Awarding Welfare-to-Work Contracts Based on Performance
by Mayor Rudolph W. Giuliani
This week, following the release of a report issued by the City Comptroller, newspaper articles have misrepresented a series of welfare-to-work contracts that the City has entered into with private companies. I want to explain to you clearly and thoroughly what the City's Human Resources Administration is doing so that you can understand how these new contracts work and exactly what's being distorted, because these contracts are enormously important to allow the genius of America to work for people that are on welfare. What I mean by that is to take enormous numbers of people who are on welfare and move them toward jobs.
Years ago, City government would take its job training funds and just give them to social service providers, many of them politically connected, regardless of their record of performance. Money would be given to the providers and the providers would find very few jobs for people, but still keep the money. Unfortunately, what that led to is a system in which over 800,000 people, and sometimes as many as a million and a million-one were on welfare for long periods of time - 30 years, 35 years, and the cycle of dependency had moved into a second generation.
What we're doing now is completely rethinking the way the City contracts with those providers who attempt to find jobs for people on welfare and we will pay them only if they find a job for someone and then they will get full payment only if the person remains in that job so we will tie the contract to the actual finding of a job, not just throw money to many of these social service providers, some of which are neighborhood providers and are politically connected.
The comptroller and the newspapers have alleged that these contracts were not subject to competitive bidding. That's just plain wrong. Seven hundred notices for bidding went out, 125 organizations expressed an interest. We then received 41 applications for the long-term contract and 32 for the short-term. And then three people were appointed to evaluate each one of these many, many bids that had been submitted. They interviewed 21 applicants and selected 13 as being qualified to do the work. That's a rigorous, intensive, extensive and competitive bidding process.
Again, with these new agreements, the companies will only receive payment when they successfully find people jobs and place people in those jobs. And then they'll make more money if they place people in jobs that offer medical benefits and other benefits. So, the better the job and the longer the longer the person remains with the job, the more money that will be paid. But what we're doing is, we're tying the payment of the money to the very result that we all want to reach, which is to move people from welfare to work; from dependency to self-sufficiency. The only expenses the City will pay for those companies that are unsuccessful would be the first three months of expenses, and then the City can cancel the contract.
It's very, very unfortunate that this innovation in City contracts is being attacked in this highly partisan way. This is Rudy Giuliani.
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