Reforms in the works for VENDEX contracting system

The city is backing efforts to reform the decades-old system that maintains information on billions of dollars of contracts.

During a Nov. 7 hearing by the City Council’s Committee on Contracts, Michael Owh, director of the Mayor’s Office of Contract Services, said that with a little fine tuning, the administration could generally support three bills to modernize and streamline the Vendor Information Exchange known as VENDEX.

While the system provides vital information about conflicts of interest and vendor performance, advocates have long complained about duplicative paperwork requests, lengthy processing times, information getting lost and heavy administrative burdens. On the city side, entering the data into the computer system is labor intensive.

One bill, sponsored by Councilwoman Helen Rosenthal, who chairs the Contracts Committee, would increase the yearly contract amount required to fill the VENDEX questionnaire from $100,000 to $250,000. “This change would be most beneficial to smaller organizations, particularly nonprofit organizations and MWBEs who are often greatly burdened by VENDEX requirements,” she said.

Owh, who along with MOCS would have a key role in working with the City Council and advocates to implement the changes if passed, said the increased threshold was overdue.

“Frankly, I actually think it’s courageous that you’re offering this (threshold) as an option because I think it’s very hard for a public servant to come out and say that we’re going to take a risk-based approach on something when there is a chance that 10 out of 60,000 could be found un-responsible,” he said. “But it is something that I think is good for not only streamlining for efficiency but for all of the smaller nonprofits, all of the MWBEs out there, that have to go through (lots of) paperwork.”

There are about 40,000 to 60,000 transactions processed in a typical year, Owh said. In the 2015 fiscal year, about 30 were found to be “non-responsible,” meaning the organization was considered to be unable to fulfill the contract or lack business integrity. Some of those determinations were “most likely” based on sources outside of VENDEX, that might include Google, LexisNexis, Dun & Bradstreet and others.

“The current statute is outdated and this new threshold would capture more than 99 percent of the dollars currently covered under the requirement while streamlining the process for many vendors,” Owh said.

Two other bills would require VENDEX to accept electronic responses; and allow the public to access the information online as opposed to having to physically visit the Public Access Center near City Hall. Sets of questionnaires include information about a contractor’s legal structure, past performance and financial viability; the principal questionnaire asks detailed information about the officers at the head of the organization.

Owh asked for tweaks to the bill to ensure protections for some of the most sensitive information collected, which can include Social Security numbers, home addresses and salaries.

The amount of paperwork is staggering: nonprofits may have to answer hundreds of questions per submission. MOCS received 12,661 packages in the year that began in July 2015; Since July 1, it has gotten more than 4,500, Owh said.

He also said MOCS would be open to discussing options for streamlining the questionnaire to exclude redundant information collected in the IRS Form 990 other governmental forms, as well as those  other databases.

“I feel a task force coming on,” Rosenthal said.

It wasn’t immediately clear how long it would take to implement the changes, if passed. Asked how much the legislation would cost, Owh said he would like to see it wrapped into an upcoming “citywide procurement innovation plan.”

A representative of for-profit contractors, who also use the system for construction and other building projects, supported the legislation, pending privacy protections.

The Human Services Council, which has lobbied for similar reforms, also supported the legislation.

"We’re really in favor of anything that digitizes or automates things because from the nonprofit perspective, it just cuts out so much extra work, anxiety, stress and also risk of error,” said HSC Senior Policy Analyst Tracie Robinson.

In some smaller organizations, she said, program staffers may be involved in addressing clients as well as fundraising, drafting business proposals and completing compliance forms such as those for VENDEX. “For us, these changes will have a real impact on communities because it will free up time and resources, particularly among smaller organizations, so people can spend time doing what the city pays them to do, which is deliver services,” Robinson said.

This article was first published on our sister site, New York Nonprofit Media, on November 8.