PASSPort's software contracts run out in April 2027. The city told the Council it will likely negotiate, not rebid

PASSPort is the online system the city uses to buy goods and services and to pay the nonprofits that run after-school programs, shelters and senior centers. At a Council oversight hearing Thursday, the city's contracting office said the two contracts that keep it running expire in April 2027. It said it will most likely extend them through a negotiated deal rather than a new competition.

Why it matters to residents: when PASSPort stalls, the groups that deliver city services wait longer to be paid. Some borrow money to cover the gap. Council members said they hear about PASSPort at nearly every hearing on social services.

We previewed the hearing last week. Here is what was said, from the Committee on Contracts video and transcript (meeting page).

What the city told the Council

What it costs. Committee chair Lincoln Restler said a Council review found the city has spent at least $120 million on PASSPort since design work began in 2016. That includes about $97 million with the software company Ivalua and more than $20 million with Accenture (1:02:19). Kim Yu, director of the Mayor's Office of Contract Services, said the city's own figure is "a little higher." She said the city pays about $2.5 million a year for the Ivalua license and about $7.5 million a year to Accenture, which integrates the system. The coming upgrade, called Release 7, costs about $6.5 million (1:03:09).

What happens in 2027. Both contracts expire in April 2027, and there is no renewal option, Yu said. The city considered a new solicitation earlier this year but did not go through with it, and will "most likely" use a negotiated acquisition (1:04:10). Because the city rents the software rather than owning it, upgrades can't be paid for from the capital budget. Yu called one fix, buying the intellectual property from Ivalua, "a very conceptual idea" that would need buy-in from many parties (1:11:14).

The fix nonprofits asked for. Last fiscal year the city processed about 10,000 budget changes on contracts. Each took about five days on average, and providers couldn't submit invoices while one was pending, Yu said. Release 7 will end that block, and she said it is on track for early 2027 (1:19:27). Restler called it "probably the number one complaint" he hears about the system. He also noted that the office told the committee in 2019 that Release 2 would be PASSPort's final major release.

What comes after. Once Release 7 is out, Yu said the office will pause to decide whether to keep building, stay the course, or remove some features and run them elsewhere. She called that "addition by subtraction" (1:22:34).

Payment times. Yu said agencies now take about 22 days on average to pay an invoice, down from 41, against a 30-day standard. She said about $1 billion in unpaid invoices was sitting in PASSPort's queue, adding that this doesn't mean all of it is late (45:03). Restler said the median time for competitive sealed proposals rose from 386 days in fiscal 2025 to 527 days in fiscal 2026. Yu said, from memory, that about 69% of contracts were registered on time last year, and agreed to send updated figures in writing (1:37:53).

The bills

Four items were heard and laid over:

• Int. 1064, from Carl Wilson, would set deadlines for agency approvals and change orders on small capital projects. The Department of Design and Construction said agreeing that work is a change order can take four or five months of back-and-forth. After that, it takes about a month to prepare and a month for the comptroller (34:58).
• Int. 1065, also from Wilson, would require cost benchmarks for small recurring projects. The department said it could publish past costs, but was wary of forecasts. Construction costs are rising about 8% a year, it said, partly because data centers are taking up steel and concrete (36:59).
• Int. 991, from Chris Banks, would require a catalog of standard designs.
• Res. 619, from Eric Dinowitz, asks Albany to lower the dollar threshold for design-build contracts.

Two related bills have not had a hearing. Int. 675, from Julie Won, would require a digital procurement and contract management system and has waited 260 days. Int. 1053, from Restler, would require model procurement staffing plans for human services agencies.

What's next

Ballot Question 2, on Tuesday's ballot, would change parts of the city's procurement rules. Officials discussed it near the end of the hearing (1:52:12). The four bills stay in committee until another vote is scheduled. The Contracts Committee has 37 items pending, 22 of them for more than 180 days.