Mayor de Blasio Announces Results of Streamlined Contracting Process for Health and Human Service Providers

August 16, 2019

Nonprofit organizations providing critical services to New Yorkers will receive advance payments at the beginning and every year of their contracts to improve their fiscal stability

NEW YORK—Mayor de Blasio announced today that the Administration has delivered on the commitment to improve the human service contracting process resulting in 90 percent of all fiscal year human service contracts submitted for registration across the City’s health and human services agencies. The streamlined approval process has cleared a longstanding backlog of human service contract registrations that has delayed payments to social services providers.

These changes reflect the Mayor’s long-standing commitment to invest in nonprofit providers, resulting in a historic turning point to increase the fiscal stability of organizations that deliver critical services for New Yorkers.

“Our nonprofit partners are vital for delivering high-quality human services to communities throughout the city,” said Mayor de Blasio. “These providers invest their time and expertise with our City agencies to identify solutions for long-standing contracting challenges. That value can be seen across the city.”

Streamlining contract registration ensures that nonprofits receive timely payments for services, and are eligible to receive a 25 percent advance on their contract budget. Advance payments made at the beginning of the contract term supports fiscal wellbeing for nonprofits. During the first weeks of the current fiscal year, eligible nonprofits have received more than $700 million dollars in advance payments for service delivery.

The City’s Health and Human Service agencies implemented a new policy for timely contract registration of July 1 contracts following a recommendation from the Nonprofit Resiliency Committee, a public-private partnership launched by the Administration in 2016.  The policy change has demonstrated strong success already with ACS, DFTA, DHS, DOHMH, DOP, HPD and HRA having 90 percent of contracts ready for registration with the Comptroller’s Office on time.    

The Nonprofit Resiliency Committee has advance other important successes. The launch of the Health and Human Services Cost Policies and Procedures Manual, made New York City the first major city in the country to develop a standard approach to defining health and human service costs, as well as setting uniform policies and procedures for the reimbursement of indirect rates. 

Additionally, all City human service agencies have adopted a centralized electronic system (HHS Accelerator) to streamline the collection, review and approval of contracting, invoicing and audit documentation. By using a standardized digital invoicing system, providers are paid within six days, on average, allowing for greater financial stability. 

The City’s investments to date in the nonprofit sector have totaled over $600 million, and have supported wage increases for employees – including a minimum wage of $15 per hour and a 9 percent increase, funding for indirect rates, and rate enhancements for several critical programs such as homeless shelters, Beacon youth centers, and case management for senior centers. In this fiscal year, the City deepened its commitment by agreeing to increase reimbursement for human services providers’ indirect rates, which typically cover administrative overhead costs.

These actions build on the Administration’s launch of the Nonprofit Resiliency Committee (NRC) in September 2016, which represented a substantial change in the City’s approach to working with nonprofit service providers, resulting in a fuller and more collaborative partnership. The NRC is chaired by the Deputy Mayor of Health and Human Services – most recently Dr. Herminia Palacio – and managed by the Mayor’s Office of Contract Services (MOCS). 

“At DSS, we fight poverty and support low-income New Yorkers 24/7/365—and we don’t do this work alone. Every day, we work in close collaboration with essential non-profit service providers to deliver on our legal and moral obligations as a City, and we're proud of the progress we've made with them to continually strengthen that collaboration,” said Department of Social Services Commissioner Steven Banks. “Through the reforms we’ve implemented, including integration of DHS and HRA under the Department of Social Services, we’ve been able to address years of contracting backlogs that we inherited, improve timeliness of contracting, and streamline the process for providers. Along with our quarter-billion dollar investment in these partners to raise their rates and implementation of model shelter budgets to standardize costs and services, we’re making good on our commitments to right-size this work stream once and for all.”

“In the two years managing the Nonprofit Resiliency Committee, I’m proudest of the bridge built between City Hall and the human services community,” said Jennifer Geiling, Executive Director of the Nonprofit Resiliency Committee, Deputy Director, Mayor’s Office of Contract Services.  “Together we have made it easier and faster to do business with the City and are making significant investments in strengthening nonprofit organizations.”

 “The Nonprofit Resiliency Committee has helped deepen collaboration between City government and its nonprofit partners, and produced concrete changes to City practices in areas like funding, program development, and contracting – all in recognition that nonprofits must be strong in order for their services to be effective,” said Matthew Klein, executive director of the Mayor’s Office for Economic Opportunity. “Our office looks forward to continuing our work with the NRC to ensure that service providers can deliver high quality programs that benefit all New Yorkers, and especially our most vulnerable residents.”

"Many non-profit organizations that work with New York City to provide vital services and programs often struggle to receive timely payment for services. I am pleased that improvements are being made to the contracts approval process so that non-profits can continue to serve New Yorkers," said Assemblymember Michael Dendekker.

"We are ensuring people are paid on time and even advancing funds nonprofits need to help our neediest New Yorkers," said Council Member Ben Kallos, Chair of the Contracts Committee. "After decades in which payments could arrive more than a year late the City has been able to work through the Mayor's Nonprofit Resiliency Committee to finally clear the backlog and has already registered 90 percent of human service contracts in the first 45 days of the fiscal year. As Chair of the Contracts Committee I look forward to working with the Mayor's Nonprofit Resiliency Committee and will push to get the remaining contract registered. Thank you to Mayor Bill de Blasio for prioritizing our neediest New Yorkers and those that serve them."

