction is important to public trust in procurement and it is also important to ensure that oversight discussions are grounded in how these agreements actually function. At the same time, it is important to distinguish between contract-level information and agency-level usage information. For many competitively procured contracts, including DCAS-administered commodity contracts, the underlying bid includes the line items that describe the goods available through the contract. In those cases, the contract record provides information about what can be purchased through that agreement.

A separate question is how agency usage is reflected after the master agreement has been established. Once agencies begin purchasing against an agreement, oversight entities and the public want to understand which agencies are using it, what quantities are being purchased, which purchase orders or task orders are being issued and how spending changes over time. Some of that information is captured across different City systems. However, those systems do not always present information in a single unified way. As a result, a complete picture of agency-level usage requires looking across multiple data sources, depending on the type of master agreement and the way agency activity is documented.

That is the core visibility challenge. It should not be confused with a lack of procurement authority or contract structure. Rather, it reflects a system and data limitation on how downstream usage is captured and displayed across agreement types and City systems. MOCS supports continued conversation on how to make this information easier to understand.

Any discussion of transparency should therefore distinguish between the master agreement itself, which establishes the contract vehicle, and the agency-level purchasing activity that occurs under the vehicle over time. Master agreements can support consistency across agencies, but consistency does not mean every agency will use an agreement in the same way or at the same level. Agencies have different operational needs, service environments,

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volumes, locations and timing, and those differences can affect what is purchased or how services are scoped. The value of a master agreement is that those needs are addressed through a common procurement structure rather than through a separate, uncoordinated procurement by each agency. This structure can support competition, consistent terms, established pricing and better use of the City's collective purchasing power.

For that reason, differences in agency usage or cost do not necessarily mean inconsistency or a lack of value. What matters is whether agencies are using the agreement within its scope, under the established terms and conditions set by the procurement and through the applicable purchase order or task order process.

That is the balance master agreements are intended to support: flexibility for agencies to meet specific needs and a common procurement structure that promotes consistency, competition, oversight and value. In closing, master agreements are an important part of the City's procurement toolkit. They help agencies meet common and recurring needs efficiently while remaining in line with the applicable rules, registration requirements, oversight review and audit authority that governs City contracting.

This hearing also reflects the importance of clear public visibility into how master agreements are used over time. That discussion benefits both from a citywide procurement perspective and the operational experience of agencies that administer specific contract vehicles, including DCAS and OTI. MOCS looks forward to continued work with the Committee, the Comptroller, OMB and agency partners to strengthen procurement transparency while preserving the tools that help agencies deliver services effectively. Thank you for the opportunity to testify and I am happy to answer any questions.

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Great, that was helpful and clear testimony. Thank you very much for providing it. I really appreciate it and thank you for coming back to the Contracts Committee again, John. Good to see you. So I want to thank our whip, the North Shore's own Council member, for joining us, as well as CM Vernikov from the best borough. Do you have anything? Yeah, go ahead, thank

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you so much, Chair, and thank you so much for joining us here today. What records are

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Created when an agency contracting officers make delivery orders under a master agreement. So the structure, the document name that would be referenced from a master agreement, that is an MA-1.

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The resulting order is a DO-1. For a master agreement, the resulting task order is called the TO-1. Thank you. What steps must be taken for agencies to justify the use of a master agreement rather than a conventional contract?

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It is all part of the pre-solicitation review that goes into the procurement process. Overall, the agency would have to include its justification for the use of the procurement method, why it is establishing the contract that it needs, and would come with supporting documentation.

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So who would drive that? Thank you. So who would review that and approve that justification?

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Well, it begins with the individual agency that seeks to set up that master agreement. I would defer to my colleagues here who would speak to what would drive them to begin this process, but DCAS would have a review in that.

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Pre-solicitation review before anything is released. But I will defer to my colleagues. Thank you.

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Really, how the DO-1 process starts, or the master agreement — what steps need to be taken for agencies to justify the use of the master agreement rather than a conventional contract, and who reviews and approves that justification?

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So for the use of master agreements, they are put in place to be readily available for agencies to use. They do not have to have a justification to use them. For DCAS-specific contracts, part of our Charter mandate is that any goods purchased by agencies over a certain dollar value automatically — if an agency has a need for a line item off of that contract, they are allowed to use it. There is no justification required. There are certain contracts that do have additional buyer approval, where we review the direct orders that come to us before we allow the purchase order to go through the full systematic approach before it gets approved.

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Thank you. And so lastly, is there any reason why a request for the use of a master agreement would be turned down?

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So just to clarify, agencies are not requesting to use master agreements. They are readily available. There are certain items, certain contracts that we do for NYPD — like firearms, bulletproof vests, furniture — where we have buyer approval. They are still allowed to use it but they need to submit it to us and we have to confirm that it is used appropriately. So another agency cannot go buy a firearm unless it is one of those agencies like DOC, DCAS, and so on. Thank you so much, and thank you.

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Chair, CM Brewer, would you like to ask any questions?

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You want to go? Go ahead. I am doing the Manhattan delegation budget. She is double — wow, double-fisting. Okay, so I will jump in and you will let me know when you are ready. So I just want to say firstly, and I hope my opening was clear on this, that I think master agreements are a helpful tool. They are a good thing. The premise of the hearing is not to question the existence of master agreements or to imply that there is something problematic about them as a procurement vehicle. The goal — the concerns that were outlined in the Comptroller report and that I share — are: do we have the right transparency and oversight to ensure that we are spending as cost-effectively as we can be?

So you outlined this a bit in your testimony, but could you just help me once again to explain the difference between MA-1s and TO-1s? Who makes the determination of whether to use an MA-1? When the agency makes a determination to use an MA-1 versus a TO-1, why are they choosing one or the other? I want to make sure I understand.

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Your question — are you asking when the contracting agency that sets up that master agreement, what is the decision-making process to set it up one way versus the other? Yes. I think it is nuanced, so I will not speak entirely on behalf of, or put words in the mouth of, my colleagues here, but I will defer to them to add to this. It is all a matter of what the intended contract intends to provide and what the scope of those overarching terms and conditions are.

What I mentioned briefly in my testimony is that you would typically see MA-1 contracts for goods-based or commodity-based contracts, which is a very simple list of catalog items, and you are placing an order for a particular item and that direct order is placed to the vendor for fulfillment. Something a little bit more in-depth in scope — the work that is being requested — is that task order process, the TO-1. It is also present when you have a competitive process among multiple master agreement holders and then you introduce a competitive task order process that would define more detailed services specific to the agency's needs and include different pricing.

Now, the master agreement sets ceiling prices, which means in a competitive process you can actually drive that pricing even lower if you are introducing that level of competition. So that is what those CTA-1 documents, or contracts resulting from a TO-1, would result in. So the TO-1 has a competitive process that you can go through to potentially drive the price down, and with an MA-1 you are just buying off of the existing

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vendors. At a very high level, yes, that is right.

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Does anyone want to add on that? I would just say that everything is correct. Almost all of our goods are done as MA-1s. We have clear line items for what agencies are purchasing. The TO-1 instructions are set to just our service contracts. It is really like John said — for security guards, even though we are awarding one vendor for a borough, we still want agencies to do a task order because they outline what buildings, where they are going, if they need specific trainings. There are different trainings for security guard services, and those task orders add on to the scope of work of the original master agreement, because the master agreement is just the responsibilities of a security guard company on how to provide security guard services. The specific responsibilities are outlined in task orders.

But even in our service components — pest management, for example — we have a line for setting traps and things like that, and it is just an MA-1 because we know exactly what we want the pest management service company to do. But not to fixate on this example — Deputy Commissioner, I think I grilled you about this a couple of years ago when I was chairing... but the Garner contract is an MA-1 and that does not precisely fit the description that you both gave. I understand there are exceptions. I guess why and when do those exceptions exist?

