An investigation into the millions of dollars the cash-strapped Housing Authority spent on outside contractors tapped to make thousands of repairs prompted a union leader who represents NYCHA staff to call into question why the agency has invested in private vendors instead of staff “who can be held accountable.”

News outlet The City reported that since the beginning of the de Blasio administration, NYCHA Property Managers have spent $250 million on 90,000 no-bid contracts for repairs at the Authority’s 326 developments. Facing $32 billion in capital needs and a backlog of more than 312,000 work orders, NYCHA managers are allowed to hire vendors without going through the bidding process as long as the contracts were under $5,000.

Corruption Concern

It obtained a 2016 DOI report probing NYCHA’s procurements, and found that during a 10-month window in 2015, one-third of the agency’s no-bid contracts, totaling $18 million, went to just 17 vendors. (NYCHA clarified that the $250 million that has been spent on micro-purchases since 2014, which included fees, were paid to 2,200 distinct vendors.)


BART SCHWARTZ: Criticized HA understaffing.

The DOI also found that despite one vendor being awarded five separate under-$5,000 contracts to repair 28 apartments at Brooklyn’s Van Dyke Houses, NYCHA employees were the ones who made the repairs at all but one unit.

Investigators warned NYCHA that year that increased reliance on no-bid “micro-purchases” left it vulnerable to corruption. And in a report released this past January into mismanagement at the Throggs Neck Houses, DOI found that a pair of supervisors at the development violated NYCHA’s procurement rules by splitting a contract with a company hired to power-wash several buildings into separate contracts so that they fell under the $5,000 threshold.

Since DOI flagged the potential for abuse, NYCHA has implemented “stringent reforms” in order to ensure “that all vendors are thoroughly vetted before any contract is approved,” said agency spokeswoman Barbara Brancaccio.

The Authority also addressed concerns raised at a City Council hearing that HA had no way to flag potential bid-splitting.

‘Built in Alerts’

“Since our testimony, we have built alerts into our automated systems to curb procurement misconduct from the onset, and we have developed management protocols to identify and address malfeasance,” Ms. Brancaccio told The Chief.

Between 2014 and 2017, there was a steady increase in the amount NYCHA spent on micro-purchase contracts, from $32 million a year to $38 million. In 2018, that number jumped to $61 million, while $47 million had been spent this year as of August, according to The City. The use of micro-purchases increased in order to ensure that repairs were made quickly.

But Teamsters Local 237 Gregory Floyd, who represents 8,000 NYCHA employees, questioned why the agency was investing in private contractors but not in its own staff.

“If you have to spend money on repairs, why don’t you just hire more employees, who can be held accountable, instead of wasting money on vendors?” he asked.

Reduced In-House Staff

According to the Mayor’s Management Report, the number of NYCHA employees has slightly dipped over a five-year period, from 11,399 in fiscal year 2015 to 10,834 in fiscal year 2019.

NYCHA stated that last year, 792 Housing Assistants, Caretakers, Heating Plant Technicians, and Maintenance Workers were hired. “[HA is] preparing to further increase the workforce at developments across the portfolio. In April 2019 we implemented internal controls to prevent contract abuse,” Ms. Brancaccio said. “We have increased our contracts and we are hiring more staff to meet increased demand and deliver quick, quality repairs and maintenance for our residents.”

NYCHA officials have also previously stated that a shortage of skilled-trades staff such as Carpenters has contributed to the large backlog of repairs. (There are about 1,000 skilled-trades employees).

Bart Schwartz, the Federal monitor in charge of overseeing reforms in the public housing system, stated in his first quarterly report released this past July that the severe understaffing across the agency impeded its chances of successfully tackling serious issues such as mold, heating outages and pests.

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