Town Approves New Contracting Reforms to Protect Taxpayers

Town Approves New Contracting Reforms to Protect Taxpayers

Oyster Bay Town Supervisor Joseph Saladino and Councilman Steve Labriola announce that the Town Board today approved reforms to the contracting policy to protect taxpayers from abuse while holding contractors and departments accountable for every taxpayer dime spent on a project.  The reforms apply to the way in which Town departments handle Change Orders to contracts previously approved by the Town Board.   A Change Order, the general construction industry term for an amendment to a construction project that changes the contractor’s scope of work, requires Town Board approval and sometimes affects originally-approved scope of work and/or the price of the job.

Councilman Labriola stated, “I’ve shared my experience as former Nassau County Chief Deputy Comptroller and worked with Supervisor Saladino to develop these new stringent controls over government projects.  These new taxpayer protections are designed to prevent waste, fraud and abuse of tax dollars.  This new policy will help assure the taxpayer and Town Board members that all change orders are necessary and reviewed by the Finance Director, Town Comptroller and Inspector General.”

Change Orders exist due to the dynamic and complex nature of construction projects.  For most projects, it is not possible to anticipate every challenge or variable from the outset.  While individual departments handled these matters independently, these reforms reinforce existing practices with a formal policy and added layers of accountability.  The goal of these reforms is to obtain Finance, Comptroller, Inspector General and Town Board approval for Change Orders prior to work being completed, unless an emergency or pressing need exists.

“To protect taxpayers, Councilman Labriola and I evaluated the policies and procedures that govern contracts and the way in which government spends your money,” said Supervisor Saladino.  “These new reforms will add a layer of taxpayer protection while holding both contractors and departments more accountable.  The reforms also increase transparency over government spending so that all projects are open to review.”

Procedures outlined by this new policy include:

  1. All Change Orders must be accompanied by a detailed memorandum setting forth the nature and justification for the addition or deletion of the scope of work.
  1. For each contract, all Change Orders must be submitted in chronological order, numbered sequentially, and shall state the cumulative total in dollar amounts of all prior change orders and the total cumulative percentage of change orders as to the original amount of the contract.
  1. All Change Orders shall be reviewed by the Director of Finance and the Department to which the Change Order is being written for.  Before a resolution is submitted to the Town Board, the Comptroller shall review the Change Order.  The Director of Finance and Comptroller shall sign each Change Order certifying that sufficient funds have been encumbered and/or funds are available but require Town Board approval to be encumbered.
  1. All cost overruns which cumulatively exceed 10% of the original amount of the contract or exceed the overrun threshold established by the Engineering Division, whichever is lower, shall be reviewed by the Inspector General and the Town Supervisor, or his/her designee, before a resolution is submitted to the Town Board to authorize the additional work.
  1. In the event of Change Orders requiring work of an exigent nature, the Change Order shall be reviewed and approved by the Director of Finance, Inspector General and Comptroller, and thereafter ratified by resolution of the Town Board.
  1. Any work performed by a contractor that is outside the scope of the original award and outside the parameters of this policy, shall be undertaken at the contractor’s risk and expense. Pending a review by the Director of Finance, Inspector General and Comptroller, and approval by the Town Board, the Town may submit payment to the contractor.  This provision must be included in the bid documents.

Supervisor Saladino and the Town Board have worked tirelessly to deliver important services and strengthen the public’s trust in government.  The Town Board took the historic step of being Long Island’s first municipality to create an Office of Inspector General.  Supervisor Saladino and the Town Board hired an experienced Federal agent who worked with the FBI, CIA and DEA.  A former Federal prosecutor from the Eastern District of New York was also appointed as Town Attorney.  He has guided the Town Board in cancelling contracts and leases with unscrupulous vendors and companies.