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So the Garner contract was procured a little bit differently. It was not a competitive procurement by DCAS. It was an intergovernmental — I think when we last testified about this, we were utilizing the federal government's schedule to contract with that. The line items are predetermined and were pre-negotiated by the federal government. We are just piggybacking off of that contract. In those scenarios, that contract has been mostly used by NYC OEM for coastal storm flooding and things of that nature, and there are predetermined line items. Those line items, as I testified before, are not-to-exceed, where you can negotiate the line items down. But for Garner itself, it is a blanket purchase order. We have a coastal storm flooding or Hurricane Sandy situation and we need to act quickly, so we are issuing an order and then we are determining the full scope of work while we are having conversations with Garner. They would submit a quote and we would approve that quote.

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Why is the information on delivery orders, or DO-1s, not... I am sorry, I have to remind myself to keep the mic on.

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There are different systems in the way this information is

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collected. While it is collected in different ways, it enables the individual agencies that are managing those contracts the ability to manage their contracts. But there is no uniform way to bring that information together in a more meaningful way that can be centralized and shared out. That is part of what we strive to improve on with transparency and the improvements that we make to the level of reporting, and we look forward to doing that and working with all the stakeholders involved in that process.

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But today, because that is done in different ways and captured in different ways,

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therein lies the challenge. Why is it not captured in Passport? Why is it not captured in Checkbook, like our primary transparency reporting tools? I think — this is just my own speculation — I believe it was just the way Passport had been rolled out. It was going with the more complex nature of the types of contracts and procurement that would be done, and the vehicle for these master agreements was done in a more predetermined, simpler way. So you set them up and you are placing your orders. They were already done in different systems. Deputy Commissioner Goffman had mentioned that DCAS has a system

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to place direct orders. They have managed the incoming for that, and so that was a process that was already in place but had not necessarily been transferred over to Passport entirely. That is just one example of the many reasons why we are still moving forward to that central, complete, transparent process, but we still have more steps to take. For it to be incorporated into Passport would require the agencies that hold the master agreements to work with the agencies buying off of those master agreements just to input that information to Passport. It would require some technology investments to improve Passport. Are there ways to think about it, or is there an alternative approach to create the transparency here

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that we are seeking? Chair Restler, I think that is an excellent question, but I think it might deserve additional follow-up and some careful consideration about how I can fully answer that question.

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What about incorporation into Checkbook? I do not know how everything gets sent to the Comptroller — forgive my ignorance — but is that just emailing the Comptroller every other day? I would not presume to advise that. But in all seriousness, for it to be incorporated into Checkbook — if Passport does not have it, if it is not an easy adjustment within Passport to make modifications there — is there another mechanism that we have to bring some transparency and oversight to this?

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There is admittedly somewhat of a disconnect about how agencies are processing the data that is collected and what ultimately gets transferred, so that would translate into something in FMS and Checkbook would be able to provide.

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That is part of that deeper discussion to identify how we can achieve that.

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And it is something that I do not think I could reasonably answer here and now. It deserves a follow-up, because I would imagine this is the largest tranche of City spending that is not tracked in Passport or Checkbook. Is that your understanding as well?

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I think you do not capture a hundred

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percent. I think that is accurate. And do we have a break?

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I could go all day, so I will do one more and then I will kick it over.

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I will not, because there are various things to do. But what kind of breakdown do we have of the $8.8 billion that the Comptroller identified over the Adams administration that was spent through MA-1s? What breakdown of that spending do we have through each agency, through how they spent the money? If we wanted to piece this together, how would we go about doing that? What information do you have today? Do you know what the breakdown is of that agency spend? I think that would involve us having to discuss individually with each agency that has these master agreements set up. We have some in the room, but I would not presume to say that is the entirety of the agencies across the City

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that have master agreements, and I think it would require some additional input from them. Could either of you

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speak to — of the $8.8 billion during the Adams administration, what percent of the master agreement contract spend was through your agency? I will just say — I do not have the numbers in front of me, but our agency does have the ability to do spend reports on all our contracts by fiscal year and by which agencies submitted those direct orders. So we have overall spend. How hard would it be

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for you to produce a report like that?

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I would have to get back to my team. It could be produced. There is some manual review in there, but we have produced reports like that in the past. We can

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produce the reports. Do you think that every agency could produce a report like that? I know that DCAS can produce spend reports on our master agreements by agency, but when it comes down to line items, that would have to involve going back to the agencies to review individual invoices where they would see what they bought and how they spent their money. And what about OTR? It would be the same for OTR. You could pull a report together. It would not be too heavy a lift. We would be able to see the overall spending by the agency, but as my colleagues have mentioned, not to the line item details without getting that information from the agency that made the purchases. Yeah, I

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mean, it is just a little bonkers to me that we do not have that. It is a lot of money that we are spending through these vehicles, and it is a good thing — we want agencies to be able to spend efficiently. It is not that I do not want it to happen. It just seems kind of bonkers that we do not track how that money is being spent and look at it all together to evaluate prices. How is each agency spending off of your contract? Are they getting the best prices? It is such a significant amount of money — billions of dollars a year — I do not understand how we do not have a centralized tracking of it.

And I do not totally understand what the path would be to do it. I mean, asking every agency to pull these reports — they could not even indicate on those reports the spending unless we were to cross-check every agency and put it all together. It would be a laborious process. Chair, you raise an excellent point, but I think this might require some additional in-depth review on our part and we would be happy to come back to you with that. Okay. I mean, I wonder if there is just some mechanism to automate the invoicing into the reporting, because the companies that agencies are buying from — they know exactly what is being spent and who is buying it. Is there some easier mechanism where they can submit the information back to the agencies that hold the master agreement so that you have that information available and can then report that into... like, how do we get there? That is what I am trying to get at.

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Thank you, Chair. So I will say for DCAS specifically — first on the pricing statement, outside of the Garner contract which has not-to-exceed pricing, every other contract has pre-negotiated pricing and everybody is paying the same price across the board. Not-to-exceed means they are not paying more than a certain amount, but that does not mean they are paying the same price. So Garner is the only one with that not-to-exceed because we did the intergovernmental contract. All other contracts that we have are straight-line pricing. There is no lower, no not-to-exceed — it is what it is, the same price. Yes, we also have set discounts for all the different manufacturers. Agencies are able to negotiate on an agency level and could get better discounts if there is significant volume purchased at once. That is essentially a not-to-exceed.

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Though they are set to discount pricing for each of the manufacturers, so

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this is set discount pricing. You pay

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less — you could potentially pay less, but you would not be paying more. Right?

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Not-to-exceed. Okay, I will stop for a moment and pass it over to my friend CM Burke.

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I just have a general question. In terms of transparency — you are thinking that obviously DCAS is here, but do you think every single agency has some kind of master agreement contract? How would we know which agencies do or do not? Like, you might think

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for instance... there are some agencies that have master agreements. I think you just mentioned that Emergency Management has master agreements as well. But each one of them independently will manage their contracts as they see fit to do, and with that might come a variance in the types of reporting and information that they gather and use. So that is the difference that I was mentioning earlier in how this information is collected,

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because they manage it individually per agency. Yes. Okay.

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But is there no agency that sort of keeps tabs — like OMB or somebody — that keeps tabs on whether they are managed correctly? Well, how they are managed correctly is through the review of the task order process and the invoicing. You are making sure that after the master agreement has already been set through the procurement process, it is registered...

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And then you are operating under those terms and conditions, and then it just becomes a practice of reviewing the request that becomes that task order. And then when an invoice comes against that task order, you are reviewing that. That is an invoice validation and payment process, which I think is something different than what you are describing.

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Yeah, I mean, the other question I have is how would you determine that you are going to need a master agreement? For that... say for instance an agency decides that this is... how would one know that that is what one wants? How would one decide? How would one get to you? Do you need permission to decide, or would the commissioner just say we need a master...

