Relates to state agency contracts with not-for-profit corporations

• Democratic19

◆ The sponsor's argument

Why Shelley Mayer says this is needed

New York State often outsources crucial programs to non-profits, includ- ing early childhood education programs, mental health counseling, and shelter for the homeless. The state relies on non-profit organizations to provide these vital social services. However, non-profit organiza- tions that contract with the state have expressed concerns for years about the slow contract and procurement process. In an effort to address these concerns, the state enacted the Prompt Contracting Law in 1991 to help expedite contracts and reduce the fiscal stress on not for profits. Thirty years later, the problem persists and non-profits are facing immense financial hardships as a result. In May of 2020, the Office of the NYS Comptroller released their "Not- For Profit Prompt Contracting Annual Report" that found 50% of contracts in 2019 had not been approved until after the start date of such contracts, compared to 47% of contracts in 2018. A non-profit cannot receive payment from the state until the contract is formally approved by the state comptroller. So, while non-profits are required to start providing services by the start date of their contracts, the state is not required to pay them within the same timeframe. In order for non-profits to begin their work, they often have to take out lines of credit to finance their operations. The May 2020 NYS Comp- troller report notes, "the failure of the state agencies to process contracts on time harms not for profit service providers, which in turn erodes service delivery to vulnerable populations." The report recom- mends that state agencies "take responsibility for their critical roles, and make prompt contracting a priority." This bill seeks to address this issue by requiring state agencies to report to the Comptroller on the status of significantly late contracts and barriers to the agency executing contracts in a timely manner.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.