The no-bid micro contracts awarded to vendors at the center of a bribery scandal are rife with wildly inflated costs, an analysis finds.
How much does it cost NYCHA to change a lightbulb?
In one case, more than $708 per bulb.
That’s the rate the housing authority paid one vendor, who submitted a total bill of $4,250 to replace six LED bulbs and covers at Throggs Neck Houses in The Bronx, according to records reviewed by THE CITY.
Another vendor billed NYCHA $4,985 to replace one door to a compactor room. Yet another charged $4,875 to put in slip resistant rubber treads on a stairway with 15 steps — a cost of $325 per step.
When law enforcement officials arrested 70 current and former NYCHA workers on bribery charges earlier this month, they identified small no-bid contracts for apartment repairs, awarded to select vendors in exchange for cash to superintendents, as the source of corruption.
What prosecutors didn’t say was that many of the bills submitted by the vendors who win these so-called micro-purchase contracts raise serious questions about whether NYCHA wound up paying them hundreds of thousands — or even millions — of taxpayer dollars in inflated costs over the years.
All of these bills had one thing in common, a review of contract data by THE CITY found.
The vendors sought compensation as close to the maximum allowed at the time on each contract, regardless of the work performed. Micro contracts have a built-in incentive for vendors to bill for just below the maximum allowed — $5,000 until late 2019, $10,000 since — no matter what the scope and value of the task at hand is.
Efficiencies with privatization, amirite?
Yeah there are many cases of big public organizations rife with corruption and many examples can be pointed to in New York. But micro-contracting is on the other extreme, and leaves so much room for overhead that the only thing it's efficient at is having the private sector loot taxpayers as much as possible.
You need lightbulbs replaced in 5 buildings? Why do we need to go through a bidding process to get up to 5 different crews and 5 different sets of equipment to do the replacement? Seems way cheaper to just get one in-house crew to do it, who can properly be held accountable, even if the crew is twice as expensive as one contracted crew job.
Could be the other way as well. The micro bid is making up for the loses on the big one.
I got a client who is going to pay 10k more next time they put an order in. They went 10k over budget last time so it gets carried over.