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How would that take place? So I believe that there is nothing short of information sharing that the City does with mayoral agencies about the availability of master agreements for use. There is no sharing?

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No, there is. So they are aware that there are master agreements in existence, and whether or not they choose to use them is entirely at their discretion based on a series of criteria. Does it meet certain criteria? Can you operate independently from using a particular contract? Say a DCAS commodities contract — if your need is within a hundred thousand dollar need, you can operate independent from that contract. A DCAS contract, to take advantage of it, service contracts are optional because the terms and conditions set in these master agreements might not be a perfect fit for that individual agency's need. So while they might consider it, which they could reap all the benefits of the pre-negotiated terms, rates and conditions, and it has already gone through a procurement process, if it is not that perfect fit that they need, then they might have to look to procure on their own.

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Okay, all right. I mean, the only one that I had heard is the one that the Chair mentioned, which is the Garner one. I mean, that is the one that has been in the papers quite a bit. So what I mean... this is what I should know, but would accelerated procurement — what is that? Is that the same thing or is that something different? What is accelerated procurement? Is it the same?

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Thank you, Council Member. So accelerated procurement is a procurement method. We do have master agreements that result from an accelerated procurement method. The method really allows us to quicken up the procurement process by submitting the contracts to the Comptroller for audit rather than registration, which saves us around 30 days. And then it also, in the rules, allows us to bypass public hearing. But the caveat to that is that all our contracts are done by competitive sealed bids that are done by accelerated method, and competitive bids are not required to go to public hearing either way by the rules. We only have limited commodities that are done by accelerated method because that is all

(00:41:52)

allowable. It is things like our food contracts and chemical contracts that are the only ones done by accelerated method, because of price differential — stuff fluctuates.

(00:42:05)

Correctly, because I think according to this you did something with boxed water that got into... I guess the vendor predictably defaulted within a month because I guess it was a small vendor. What was the status? The vendor was a certified MWBE. We do these procurements by competitive sealed bids, so we have to award the lowest bid that is responsive and responsible. The vendor was responsive and responsible and was the lowest bid. We did our quality assurance checks. The vendor did submit supply samples to us that we reviewed. It met the criteria. We awarded them the contract. At the time when that was ready for us to start getting deliveries to replenish our boxed water supply, they were unable to perform. The procurement rules have specific provisions that allow us, where there is a vendor that does not perform, to default them and move on to the second lowest bidder or anybody else that is able to perform. We did that quickly. The water we got — this water is only stored for emergency purposes. It is not distributed water. It was not a rush.

(00:43:05)

It was not a rush. We had enough water in the storehouse, as you saw on your walk-through.

(00:43:11)

Yeah, I saw a lot of water. A lot of water.

(00:43:12)

I love that warehouse, by the way. I could spend my life in there. I love that warehouse.

(00:43:17)

We had so much fun in that warehouse. Oh my gosh.

(00:43:21)

But there is $625 million of accelerated procurements, 346 contracts. So many of those must be food. Must be those.

(00:43:31)

Food counts about 60 to 80 contracts a year, about $62 to $70 million. I think the big number is the fuel, heating oil and renewable diesel that we have — that fluctuates also. Is that why we are doing

(00:43:45)

that? That fluctuates also.

(00:43:47)

It fluctuates. But the large scale of those contracts are really fuel and heating oil and diesel and renewable energy that we do as accelerated, because fuel is considered a chemical. Those contracts are sometimes in the hundreds of millions, like our renewable contracts. So that is why you have such a large number. But all are accelerated as chemicals or

(00:44:07)

food. And those also go through the same procurement process as any other contract. That still requires MOCS approval, Law Department review, own approval. What we do forego is registering the contract, but the contracts still go to the Comptroller within 15 to 30 days to ensure that they get to do a post-audit on

(00:44:30)

them. But they are not in Passport or some other... they are still in Passport.

(00:44:35)

Unlike the others. All right, thank you.

(00:44:37)

Just to continue on the accelerated procurement questions — I think that what we found was that ACS accounted for 66% of the DOE's use of accelerated procurement. That is all food.

(00:44:50)

So yeah, ACS are our biggest clients for food purchases. Juvenile detention centers — oh, for the juvenile detention facilities. I did not understand. So you got it. So it is for the food at the juvenile detention facilities. Yeah, yeah.

(00:45:06)

Would do the same.

(00:45:08)

And there are small purchases, but they make up a lot of the number of purchases.

(00:45:12)

Okay. A lot of New York State source fresh

(00:45:14)

fruit. I want to make sure it is all New York State fresh fruit and vegetables.

(00:45:20)

I do not really know where to go with that.

(00:45:22)

Do not mess with Gale. And what about NYPD? Why are they using accelerated so much?

(00:45:28)

NYPD — a lot of it is fuels. They have gas stations at their precincts, so a lot of it is fuel for NYPD. We do also do food — the police horses. We do pet food and dog food, so they use that as well. Okay.

(00:45:47)

Have we done any review to determine if we could reduce spend on accelerated procurements? Like, are we getting the best pricing through this process?

(00:45:56)

So again, they are competitive sealed bids, so it has to be the best pricing to win it. I think one of the things that I would like to say is that on the estimated portions, we are not estimating the value of the contracts — we are estimating the usage. The bids that come in against the usages is how we get the values of these contracts. The usage reports are based on historical spending and historical usages, and that is how we put these contracts together. Pricing obviously fluctuates up from the last three years that we have done a contract, so the pricing does go higher than it previously was. But the estimates are really based on previous usage.

When it comes to things like fuel, we do a usage report, we register these contracts, and then we had 20 days of below-freezing temperatures. Heating oil usage went up for all DOE schools and City buildings, so that contract went over its estimated usage and spend. Obviously we cannot forecast situations like that up front. Okay.

(00:46:58)

I am just going to come back to trying to understand the different reporting opportunities. I am not deeply familiar with the different technology systems that we have. But could you just help me understand how we can try to think about ways to capture this data more clearly? Passport has a catalog that I believe allows for effective tracking of what agencies are spending and tracking the invoices. Could we get all the relevant ones into those systems? Is that a way for us to capture the spend and track it more carefully? I know you are saying that this requires further conversation and I appreciate that, but I am going to keep asking the questions and keep trying to get to

(00:47:51)

that. That is okay. I appreciate your thoughtfulness and your persistence in this area. Not annoying at all — it is a fair question. But in order to give you the respectful response that you deserve, it does require a more meaningful, in-depth discussion with the various stakeholders that we have in this process, who manage these different types of contracts and employ the different types of ways that the direct orders are processed, and then find the best way that we can report that in a meaningful way so that you and the Committee have information, the public in general has something, and more importantly, the agencies have better data in front of them so that we can reasonably manage and predict what we want to see in future contracts. Who are the stakeholders do you think we need to be around the table to figure this out? Well, I think I have a good portion of them with me right now. Okay.

(00:48:56)

I think that might be where the conversation begins, but it expands to others that I may not even be aware of at the moment. But I will certainly — it is something that I would certainly offer to follow up with you on. What information do you receive from DCAS about

(00:49:21)

purchases off of the master agreements that they hold? I mean, from our perspective, 30% of our contracts are currently in Passport. That MOCS has access to — MOCS does review. Does that represent your total contracts or your master agreements? Master agreements.

(00:49:41)

The master agreements. I thought all master agreements were in

(00:49:43)

Passport. That is it — all procured through Passport. But a lot of them are hosted on DCAS's direct order system.

(00:49:52)

So, 30% — just so I am following — 30% of your master agreements

(00:49:57)

are in Passport. And does that mean that the purchasing off of those 30% of contracts is fully available in Passport for all of us to understand? Yes, yes, yes. So whatever — why, so

(00:50:10)

why — just why is 30% in there and 70% not in

(00:50:14)

there? So there are a lot of contracts that have other means or methods. It is not just a line item to just pick from a list. Like soap.

