What We Can Learn from NYC Procurement Reform: Prioritize Transparency, Accountability, and Analytics in Public Procurement (Albert Pulido)

Why would state leaders care about procurement best practices that have been learned in the city of New York? In Fiscal 2021, New York City adopted an $88.2 billion-dollar budget, making the City a larger procuring entity than most states. In the past 8 years, New York City has taken transformative leaps to improve procurement processes, and the following recommendations represent NYC’s efforts:

1. Digitize the Procurement Process: Nearly all stakeholders have experienced government procurement to be a black box comprised of countless rules, laws, policies, and interpretations. In 2021, New York City launched PASSPort (the Procurement and Sourcing Solutions Portal)—a product that introduced an unprecedented degree of transparency and citywide standards to NYC procurement. In its first release, the City saw immediate results—including reducing the time spent on vendor background checks from about seven weeks to three days and vendor disclosure filing from about 30 days to one. Through transparency, the new systems will: 1) further enable the City to procure and deliver services faster; 2) create new avenues for accountability within government; and 3) demystify the experience for vendors, opening opportunities for new vendors.
2. Develop a Master Contract for Digital Services: For over twenty years, New York City’s 40+ agencies have individually raced to develop digital services for its residents. In 2018, the City embarked on an effort to 1) streamline the City’s procurement of digital and service design services, 2) leverage the City’s buying power to get better deals, and 3) bring citywide standards to services through a new master contract called Government x Design. Through the contract, companies could apply to join a pool of pre-approved vendors, so City agencies could have speedy access to the pre-approved pool and individual agencies would no longer need to release lengthy RFPs for new digital products. This effort is ongoing and provides an opportunity for the City to include standard contract language on cybersecurity, accessibility, privacy, equity, etc.
3. Increase M/WBE Discretionary Spending Thresholds: In 2016, NYC recognized the importance of increasing opportunity for minority and women-owned businesses (M/WBEs). The City successfully lobbied state legislators to increase the discretionary spending threshold set for M/WBEs from $20,000 to $150,000 in 2017, and then to $500,000 in 2019. Put another way, before 2017, City agencies could quickly and non-competitively procure $20,000-worth of goods and services from M/WBEs, and in 2019, that threshold increased 25 times to $500,000. This policy has been a win-win for City agencies who are always looking to procure high-quality goods and services quickly, and for M/WBEs interested in working with the City.
4. Unlock the Capital Budget for Modern Technology Purchasing: In 2019, the NYC Comptroller issued a directive to all City agencies updating the City’s policy on capital budget eligibility for technology purchases. The City’s capital budget covers large long-term investments in facilities & infrastructure, while the expense budget covers everything else. Prior to 2019, the capital budget allowed for extremely narrow technology purchasing, (e.g., on-prem servers), but the 2019 Directive expanded capital purchasing eligibility to include subscription-based services in the cloud, taking pressure off of the expense budget and further unlocking the City’s ability to upgrade its aging technical infrastructure.