Policymakers set laws, rules and guidelines designed to ensure the integrity of the process and prevent corruption, but often also to promote other policy objectives such as diversity. The general framework for government procurement is set out in the New York State General Local Government Act. The mayor and city council enact the relevant local laws and the Procurement Policy Council (PPB) issues the rules that must comply with the relevant state laws. The SCH is composed of five members: three are appointed by the Mayor and two by the City Auditor. Federal laws and regulations govern contracts with federal funds. Too many companies are reviewing investment projects to ensure they comply with capital expenditure rules, and the process should be streamlined. The SDC`s Strategic Plan for Construction Excellence highlighted the need to streamline procurement through better inter-agency coordination, in particular between the SDC and the OMB.45 In addition, greater transparency through the PASSPort system helps identify organizational bottlenecks that can be used to streamline the system and speed up the contract approval process. Procurement laws and rules attempt to reconcile the need for competition with flexibility and reason. For example, responding to an emergency requires a flexible and fast process. Similarly, an arduous process should not regulate small purchases. Exceptions to fully competitive methods are permitted if the criteria set out in the SCH rules are met.8 Table 1 provides a brief description of non-competitive methods.9 Outdated systems, complex rules and regulations, inefficient and time-consuming tendering procedures, thorough review and oversight, and bureaucratic payment processes make the city a less attractive trading partner.
For many contracts, the city may pay a premium because of these deficiencies; This is the case in the construction sector, where suppliers would increase their margin on the «cost of doing business with the city» when bidding on public works projects.34 Agencies generally cannot simply order items from Amazon or use companies they have already done business with. Strict rules guide the procurement of items and services, and a complex network of government actors is responsible for establishing, monitoring, implementing and monitoring the process. (See Figure 4.) An important principle of public procurement is that a highly competitive process can guarantee the best price while ensuring a fair trial. In fiscal 2018, 41.5% of contracts were awarded using two competitive methods. (See Figure 5.) Nearly 23% were sealed tenders, where a bidder bids the best price their company can offer, and the contract is awarded to the «responsive and responsible» bidder offering the lowest price.5 The use of this method of awarding construction services is required by state law in almost all cases. SCH rules allow for best-value allocation, which may take into account factors other than the price of standardized goods and services.6 In order to reach a preliminary agreement with one organization, a standard contract is reviewed by as many as five other organizations. The MOC ensures compliance with procurement rules and conducts all necessary public consultations.13 The OMB ensures that sufficient funds and available capital are eligible. The legal department verifies compliance with local, state, and federal laws. DOI verifies vendor integrity and SBS ensures compliance with local, state, and federal equality laws and regulations. The underlying purpose of these procurement policy council rules is to simplify, clarify, and modernize New York City`s procurement law by ensuring fair and equitable treatment of all persons involved in New York City`s procurement system. The city reports cycle time – the number of days between the publication of a tender and the registration of a contract – for sealed bids.16 In fiscal year 2018, the median cycle length was 179 days, or about six months.
(See Figure 7.) DCAS processed the largest number of sealed tenders in 2018 and completed the process in less than 150 days for half of the bids. The Parks and Recreation Department and the Design and Construction Department (SDC) each processed more than 150 sealed tenders with an average cycle time of 192 days and 209 days, respectively. Government requirements for raising capital, particularly the lowest bid requirements, the Wicks Act, and the ban on design-build contracts, significantly increase the city`s costs. The state has granted the city limited planning and construction powers for some projects, but the city should continue to seek broader authority. Finally, Wick`s Law should be abolished. The city`s outdated procurement systems have made the bidding process unnecessarily burdensome for some potential bidders, reducing competition and increasing costs for the city.