(00:50:25)

Passport is supposed to be like the Amazon of purchasing. Ah, there are situations where some of our contracts, like the Garner contract, like our security guards contract, are not just a line item purchase order. You have to do other ways of purchasing it. So it is hosted on our direct order system, but we are slowly moving those contracts as we re-procure them, currently as much as possible

(00:50:50)

and into Passport. You have been in this position for a chunk of time now. How long have you been Deputy Commissioner? Five years. For five years. Five years ago, what percent of your master agreements do you think were in Passport?

(00:51:04)

I do not think that functionality of Passport was live five years ago. I think it only started to go live towards the end of COVID, and then during COVID, DCAS was involved heavily in

(00:51:17)

procurement. Am I hearing you correctly that as you reissue each new master agreement, you are incorporating that information into Passport? The purchasing off of the direct orders off of that agreement — is what the agency spends available in Passport? If I pick your agency — DHS is buying things off of a contract, a master agreement that DCAS holds — is that purchasing available? Is the information of what they are spending available in Passport?

(00:51:46)

So I think I will let you follow up on that. And I think that again, we have spend reports on every agency.

(00:51:53)

I think there are spend reports in Passport. I believe you could pull it from Passport. I think we have received a report recently. We do run our spend reports out of FMS, which is the Financial Management System, that more accurately reflects because a lot of the invoice payments historically have been done through FMS directly, and that is where we pull spend reports from. But again, for all contracts, we have the ability to run spend reports on individual agencies against

(00:52:24)

our contracts. Okay. So just to make sure I am following — for the 30% of contracts that are in Passport, of your master agreements in Passport, that provides insight into... all right, if we were to understand what agencies are spending off of those contracts, we would have to look at your spend report separately to understand that. That is not tracked in Passport — what the agency spend is. Yeah.

(00:53:01)

It is for the master agreements that are set up and in use. So the direct orders placed through Passport — that is available. But it does not capture 100% of

(00:53:14)

the master agreements that are out there. Okay, okay. And what percent of your... you have one major master agreement, you have multiple — how many master agreements do you have? Apologies. We also have a number of master agreements tracked in Passport. I mean, they are processed in Passport, but for spend reports, similar to DCAS, we also pull out the detail reporting. When delivery orders are placed under a master agreement, is Checkbook able to record that information? I believe Checkbook does not have the order details of an order placed, but rather the payment made. Okay. And I guess what I am struggling with is — we have the spend reports from the agencies that are tracking. But you have spend reports from the agencies, so you do know what each agency has bought off of your master agreement.

(00:54:33)

You have that, and what they spent, and what deliverables they received. You have all of that information — both DCAS and... for everything that is spent, right? You have that. You could conceivably run a report today that shows all of that

(00:54:51)

information. So from my understanding — and I will get back to you on exactly the reports that I received from my team — it is encumbrances against, meaning that they issued direct orders or purchase orders against a master agreement, and the total invoices paid against that same master agreement. But it

(00:55:07)

would not show what they bought.

(00:55:09)

Yeah, because the information in FMS is just line items of encumbrances of budget codes. It does not actually — FMS does not allow for items to be captured in there on reporting structures. Okay, okay.

(00:55:30)

So you said 30% are hosted on Passport catalog basically. Do you know how many are on punchout? A punchout is a catalog of...

(00:55:41)

Punchout is a type of contract, and they are hosted — I think most of them are hosted on Passport. I would have to check to confirm. But punchout is just a

(00:55:52)

contract that has a catalog associated to it. So like our contract with Staples, where you log in and place orders like that and it gets delivered. Okay. How do you decide which go on Passport and which do not?

(00:56:10)

So it depends on how we procure. If we are procuring a catalog contract — so some contracts like maintenance, repair and operation catalog — the Staples one would be a good example. They have a full catalog. We are not going to bid out 10,000 line items for every

(00:56:27)

pencil. So we go against a catalog and the bid price is a percentage discount off of MSRP to the general public. We have other catalogs like that also for plumbing supplies and electrical supplies, where there are thousands of line items. But instead of calling out all thousand line items, we show a catalog and vendors bid a percentage discount off the catalog.

(00:56:53)

Sure, sure. The Commissioner is watching and she will be with you. Knowing her for 40 years — thank you. 40 years, come on. You do not know her for 40 years. She is younger than me. I am 42. Yeah, she is still younger than me. Not by much, but you know. But we do not need to talk about the Commissioner's age. But you all knew she was younger than me — you could tell. All right. So, just — and forgive me for being so dense, but I am trying my best to understand. For the 30% of your contracts that are hosted on Passport, when purchases are made, do they automatically generate direct order records so that we understand the spend that is happening? Is that right? It records a direct order as an encumbrance document or a purchase order against that master agreement. Okay. And do

(00:57:50)

you have a timeline by when you think you might get to 100% of your master agreements being hosted there? I mean, we are working every day. Procurements do take sometimes 12 months, sadly, in the City. So we are working every day as contracts expire to re-procure the seasonal commodities. Obviously we also have to talk to our partner agencies as to whether those commodities are still useful to be re-procured. But we are working with MOCS all the time on every new procurement on which ones are going out and how they could be hosted in Passport. Okay.

(00:58:25)

So it sounded to me like what you said earlier, Deputy Commissioner, was that you predict the amount on the contract based on

(00:58:35)

previous year's spend.

(00:58:38)

So we create bid sheets with estimates of usage. So you know, fuel will be bid out on a fuel contract based on historical gallons bought by the City. We do have an estimate. We used a historical span, you know, multiplied by if the contracts are for the next two years and three years for future usage. But again, a lot of those estimates go off based on the needs, right. We are electrifying our fleet. Gasoline is going to be used much less than when we put out that contract. Same thing with heating oil. You know, we are making Local Law 97 improvements to a lot of our buildings, so heating oil consumption might go down.

(00:59:20)

Based on improvements to the buildings. But then there are situations like the two weeks of freezing temperatures that might go over the estimated usage.

(00:59:29)

So the usage estimates, the values of the contracts are based on the bids. It seems like there has been consistent kind of overspend, if that is the right word, on what had been anticipated on master agreements. I guess it is a question for all of you: if we were better anticipating the spend on

(00:59:51)

contracts, do you think we could get better prices? So I personally would like to move away from the phrase of overspend, right, because it is an estimate of usage. Spends are dependent on the agencies' budgets and then issuing the direct orders, not on the master agreements. I believe from our stance is that we have good enough estimates based on economies of scale to get the best pricing by competitive sealed bids as it stands. Whether we are going a little bit under or going a little bit over, we do not believe, or we have not seen in the market, that we would have got a couple cents extra if we overestimated or overspent. We believe that our spend is...

(01:00:31)

Our estimates are high enough at least to get the best pricing available to government agencies. So I do not believe that that would be the case on the estimate side. On the savings side, I know that the Mayor has highlighted that his citywide savings plan has called for contract savings. John, do you know if master agreements were viewed as a part of this process for potential savings opportunities, and to the agencies as well? I do not know for sure whether or not master agreements were part of that review. But the one thing I would say is that inherent in the master agreement use, there was already a savings over time and resources that would be used by individual agencies procuring individually for those needs. So that is something already inherent in the use of these types of contracts. Okay.

(01:01:24)

Deputy Commissioner, I recall that when we did the storehouse tour, you mentioned that DCAS recently had OMB kind of pull some reports on agency purchasing. I believe that was new, that you were newly able to get OMB to share some information that could provide some insights on spending and maybe potential savings opportunities. Can you elaborate on what DCAS requested and if there are savings that you were able to identify through that process?

