No-bid contracts ripe for corruption at NYCHA buildings: investigators

9 NYCHA contractors were arrested Monday for alleged bribery in sweep of no-bid “micro-purchase” contracts

New York /
Sep.September 21, 2021 05:00 PM
(Getty, iStock/Illustration by Kevin Rebong for The Real Deal)

(Getty, iStock/Illustration by Kevin Rebong for The Real Deal)

City investigators are stepping in to make sure no-bid contracts for repairs to NYCHA buildings are no longer fertile ground for bribery schemes.

Nine NYCHA-hired contractors were arrested on Monday following an investigation into “micro-purchase” contracts, which circumvent the competitive bidding process to ensure repair requests are handled quickly.

The nine vendors allegedly won more than $20 million in non-competitive contracts in recent years, Department of Investigation Commissioner Margaret Garnett told The City. While most of the work was completed, the contractors face charges including bribery, giving illegal gratuities and offering a false instrument for filing, according to the publication. If convicted, the defendants will face sentences ranging from probation up to seven years behind bars.

In the past, the DOI warned NYCHA about the vulnerability to bribery inherent in the no-bid process, which exists for jobs costing less than $10,000.

The investigation began when a NYCHA manager alerted the DOI after being offered a cash bribe and agreed to wear recording equipment. From there, undercover agents posed as managers at two NYCHA facilities, the Red Hook Houses and Lafayette Gardens in Clinton Hill, where they received thousands of dollars in cash bribes, as well as gift cards and bottles of Johnnie Walker.

The DOI has made various recommendations to mitigate the possibility of bribes, such as having a central office award bids for smaller contracts, rather than building superintendents who deal directly with vendors. Currently, a single contractor amassing more than $250,000 in aggregate NYCHA contracts would trigger an automatic review. The DOI has suggested lowering that threshold to $100,000.

Meanwhile, the investigation into the alleged bribery is set to continue.

“I do think that these practices, these kickbacks and bribes, to some [NYCHA] assistant superintendents and superintendents, it’s really part of an ecosystem of people willing to make bribes and take bribes.”

The “micro-purchase” contracts came about due to the desire to handle repair requests with greater urgency, rather than letting problems linger in NYCHA housing, where conditions have been drawing increased scrutiny from elected officials.

On Tuesday, Sen. Chuck Schumer penned an op-ed calling for $80 billion in funding to address public housing concerns across the country, including NYCHA.

“This is significant corruption because honest contractors stand no chance of doing the work if you have to corrupt the process in order to be awarded the contract,” Brooklyn Attorney General Eric Gonzalez told The City. “The residents of NYCHA often live in conditions that are deplorable. And we definitely need a system that works to their advantage to get things done quickly. But they deserve to have the best contractors to fix items without the corrupt process.”

[The City] — Holden Walter-Warner





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