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For-Profit Contractor Frequently Asked Questions (FAQ) and Information Guide
All italicized terms on this webpage are defined in the NYC Conflict of Interest and Related Party Transactions Policy and Guidance for Contractors of Human Services.
Related Party Transactions & Conflict of Interest Prequalification Questions: General
Select a question to reveal its answer.
What are some examples of a related party transaction?
- A board member of a Contractor leases office space they own to the same Contractor.
- A board member of a Contractor is a partner at a law firm, and the Contractor pays for the services of the board member’s law firm.
- A Contractor hires the board chair’s spouse as a paid program consultant.
- A Contractor purchases office supplies from a retailer owned by a board member’s sibling.
What is an example of a conflict of interest?
An Executive Director rents office space from a private landlord. The Executive Director then decides to hire the private landlord's daughter as a Program Director in the company.
Is the grandchild of an executive director considered a ‘related party’?
Yes. You can find the definition of a related party in the Citywide Conflict of Interest and Related Party Transactions Policy found on the Mayor’s Office of Contract Services (MOCS) Contract Compliance Support webpage.
Do you have any best practices to help me prepare for answering the additional questions?
Suggested best practices include, but are not limited to, conducting meetings, discussing less-than-arm’s length agreements, conflicts of interest and related party transactions on a routine basis. Once these transactions are disclosed, you should collect additional details, including payment records/funding sources, and written agreements of such transactions.
In the HHS Accelerator Prequalification Application, several questions ask about relatives. What family members are considered in this category?
His or her spouse or domestic partner; (ii) his or her ancestors, brothers and sisters (whether whole or half-blood), children (whether natural or adopted), grandchildren, great-grandchildren; or (iii) the spouse or domestic partner of his or her brothers, sisters, children, grandchildren, and great-grandchildren.
Related Party Transactions & Conflict of Interest Prequalification Questions: For-Profit Contractors
Select a question to reveal its answer.
I. Conflict of Interest Question
1. From the beginning of the Contractor’s last fiscal year to the present, did the Contractor or a Covered Person have any interest that presents or constitutes a Conflict of Interest in accordance with the City of New York Health and Human Services Cost Policies and Procedures Manual?
Understanding the Question:
The question is asking whether the Contractor or a covered person had an interest (whether in property, management/control, a transaction, or a legal entity) that could reasonably be viewed as adverse to (1) the Provider’s obligation to deliver cost-efficient services or (2) the City’s interest in prudently disbursing public funds only for reasonable and necessary expenses which the Provider incurs while providing services pursuant to the terms of its City contract and the City of New York Health and Human Services Cost Policies and Procedures Manual (HHS Cost Manual), during a specific timeframe. Here’s what that means, step by step:
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“From the beginning of a Contractor’s last fiscal year to the present” means: Start with the first day of your company’s last fiscal year (ex: July 1) depending on your fiscal calendar. Continue through to today’s date.
Example: If your fiscal year is July 1st - June 30th, the timeframe would be: July 1, 2024, to today (the day you submit the PQL application).
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“did the Contractor have any interest that presents or constitutes a conflict of interest” means: Did the Contractor have an interest (whether in property, management/control, a transaction, or a legal entity) that could reasonably be viewed as adverse to (1) the Provider’s obligation to deliver cost-efficient services or (2) the City’s interest in prudently disbursing public funds only for reasonable and necessary expenses?
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“in accordance with the City of New York Health and Human Services Cost Policies and Procedures Manual” means: According to the rules and regulations stated in the City of New York Health and Human Services Cost Policies and Procedures Manual.
Frequently Asked Questions:
What timeframe do I need to consider for the Conflict of Interest question?
The first day of your company’s last fiscal year, depending on your fiscal calendar, through today’s date.
What is considered a conflict of interest?
An interest (whether in property, management/control, a transaction, or a legal entity) that could reasonably be viewed as adverse to (1) the Provider’s obligation to deliver cost-efficient services or (2) the City’s interest in prudently disbursing public funds only for reasonable and necessary expenses?
I do not understand the terms used in this question. Where can I find the definitions?
You can find the terms used in the question in the Citywide Conflict of Interest and Related Party Transactions Policy found on the MOCS Contract Compliance Support webpage.
Where can I find the City of New York Health and Human Services Cost Policies and Procedures Manual?
You can find the manual on the MOCS Indirect Cost Rate Initiative webpage.
What if the Contractor did not have any conflicts of interest?
You would answer “No” to this question.
If I answered “Yes”, what additional information would I need to disclose for this question?
The name(s) of the parties involved, purpose of the transaction, all funding sources of the transaction, and the written agreement governing the transaction, if any.
II. Less-Than-Arm’s Length Agreement Question
2. From the beginning of the Contractor’s last fiscal year to the present, did the Contractor enter into a “Less-Than-Arm’s Length” Agreement?
Understanding the Question:
The question is asking whether the Contractor has entered into an agreement under which one party to the agreement can control or substantially influence the actions of the other party, as defined further in Title 2 of the Code of Federal Regulations Law Section 200.465(c), during a specific timeframe. Here’s what that means, step-by-step:
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“From the beginning of a Contractor’s last fiscal year to the present” means: Start with the first day of your company’s last fiscal year (ex, July 1), depending on your fiscal calendar. Continue through to today’s date.
Example: If your fiscal year is July 1st - June 30th, the timeframe would be: July 1, 2024, to today (the day you submit the HHS PQL application).
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“did the Contractor enter into … agreement” means: Did the Contractor sign a contract, make a payment, or agree to do business with someone?
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“…Less-Than-Arm’s Length” means: The agreement was made with a person, entity, organization, or business the Contractor is connected to professionally or personally.
For example, a Contractor hired a cleaning company to service its office space annually. The cleaning company is 50% owned by the Contractor’s Chief Financial Officer (CFO). This is considered less-than-arm’s length because the CFO has ownership and a financial interest in the cleaning company as well as a leadership role with the Contractor. The CFO could influence decisions in a way that benefits their own company.
Frequently Asked Questions:
What timeframe do I need to consider for the “Less-Than-Arm’s Length” Agreement question?
The first day of your company’s last fiscal year, depending on your fiscal calendar, through today’s date.
I do not understand the terms used in this question. Where can I find the definitions?
You can find the terms used in the question in the Citywide Conflict of Interest and Related Party Transactions Policy found on the MOCS Contract Compliance Support webpage.
Where can I find Title 2 of the Code of Federal Regulations Law Section 200.465(c)
You can find 2 CFR Law § 200.465(c) on its website here.
If I answered “Yes”, what additional information would I need to disclose for this question?
The name(s) of the parties involved, purpose of the transaction, all funding sources of the transaction, and the written agreement governing the transaction, if any.
What if the Contractor did not have any “less-than-arm's length” agreements?
If the Contractor did not have any less-than-arm’s length agreements, answer “No” to this question.