(01:01:57)

So DCAS requested spend data on commodities. One was from the storehouse. We want to re-evaluate the commodities that we are holding. We did get that information. We are now in the process of re-evaluating what commodities are more purchased on a citywide level that we could add to our storehouse catalog, and what items that are not being utilized as much where we could remove them and give them back to the agencies. Additionally, DCAS is now in the process of reviewing and centralizing more service contracts than we have done in the past. We are estimating that that will create citywide savings where we have, again as you spoke earlier, one price citywide, so that not every agency is negotiating their own pricing and there is a lot of fluctuation on pricing. So we are in the process of speaking to our partner agencies that are utilizing a lot of these service contracts, and which ones would be the best fit with the resources that we have right now to start moving in fiscal year 2027 to procure these. And then on your other statement, there are savings initiatives going on with citywide contracts. We are actively renegotiating any contracts that we have for commodities right now.

(01:03:06)

Okay. For the team, the contract with CDW covers, I believe, more than 740 different manufacturers and services, and OTI has already paid, I believe, $600 million through CDW this fiscal year. Does CDW have records of all the purchases that were made off of that contract? I mean, for the ones that OTI purchased, we have the records. For the ones the agencies are purchasing, the records would be with the agencies. Right, right.

(01:03:39)

How many... so those records, you could not answer, for example, how many laptops the City purchased this year or the average price, because that information would largely be with the agencies beyond what you purchased for yourselves. Right, and...

(01:03:57)

How long has OTI's master agreement for technology purchases existed? For the first one, I think the oldest one started in 2018. Okay. For the first two, and then more have been brought on since then.

(01:04:14)

And I believe that OTI is going to be renegotiating this contract soon. Is that right?

(01:04:19)

We have renewals in the pipeline because these contracts are...

(01:04:24)

Would you mind just speaking a little louder? Yes, yes, we are. Okay. Are you considering using multiple vendors instead of a single vendor as a clearinghouse? We do have multiple vendors. We actually have six citywide resellers today, not just one.

(01:04:47)

And do you anticipate including more requirements on

(01:04:50)

standardizing pricing? We are already, as previously mentioned, there are set discounts on the pricing. And you know, if a new manufacturer does come up, like an agency needs to request a new manufacturer, like a new product that comes to market, we do also put out a mini bid to all of our six resellers to obtain the best discounts possible. Whoever actually provides us the best discount will actually get the manufacturer added to their contract.

(01:05:21)

I recall that toward the end of last year there was a very large laptop and tablet purchase that we did. I believe the purchase was $142 million in Chromebooks with cellular service through OTI. Is that your understanding as well?

(01:05:44)

That is correct. And do you know the status of these laptops? How many laptops were purchased, and were they for high school students? Around the City, 350,000 Chromebooks were actually purchased, and I think by the end of this year they have been distributed to over 1,500 public schools across all five boroughs. It is not just high school students. And are we still paying for this? Are we paying for the cell service on these laptops? The Chromebooks are internet capable and can connect to Wi-Fi. They can connect to Wi-Fi. Do we pay for cell service for them as well?

(01:06:32)

We are currently covering the cell service. I think that was an initiative from the prior administration. Do you know what the monthly cost is on the cell service?

(01:06:46)

Has this been considered in our savings plan? It seems like a ripe thing for us to look at.

(01:06:53)

Actually, I was wondering if these thoughts would be... to answer the question: yes, right now the service is paid by OTI. Additionally, I just wanted to offer a correction with respect to the laptops themselves. They were actually purchased by OTI as well.

(01:07:13)

They were purchased by DCAS? Correct. So the $142 million purchase, you have information on that because you did it.

(01:07:19)

So $142 million, and I think you said 350,000. Is that right? And do you know the monthly cost on the cell service? The monthly cost on the cell service, I would have to get back to you with that information. Okay.

(01:07:34)

Okay. And do you know if we could terminate the spending on the cell service if we wanted to? I mean, I think the agency is considering all types of savings, so I do not know what the entire portfolio is. But I know that our savings officer has been diligently looking at savings since the executive order came out.

(01:07:54)

Okay. And I guess to that point, in the Mayor's savings plan it was announced that OTI would eliminate duplicative hardware and software.

(01:08:12)

Is the renegotiation of the master agreement part of that process, or is that just on its own track independently?

(01:08:20)

We are not limiting to just master agreements. It is really a review of all the different contracts that we have. Okay. That is good.

(01:08:35)

I think then we are okay. Anything else anyone on the panel would like to add? No.

(01:08:43)

Thank you all for coming and trying to answer these questions. I think that whether we have to do something legislatively to bring more transparency here or figure

(01:08:58)

out an alternative approach through sitting down together and working it out, I think these are good tools where we just want to make sure that we are spending money as effectively as possible. And so when there is so much money spent that is kind of outside our traditional transparency systems, which I think worked quite well, it raises questions. But I am thankful for each of you coming today to answer questions and engage with our committee, and I hope you all have a good rest of your afternoon. Thank you.

(01:11:32)

Chair Restler, members of the Committee on Contracts, thank you for the opportunity to testify today about a critical but often overlooked area of City procurement: the use and oversight of master agreements, or as they are referred to in FMS, MA ones. These contracts play a pivotal role in enabling agencies to quickly acquire goods and services essential to serving New Yorkers. Yet as our recent analysis shows, the opaque and outdated systems governing these contracts sharply limit our ability to effectively manage them. While the flexibility of MA ones can be very beneficial, the City is not doing enough to keep track of what the agencies are buying, at what cost and from whom. Today I will outline why the City must act urgently to modernize its procurement systems and highlight concrete steps we can take to ensure our spending is strategic, efficient and fully accountable to the public.

MA ones streamline the typical lengthy process for making purchases by establishing an on-call relationship with vendors under prearranged contractual terms. They are typically used in situations where there is a projected future need but agencies do not know exactly how much or how often they will need to buy, and to procure commonly needed goods or services more quickly than if they had to go through a whole procurement cycle for each such purchase. They also seek to achieve economies of scale by leveraging the City's substantial buying power to get the best price for a good or service. Although just a few City agencies can establish MA one contracts, many of them can be used by other agencies to make purchases. Importantly, the actual purchases under these contracts are made via delivery orders, or as FMS refers to them, MA seconds, which unlike their parent MA one contracts are not subject to Comptroller or review as part of the City's procurement rules. Finally, the stated value of an MA one is an estimate of future demand, not a firm spending cap. The City may never end up purchasing anything under a registered MA one, or it could spend many times the listed value of that contract.

Our review found that these contracts are quite popular. Between fiscal years 2022 and 2025, mayoral agencies placed more than 28,000 delivery orders each year using MA seconds. Yet oversight bodies have far less visibility into these purchases than into other types of contracting. Delivery orders often contain little or no information on what was purchased, in what quantity or from which manufacturer. This shrouds billions of dollars of spending in a black box and weakens the City's ability to control costs. The data also shows that the City frequently misestimates its needs. Since 2015, one out of every three completed MA ones was underspent by more than half, while another third was overspent. Despite the similar share of contracts in these two buckets, agencies ultimately overspent the cumulative estimated value of all MA ones by more than $1.6 billion. That is a lot of unrealized buying power that we could be using to negotiate better prices.

It is hard to manage what is not being measured. One of the starkest examples of this lies with our citywide IT contracts procured under the Office of Technology and Innovation, which were overspent by nearly $4 billion relative to their estimated values. Because of the lack of information being captured by the delivery orders issued under these contracts, neither the public nor oversight agencies can determine what technology products or services drove these costs. It is simply not acceptable for the City to be without a full accounting of what it has purchased.

These issues are even more prevalent for a subset of master agreements procured under the accelerated procurement method, used to fast-track the bidding process for commodity purchases such as fuel that must be obtained quickly due to shortages or rapid price fluctuations. Unlike other MA ones, these are exempted from my office's registration reviews. But they still constitute big business. Our reporting found that they account for nearly 40% of all MA ones registered since fiscal year 2022 and that agencies spent more than $625 million under them during this period. While it is important that the City can secure the best price for vital commodities, insufficient oversight of accelerated procurement can increase opportunities for the misuse of public dollars.