“Nonprofit service providers are the backbone of our social service system. I am encouraged by today’s news that the Administration, working with the Nonprofit Resiliency Committee, has been able to address the lengthy backlog of contracts for nonprofit service providers and put in place measures to realize timely contract registration. This goes a long way in ensuring that nonprofits have the means and resources to provide high-quality, consistent programming that benefits all New Yorkers,” said Council Member Stephen Levin. “I want to thank the Mayor for his work in establishing the Nonprofit Resiliency Committee and look forward to our continued work together to further improve the ability for non-profits to provide services to our most vulnerable New Yorkers.”

“Nonprofits and community-based organizations provide crucial services to New Yorkers, from homeless shelters to counseling to senior centers. Many rely on City funding to carry out this critical work and it is a critically important step that the vast majority of human services contracts have been approved for registration this year, enabling providers to obtain 25 percent of their contracts up-front. This will help our hardworking nonprofits maintain positive cash flow, avoid debt, and focus on what they do best -- serving the most vulnerable New Yorkers," said Council Member Helen Rosenthal.

“I applaud the City for working with the non-profit sector to improve the business climate,” said Fred Shack, CEO of Urban Pathways. “I am proud to serve on the Mayor’s Nonprofit Resiliency Committee, which has been working hard to improve the city’s timeliness in registering contracts. The fact that as of today, more than 90 percent of all human service contracts with the HHS city agencies are registered or ready for registration is a substantial improvement over prior years and significantly improves cash flow for the city’s partner non-profit organizations. Timely registration is important because following the registration of a contract the non-profit is able to draw down an initial 25 percent of the value of the contract.  This enables the non-profit to have resources to meet their business obligations, including paying vendors on time and meeting the overall demands of the organization. I thank the City for their partnership in this work and look forward to its continued investments in strengthening the non-profit sector.”

“The Nonprofit Resiliency Committee is demonstrating that effective change is possible when nonprofit and city leaders work together,” said Phoebe C. Boyer, president and CEO of Children’s Aid. “Improving the proposal and contracting processes are meaningful steps forward. And while there is much more to be done, addressing indirect costs, and therefore funding the true cost of delivering services, will go a long way in ensuring the nonprofit sector’s future strength. This stability is critical given the constantly evolving policy environment and the resulting need, which continues to grow. The effects of this partnership will meaningfully impact the lives of the many New Yorkers who rely on us.”

“We are proud of our continued partnership with the Mayor’s Office through the Nonprofit Resiliency Committee, which actualizes New York City’s commitment to its most vulnerable citizens by strengthening the operational capacity of the community organizations at the front lines of service,” said Ron Richter, Chief Executive Officer of JCCA.   “The NRC’s advocacy for timely contract registration and advance funding policies has already made a material difference in the ability of providers like JCCA to deliver high-quality services to their communities. These policies reflect not only the concerns of the organizations doing work on the ground in New York City, but a continued investment in the future of millions of our neighbors.” 

“The NRC plays a vital role, delivering strong and innovative solutions that will have lasting value and increase the strength of the human service sector to deliver high-quality services for vulnerable New Yorkers, said Jennifer Jones-Austin, President and CEO of FWPA. “The NRC is a model unique to New York City and we are proud to be the city demonstrating how the non-profit and public sectors can collaborate to strengthen the health of the sector and support innovation. I applaud the Mayor for his commitment to the sector and the work of City agencies to deliver on the resolution of the backlog. We look forward to seeing the work ahead, including the important investment in developing a workstream to introduce a justice informed lens to practice and procurement across human services.”

“Homeless Services United is a proud member of the Nonprofit Resiliency Committee.  Since its inception, the committee has advanced policies that improve the contract registration process and give service providers the flexibility they need to better control cash flow.  After much difficult work, I am pleased to say our members are finally beginning to reap the benefits of this work with more timely contracting and ability to access critical funds allowing them to more effectively deliver services to homeless New Yorkers citywide. We are grateful to our partners at MOCS, OMB and DHS and look forward to continued success,” said Executive Director of Homeless Services United Catherine Trapani.

“We thank the Nonprofit Resiliency Committee for its work to promote equity and access for small community based organizations, including the timely contract registrations that have maximized cash advances for this fiscal year,” said Wayne Ho, President and CEO of the Chinese-American Planning Council. “While there is more to be done, we look forward to working with city agencies and nonprofit allies through a new workstream to ensure that marginalized New Yorkers - including immigrants, people of color, women, and LGBTQ+ -- have equitable access to critical services from organizations that have the expertise to serve them.”

“Thanks to the leadership of the Mayor's Office and a partnership between the City and social service providers, the Nonprofit Resiliency Committee is tackling long standing, bureaucratic challenges head-on. Thanks to the leadership of the NRC, needed and timely solutions are being implemented such as streamlined processes, innovative engagement with stakeholders and a continued commitment to support the human service sector,” said Allison Nickerson, Executive Director for LiveOn NY. “For LiveOn NY and our member agencies, this work translates into more effective and efficient services for older New Yorkers so that they can thrive in their later years. We commend the Mayor's Office for this leadership and look forward to partnering in this critical work so that together we can make New York the best place to age.”