PASSPORT - NYC’s OVERHAUL OF VENDEX

By Henry L. Goldberg

The Mayor's Office of Contract Services ("MOCS") is actively engaged in a significant overhaul of the Vendex system which it administers. A two year process, to be known as Passport, led by MOCS Director Michael Owh, is designed to "enhance and streamline" the way Vendex operates. The goal, as stated by MOCS, is to ensure that the procurement process is "fair, efficient, transparent and cost effective."

Passport's "Release #1," as it is referred to by MOCS, is intended to go online this Spring (2017). This is extremely ambitious, as Passport is by and large still a work in progress. MOCS claims this release will benefit Vendex users. The new Passport system will allegedly simplify the process for contractors and vendors.

MOCS had hoped to obtain Citywide approval for revamping the current Vendex "Vendor" and "Principal" questionnaires. However, it was unable to get a consensus among City agencies. MOCS had also hoped to eliminate the reporting requirement on the part of "affiliates" and/or subsidiaries of Vendex-registered companies from the Vendors Questionnaire, but was advised that this information was mandatory under the enabling legislation that created Vendex. As a result, the current questionnaires will continue to be utilized in the Passport application process.

Noteworthy is that, unlike the current Vendex questionnaires which are generally not updated until a contract is to be awarded, or every three years, full disclosure will be made at the outset upon first registering under Passport. It will also be the contractor's responsibility to regularly update its profile pro-actively as circumstances change or events occur. However, how significant changes (e.g., criminal investigation, indictment, convictions, safety findings, poor performance evaluations, etc.) will affect awarded contracts currently being performed remains to be seen.

In order to get this program up and running, all contractors, subcontractors and vendors will be required to create initial Passport accounts. This will require the refiling of Vendex information, regardless of when last updated and filed. This will greatly assist the implementation of Passport. If the City were required to upload its entire current Vendex information database into Passport, it reportedly would delay the implementation of Passport by years.

As a result, MOCS has chosen to require all contractors, subcontractors and suppliers doing business with New York City to "refile" their complete Vendex submission into Passport. As a registrant of Passport, contractors will have access to their private accounts. Only MOCS, the NYC Department of Investigation and City contracting agencies will have access to this information. It will not be available to the general public nor competitors. Also, since contractors will be updating profiles as events occur, "Certificates of No Change" will no longer be utilized.

Passport will allow those that have access to a profile to see any performance evaluations and/or "advices of caution." The current Vendex database requires an "advice of caution" and/or performance evaluation to appear on one screen, and any "rebuttal" or response to them on the part of the contractor on another. Under Passport, both the evaluation and/or "caution" will appear on the same screen as the contractor's "rebuttal" comments. This will allow the inquirer to have a more complete picture of the registrant's record and/or evaluation in one location.

Under Passport, all submittals will be done electronically. All certifications will be done by e-signature, in the expectation of minimizing the vast amount of paperwork which is currently bogging down the Vendex submittal process.

Passport Release #2, which MOCS anticipates will go online in 2018, will involve contract procurement-type information, and not simply integrity or responsibility-related matters. MOCS hopes to be able to link together a contractor's Vendex Information, its MBE-related information, contract administration information (including payment and change order tracking information), and upcoming procurements. MOCS also envisions Passport reporting bid results and contract award information.

Release #2 is currently in the planning stage. MOCS realized that the success of Passport is largely dependent upon a cooperative effort between MOCS and the construction industry. As such, MOCS is actively soliciting input and participation from the construction industry to assist in its development.

As indicated, MOCS envisions that, as part of Release #2, the contractor's MWBE certification information will be online and updated as the need arises. Under Passport, the current self-certification process for subcontracting will be changed. A subcontractor will have to certify the trades in which it is capable of performing. As part of MOCS's review and evaluation of a subcontractor's ability to perform a specific trade, that subcontractor would be required to submit proof to MOCS that it has successfully performed such work in the past. This proof will also be reviewed and included in Passport.

Once Passport is fully integrated, the contractor will be able to access all of the contracts it has with the City, as well as submit and review any change orders. Contractors will also be able to access and review any performance evaluations, or "advices of caution," which may have been filed against them. Importantly, contractors will be able to electronically respond to those evaluations and/or cautions.

As part of this process, there will also be a citywide procurement standardization effort. While there is currently a Standard Citywide Construction Contract, MOCS is hoping that it will be able to standardize all procurement contracts so that a contractor or vendor would more readily be able to ascertain what precisely are its contractual requirements, whether for a contract for construction services or for the procurement of goods.

G&C Commentary

It remains to be seen how this will unfold. Many changes are in the discussion stage. It does, however, appear to be well intended. It certainly is long overdue. Any improvement in the procurement procedure which would streamline the award and administration of contracts, as well as payments to contractors, is a welcomed improvement. So are efforts to more fairly disclose contractor "rebuttal" information concerning advices of caution or unfavorable performance evaluations. However, the "devil is in the details," and, as indicated, much remains to be developed. Know, for now, that significant changes in Vendex are on the way.

As always, please feel free to call me with any questions or comments.

©Goldberg & Connolly 2017

This article has been prepared for informational purposes only. It is not a substitute for legal advice addressed to particular circumstances. You should not take or refrain from taking any legal action based upon the information contained herein without first seeking professional, individualized counsel based upon your own circumstances. The hiring of a lawyer is an important decision that should not be based solely upon advertisements. Before you decide, ask us to send you written information about our qualifications and experience.