There are concrete, achievable steps we can take right now to strengthen our procurement system and restore confidence in how taxpayer dollars are being spent. The City must expand the use of centralized tools that already exist to capture critical data on MA one purchases. Less than 10% of active master agreements are covered by PunchOut and the Passport catalog. These tools function like an online shopping portal where desired items and quantities can be ordered by permissioned agency users. Wider adoption would reduce staff burdens associated with the manual creation of individual delivery orders and allow the City to more easily capture detailed purchase information under those orders. The City should make far more MA one purchase data publicly available. Passport and FMS should be enhanced to capture key MA one transaction data including product manufacturer descriptions, units of measure, quantities and unit prices. Agencies must improve their methodologies for estimating demand. Agencies currently rely on inexact inputs like optional agency surveys to assess demand for goods and services that they will procure via MA one contracts. The City's struggle to accurately estimate demand can make it harder for agencies to negotiate the best price on behalf of taxpayers. These agencies would be fundamentally stronger with better information. And lastly, the City must proactively seek savings by examining areas where MA ones regularly exceed their estimated value.

Information technology should be an early priority because of the scale of spending and the potential opportunities for enterprise-wide purchasing and license consolidation.

In closing, we fully believe that MA ones, as the Chair has indicated, are an essential tool for helping agencies purchase goods and services quickly and at scale. But flexibility without reliable data limits accountability and prevents the City from using its full purchasing power. The City should know what it is buying, in what quantity and from which manufacturer. It should use that information to forecast demand, compare prices across agencies, negotiate better terms and identify opportunities for savings. Right now its systems too often make those basic tasks difficult or impossible. Modernizing these systems would not only improve

(01:18:03)

transparency, it would help agencies work more efficiently, strengthen oversight and ensure that the City gets the greatest possible value from every public dollar. Thank you for the opportunity to testify today and we welcome your questions. Thank you so much.

(01:18:17)

For the thoughtful testimony and for the great report. Chair, you and I have spoken and I know you have spoken with other oversight agencies. I think the City's procurement process in general needs a whole lot of reform and a lot of that might be process changes, legislative changes, but some of it rests in technology. Listening to the testimony from the administration before, they are on board and willing to work with the Council and with our office to make this information more transparent and in a more digestible way. That is not only good governance but I think they would agree with this — it helps them in being able to better manage contracts.

So in hearing the testimony, I think in many ways it confirmed what we discussed in our report, which are the varying systems that currently exist to capture this enormous spend. Over the past mayoral administration, the number of direct orders each fiscal year does not change a whole lot. Neither does necessarily the spend, but that is billions of dollars every year. The fact that we cannot go to one place and gather the information on what we are spending, let alone on who we are buying it from and why, I think is the challenge there.

It sounds like agencies might have some of this information living in spreadsheets and internal systems. It sounds like OMB captures some of it in Passport. Certain information is available there. You made a good point about invoices — we should have the information going out because ultimately somebody at an agency is placing the order for exactly what they need, but at the end of the day the vendor is also invoicing us for that, and those invoices are being reviewed by agency staff who are making those payments. So whether it is a reverse engineering of those invoices or some other way, the information sounds like it exists, but there needs to be technology enhancements to sort of get it all together, consolidated and centralized. So what technology do you think would be the most logical to pursue?

(01:20:57)

I think having centralized tools is critical. To the extent that Passport is already a vehicle by which some of these contracts and some of these delivery orders are being placed, I think it would behoove us to, as OMB indicated during the prior testimony, look to see what resources and enhancements would be necessary in order to fully have the system live in Passport. My experience is that when you bifurcate or have even multiple systems where agencies are entering information and vendor information is being captured, it is not only difficult to manage but it is also ripe for things to fall through the cracks if there is not clear guidance. So I would say probably the best course of action would be to see what functionality can be expanded into Passport so that all the master agreements, their delivery orders and the use of those delivery orders, lives there. It is just frustrating.

(01:22:03)

I imagine it is frustratingly hard to actually make that happen, but important for us to pursue and try. Can I ask...

(01:22:10)

What would it take to get this into Checkbook? And Dan, you will keep me honest here — the Comptroller's public-facing website.

(01:22:24)

Launched well over ten years ago at this point, its information derives directly from the City's financial management system. So for the most part there is no independent entry — information does not independently enter Checkbook, it is filtered in. For example, when we register a contract and it is registered in the City's financial management system, that information is reflected in Checkbook. There are also integrations with Passport that allow for certain information to be visible in Checkbook. So I believe — not being the technology expert behind Checkbook at our office — that if this information lived in Passport we would be able to filter it into Checkbook.

(01:23:25)

That is right. Just adding on that there is more information in some cases that gets captured in Passport than is able to be transmitted into Checkbook via the existing forms. So that mismatch is part of the reason why even for Passport, which usually provides the most data, we are still not seeing everything that we want to see in those records.

(01:23:56)

I imagine they are the holder of more master agreements than anybody else, and them testifying that 30% of their master agreements do not show the products that were purchased or the quantities that were purchased, or tell us all that much information — it is still pretty opaque. So I feel like, and I think what I heard the administration try to testify to today was that the Gartner contract, purchasing off of a federal procurement vehicle, is more of an outlier, and that the vast majority — if I were to put words in their mouth — or nearly all of the others are purchasing goods that have a set price, negotiated to get to a lower price, but there is a price for an air conditioner, a price for whatever item. What I interpreted was that we do not need to worry too much about efficient spend and getting the best prices because we do that through the competitive process. Which may be fine. Do you think that is right? Do you agree? Tell me if you think I am mischaracterizing what I heard — I am not trying to be flippant. Please adjust or amend, but do you think that assessment is fair and accurate? That was my takeaway as well.

(01:25:38)

I agree that a public competitive process can certainly establish competitiveness at the time that you are doing that procurement, but I do think that there is a missed opportunity to better manage what agencies are purchasing. For example, using the IT software and hardware contracts as an example — if there is not central oversight of what agencies are purchasing, it is great to know that agencies on their own can negotiate a better price than the not-to-exceed that is in the contract, but another agency might not know. The vendor is most likely not going to tell you, "by the way, I offered savings to another agency." So absent the cross-sharing of that information, absent the management of what agencies are buying at what quantities and for what dollar amounts, I do think that you miss out on the opportunity to re-evaluate the competitiveness of those prices from whatever it was that you initially procured the contracts at. How often does that make sense?

(01:26:42)

My understanding — maybe from your report or maybe because Molly told me — is that there is like an entire Amazon catalog that kind of counts as a master agreement. Do you have concerns about agencies purchasing off a catalog in that way, or is that just a good tool for them to have? Is this a positive thing or something that should raise alarms?

(01:27:11)

We think it is both. I think we have so many City agencies and so many program areas within agencies that clearly have unique needs that arise as there are program changes, technology changes...

(01:27:22)

Whatever the case is. So I do think that having a tool that is nimble enough to offer City agencies the ability to quickly purchase is essential. But I think the lack of oversight as to what is being purchased off of those contracts, or what might be added to those catalogs over the course of the contract and why, raises concerns — not necessarily even just from a cost control perspective, but in terms of understanding why so much furniture is being purchased, why so many expensive couches are being purchased. I mean, just in the past — the chairs, yes.

(01:28:08)

So just to answer the question more directly, I think the flexibility of master agreements is important, but given the amount of money that goes through these contracts, there does need to be better oversight of what is being...

(01:28:22)

Purchased. I mean, I think — having worked on the other side of multiple administrations — it is so painful to buy things.

(01:28:31)

If you have an efficient vehicle to purchase, you might say you are not as concerned that this is the best possible price you might be able to get, because at least you can get it in a period of months instead of years. So ensuring that we are getting the best prices across the board in these catalogs or master agreements or whatever it may be is really important, because the speed is worth money to agencies. Our traditional procurement processes are so painfully slow.

