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The federal monitor overseeing the New York City Housing Authority is targeting the agency’s expensive habit of awarding millions of dollars in no-bid contracts to select contractors who are subject to almost no oversight.

Monitor Bart Schwartz made his concerns public in a quarterly report filed Friday, just over three weeks after THE CITY revealed that NYCHA has increasingly relied on these no-bid gigs, spending more than $250 million on them since 2014.

The authority allows low-level managers at housing developments to avoid competitive bidding as long as they keep a contract below $5,000. Many managers wind up awarding hundreds of these small contracts to the same vendors over and over, THE CITY’s investigation found.

THE CITY revealed that three times in the last four years, the Department of Investigation has privately warned NYCHA about these types of contracts, red-flagging them as potential sources of corruption.

Now the federal monitor is weighing in.

In the new report — his second since being appointed earlier this year — Schwartz said his interaction with NYCHA has improved after an initial bumpy start. He was tapped in March under an agreement between NYCHA and the federal government after prosecutors found the authority had deliberately hidden serious health and safety issues including lead paint and toxic mold afflicting its 400,000 tenants.

For the first time, Schwartz revealed he’s tackling an issue that’s not on the list of topics specified in the agreement that created his job: His team has been looking into the no-bid contracts after receiving complaints from tenants that the people hired this way did shoddy work.

“These revelations raise a number of issues that the monitor team will work with NYCHA to address,” Schwartz wrote. “This includes NYCHA policies, procedures and controls for the selection and oversight of vendors to ensure their competence and diligence in performing specific work and the training of development management staff to effectively inspect and verify the quality of the work performed by third party vendors.”

The monitor took particular issue with the fact that “contracts for these amounts require little oversight as to how and to whom the contracts are let.”

Billed for Bad Work

A key issue raised by THE CITY’s investigation was that NYCHA managers who hire these vendors don’t typically check the contractor’s work. An internal DOI report obtained by THE CITY found one such vendor, Matrixx Construction, appeared to have billed for work actually performed by NYCHA staff.

THE CITY found some of the work performed by Matrixx to install tub “surrounds” and bathroom fixtures was botched. One tenant at the Morris Houses in the Bronx recalled the contractor neglected to install a handle on the shower, while sources at the same development said Matrixx botched the job of installing “grab bars” in other tubs by screwing them into the tile-and- plaster wall, not into the metal studs behind the wall as required.

The Morris Houses public housing complex in The Bronx, on Oct. 4, 2019. Credit: Ben Fractenberg/THE CITY

NYCHA managers have awarded Matrixx 428 under-$5,000 contracts since 2015 totaling $1.8 million, records show. The company was formed in 2014 by a newly retired NYCHA development manager.

Schwartz details shoddy work by one contractor that, while unnamed in the report, matches details THE CITY uncovered about Matrixx.

The report noted one job performed by the vendor in which “the grab bars were only screwed into the plaster wall above the tub with plastic anchors which would instead easily pull from the wall if used for fall prevention by a resident.”

The monitor’s field examiner found similar problems with grab bars at two other apartments, and noted that experienced NYCHA staff had to remove the poorly installed materials and do the entire job over for additional cost.

“Vendors who do shoddy work are repeatedly hired, continuing this trend of poor workmanship that, among other things, further instills in residents the sentiment that NYCHA does not care about their living conditions,” the monitor wrote.

“While it is premature to know how pervasive across NYCHA these unacceptable work practices are, they certainly need to be addressed. NYCHA and the monitor team will work together to make the needed changes.”

‘Significantly Behind’ on Lead Paint

Schwartz’s new report offered some good news: under his supervision, NYCHA will finally start getting $450 million in state funds promised years ago by Gov. Cuomo for new elevators and boilers.

But he also noted that NYCHA is still struggling to adhere to its promised reforms on cleaning up toxic lead paint from its apartments, and remains “significantly behind” in its effort to inspect 135,000 apartments with lead paint by the end of 2020.

In an emailed statement, NYCHA spokesperson Barbara Brancaccio didn’t address specific issues raised in the report, but portrayed a working relationship with the monitor that’s become increasingly productive.

“In collaboration with the federal monitor and his team, NYCHA is working diligently to address the pillars of the agreement and create action plans that will bring us into compliance,” she wrote.

“Beyond this, we now have the leadership team, vision and support to fundamentally transform the organization, and our work these past few months has been focused on this goal. We remain deeply committed to improving our standards, performance and the quality of life for our residents.”

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