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NYC Department of Housing Preservation & Development
Developers

Enhanced Contractor Review Procedure

The developers and owners who participate in HPD programs select contractors to perform the construction or rehabilitation work funded through the project. This procedure establishes a framework, including internal monitoring processes that primarily focus on labor law compliance and construction quality, to help HPD determine whether to approve the participation of any such contractor in an HPD project. This framework supplements, but does not replace, the Sponsor Review process (which addresses additional issues regarding integrity and competence that are not the subject of this procedure).

1. Internal Roles

Labor Monitoring (LMU): LMU will (i) maintain a list of contractors with past and/or current labor law violations, including prevailing wage withholdings; and (ii) create and maintain, in consultation with Development program staff and BLDS, a list of contractors on Enhanced Review status, as described below. LMU will update and distribute the Enhanced Review list on at least a quarterly basis and will meet with Development at that time to review any issues. If LMU becomes aware at any time that a contractor no longer meets the criteria for Enhanced Review status, LMU will promptly update the list.

Division of Building and Land Development Services (BLDS): BLDS will create and maintain a database tracking contractor performance on past and current HPD projects. The database will contain information with respect to quality of construction work and adherence to construction schedules. BLDS will rate the quality of construction work at project completion.

Office of Development (Development): Prior to approving any contractor selected by a developer or owner, Development program staff and BLDS will review the Enhanced Review list and the construction monitoring database and consult with LMU regarding any questions or issues.

Office of Asset and Property Management (Asset Management): Prior to approving any construction contract by a Mitchell Lama housing company or any other project under its jurisdiction, Asset Management will review the Enhanced Review list.

2. Contractor Status

As used below, “Contractor” includes general contractors and subcontractors as well as their principals and related companies or entities.

HPD will place a Contractor on Enhanced Review status if:

(a) the Contractor has $500,000 or more in current prevailing wage withholdings; or

(b) the Contractor has a history of multiple or significant construction quality issues; or

(c) the Contractor has a history of multiple or significant labor law or construction law violations, as evidenced by (i) one or more determinations in judicial or administrative proceedings (unless such determination has been reversed on appeal), (ii) one or more settlements, pleas, or other agreements in judicial or administrative proceedings; and/or (iii) non-confidential information based upon which HPD has reason to believe that the Contractor has violated such laws.

(d) the Contractor is listed in the federal Excluded Parties List System, the List Of Employers Ineligible To Bid On Or Be Awarded Any Public Work Contract maintained by the State Department of Labor, and/or the List Of Debarred Offerors maintained by the State Office of General Services.

Development, in consultation as necessary with LMU, the Office of Legal Affairs, or the Department of Investigation (DOI), will decide whether to place a Contractor on Enhanced Review status, the conditions for removing a Contractor from Enhanced Review status (including, where appropriate, setting a fixed period after which such status will expire), and whether to remove a Contractor from Enhanced Review status.

3. Closing

HPD will determine whether to close (and, if so, upon what conditions) on a project-by-project basis. Any closing with a developer who intends to employ a Contractor on Enhanced Review status may be subject to the following:

(a) if the Contractor was placed on Enhanced Review status due to prevailing wage withholdings or other labor law issues, HPD may require the Contractor to hire and pay for a third party Labor Compliance Service Provider (Development and LMU will jointly decide whether to require a Labor Compliance Service Provider based on the number of projects the Contractor is being considered for, the size of such projects, the type and extent of the Contractor's past labor law violations, the dollar amount of current prevailing wage withholdings, and whether the Project requires prevailing wages); and

(b) if the Contractor was placed on Enhanced Review status due to construction quality issues, HPD may require enhanced monitoring of construction quality (BLDS will decide whether to require such enhanced monitoring based on the type and extent of the Contractor's past construction quality issues); and

(c) HPD may impose such other conditions as it deems necessary or desirable with regard to the issues that cause the Contractor to be placed on Enhanced Review status.

4. Notification of Contractors

When HPD intends to place a Contractor on Enhanced Review status on the basis of facts or conclusions that are open to dispute and the Contractor has not previously had an opportunity to dispute such facts or conclusions, LMU will notify the Contractor before placing it on Enhanced Review status. The notification will include (i) the reason(s) for the proposed placement of the Contractor on such status, and (ii) an opportunity to comment on or challenge any of the facts upon which the proposed placement of the Contractor on such status is based. If, after the Contractor has had its opportunity to comment on or challenge such facts, HPD determines that the Contractor should be placed on Enhanced Review status, LMU will send the Contractor a notice of such determination stating (i) the reason(s) for placing the Contractor on such status, and (ii) the conditions for removing the Contractor from such status.

When HPD determines to place a Contractor on Enhanced Review status on the basis of facts or conclusions that are not open to dispute, or where the Contractor has previously had an opportunity to dispute such facts or conclusions, LMU will notify the Contractor of such determination at the time that HPD places it on Enhanced Review status. The notification will include (i) the reason(s) for placing the Contractor on such status, and (ii) the conditions for removing the Contractor from such status.

5. Change in Status

Development and LMU will review the status of Contractors on at least a quarterly basis and any time a Contractor is being considered for a project in order to determine whether the Contractor's status should change. HPD may remove the Contractor from Enhanced Review status if HPD determines, based on evidence satisfactory to the agency, that the Contractor has cured the issues that resulted in such status (or has submitted/implemented an acceptable corrective plan to do so) and/or has performed enough subsequent work without a recurrence of such issues to indicate that any deficiencies that led to such issues have been appropriately addressed.

LMU will notify a Contractor when the Contractor’s status has changed.

As used above, "labor law" means, collectively, Labor Law §220 or §230, the Davis-Bacon Act (40 U.S.C. 276a-276a-5), the Contract Work Hours and Safety Standards Act (40 U.S.C. 327-332), the Fair Labor Standards Act, and any other federal, state, or local law addressing similar or related subject matter.

As used above, "construction law" means, collectively, the Multiple Dwelling Law, the Building Code, Section 804(f)(3)(C) of the federal Fair Housing Act (42 U.S.C. 3604(f)(3)(C)), Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), the Occupational Safety and Health Act, and any other federal, state, or local law addressing similar or related subject matter.

General Contractors and Subcontractors currently under Enhanced Review status  (PDF)




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