(01:29:10)

This was all incredibly helpful. Was there anything else you would like to add?

(01:29:14)

I just want to thank you, Chair, and the Committee for holding this hearing and for paying attention to our report, and to my staff for pulling this all together. I know it is a super wonky piece of City contracting, but given the volume and the amount of dollars that go out every year, I am really grateful for the opportunity to testify and for your attention to the report. Your report is smart and nuanced and insightful and we really appreciated you and your team putting the time in to sharing it with the broader world. We are really happy to help with this hearing and we are always grateful for expertise around procurement issues and look forward to continuing to work closely together.

(01:30:01)

Absolutely, thank you so much. We are going to go to our next panel. Oh no, now I have got to read the thing. I am sorry. All right. I will just read this. Okay, I will read this fast because I am required to read it.

I now open the hearing to public testimony. I remind members that this is a formal proceeding and that decorum shall be observed at all times. As such, members of the public shall remain silent at all times. The witness tables are reserved for people who wish to testify. No video recording or photography is allowed from the witness table. Further, members of the public may not present audio or video recordings as testimony but may submit transcripts of such recordings to the Sergeant at Arms for inclusion in the hearing record. If you wish to speak at today's hearing, please fill out your sign-in card with the Sergeant at Arms and wait to be recognized. Once recognized, you will have two minutes to speak on today's hearing topic. If you have written or additional written testimony you wish to submit for the record, please provide a copy of that testimony to the Sergeant at Arms. You may also email testimony within 72 hours of the hearing. Audio and video recordings will not be accepted. I will now call up...

(01:30:58)

Charles Diamond in his personal capacity and Mike Hickey from Citizens Budget Commission. Thank you both. I will give you this. Thank you, Chair. As I said, my name is Charles Diamond. As you know, I served with the Comptroller's office and OMB — I feel like I know a bit of both of those worlds.

Chair, why do master agreements not attract tracking like normal procurements? We were kind of dancing around it. I think the Deputy Comptroller was really getting there, which is that because we register and we track things based off of their competitiveness — if there was a competition, that means it is not going to be registered and it is not going to flow that way — because the rules and law are concerned more with procedural compliance than they are with value for money. The idea of competitiveness is not the same idea as spending your money well.

(01:32:00)

Well, the thing we are really getting at is it is not the traditional concerns of competition or things like that — those are happening — but there is an information gap. So maybe someone buying too many pieces of furniture is an indicator somewhere...

(01:32:12)

Else. The data is still valuable even if there was a competition. So I think that is why this is the way it is — it is not by accident that these are like this. It is because of the very nature of what we are doing that they are not tracked like standard items. You also asked how do you get it on there. Again, I think the Deputy Comptroller was getting there — you need to build an enhancement into Passport. The Deputy Comptroller referenced that at the time I was there, I helped work on it when we started being able to get these contracts into Passport.

I have to mention, it is budget season. The current executive budget proposes to reduce OMB's budget by 18.8%. Now if that means that we are not going to implement Passport enhancements, guess what — things like this cannot be done. I mentioned at the preliminary budget hearings that those are false economies. We are seeing an example right now. If you want to do these things, you need to invest in it. It makes me very sad that apparently that lesson has not been learned — that you need to care about procurement if you want good outcomes in procurement.

I have read in the press this week and last week about more delayed payments to nonprofits. Again, it is not like we do not know about these issues. These have all existed for years. We have got to invest in procurement if we want it to succeed. Also, can it be on Checkbook? Again, I think this gets back to the idea that the information being sent is simply the most basic data, because it is not really the same thing as a big procurement. You can get it on Checkbook — I also worked on Checkbook — you can get it on Passport, but you have to build an enhancement where you are getting something different in there. I completely agree with the Deputy Comptroller that despite Passport's faults, it is clearly where all this stuff needs to go.

Finally, I would reiterate again — I have advocated for master contracts before this Committee when I worked for the City at various times, for similar reasons. They are an amazing tool. So I am really appreciative of that tone again, where these are really great tools but there is an information gap. It is not 1989 when the structure was developed. We need data, whether it is about competition or not. We need the data. There is no excuse not to have it and we need to find... I will stop there.

(01:34:04)

Thank you, Chairman. So as Chief of Strategy and Operations for Citizens Budget Commission, I just want to give you a bit of background on our master contract. This past year we will issue payments to 750 community-based organizations totaling some $12 million for our efforts, from participatory budgeting to workforce development, child care, open streets programming, supporting LGBTQ+ communities and others. The difference is these funds will be issued through eight City agencies using the master contracts that we hold through emergency management. The groups we are funding typically go from applying to an RFP to being paid in about 40 to 45 days. They do this with greatly reduced administrative burden and a much deeper working partnership with City agency program staff. City agency partners can enact these...

(01:35:00)

Programs with flexibility, speed and simplicity, all while retaining full oversight and authority over the implementation and funding. As someone who formerly ran a major City office working with highly vulnerable students and families, I am frankly a little jealous that I did not have this funding mechanism available to me when I was working that job. It would have greatly improved my ability to respond to both immediate and longer-term needs on the ground, and empowered my team to innovate and deepen trust with residents who otherwise first experience hardship when the bureaucracy cannot live up to its intentions.

The master contract is an exception process, so it is an outlier and cannot itself serve as a model for overall procurement transformation. But it can serve as an example of what happens when a City agency commits to creating an innovative procurement pathway for engaging hyper-local leaders, restoring trust with communities by partnering with those who already have it, and deepening understanding of neighborhood needs and applying those learnings to City agency planning and operations in ways that really improve that work. Finally, this helps build the capacity of the nonprofit sector by using that most fundamental and powerful of tools — on-time payment in full. So the master contract makes all these things possible now as exceptions. Obviously we would like to continue using these tools to help us...

(01:36:20)

Conduct our work. I am more than happy to speak about my direct experience as someone who has worked with multiple City agencies in implementing a master contract and what we see in terms of our interactions with Passport and Checkbook and other systems, based on the data that we collect and what does not seem to transmit all the way to the ultimate reporting. Go ahead.

(01:36:42)

Please. So the good news is we have all the data. When we are issuing payments, every vendor does — I mean, you are a beloved local nonprofit, but everyone in between has all of the data as well and it should be captured. So just to interject...

(01:37:03)

Right, and I think it is as Charles is saying, that what is...

(01:37:06)

When we are working directly with the City agency partner, that is all 100% transparent. Thank you. But there really is not a way within Passport for us to communicate that, even though the administrative burden of doing so would not be particularly onerous, and we would be happy to.

(01:37:22)

The other thing I want to mention is that in this process we do see how different agencies interact with these tools, with reporting tools. As you would not be surprised to understand, every agency has its own culture and approach to procurement. Some are highly flexible and innovative, some not so much. We are hoping we can use those insights to continue informing the way that the City more broadly can address the challenges around procurement efficiency. This was part of testimony I just offered to the Commission on Government Efficiency and I am part of a number of folks who are seeking to provide additional advice and guidance. Your master contract is through NICENE, was originated through Emergency Management. It is actually a process that is helpful, and the grants...

(01:38:17)

...the grants — are you obligated to go through a competitive process for your grants and how you disperse those funds? Yes, we are.

(01:38:25)

First off, the master contract itself has a competitive bidding process. We were one of the organizations that bid and we were selected. In addition, when we create a task order we work with City agencies to then generate a competitive bid process for the specific implementation that they are creating. We are part of the creation of the process, the evaluation and awarding of that process, so we are fully involved. So you do your own RFP process to select vendors to meet whatever intended spend you have? Yes, we work with the City agency — they are really the originator of the competitive process. They are the ones that ultimately make the decisions on who is selected, but we often...

(01:39:08)

...navigating to hyper-local partners can be challenging, so...

(01:39:09)

...we are often a part of helping them identify the people they want to have included in the pool for competitiveness to apply.

(01:39:17)

And a City agency — these are all to nonprofits?

(01:39:20)

Not exclusively. Citizens and Grand Tour does not limit our grants to nonprofits. We work with volunteer-led organizations that do not have a corporation status and small businesses as well. That is enabled under the master contract. The City could do micro-purchases up to $25,000 to a non-profit, so this really helps quickly get the money out the door for something that is $25,000 or under. So with the Civic Engagement Commission we were issuing hundreds of payments of around a thousand dollars to groups that are not part of particularly much bureaucracy and...

(01:39:57)

...paperwork for this enormously, although they could do it themselves, but it is just painful in theory. DOT is another partner of ours and they were so happy to be using the master contract they actually issued a press release about the new payment methodology that we just originated for Open Streets this year. That is cool.

(01:40:16)

That is cool. I would add that something under $25,000 is still going to take longer than the process of the master contract almost. I cannot imagine that, so it is...

(01:40:25)

...still faster than the way the City would do it. Yeah, it is kind of amazing that a micro-purchase that does not even require a competitive process — where an agency can just say we have a need, we need to go here and partner with this entity — is slower than going through a competitive process with an outside party once you have a master contract involved. It underscores the value of this as a procurement tool. And then we...

(01:40:47)

...appreciate the work you are doing and I think this was a good innovation and I am glad to hear that you are figuring out a stable home and working well with other agencies. It is a really positive thing. And then Charles, I did want to just say on the record...

(01:41:03)

...my understanding of the variation in the MOX budget is that it is almost entirely the fact that there are no enhancements to Passport this year. I think that is the number that we — the Council — pushed successfully for in last year's budget for Passport enhancements that are going to be released in the fall, and there is not at this time, at least as of the executive budget, additional investment planned for Passport. I think that we are all trying to figure out what the future of Passport looks like right now as we determine what adjustments are needed.

(01:41:42)

I would just say I appreciate that, Chair, because of course we and the public do not get to hear about what they are. But I think in fact when I wrote about it I said my assumption is exactly what you are saying — that we are just not going to enhance Passport this fiscal year.

(01:41:55)

And as I would say, is it lovely and pretty with a bow on it? Passport is done, we are all set? No. I think everybody under the sun knows that there is a list that goes into multiple pages of planned enhancements that have been planned for probably a decade. So the list exists. About the human services — of course, exactly, we all know that. So again I would urge that it is tempting, especially in these crises. What I would also say is that I have heard — if you can take all the lines together — it should include licenses that need to be approved by MOX, leases that need to be approved by... all of these are still contracts. There are over a billion dollars of savings being projected through being better at contracts. And as I would say, if our idea is that we are going to be a billion dollars...

(01:42:36)

...better at contracts next year than this year while spending less money on central procurement staff, I would say I hope you succeed but it is obviously not a reasonable expectation to have. My understanding is that there were vacant positions that were eliminated, not to say that...

(01:42:51)

...there was a high turnover at MOX over the past few years as well. So again, yeah.

(01:42:56)

You know more than I do, but I appreciate that, Chair, for letting us know.

(01:42:59)

Really, thank you both for your testimony today and for taking the time to join us. We appreciate your enthusiasm for master contracts and procurement and contracts. Have a great afternoon. On our final panel, which will be hybrid, we are going to hear from Hayden and I think our number one frequent flyer at the Contracts Committee, Christopher Leon Johnson, in person. Why do not we start with Chris and then we will go to Hayden.

(01:43:21)

All right, cool. All right, ready. Hello, my name is Kristopher Leon Johnson. Thank you, Chair Restler. I want to say right now that I think the City Council needs to start really making sure that the contracts are fair and that every year these nonprofits do not have to go through this nonsense. I understand that Mamdani is mayor and Mamdani's main nonprofits are the Working Families Party and they got him into office. The issue is that we have a City Council that is more hell-bent on protecting the Working Families Party than any of these human service nonprofits, including nonprofits outside of that.

The Rooster Hub is outside begging, handing out flyers like Guapo and Gustavo, outside begging for money from the City Council. I know that they do a lot of great work for the City but they get more scrutiny from the City than these Working Families Party nonprofits when it comes to transparency. Understand that last session with Eric Adams, when it came to the migrant crisis, they were handing out a billion dollars of contracts. I understand that we need transparency and the big problem is this homeless industrial complex — that is a different topic. But going forward I think the City Council needs to start bringing the same type of energy when it comes to these Working Families Party-based nonprofits. Like Vocal New York — why is Vocal New York still holding a convicted pedophile in a nonprofit and they are paying this person money with our tax dollars? Many get paid by this developer and it was an undue arrangement to support a development that will destroy Greenpoint within the Brooklyn waterfront park.

Going forward, like I said, the City Council standing up for human service nonprofits will probably get a lot of heat because they are connected to the homeless industrial complex. But bring this same type of energy to the Working Families Party base, and maybe anything that is under the People's Plan or under their leadership needs to get the same type of scrutiny. Because going forward, if there is no real accountability, these human service nonprofits will find out and there is going to be a real division. I do not think we want division between these human service nonprofits and the Working Families Party because we should be working together.

But going forward, I will say it right now with the last 45 seconds: the City Council — I know that when it comes to master contracts you can do a non-bid contract for a table outside the Rooster Hub because they have a lifetime table that is worth about $20 and it is less than $25,000. Like I said, they need to not be spending $2,000 on a table. Get rid of that lifetime table and put in a better-looking table. It is outside — you can look at it yourself. It is a bad-looking white table and I am calling on the City Council to hand out a contract to give them a better-looking table and get rid of that lifetime table outside. So thank you so much, enjoy the day.

(01:46:30)

Thank you for your testimony. It is always good to have you before the Contracts Committee. Next up, Hayden Segal on Zoom.

(01:46:39)

Time starts now. Okay, there we go. Hello. So I watched this whole thing and all I could really hear is an expansion of what I am going to have to do at work. I work for the City in NYC Health and Hospitals and basically my role covers everything in IT for everything that touches public health care. So somebody has a question on how to enter a patient note or how to order an office supply — you were talking about WB Mason earlier and how to have oversight on those contracts, at least for ordering. Or even the biomedical equipment like X-rays and stuff — those orders are put in through ServiceNow. There is a way to capture why somebody wants a specific piece of equipment. WB Mason and the office supplies and such are handled through the vendor's means and they have their own separate system.

But in the last maybe three years I want to say my role has expanded to cover not just the computers and phones but also the actual biomedical equipment, which is how I got into this career path in health care. The reason why I am coming to you today is actually just to seek an expansion of my personal department's contract. I want to see about getting everybody within my role paid more because we have expanded the roles for those people and it is already a very low-paid position that requires qualified workers to do it.

To put it this way, we are a 24/7 department. During the day when I first got into the role it was the heaviest volume help desk I have ever had, with way more than I have ever had to cover for any other company I have worked for in the private sector — working on equipment that is used in laboratories. I worked in the private sector doing admin and project management, done all of that, and then I came to work for the City. The day crew have a nightmare of just a plethora of work. For overnight there is just nobody that we can escalate to and that is where my role is — I work overnight. So unlike the day crew where you get slammed by emails, chats and phone calls, on overnight there just is not anybody that you can call to say I do not really know how to fix this. So you have to be on your A game and know how to actually fix whatever it is or set it up properly. For you, City Council, so you have the oversight to know that we are actually performing certain tasks according to the City standard — and I do like to say that I am working...

(01:50:04)

Segal, thank you so much for your testimony and for your work at Health and Hospitals and for sharing your insights and for advocating for your unit. We really appreciate it and this is helpful information to share with the Committee. So thank you for taking the time and for being a part of our hearing today. With that I will once again thank our Committee counsel and my team, especially Molly, and the Sergeant...